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Monthly Wrap-Up — February

Spring is here, but is it for crypto? February wrap-up

While January presented the market with a lot of hope, February triggered a wave of uneasiness, with the prices of major assets showing high volatility. To this point, between Feb 8-14, the total market capitalization of the industry dipped from $1.125 trillion to $1 trillion, only to forge a remarkable comeback over the coming week.

This article will list some of the most noteworthy events from February.

CPI Data Induces More Investor Skepticism

Following the release of the latest Consumer Price Index (CPI) data report, which saw annual inflation levels drop to 6.4 percent, market participants remained cautious. Increasing reports of layoffs from within the tech industry have made investors extremely conservative when spending their hard-earned savings on digital currencies. Lastly, the aforementioned developments have come at a time when the US government has introduced further regulatory directives to govern the rapidly evolving crypto sector.

Bitcoin and Ethereum Surge Despite Shaky Macros

After trading horizontally for the latter half of January, both Bitcoin (BTC) and Ethereum (ETH) recently scaled up to relative highs of $25,000 and $1,720, respectively. To put this news into perspective, BTC and ETH’s value rose by over 30% between January and February.

Liquid Staking Continues to Garner Mainstream Momentum

Ethereum’s core dev team announced that they are closing on their project’s highly awaited Shanghai upgrade, with the update most likely to go live sometime in March. The announcements spurred interest in liquid staking derivatives, with LDO, the governance token of the decentralized autonomous organization behind liquid staking provider Lido surging by 33% over the last 30-day stretch. Another similar protocol called Rocket Pool saw the value of its native crypto asset ‘RPL’ spike by approximately 20%.

Interest in NFTs Rises Again Thanks to the Bitcoin Network

Since last month, many crypto investors have been gravitating toward using Ordinal non-fungible tokens (NFTs) — NFTs specifically designed to be compatible with the Bitcoin blockchain. A growing interest in this asset class has seen the value of Bitcoin layer- 2 protocol Stacks Network’s native token ‘STX’ surging by a whopping 200+%.

SBF’s indictment includes 12 criminal charges

The disgraced CEO of now-defunct cryptocurrency exchange FTX Sam Bankman-Fried (SBF) has been charged with four new criminal counts by a federal judge, bringing the total number of criminal charges against him to 12. These include eight conspiracy charges related to fraud as well as four charges of wire fraud and securities fraud.

Senator seeks to curtail Fed’s digital dollar oversight via a new bill

Pro-crypto US Congressman Tom Emmer recently tabled a new bill seeking to limit the power of the Federal Reserve when it comes to issuing a Dollar backed central bank digital currency (CBDC). The legislation, if approved, will prevent the central bank from issuing digital dollars directly to individuals.

Do Kwon slapped with a new lawsuit by the US SEC

Adding to his growing list of problems, the United States Securities and Exchange Commission (SEC) has now filed a lawsuit against the Terraform Labs founder. As per the regulator, Do Kwon orchestrated a “multi-billion dollar crypto asset securities fraud” while also selling an “inter-connected suite of crypto asset securities, many in unregistered transactions.”

Kraken settles with US regulator for a sum of $30M

Popular cryptocurrency exchange Kraken agreed with the SEC to stop the availability of its staking service for US residents with immediate effect. The $30 million fine primarily deals with the issues of disgorgement, prejudgment interest, and civil penalties. It is worth mentioning that following the decision, the regulator was publicly rebuked by its commissioner Hester Peirce, who claimed that the fine was “not an efficient or fair way of regulating” a nascent, maturing industry like crypto.

UK govt releases comprehensive crypto regulation framework paper

After much anticipation, the British government has published a consultation paper outlining their upcoming crypto regulation. This document covers a wide range of topics, such as algorithmic stablecoins, non-fungible tokens, and initial coin offerings. The ultimate goal of the framework is to ensure that digital assets are included within the ambit of the U.K.’s Financial Services and Markets Act 2000, thereby creating a level playing field between crypto and traditional finance.

Silvergate is in more hot water due to its dealings with FTX and Alameda

The United States Department of Justice’s fraud unit is conducting an investigation into Silvergate, a cryptocurrency bank, over its links with the bankrupt FTX exchange and its associates. The investigation is focused on the extent of the relationship between FTX and its sister hedge fund Alameda Research.

Zuckerberg Unwavering on Metaverse Plans despite mounting losses

Despite Meta’s Reality Labs incurring a significant operating loss of $13.7 billion in 2022 — reportedly its largest-ever annual loss — company CEO Mark Zuckerberg has confirmed that the company will remain steadfast in its long-term strategy for the metaverse.