As the crypto industry continues to evolve and mature, there is always plenty of news to keep up with. Last month was no exception, as the crypto market experienced some significant developments that have grabbed the attention of investors, enthusiasts, and industry experts alike. From price movements to regulatory updates, this round-up will cover all the latest happenings in the world of cryptocurrency within the last 28 days.
Whether you are a seasoned crypto investor or just starting to explore the world of digital assets, this post will provide you with valuable insights into the current state of the crypto market. So, let's dive in and explore the exciting developments that occurred in the crypto market in February 2023!
February Holds Steady
Despite some initial concerns about a potential market correction, after an unusually green January, with Bitcoin gaining nearly 40%, the cryptocurrency market managed to hold steady in February 2023.
At the start of the month, the crypto market appeared to be on a steady upward trajectory. Bitcoin, the leading cryptocurrency, was trading at around $23,000 after starting the year at around $16,000. It looked like the doomsday analysts would be right as crypto took a downturn in mid-February, in line with the SEC's regulatory crackdown on some crypto companies, leading to a slight drawdown that saw Bitcoin trade at $21,000.
Despite these concerns, the market managed to recover towards the end of the month, with Bitcoin's ROI for February 2023 remaining almost unchanged (+0.03%). While there was some volatility, particularly in the middle of the month, the overall trend remained slightly positive, as the fear and greed index largely swung within neutral and slight greed. Hence, it’s safe to say that investors are optimistic about the long-term prospects of the cryptocurrency market.
Regulatory Concerns Linger
The Security and Exchange Commission (SEC) has challenged some crypto firms for issuing stablecoins and not registering the products as securities. This long began before the UST de-pegging in 2022 as the SEC had subpoenaed Do Kwon, the CEO of Terraform Labs, in November 2021, months before the de-pegging in 2022.
Following UST’d de-pegging in 2022, the industry crackdown has been even bigger, and a few weeks ago, Kraken had a settlement with the SEC to stop offering staking services, as the regulatory body defined it as “offering unregistered securities.” In addition to closing down its staking service, Kraken paid the SEC a $30 million fine.
The SEC is also putting pressure on Paxos, the Issuer of Binance Dollar (BUSD), as the regulatory body alleges that the BUSD is an unregistered security. Binance CEO, Changpeng Zhao, has hinted that repeated regulatory issues with the US dollar may cause a shift to non-dollar stablecoins.
The SEC has a rich history of cracking down on cryptocurrencies, on the status of their securities, with a two-year-old lawsuit against XRP, claiming that XRP wasn’t registered as a security before being sold to investors. Hence, regulatory crackdowns aren’t new to the crypto space; however, continued pressure from regulatory bodies may halt the prospects of the already recovering crypto market.
ETH 2.0. Progresses: Shanghai Upgrade
Liquid staking is gaining traction in the cryptocurrency market, with Ethereum's upcoming Shanghai upgrade expected to further boost the popularity of these flexible staking protocols.
This increased interest in liquid staking derivatives has been reflected in the market, with the governance token of the decentralized autonomous organization behind liquid staking provider Lido, LDO, surging over 40% for the month. Rival Rocket Pool's native RPL token also rose by nearly 25%.
The shanghai upgrade will allow all ETH staked to become removable ahead of the Shanghai upgrade; however, liquid staking platforms like Lido and Rocketpool have enabled users access to their staked tokens while benefitting staking benefits. However, with the upcoming shanghai upgrade in march, users are set to return the collateralized loans to get access to their stakes and profits; hence, the governance tokens of these platforms are benefiting from this surge in transactions.
Conclusion
February 2023 proved to be a steady month for the crypto market, with Bitcoin's ROI remaining almost unchanged. Although regulatory concerns continue to linger, causing a slow boom of perhaps a new bullish run. However, investor sentiments and market prospects are largely positive, and upcoming major events, such as Ethereum’s upgrade, may further spell positive news for the crypto industry.
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