Bank of America warns of an impending “recession shock”. Global coffee giant Starbucks plans to enter the NFT market. OpenSea customers will soon be able to make payments via credit or debit cards without the use of cryptocurrency. All this and more are included in this week’s newsletter.
According to Bank of America strategists in a weekly research note, the macro-economic picture is deteriorating rapidly and may push the U.S. economy into recession as the Federal Reserve tightens monetary policy to control inflation. The inflation shock is worsening, the rate shock is just beginning, and the recession shock is on its way. Bank of America Chief Investment Strategist Michael Hartnett wrote in a note to clients. He added that in this scenario, cash, volatility, commodities, and cryptocurrencies could outperform bonds and stocks.
As it confronts inflation running at a four-decade high, the Federal Reserve indicated on Wednesday that it will likely start shrinking its $9 trillion balance sheet during its meeting in early May, and at a pace nearly twice as rapid as it did in its previous “quantitative tightening” exercise.
By the end of the year, Starbucks, an American multinational chain of coffeehouses, plans to enter the non-fungible token (NFT) business. In a blog post, Starbucks confirmed NFT plans, saying that it is among the company’s plans “in the works.” Billionaire businessman Howard Schultz, who has returned to Starbucks as interim CEO, revealed the news during an Open Forum on Monday.
The announcement comes as the company faces a variety of challenges, including dissatisfaction among some employees, higher prices due to rising inflation, and growing competition in its key China market.
Customers on OpenSea, one of the world’s most popular marketplaces for non-fungible tokens, will soon be able to pay for NFTs with their credit cards, debit cards, or Apple Pay without having any cryptocurrency. MoonPay, a fintech company that builds payment infrastructures in the crypto space, announced the news on Friday morning. It is also MoonPay that has facilitated the purchase of Bored Ape NFT by so many celebrities.
This move is likely intended to attract more mainstream buyers, similar to the strategy taken by NBA Top Shot when it was hot one year ago. In addition, the announcement comes at a busy time for OpenSea, which has made its fair share of crypto headlines in recent months.
The NFT marketplace also confirmed this week that it will begin listing Solana NFTs this month. The exact date is not yet known when OpenSea will begin listing Solana NFTs in April, but the NFT marketplace tweeted a short teaser video in which it described the announcement as one of the most well-kept secrets in Web3.
Finally, Georgia is preparing to regulate its crypto market. According to Koba Gvenetadze, Governor of the National Bank of Georgia, this regulation has already been drafted following the specifications established by international agencies.
While bitcoin and other cryptocurrencies were steady or even rose slightly on Friday, the digital asset space remains under similar pressure to the stock market as investors grapple with a shift in U.S. monetary policy.
The leading cryptocurrency, Bitcoin, is up less than 1% in the past 24 hours, holding at around $43,500, the level it has maintained since Thursday. After having been above $45,000 for the first time since January in a rally more than a week ago, it plunged below that level on Wednesday. On a technical basis, bitcoin rejected the 200-day moving average on March 28 — around $48250 at the time — and this is likely to limit its advance in the short term, according to Nicholas Cawley, a strategist at broker DailyFX.
“We have identified two major areas of support, $42,000 and $39,600,” Cawley noted. “These must remain in place to prevent further declines.” A trading range will likely be established with the 200-day moving average capping the upside.”
Bitcoin’s smaller peer, ether, was also slightly higher following a recent decline, rising less than 2% to $3,300. As we begin a new week, the token supporting Ethereum’s blockchain network was trading above $3,500.
Similar price movements were seen in smaller cryptos, or “altcoins,” with Solana’s rise being 2%, Cardano’s rising less than 1%, and UniSwap’s up 2%. Dogecoin and Shiba Inu, which were originally intended to be internet jokes and not significant blockchain projects, also rose slightly, as dogecoin ticked up almost 2% and Shiba Inu was almost 1% higher.
The recent weakness in digital assets has largely mirrored similar trends observed in the stock market. Even though Bitcoin and other digital assets are supposed to trade independently of mainstream financial markets, they have shown a correlation with other risky assets such as technology stocks.
*Disclaimer* Investment in cryptos carries various risks and is not suitable for all investors. Be sure to do your research thoroughly before making any decisions to invest.
According to the Financial Times, Meta is considering introducing virtual tokens and cryptocurrencies. As reported, the social media giant plans to use these digital assets to reward creators and provide lending and other financial services.
Meta’s plan is currently in its infancy. A move like this is taking place at a time when the company is focusing its services on the metaverse — a virtual platform where people can interact, work and play. Reuters reports that the tokens could be a new source of revenue for Meta and will give it control over transactions in its apps and services. These include Facebook, Instagram, WhatsApp, and Meta Quest, a virtual reality platform. Financial Times reported that Meta’s cryptocurrencies — internally referred to as “Zuck Bucks” — may not run on blockchain technology and are intended to be used in the metaverse. It was also reported that an in-app token controlled by Meta could be introduced. According to the report, these tokens may be used to reward creators or to pay favorite creators.
As a spokesperson for Meta told Reuters, the company is primarily focused on building for the metaverse, including financial services and non-fungible tokens (NFTs). Mark Zuckerberg, the CEO of the company, announced last month that NFTs would be introduced soon.
This concludes our weekly newsletter. We thank you for reading. We hope it was informative and helpful for you. We look forward to bringing you more news about crypto and blockchain next week.
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