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FED AND CHINA MOVES POUND BITCOIN AND ETHER. Investors continued to run away from cryptos in droves following a crackdown against crypto payments in China and emerging regulatory moves by the Biden administration in the U.S.
Some of the news might not have been quite what it seemed, but it affected buying and selling nonetheless. As far as news about China barring banks from handling Bitcoin trade, crypto news outlets pretty quickly pointed out that, though, it wasn't anything new.
Even mainstream NBC caught the drift, acknowledging:
“Cryptocurrencies could still be bought from China on Thursday and investment schemes promising juicy returns for mining them remained operational.”
The Biden administration’s announcement that it would seek to bring cryptos under tax regulations “similar to cash” with reporting requirements for businesses for transactions of $10,000 or more in value, also weighed on investors.
BINANCE “BUNNY PANCAKE” PROTOCOL LOSES $45 MILLION IN EXPLOIT. Bad news continued on Friday. A cyber-criminal manipulated loans involving a Binance smart chain defi lending protocol called “Bunny Pancake.” The exploiter was able to accrue minted BUNNY tokens and then quickly sell them off, effectively stealing $45 million.
The gory technical details were reported by The Block here. Suffice it to say, it makes The Sting seem like child’s play.
It doesn't matter that the exploit resulted from a flaw in the Bunny Pancake protocol logic and not a blockchain-level hack. The news will likely do nothing to improve trust in crypto technologies.
One thing is sure: monetary and finance scams aren’t limited to central banks or Wall Street, and defi app protocol bodies will need to pay much closer attention to ways in which their logic mechanisms are potentially open to manipulation. The Pancake Bunny protocol did say it is “working on a reimbursement plan” for holders affected by the crash in price of its token.
THE POTTER STRATEGY? MICROSTRATEGY BUYING UP BITCOIN AS OTHERS SELL. There’s a scene in the Christmas classic It’s A Wonderful Life where George Bailey tries to stop people rattled by a Depression-era bank run. He points out that while average folks in the town are selling their building and loan shares to Potter, the town’s resident fatcat:
“Don’t you see what’s happening here? Potter isn't selling. Potter's buying, and why? Because we're panicky and he's not. That's why. He's picking up some bargains.”
At least some corners appear to be taking a page out of the Potter playbook and making a bet that Bitcoin is going to be fine, despite the current steep selloffs.
Business Intelligence firm Microstrategy was already stockpiling Bitcoin, as reported by the Trends Journal. But they recently acquired another $10 million in the crypto asset.
They paid about $44 thousand per BTC, according to a Securities and Exchange Commission filing.
The Virginia company holds about 92,000 Bitcoins, currently valued at over $2 billion.
NEW PYMNTS REPORT SEES CRYPTOS GAINING IN PAYMENTS INDUSTRY. The payments industry news outlet pymts.com put out a new report detailing a strong consumer interest in utilizing cryptos more easily to pay for goods and services.
The paper, titled “Cryptocurrency Payments Study - How Consumers Want to Use it to Shop and Pay” noted that in 2020, cryptocurrency ownership soared 63 percent. Before the recent drain on cryptos, total valuation this year had exceeded $2 trillion for the first time (as of April).
According to the study:
“Consumers’ interest in buying and spending cryptocurrency continues to rise, propelled by the fear of missing out on both a potential investment opportunity and a way to use these currencies as an alternative to their own fiat currencies to pay for retail purchases.”
It also estimated that 30 million U.S. consumers currently own cryptocurrency, and some 24 million consumers are either former owners or nonowners plan on acquiring it in the future.
Several important factors that merchants should be aware of are driving interest in cryptos:
- Cryptocurrency holders are young, male, and millennial.
- Millennials are particularly interested in paying for retail products, streaming services, and financial services using cryptocurrency.
- Bitcoin is the most commonly-owned cryptocurrency, with 80 percent of current holders owning it.
The study wasn't entirely upbeat for cryptos. It found some barriers were impacting wider crypto adoption for payments. Ninety-two percent of non-users said they don’t know enough about cryptocurrencies and how they work to feel comfortable using them. Others worry about their intrinsic value, and even whether using them is legal.
Still, the overall outlook was positive for crypto use. Forty-six million U.S. consumers say they are likely to make at least one purchase with cryptocurrency in the next year.
The study data and findings were based on PYMNTS surveys of over 8,000 cryptocurrency users and nonusers in the U.S.