As cryptocurrencies continue to settle in the bear market, Portuguese investors may hold their breath as Parliament has rejected proposals for cryptocurrencies made by members of left-wing parties. The European Central Bank maintains its position and continues to consider digital assets as a risk to financial stability. In any case, the US mega bank JP Morgan is not of the same opinion as the ECB, because Bitcoin will be its preferred “Alternative Asset”. Finally, we remember that TFL launched Terra after the community approved the “1623 proposal”.
The bearish sentiment: The prevailing market trend
With the drastic fall in the crypto market during the month of May, there is no longer any doubt that cryptocurrencies have entered a crypto winter. Although the price is not as brutal as in 2018, when the price of Bitcoin fell almost 80% from its height in 2017, it is still significant when you consider all the euphoria it had around cryptocurrencies. Now one has to ask the question: how long will this crypto winter last?
Some experts had to move their “bottom line” for Bitcoin to much lower levels and approached the $ 15K- $ 20K zone. The threat from the worst case scenario grows as we observe the current pessimism for the future of Bitcoin. Especially since cryptocurrencies would be decor-related from the stock market, which ended up rising after 7 weeks of negative growth.
To learn more, read our article: A crypto market that is still characterized by a “bearish” mood
Portugal will not tax cryptocurrencies (so far)
The country is known as the European Eldorado and currently seems determined to maintain its status as a crypto-tax haven. The Portuguese Parliament rejected two proposals from left-wing parties to tax digital assets. Nevertheless, the threat of taxation has not completely disappeared as the Portuguese finance minister has stated that cryptocurrencies will be taxed in the near future. According to the latter, the tax on capital gains for investors in digital assets could amount to 28% tax.
Portugal has emerged as a real cryptocurrency hub in Europe for its tax facilities. Many investors have migrated to this country on the Iberian Peninsula to take advantage of its benefits. With a future cryptocurrency tax law, the country risks losing its attractiveness in the sector. But at the moment, its status as a tax haven is well preserved with these rejections of proposed laws.
To learn more, read our article: Portugal, still a tax haven for cryptocurrencies
The crypto market: threat to financial stability
At least that is the opinion of the European Central Bank, which during its biannual review went up against cryptocurrencies. The ECB is afraid of the effects that cryptocurrencies may have on the markets by provoking a possibility of a crisis among the tops through their fault. The European Monetary Authority points out the harmfulness of the volatility of cryptocurrencies, which can have a catastrophic ripple effect on other assets. She remembered that:
“Systemic risk increases with the level of interconnection between cryptocurrencies and the traditional financial sector”
ECB officials do not miss the opportunity to launch harsh remarks against the crypto sector. In a recent interview, Christine Lagarde said: “ItCryptocurrencies were worthless “and” backed by nothing because there are no underlying assets to act as a security anchor. “. Fabio Paneta, a member of the ECB Council, for his part, compared cryptocurrencies to the Wild West, and according to the latter, they will collapse as subprime.
To learn more, read our article: The crypto market poses a financial stability risk, says the ECB
Bitcoin: JP Morgan’s favorite
In a note to investors, JP Morgan analysts said they prefer Bitcoin over real estate. They reported that a fair Bitcoin price would be at $ 38,000, roughly over 30% of its current price. The bank’s analysts believe that the number 1 asset in the crypto market would have much higher growth potential than real estate despite the latter having lost more than 50% of its value.
“Last month’s cryptocurrency market correction looks more like a capitulation from last January / February, and going forward we will see an upside for bitcoin and the cryptocurrency market more generally. »
noted Nikolaos Panigirtzoglou, chief analyst at JP Morgan
In addition, experts specified that the rise in mortgage rates will have a negative impact on market prices.
To learn more, read our article: JP Morgan prefers Bitcoin over real estate
Terra 2.0 launched, but token drops over 80%
Two weeks after its crash, the Terra community approves the proposal “Proposal 1623” of Do Kwon in an attempt to breathe new life into the ecosystem. The original proposal consisting of a blockchain fork and the launch of a new Luna 2.0 token. The Terra community will finally have voted in favor of creating a new token with a Terra 2.0 chain that does not support the UST algorithmic stablecoin.
After receiving a shower of support from stock exchanges and other developers, Luna 2.0 disappointed as the price reportedly dropped almost 80% after launch. It went from almost $ 20 to $ 4 in less than 6 hours. At the time of writing, however, Luna’s price has increased by 17.87% to $ 5.87.
To learn more, read our article: Exchanges support the launch of Luna 2.0
Top and flop: Bitcoin Gold rises to the top of the top 100 crypto
Cryptocurrencies continue to feel the effects of the bear market, even though they jumped a few percentage points over the weekend. But in cumulative performance, Bitcoin Gold (BTG), the Bitcoin fork is the one that manages to show the best growth rate among the 100 best cryptocurrencies. The crypto exploited a post by the famous author of the book ” Rich father, poor father », Robert Kiyosaki. Just after Bitcoin Gold, there is TRON, which continues to rise thanks to its algorithmic stablecoin.
Here are the week’s peaks and flops
|Crypto tower||Current course||Gain of 7 days|
|Bitcoin Gold (BTG)||$ 23.33||19.18%|
|TRON (TRX)||$ 0.0833||7.95%|
|Aave (Aave)||$ 99.46||6.86%|
|Crypto tower||Current course||Loss of 7 days|
|Composite (COMP)||$ 58.68||-17.29%|
|Avalanche (AVAX)||$ 26.88||-14.16%|
|Axie Infinity (AXS)||$ 18.95||-16,50%|
While the stock market recovered from the rather reassuring figures from the Ministry of Commerce, cryptocurrencies developed in the opposite direction with, however, a small catch-up over the weekend. But several observers began to talk about an end to the correlation between the two asset classes. In our article on this topic, we talked about the importance of the “time” variable to see this decorrelation of Bitcoin to Wall Street stock market indices. Next week will then be a “test” period to confirm or deny the beginning of the end of the correlation between BTC and US stock market indices.
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