Bitcoin softens on China protest concerns

Written by Simon Peters, eToro's Market Analyst.

Bitcoin saw a steady uptick last week, rising from below $15,500 to trade above $16,500 at one point on Thursday.?

But the price has dropped to just above $16,000 this morning on the back of concerns around events in China, with anti-Covid lockdown protests apparently rising. Such concerns will likely impact other markets, not just crypto, such is the importance of China in the global economy.?

Ether meanwhile saw decent gains last week, rising from lows of below $1,075 to trade above $1,200 by the end of the week. However, like bitcoin, it has seen a sell-off take it to around $1,150 this morning.?

Dogecoin spikes on Musk plans

The perennial Elon Musk sentiment tracker - dogecoin - has seen its price spike briefly after the owner of Twitter published plans for the turnaround of the social media firm.?

Musk’s plans to turn Twitter into the “everything app” has tantalised investors in dogecoin, which at several junctures has been the focus of Musk’s musings for Twitter. Dogecoins price spiked from just under $0.09 to over $0.105 in a matter of hours - a spike of around 20%, after Musk published his slide deck.

Unfortunately the price has come back down somewhat to now trade around $0.093. The truth for dogecoin is that this is pure speculation on what Musk might do. The tech entrepreneur is one of the few people in the world with the power to move markets with his words, but the likelihood of him sending dogecoin skyrocketing again is pretty limited at the moment.?

Crypto fraud ratchets up in the UK

Data from the Action Fraud shows crypto fraud has surged around 32% in 2022. This is a worrying revelation, but there are some clear actions that the crypto sector can take to protect customers and the public more widely from such frauds.

Scams are not exclusive to crypto. Financial fraud in general is an enormous problem in the UK - one that goes largely unpoliced other than through awareness campaigns. UK Finance statistics show losses among the public from general scams to the tune of ￡609.8 million in the first half of 2022 alone.?

So what can we do to reduce crypto scams? Firstly users need to take any offer with a sceptical eye. Like any scam, something that offers too-good-to-be-true returns, or guarantees returns, is likely not trustworthy. But there is another step, which is well underway, that can protect users - regulation.?

As we’ve seen in recent weeks, the sector is now very much moving in the direction of more constructive regulatory frameworks. A regulatory seal of approval for crypto businesses will help to reassure consumers that the services they are using are legitimate.?

Bank of Japan to launch digital yen in 2023

The Bank of Japan (BoJ) is reportedly looking to issue an experimental version of digital yen in 2023. The BoJ is said to be working with three major Japanese banks to develop the central bank digital currency (CBDC), focusing specifically on issuance and withdrawal mechanisms.The experiment will run for two years, with the BoJ to decide if a wider project can be launched after 2026.?

CBDCs are an interesting area of crypto, in that they are almost the antithesis of why much of crypto was created. Managed and controlled by central banking authorities, CBDCs have come in for much opprobrium, with many projects faltering simply because the public isn’t that enthusiastic for digital central bank money.

But CBDCs have gained traction in international banking and cross-border supranational circles, with cross-border payments an increasingly relevant area for the technology. Institutions such as the Bank for International Settlements (BIS) have been taking a close look at how CBDCs could function between nations, with successful experiments already between countries such as China, Hong Kong, Thailand and UAE.

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