Bitcoin edges toward $25k during slow economic day.
21 Feb 2023
Prices in China, enthusiasm, and euphoria might drive Bitcoin to the next support level.
Monday was a holiday in the U.S. in honor of Presidents’ Day, but crypto never sleeps.
Bitcoin is opening the day in Asia up 1.9% to $24,815, while ether is up 1% to $1,701.
China-themed layer 1s experienced quite a surge this week. Conflux is up 500% during the last week, while NEO is up 70%. Both are up around 40% in the last day.
Last week Conflux announced it is partnering with China Telecom to build blockchain-based SIM cards. It’s important to remember, however, that the Conflux Network within China is a separate, tokenless, government-approved blockchain used in conjunction with the country’s Blockchain Service Network.
Craig Eram, the senior market analyst at OANDA, says that solid economic data from a post-COVID, re-opened China is going to drive up stocks and crypto prices.
“The bullish case for the Chinese economy remains solid, and the likely release of stimulus over the next couple of months as it gathers pace could supercharge that,” he told CoinDesk in an email. “Domestic demand is going to be the cornerstone of the economic revival, and policymakers appear poised to unleash that to its full potential.”
While crypto and stocks might be on an upward trajectory, Eram doesn’t see gold going in the same direction.
“Gold traders do not share the eternal optimism that equity and crypto traders possess, and recent weeks have highlighted that perfectly,” he said. “The yellow metal fell into a corrective pattern and has struggled to get out since.”
This week might be a slow one with the U.S. holiday on Monday and not much scheduled for economic events in the U.S. and Europe, but it could be the start of a breakout for bitcoin, with price gains based on enthusiasm alone.
“Cryptos are seemingly existing in a world of their own, with bitcoin rising 2% again on Monday and eyeing the highs of the last week once more,” he said. “This could be a pivotal level for bitcoin and a break of it could generate plenty more enthusiasm. And we’ve all seen what happens when enthusiasm and euphoria exist in crypts.
Crypto regulation missing from Canada inquiry into emergencies act
The long-awaited report from the inquiry into the Canadian government’s use of the Emergencies Act to quell last year’s “Freedom Convoy” protest centred in Ottawa was released Friday afternoon.
For observers of Canadian politics, the inquiry, led by Justice Paul Rouleau was fascinating. But despite crypto acting as an important fundraising mechanism, and protesters using crypto to openly defy the country’s first-ever crypto-related sanctions, absent from Justice’s Rouleau were recommendations for strengthening controls on digital assets.
Revelations from the hearings
In the early weeks of the hearings, which occurred last November, the revelations came fast and furious: Canada’s national intelligence agency did not consider the protests a national security threat and warned that invoking the Emergencies Act would only radicalize protesters. Police were largely sympathetic to protesters and provided a “steady stream” of leaks to organizers. Despite early claims that Russia was backing the protest, intelligence officials revealed that it was largely Canadian funded.
Most of Rouleau’s recommendations address the inter-jurisdictional squabbling that defined the first few weeks of the protest.
Buried in the last pages of the report is Rouleau’s crypto-related recommendation – the 54th of 56.
“The federal government should continue with its study into cryptocurrencies. This study should be informed by the findings of this Commission,” Rouleau wrote. “Federal officials should seek to collaborate with counterparts at other levels of government to benefit from existing study in this area and to ensure that any jurisdictional issues may be addressed.”
Bitcoin ‘defied government crackdown’
Central to the financing of the protest was bitcoin.
Traditional crowdfunding platforms such as GoFundMe and Give Send Go had exposure to Canadian banking rails and were frozen after an Ontario Superior Court judge issued a Mareva injunction ordering the platforms and their banking partners to cease facilitating the Convoy’s transactions.
But the Convoy’s bitcoin remained outside of the Court’s control.
As CoinDesk reported in February last year, most of the bitcoin wallets were completely drained, according to on-chain data. Nearly all of the 20 BTC (about $788,000 U.S. at last year’s exchange rates) was moved to other, non-sanctioned wallets, with some landing at major centralized exchanges.
Among bitcoin’s true believers, this was an exemplification of the digital asset’s perfect use case: censorship-resistant money.
“Bitcoin proved itself to be a sovereign financial rail as hundreds of thousands of dollars in BTC reached protesters in spite of government efforts to block donations,” Bitcoin magazine wrote in June. “Its use as a system for getting hundreds of thousands of dollars in value directly into the hands of those who had been blacklisted by the Canadian government may be the most potent illustration of that power to date.”
But this opinion isn’t universally shared within the crypto industry.
Last February, Coin Desk columnist J.P. Kenning wrote that bitcoin was a bad way to fund the Ottawa protest, and that funding an illegal protest in any currency isn’t right despite the government’s worrying use of the Emergencies Act, which he wrote made him “very uncomfortable.”
“When protest becomes illegal, it’s the task of the police to step in and break it up. Any inability to do so on their part hurts one of the other key pillars of a democratic society: rule of law. If the law no longer functions, Canada will quickly descend into a state of perpetual chaos,” Kenning wrote.