Privacy coins pop amidst choppy crypto market
Despite repeated attempts to break higher, Bitcoin spent most of last week trading sideways below $40K.
The lack of clear trend reflects investor uncertainty: War in Ukraine, soaring commodity prices, and record inflation figures have roiled global markets, and crypto is no exception. Yet the long-term outlook has brightened over the last week. Biden’s long-awaited executive order was well-received by the crypto community, and South Korea has elected a crypto-friendly president. In addition, two of the world’s largest investment banks — State Street and Goldman Sachs — have announced crypto services.
Leading a resurgence in privacy coins, Zcash is one of the week’s top-performers with over 35% gains. Elsewhere, Dogecoin finished the week down 5% despite jumping 9% after Elon Musk said he won’t sell his holdings, and Polkadot has risen around 2% after it was identified as the most popular cryptoasset among hedge funds and venture capitalists.
This Week’s Highlights
– Zcash zooms 35% higher on privacy coin renaissance
– Biden’s executive order boosts Bitcoin to $42K
Zcash zooms 35% higher on privacy coin renaissance
As financial sanctions against Russia put crypto under the regulatory microscope, privacy coins have hit prime time.
This class of cryptoassets, which powers anonymous financial transactions by obscuring the origin and destination details, surged last week as Zcash made more than 35% gains.
Analysts speculate that the resurgence could be due to not only increased interest in privacy as the global financial system is weaponized against Russia, but also concerns that coming regulation will lead to greater levels of financial surveillance.
Biden’s executive order boosts Bitcoin to $42K
Last Tuesday brought a wave of volatility for crypto, with Bitcoin spiking to $42K as US President Joe Biden’s executive order on crypto was leaked.
The document emphasized that the US “must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate.”
Such fighting words were well-received by the crypto community, and even described as a “watershed moment” by Circle’s Jeremy Allaire. Nevertheless, Bitcoin later fell back to settle below $40K.
Week ahead
In the coming week, market sentiment is likely to remain cautious on regulatory developments in Europe, interest rate decisions in the US, and continued turmoil in Eastern Europe.
On Monday, the EU parliament is set to vote on a legislative package that could seek to limit the use of proof of work cryptoassets such as Bitcoin.
Then on Wednesday, Federal Reserve officials are expected to raise interest rates for the first time since 2018. Any deviation from the widely-anticipated quarter rate hike could catch investors unaware and lead to significant volatility.