Finimize - 💵 The UK turns its back on crypto

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Today's big stories

The Bank of England is clamping down on crypto
Ether is about to undergo a pretty radical shift, and it could be exactly what it needs to keep rallying – Read Now
European business activity grew by more than expected despite war in the region

Fun Police

What’s Going On Here?

Well, it was good while it lasted: meeting minutes released on Thursday showed that the Bank of England (BoE) is calling for tougher crypto regulation.

What Does This Mean?

The entire crypto market is big and growing fast: it’s now worth $1.7 trillion, having grown tenfold between the start of 2020 and the end of 2021. And while that’s still a fraction of the $469 trillion sloshing around the global financial system as a whole, it’s still bigger than the $1.2 trillion subprime mortgage market that triggered the global financial crisis.

The BoE has noticed. In a meeting last week, the central bank said there should be tougher regulation in the UK and globally. As for what that looks like, it’s talking about requiring financial firms that invest in cryptocurrencies to hold significantly more cash than they do now, just in case everything goes south.

Why Should I Care?

For markets: Bitcoin bucks.
The BoE’s not the only one concerned: the US government announced earlier this month that it’s looking into ways to better protect customers from the risks of trading crypto. But it’s far from turning its back on the digital space: it’s been thinking of ways to make the US a leader in the crypto world, potentially by launching a “digital dollar” backed by the real deal. That would expose a lot more Americans to crypto, which might explain why bitcoin has risen more than 10% since the news.

The bigger picture: VCs aren’t giving up.
Venture capital (VC) firms poured $32 billion into crypto startups last year, and it doesn’t look like the prospect of tighter regulation has put them off. Haun Ventures, for one, announced this week that it’s raised $1.5 billion to invest in firms specializing in the crypto space and web3. And there’s more where that came from: VC firms Electric Capital and Bain Capital Ventures raised $1 billion and $560 million for crypto-related investments earlier this month.

You might also like: How central bank digital currencies could disrupt the crypto industry.

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Analyst Take

An End To Ether Mining Could Be Exactly What Ether Needs

By Jonathan Hobbs, Analyst

What’s Going On Here?

Ever since a particularly nasty correction in January, the ether price has rallied by 40%.

And sure, that could have a lot to do with the upswing cryptocurrencies have found themselves in, especially as investors get used to the idea of higher interest rates.

But it could have more to do with its shift from a “proof-of-work” model – which involves miners and mining – to a “proof-of-stake” system.

This shift could end up being a huge deal. For one thing, it could drive down supply, with one company estimating that the issuance of new ether could drop by as much as 90%.

For another, it could push up demand, particularly among green-fingered institutional investors.

So that’s today’s Insight: why the end of mining could boost the value of ether, and whether you should buy in.

Read or listen to the Insight here

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