It was announced on Friday that Cardano (ADA) is targeting the mainnet launch of the Alonzo hard fork for September 12th. This upgrade will enable users to finally run smart contracts on the network, meaning DeFi, gaming,and NFT applications will be supported. In anticipation of the announcement, ADA breached the $2 level and hasn’t fallen below since. Even with the big news, cryptocurrency betting platform Polymarket is currently assigning only 82% odds that Cardano smart contracts will be supported by October 1st, moving up just 4% from the previous week. Skepticism aside, Cardano has moved into the top four cryptocurrencies by market cap and should be watched going forward, especially after having such a major 50% over the past week.
Ripple’s XRP was also a major mover last week gaining north of 50%. Going forward, investors should be aware that the road to $2 is still quite steep. There are resistance levels at $1.40, $1.65, and at $1.82. Technical measures including Bollinger Bands and the RSI also suggest that XRP is overbought. Traders should tread carefully as well due to the fact that several major crypto trading venues, including Binance and Huobi, received a total of 61 million XRP tokens (worth $77M) from private wallets within the past 24 hours, with the probable intention of liquidating said tokens. On the positive side, according to Santiment, “in a never seen before trend, the XRP Network was closing in on a higher daily github development rate than Bitcoin, which has rarely occurred.” In fact, development activity for XRP saw all-time highs over the weekend.
Infrastructure Bill Passage Update: The much maligned crypto tax and reporting provisions passed by the Senate last week still need to go through the House of Representatives. The House will return to session on August 23rd. House Speaker Nancy Pelosi is attempting to advance both the infrastructure bill and the $3.5 trillion spending package together, however, a number of moderate Democrats have said they would not support the spending package until the infrastructure bill gets approved, whereas a number of progressive lawmakers are saying the spending package must go first even though it likely won’t be ready until the fall. Until some compromise is agreed upon, it’s likely the infrastructure bill could languish for weeks if not months. A small number of House representatives from both parties have said the crypto language needs to be changed, but many Democrats are reluctant to change the bill in any way because doing so would return the bill to the Senate, where it could face additional challenges.
An unnamed Treasury official reportedly said that “the agency is looking to release new guidance that exempts crypto firms – including developers, miners, and wallet providers – from complying with the proposed Internal Revenue Service (IRS) reporting requirements in the infrastructure bill as long as they do not provide broker services.” The bill’s current language would include key players in the crypto space, such as software developers or validators and wallet providers, that do not fall within the scope of a traditional broker. The guidance “will involve focusing on the activities of crypto firms to determine whether or not they qualify as brokers under the tax code.” The clarifications are meant to reassure the crypto industry that the legislation won’t impact innovation and growth. No official confirmation by the Treasury has been given.
The "realized cap" of Bitcoin hit a new all-time high on Friday. Realized cap is an alternative measurement to a traditional market cap that assesses the value of a blockchain asset, based on the price at which each individual coin last moved. This means that more funds have been invested in bitcoin now than in April, when the price was in the $60K range, even in the face of negative sentiment, a strong sign for the bitcoin community.
Is Dogecoin back? DOGE gained 34% over the past week and even broke the $0.30 level. The meme coin undoubtedly benefits when there’s bullish momentum in the crypto market overall and Mark Cuban’s recent comments that Dogecoin is the “strongest cryptocurrency as a medium of exchange” surely helped push it higher. Not to mention the fact that Elon Musk tweeted his agreement. Another billionaire aggressively promoting the benefits of Dogecoin definitely adds to its story.
It has been reported that the Biden administration will pick acting Chairman Rostin Behnam to head the CFTC. Behnam was appointed as the CFTC’s acting chairman in January, but he’s yet to be nominated and confirmed by the Senate. In March, Behnam commented that the federal government should have a role in regulating the cryptocurrency market as it continues to see strong retail-investor interest. Behnam has in the past spoken favorably on the use of blockchain technology in financial markets. His stance towards the crypto market should be analyzed carefully, especially as the SEC and CFTC butt heads for primacy in cryptocurrency regulatory purview.
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