ALPEX Global Weekly Newsletter — February Week 2

This week, Russia is expected to recognize and regulate cryptocurrency as a form of currency by 2022. McDonald’s has registered a trademark for a restaurant in the metaverse that will deliver food to customers’ homes. I’m loving it. Check out this week’s newsletter for more information.

To begin- A future regime for the circulation of cryptocurrencies in Russia has been adopted by the government and the Bank of Russia. It is expected that before February 18 a draft law will be prepared on the circulation of digital currencies in the Russian Federation, which will recognise cryptocurrencies as a form of currency rather than a digital financial asset, reports the Russian newspaper Kommersant.

According to the report, the circulation of cryptocurrencies in the legal sector will only be possible upon complete identification employing the banking system or licensed intermediaries. A blanket ban on cryptocurrency was proposed by Russia’s central bank a few weeks ago. Proposed in January, the ban prohibits the trading of cryptocurrencies as well as the mining of cryptocurrencies. Reports indicate that the law will only allow Russians to own cryptocurrencies and not engage in any related activities.

In other news, MacDonald’s has filed several trademark applications for a virtual restaurant that will deliver food both online and in person. This fast-food chain joins a long list of other companies who have announced plans to capitalise on Web3, including the metaverse.

Several trademark applications covering both McDonald’s and McCafe were filed with the US Patent and Trademark Office on February 4.

Among the trademarks were for ‘virtual food and beverage products, including NFTs, and ‘operating a virtual restaurant online offering home delivery.’ It also trademarked entertainment services and events under the McDonald’s and McCafe brands, such as ‘online actual and digital concerts.’ In his tweets, trademark lawyer Josh Gerben described the idea of a McDonald’s restaurant in the metaverse that would sell both virtual and real-world food.

Last but not least, crypto exchange Binance will invest $200 million in U.S. media firm Forbes. Forbes, which is preparing to go public via a special purpose acquisition company (SPAC), announced Thursday that cryptocurrency exchange Binance would invest $200 million in the media company.

The investment announced by Binance, the world’s largest cryptocurrency exchange by trading volume, will replace half of the $400 million in private placement commitments already announced by Forbes and Magnum Opus Acquisition Limited. Magnum Opus and Forbes said in a statement that the deal is expected to close by the end of March.

Every day, ALPEX Global provides market wrap — following analyses are based on keeping an eye on the markets and what we anticipate.

Geopolitical tensions caused investors to steer away from risk assets and towards safe, low volatility ones, which ended a promising week for digital asset markets. Bitcoin (BTC), the oldest and most valuable asset in crypto, gained 1% over the last week. Ethereum (ETH) and Binance (BNB), the second and fourth largest crypto assets, were both down 4%.

In the wake of last night’s warning by American president Joe Biden, investors began to reallocate towards safe havens. Amid growing fears that Russia may invade Ukraine, Vice President Biden has asked all Americans to leave the country. Lester Holt of NBC News discussed that Biden believes, “We’re dealing with one of the largest armies in the world.” “This is a very different situation, and everything could get out of hand.”

Russia’s premier Vladimir Putin has been keeping his cards close to his chest the past week. Though he hasn’t ruled out diplomacy, he has also made it clear that Moscow will not back down easily, and has hinted that he is ready to wage an all-out war with the West over Ukraine. This type of war would have enormous economic consequences.

The price of BTC, which hovered around US$45,600 when Biden made his statement, has fallen to US$42,000 now. ETH’s price has dropped from around US$3,250 to US$2850 during the same period.

Global inflation concerns also increase as a result of geopolitical tensions, and a sharp increase in federal funds rates is inevitable. Due to the macro-environment, crypto and equity indices suffered last week, while ‘safe’ assets such as the US dollar and gold gained value.

For the majority of February 2022, crypto investors were able to find the conviction to buy back into markets despite numerous bearish macro signals. By the end of last week, however, the desire to allocate towards safe, secure investments was too strong.

Despite external macro tailwinds dragging BTC’s price back, its fundamentals continue to grow stronger. Bitcoin’s hashrate spiked upward by more than 30% on February 12th, reaching 248.11M TH/s.

• 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.

The price of Bitcoin is hovering around $40,000, with greater support pressure. In the past week, BTC prices have oscillated around $40,000. The price broke $45,000 at its highest point, but the upside is limited. At present, the U.S. CPI index for January is up 7.5 year-over-year, a record high, and with expectations of a Fed rate hike high, Bitcoin and the cryptocurrency market as a whole are under additional pressure.

Russia may view crypto-assets as currency analogs. As a result, the Russian government and the Central Bank are preparing a draft law on the circulation of digital currencies in the Russian Federation, where cryptocurrencies are considered monetary analogues, not digital financial assets (DFA). The only way they can circulate is if they have been fully identified by the banking system or licensed intermediaries. By implementing rules and controls for the circulation of cryptocurrencies, the financial system will be more stable and less vulnerable to threats, since a complete ban on operations related to the circulation of cryptocurrencies is impossible.

That concludes our weekly newsletter. Thank you for reading. We hope it was insightful and helpful. Stay tuned for more exciting news about crypto and blockchain next week.

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