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Overview of the topics

• Crypto Highlights: The European Parliament has approved the world's first set of rules aimed at regulating the crypto industry.
• Economic Data: The move puts the EU ahead of the US and the UK, which are yet to bring in formal rules for the crypto space.
• Social Data: On Friday, the cryptocurrency market experienced a significant decline, with Bitcoin (BTC) leading the way.
• Onchain Data: A massive cryptocurrency holder has made a significant move in the market by transferring 279 BTC.
• Deep Dive: Société Générale has just announced the launch of its stablecoin, EUR CoinVertible, on the Ethereum blockchain.

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Crypto Highlights

The EU crypto regulation to the moon

The European Parliament has approved the world's first comprehensive set of rules aimed at regulating the cryptocurrency industry.

The legislation, which was called the Markets in Crypto Act or MiCA, seeks to reduce risks for consumers purchasing cryptocurrency assets by holding providers liable for the loss of investors' assets. MiCA imposes requirements on crypto platforms, token issuers, and traders on transparency, disclosure, authorization, and supervision of transactions.

Additionally, platforms must inform consumers of the risks associated with their operations, while sales of new tokens will also come under regulation. Stablecoins like Tether and Circle's USDC must maintain ample reserves to meet redemption requests in the event of mass withdrawals. MiCA even addresses environmental concerns related to crypto, with firms required to disclose their energy consumption and the impact of digital assets on the environment.

The European Securities and Markets Authority (ESMA) will be given powers to restrict cryptocurrency platforms that don’t protect investors properly, or threaten market integrity or financial stability. The law is expected to start applying next year.

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Economic Data

EU versus US: who is the crypto winner?

Apart from the law aimed at reducing anonymity in crypto transactions, the EU Parliament has also passed a separate regulation aimed at combating money laundering.

While the first law, known as MiCA, will require all crypto-asset issuers and service providers to be authorized by a national regulatory authority and comply with disclosure requirements, the Transfer of Funds regulation will apply the travel rule to crypto transactions. The rule will require financial firms to screen, record, and communicate information on both the sender and recipient. Transfers between exchanges and self-hosted wallets will need to be reported if the amount exceeds the 1,000 threshold.

The move puts the EU ahead of the US and the UK, which are yet to bring in formal rules for the crypto space. Furthermore, crypto companies will be able to use their licenses in one European country in order to passport their services across various member States.

In response to tough regulatory moves in the US, crypto companies have been looking abroad for expansion. The SEC, or Securities and Exchange Commission, issued Coinbase with a Wells notice last month, and the CEO Brian Armstrong has said the company is prepared for a "years-long" legal battle with the SEC.

Armstrong has also announced that if the US will fail to provide regulatory clarity, Coinbase may consider investing more abroad, including relocating from the US elsewhere.

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Social Data

The reaction of the cryptocurrency market

On Friday, the cryptocurrency market experienced a significant decline, with Bitcoin (BTC) leading the way. The price of Bitcoin plummeted in the late afternoon, and bears are now targeting support at $27,000.

The majority of the altcoin market has also experienced significant losses. In contrast, equities experienced a shaky start as stocks fell shortly after the opening bell. However, as the day progressed, they recovered and finished slightly in the green. At the close of markets, the S&P, Dow, and Nasdaq all finished up by a small margin.

However, Bitcoin bulls were able to defend the support at $28,000 during the morning session. Still, they were eventually overwhelmed by the bears in the afternoon, leading to the top crypto falling to a low of $27,211. As the market heads into the weekend, further losses could be expected.

According to Kitco senior technical analyst Jim Wyckoff bulls are fading fast after prices hit a contract high last Sunday. He stated that the price uptrend on the daily bar chart has stalled out and warned that bulls still have a slight overall near-term technical advantage but need to show fresh power soon to keep it.

Most analysts on crypto Twitter are in agreement with Wyckoff that the uptrend is at risk of being invalidated. Many have set their sights on entry points at lower support levels. Hence, market analyst van de Poppe has pointed to the region between $26,600 and $26,900 as a possible entry point for a long.

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Onchain Data

However, BTC whales are still moving…

A massive cryptocurrency holder has made a significant move in the market by transferring 279 BTC, worth $7.8 million, to three new wallets. The holder had originally received 1,128 BTC in October 2012 and May 2013.

The holder owns a total of $31.6 million in Bitcoin, and their recent transfer marks the latest in a series of old BTC stashes coming to life. According to research by the Bank for International Settlements, BTC whales, who have been hoarding large amounts of the cryptocurrency, tend to be the most successful investors.

The research suggests that those who hold the asset for years tend to do well, while retail investors who buy and sell in a short time frame often lose out. Recent data shows that Bitcoin investors are again focusing on long-term gains, with over 53% of coins ever minted remaining untouched for more than two years.

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Deep Dive

Société Générale enters the crypto world

Société Générale has just announced the launch of its stablecoin, EUR CoinVertible, on the Ethereum blockchain, making it the first stablecoin of its kind to be deployed on a public blockchain.

The bank's crypto division, SG Forge, will offer the stablecoin to institutional clients as a way to bridge the gap between traditional capital markets and digital assets, according to a statement on its website.

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News of the week

• Banks: Short-sellers sit on $1 billion loss on European banks in April. [Read more]
• Technology: Want to invest in the A.I. boom? Veteran tech fund manager names 4 stocks to own. [Read more]
• Markets: US stocks retreat and bonds rise as investors sour on the economic outlook. [Read more]
• Investments: Here’s how much money you’d have if you invested $1,000 in the S&P 500 a decade ago. [Read more]

Read the full version here.

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About

Investoom is a Munich-based Fintech Startup democratizing the access to quantitative investment insights that are used by big hedge funds, but are inaccessible to retail investors. We are a market intelligence company that provides AI-powered investment insights through social sentiment data, onchain data and financial data.

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