Miners’ search by “heat maps” in Russia and the 90% collapse of the NIRV stablecoin. Key events of the week

Bitcoin exchange rate has increased by 2,14% over the past seven days. The highest values were reached on July 28, when 1 BTC was trading at $24 199, the lowest values were registered on July 26 — $20 706 per one coin. As of July 29, 9:20 UTC, bitcoin exchange rate is $23 948 (according to Binance).

The value of the second most capitalized cryptocurrency, Ethereum, has gained 4,76% over the past seven days to $1722. The native token of the cryptocurrency exchange Binance (BNB) has increased by 3,51% and is trading at $281.

The total capitalization of the crypto market has barely changed over the week, it is $1,1 trillion with 39,85% dominance of bitcoin. Ethereum's share is 17,7%.

Criminal case for a bribe in BTC

The Investigative Committee of the Russian Federation initiated a criminal case against the head of the department of the Drug Control Department of the Ministry of Internal Affairs of the Republic of Mordovia for taking a bribe in bitcoins. The lieutenant colonel contacted a suspected drug trafficker via messenger and demanded a reward of 2 BTC (about 2,91 million rubles at the exchange rate of July 29) for data on the progress of the investigation against him. After the lieutenant colonel received part of the assets worth 50 000 rubles, he was detained. He faces up to 15 years in prison under the article on receiving a bribe in a special large amount.

NIRV stablecoin crash

Nirvana Finance, a DeFi protocol, was subjected to an exploit using a flash loan, which resulted in $3,5 million being withdrawn by attackers. In the aftermath, the project’s stablecoin, NIRV, lost parity against the US dollar, collapsing by more than 90%. The associated ANA token also fell from $8,6 to $1,28. As of July 29, NIRV is trading at $0,132, according to aggregator CoinGecko.

According to on-chain data, the attackers used a flash loan of $10 million in USDC stablecoins to issue tokens ANA for a similar amount. By manipulating the price oracle, the value of the coins was inflated, thanks to which hackers were again able to exchange 10 million ANA for 13,49 million USDC.

Global adoption of cryptocurrencies

Rio de Janeiro’s finance and planning secretary, Andrea Senko, said that the authorities will begin to encourage the adoption of bitcoin into the city’s financial system. To that end, the government will purchase BTC for the city’s treasury. Senko believes that the integration of the first cryptocurrency into the financial, social, and technological structure will make Rio de Janeiro the main cryptocurrency hub of Brazil.

In 2022, the University of Tokyo (Todai) will launch a range of training programs in the metaverse. The courses, based on engineering faculty and graduate school programs, will be available to high school students, undergraduates, and already employed people. The initiative will allow everyone to learn the basics of programming, artificial intelligence, and information technology. It was launched to address the lack of qualified personnel working on “digital transformation” and “advanced technologies.”

According to a report by the Boston Consulting Group (BCG), an international consulting firm, the cryptocurrency industry will have 1 billion users by 2030. Experts analyzed the market and concluded that the adoption of cryptocurrencies is still at a low level compared to traditional assets. According to the company, 25% of personal capital is invested in equities, while only 0,3% is invested in digital assets.

Deel, a recruitment platform, which also calculates payroll, conducted a survey of 100 000 contract workers worldwide. According to their data, residents of fragile economies are more likely to receive cryptocurrency payments. Cryptocurrencies now account for around 5% of the platform’s payments, compared to just 2% in the second half of 2021. Latin America accounts for 67% of digital asset withdrawals, while Europe, the Middle East and Africa (EMEA) economic regions account for 24%. Residents of the North American and Asia-Pacific regions account for just 7% and 2%, respectively.

The US Securities and Exchange Commission (SEC) launched an investigation into cryptocurrency exchange Coinbase, suspecting it of trading in unregistered securities. The regulator's attention intensified after the platform expanded the number of tokens available for trading, insiders said.

Russian crypto market news

The Ministry of Economic Development of Russia is developing rules to regulate non-fungible tokens (NFTs) planning to make appropriate changes to the law “On Digital Financial Assets” and the Civil Code by 2024. The ministry proposed to establish the legal status for NFTs and the rules of their issue within Russia, as well as measures to protect acquirers of tokens from re-issuance.

Experts at Intelion Data Systems, an importer of cryptocurrency mining equipment, named the most popular regions for mining in Russia in 2021. They are Moscow, the Moscow region, Karelia, Buryatia, as well as the Sverdlovsk, Murmansk and Irkutsk regions, Krasnoyarsk Territory and the Republic of Khakassia. At the same time, in the first four regions the volume of energy consumption exceeded the volume of its generation, while in the rest, according to experts, there are reserves of spare capacity.

The Yaroslavl branch of power grid operator Rosseti posted a tender on the government procurement website for the preparation of “heat maps” for identifying mining farms. The contractor must also provide reports on the total volume of incoming and outgoing traffic, the time and date of consumer's access to the mining websites. In addition, the contractor must have a license of the Federal Security Service to work with information constituting state secrets.

Russia’s Center for Strategic Research (CSR) proposed applying securities legislation to digital assets. The experts correlated cryptocurrencies with traditional financial instruments and concluded that many of them should be considered a special way of accounting for securities (using blockchain). Also, the CSR considers the option of developing a separate legal regime for NFTs. The fund does not agree with the proposal of the deputies of the New People party to recognize NFTs as objects of intellectual property.

Ethereum rate prediction by Vitalik Buterin

Ethereum co-founder Vitalik Buterin said that the cryptocurrency market has not yet factored into the price of ETH the upcoming upgrade “The Merge,” which will see the network change its consensus algorithm from Proof-of-Work (PoW) to Proof-of-Stake (PoS). The developer believes that the growth of the coin may not happen immediately, but “under the right set of conditions,” it can be expected in 6-8 months after the upgrade.

Buterin also stated that by the end of the roadmap for the network’s transition to the Proof-of-Stake (PoS) consensus algorithm will see its scalability increase from 25 to 100 000 transactions per second (TPS). In addition, ETH issuance will be steadily decreasing going forward.

On July 26, a record number of 1 066 898 active addresses were recorded on the Ethereum network. 961 196 wallets were recipients of the cryptocurrency, while 259 442 addresses sent digital assets.

New predictions for cryptocurrency rates

Guggenheim Partners Chief Investment Officer Scott Minerd said that the crypto industry has not yet been “flushed out” of troubled participants, so there is a possibility that the capitalization of the digital asset market will fall below the local low. In his view, the market will continue to deflate and face something similar to the dot-com crash. Minerd is confident that the quotes may rise in the short term and it will be a good opportunity for speculators to make money. However, in the long-term, the industry will face problems: regulatory pressure and the lack of good institutional support will have an impact.

The International Monetary Fund (IMF) warned that the crypto market may face further pressure from sellers and continue to fall. An IMF official said that if the US goes into recession, digital asset prices will fall even further. The fund considers the situation with stablecoins particularly difficult — some of them are secured not only by fiat money, but also by risky assets, which threatens the entire project ecosystem.

Glassnode analysts noted that after a month of consolidation in the range of $20 000 bitcoin rate began to grow, and in the short term, we can expect favorable dynamics. However, long-term indicators show that it may take longer to consolidate the trend. They also added that the $20 000 level attracted the most speculators due to the capitulation of some BTC holders and the transition of their coins to “new and more optimistic buyers.”

Cryptocurrency trader and investor Tone Vays expects a new low in the bitcoin rate as the asset failed to sustain its bullish momentum. Vays believes that BTC could lose more than 33% of its value after falling below the key $21 500 level. According to the trader, bitcoin could fall as low as $14 000.

Raoul Pal, a former executive of the investment bank Goldman Sachs and Real Vision TV CEO, believes that due to the growth of the global money supply (M2), the cryptocurrency market expects a trend reversal upward. The expert noted that the bitcoin rate is more affected by the dynamics of M2 than halving and the latter factor is not necessary if the impact of the macroeconomic indicator will be carried out.

The co-founder and former CEO of cryptocurrency exchange BitMEX Arthur Hayes released a new essay in which he assesses the current monetary policies of the European Union and the United States and also shares his observations about the future of the crypto market. In his view, “a bottom is usually tested again before the bull market begins.” He also noted that bitcoin’s rise from $18 000 to $24 000 is a liquidation of short positions by traders.

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