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Brazil’s Federal Revenue now requires citizens to pay taxes on like-kind crypto trades

The Federal Revenue of Brazil wants investors to pay taxes on cryptocurrency trading profits, even if there is no exchange for Brazil’s national currency.

Brazil’s Federal Reserve (RFB) has declared that Brazilian investors in the crypto-asset market must pay income tax on transactions that involve the like-kind exchange of cryptocurrencies; for example, Bitcoin (BTC) for Ethereum (ETH).

The RFB’s declaration was published in the Diário Oficial da União and was the result of a consultation made by a citizen of the country to the regulator. At the end of last year, the group issued an opinion in which it claimed that trading between cryptocurrency pairs is taxable even if there is no conversion to the real (Brazil’s national currency).

Although it does not specify what can be understood as “profit,” since in the exchange of one crypto asset for another there is no capital gain in fiat currency, it points out that there is, even so, the obligation to pay taxes on the eventual profit:

“The capital gain calculated on the sale of cryptocurrencies, when one is directly used in the acquisition of another, even if the acquisition cryptocurrency is not previously converted into reais or another fiat currency, is taxed by the individual’s income tax.”

However it should be noted that not all crypto investors need to declare their trades, as the regulator established that only investors who trade more than BRL 35,000 (roughly $7263.67) in cryptocurrencies should pay income tax.

“Capital gains earned on the sale of cryptocurrencies are exempt from income tax if the total value of the sales in a month, of all kinds of cryptoassets or virtual currencies, regardless of their name, is equal to or less than BRL 35,000, 00 (thirty-five thousand reais),” declared the RFB.

Federal deputy Kim Kataguiri (Podemos, or the National Labor Party) previously stated that he considers the Federal Revenue’s proposal to be illegal and asked the National Congress to decree the immediate suspension of the determination.

According to Kataguiri, the regulation on the calculation and payment of IRPF (Individual Income Tax) establishes that there will only be capital gain in exchanges when currency is involved (articles 134 and 136 of decrees 9580 and 2018) — which is not the case when trading like-kind crypto assets.

“In the exchange between crypto assets, there is no exchange involving currency; one crypto asset is exchanged for another, therefore, there is no equity increase,” declared Kataguiri.

The parliamentarian argued that, pursuant to article 110 of the Tax Code, the tax law cannot change the definition of private law institutes, and therefore the Federal Revenue does not have the power to change an understanding of the Tax Code.

“If the Union wants to tax the exchange of crypto-assets, legal innovation will be necessary and, even in this case, doubts may be raised about the constitutionality of the new law. What we have is a completely illegal interpretation made by the tax authorities, which clearly exceeds the power to regulate,” said Kataguiri.

Brazilian investors in the cryptocurrency market have been required to declare their crypto assets to the regulator since 2016. In 2019, the Federal Revenue Service of the country published Normative Instruction 1888, which determines that all national exchanges are required to report all cryptocurrency transactions between users to the regulator on a monthly basis.

Brazil’s Federal Revenue now requires citizens to pay taxes on like-kind crypto trades

The Federal Revenue of Brazil wants investors to pay taxes on cryptocurrency trading profits, even if there is no exchange for Brazil’s national currency.

Brazil’s Federal Reserve (RFB) has declared that Brazilian investors in the crypto-asset market must pay income tax on transactions that involve the like-kind exchange of cryptocurrencies; for example, Bitcoin (BTC) for Ethereum (ETH).

The RFB’s declaration was published in the Diário Oficial da União and was the result of a consultation made by a citizen of the country to the regulator. At the end of last year, the group issued an opinion in which it claimed that trading between cryptocurrency pairs is taxable even if there is no conversion to the real (Brazil’s national currency).

Although it does not specify what can be understood as “profit,” since in the exchange of one crypto asset for another there is no capital gain in fiat currency, it points out that there is, even so, the obligation to pay taxes on the eventual profit:

“The capital gain calculated on the sale of cryptocurrencies, when one is directly used in the acquisition of another, even if the acquisition cryptocurrency is not previously converted into reais or another fiat currency, is taxed by the individual’s income tax.”

However it should be noted that not all crypto investors need to declare their trades, as the regulator established that only investors who trade more than BRL 35,000 (roughly $7263.67) in cryptocurrencies should pay income tax.

“Capital gains earned on the sale of cryptocurrencies are exempt from income tax if the total value of the sales in a month, of all kinds of cryptoassets or virtual currencies, regardless of their name, is equal to or less than BRL 35,000, 00 (thirty-five thousand reais),” declared the RFB.

Federal deputy Kim Kataguiri (Podemos, or the National Labor Party) previously stated that he considers the Federal Revenue’s proposal to be illegal and asked the National Congress to decree the immediate suspension of the determination.

According to Kataguiri, the regulation on the calculation and payment of IRPF (Individual Income Tax) establishes that there will only be capital gain in exchanges when currency is involved (articles 134 and 136 of decrees 9580 and 2018) — which is not the case when trading like-kind crypto assets.

“In the exchange between crypto assets, there is no exchange involving currency; one crypto asset is exchanged for another, therefore, there is no equity increase,” declared Kataguiri.

The parliamentarian argued that, pursuant to article 110 of the Tax Code, the tax law cannot change the definition of private law institutes, and therefore the Federal Revenue does not have the power to change an understanding of the Tax Code.

“If the Union wants to tax the exchange of crypto-assets, legal innovation will be necessary and, even in this case, doubts may be raised about the constitutionality of the new law. What we have is a completely illegal interpretation made by the tax authorities, which clearly exceeds the power to regulate,” said Kataguiri.

Brazilian investors in the cryptocurrency market have been required to declare their crypto assets to the regulator since 2016. In 2019, the Federal Revenue Service of the country published Normative Instruction 1888, which determines that all national exchanges are required to report all cryptocurrency transactions between users to the regulator on a monthly basis.

Bitcoin price bottom signals flash as ‘fear and greed’ index matches March 2020 lows

On-chain indicators focusing on Bitcoin’s fair valuation and long-term holders’ sentiment also raise its prospects of bottoming out.

Bitcoin (BTC) has fallen by over 67% in 2022 and is now wobbling between a tight trading range defined by $28,000 as interim support and $30,500 as interim resistance.

The selloff appears in the wake of the Federal Reserve’s hawkish policy and the uncertainties in the crypto market led by Terra, an algorithmic stablecoin project whose native token LUNA fell by 99% earlier in the month.

Nonetheless, Bitcoin’s decline has somewhat cooled down as May draws to a close, leaving speculators with the hope that the token is in the process of bottoming out. 

Interestingly, Bitcoin’s Fear and Greed Index (F&G) also hints at the same scenario, notes Arcane Research in its latest weekly report.

Bitcoin F&G readings hit March 2020 lows

In detail, Bitcoin’s F&G reached the score 8 on May 17, indicating “extreme fear,” a first since March 2020.

“We see that buying fear has previously been a profitable strategy when measuring median and average returns of previous extreme fear periods,” Arcane wrote while citing the four instances wherein Bitcoin’s F&G had dropped to 8.

Bitcoin price median returns after reaching ‘extreme fear’ levels. Source: Arcane Research

Meanwhile, Ben Lilly, market researcher at Jarvis Labs, added that Bitcoin’s F&G index falling below ten signals the extreme possibility of the market bottoming out. He also noted that buying Bitcoin when its F&G score is below 10 is a good short-term strategy, saying:

“Turns out the strategy where you hold it for less time produced greater results. Meaning the strategy where you sold after F&G rose above 35 (yellow line in the chart [below]) produced better results than a reading of 50 (orange) and 80 (red).”

F&G returns for Bitcoin. Source: Ben Lilly’s Twitter Handle

On the flip side, Arcane highlighted that not all lower F&G scores have guaranteed bullish retracement moves in the past; some preceded continued selloffs. For instance, Bitcoin dropped nearly 11% on April 7, 2018, just sixty days after its F&G reached extreme fear levels.

More indicators signal bottom

More signs of a possible in the Bitcoin market come from several on-chain indicators.

For instance, Glassnode’s MVRZ Z-Score, which assesses when Bitcoin is undervalued/overvalued based on its “fair value,” is nearing the green zone that had preceded the crypto’s massive rebound rallies, as shown in the chart below. 

Bitcoin MVRV Z Score. Source: Glassnode

Simultaneously, the Long Term Output Profit Ratio (LTH-SOPR) indicator, which “evaluates the profit ratio of the whole market participants by comparing the value of outputs at the spent time to created time,” also suggests that Bitcoin is bottoming out. 

Specifically, when the LTH-SOPR value falls below 1, it highlights that some long-term Bitcoin holders could sell BTC at a loss. Conversely, a value above 1 shows that they could sell in profit.

As of May 25, the LTH-SOPR is 0.72, which could mean a potential forming bottom in the Bitcoin market because people will be reluctant to sell BTC at a loss.

Bitcoin LOTH:SOPR (SMA 7). Source: CryptoQuant

Selloff warnings remain for BTC

Nevertheless, the uplifting bottom indicators appear in contrast to a few other bearish signs elsewhere in the market and calls for as low as $15,500 and even below $10,000. 

For instance, Scott Minerd, chief investment officer at Guggenheim, argues that Bitcoin is on its way to $8,000, a 70% drop from today’s price. Minerd cites a hawkish Federal Reserve for the bearish outlook on Bitcoin, whose daily correlation with Nasdaq has been positive since February 2022.

BTC/USD and Nasdaq 100 correlation. Source: TradingView

From the technical perspective, Bitcoin could indeed fall further toward the $22,000-$26,000 range before bottoming out. 

Related: Bitcoin ‘death cross’ data hints 43% drop due in BTC price bear market

These levels coincide with two historical support levels—the 200-day exponential moving average (200-week EMA; the blue wave) and the 200-day simple moving average (200-week SMA; the orange wave)—that marked the end of BTC’s previous bearish cycles.

BTC/USD weekly price chart. Source: TradingView

“Towards the downside, the $25,000 bottom from May 12th is the closest support level below $29,000,” further noted Arcane’s researchers Vetle Lunde and Jalan Mellerud, adding that Bitcoin’s “next critical support level” could be around $20,000, the 2017 peak. Excerpts:

“Towards the upside, $30,500 has been a strong resistance area over the last week. If BTC breaks out of resistance, $35,000 is the next key resistance area.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin price bottom signals flash as Fear and Greed Index matches March 2020 lows

On-chain indicators focusing on Bitcoin’s fair valuation and long-term holders’ sentiment also raise its prospects of bottoming out.

Bitcoin (BTC) has fallen by over 67% in 2022 and is now wobbling between a tight trading range defined by $28,000 as interim support and $30,500 as interim resistance.

The selloff appears in the wake of the Federal Reserve’s hawkish policy and the uncertainties in the crypto market led by Terra (LUNA), an algorithmic stablecoin project whose native token LUNA fell by 99% earlier in the month.

Nonetheless, Bitcoin’s decline has somewhat cooled down as May draws to a close, leaving speculators with the hope that the token is in the process of bottoming out. 

Interestingly, Bitcoin’s Fear and Greed Index (F&G) also hints at the same scenario, notes Arcane Research in its latest weekly report.

Bitcoin F&G readings hit March 2020 lows

In detail, Bitcoin’s F&G reached the score of 8 on May 17, indicating “extreme fear,” a first since March 2020.

“We see that buying fear has previously been a profitable strategy when measuring median and average returns of previous extreme fear periods,” Arcane wrote while citing the four instances wherein Bitcoin’s F&G had dropped to 8.

Bitcoin price median returns after reaching ‘extreme fear’ levels. Source: Arcane Research

Meanwhile, Ben Lilly, market researcher at Jarvis Labs, added that Bitcoin’s F&G index falling below ten signals the extreme possibility of the market bottoming out. He also noted that buying Bitcoin when its F&G score is below 10 is a good short-term strategy, saying:

“Turns out the strategy where you hold it for less time produced greater results. Meaning the strategy where you sold after F&G rose above 35 (yellow line in the chart [below]) produced better results than a reading of 50 (orange) and 80 (red).”

F&G returns for Bitcoin. Source: Ben Lilly’s Twitter Handle

On the flip side, Arcane highlighted that not all lower F&G scores have guaranteed bullish retracement moves in the past; some preceded continued selloffs. For instance, Bitcoin dropped nearly 11% on April 7, 2018, just sixty days after its F&G reached extreme fear levels.

More indicators signal bottom

More signs of a possible in the Bitcoin market come from several on-chain indicators.

For instance, Glassnode’s MVRZ Z-Score, which assesses when Bitcoin is undervalued/overvalued based on its “fair value,” is nearing the green zone that had preceded the crypto’s massive rebound rallies, as shown in the chart below. 

Bitcoin MVRV Z Score. Source: Glassnode

Simultaneously, the Long Term Output Profit Ratio (LTH-SOPR) indicator, which “evaluates the profit ratio of the whole market participants by comparing the value of outputs at the spent time to created time,” also suggests that Bitcoin is bottoming out. 

Specifically, when the LTH-SOPR value falls below 1, it highlights that some long-term Bitcoin holders could sell BTC at a loss. Conversely, a value above 1 shows that they could sell in profit.

As of May 25, the LTH-SOPR is 0.72, which could mean a potential forming bottom in the Bitcoin market because people will be reluctant to sell BTC at a loss.

Bitcoin LOTH:SOPR (SMA 7). Source: CryptoQuant

Selloff warnings remain for BTC

Nevertheless, the uplifting bottom indicators appear in contrast to a few other bearish signs elsewhere in the market, such as calls for as low as $15,500 and even below $10,000. 

For instance, Scott Minerd, chief investment officer at Guggenheim, argues that Bitcoin is on its way to $8,000, a 70% drop from May 25’s price. Minerd cites a hawkish Federal Reserve for the bearish outlook on Bitcoin, whose daily correlation with Nasdaq has been positive since February 2022.

BTC/USD and Nasdaq 100 correlation. Source: TradingView

From the technical perspective, Bitcoin could indeed fall further toward the $22,000–$26,000 range before bottoming out. 

Related: Bitcoin ‘death cross’ data hints 43% drop due in BTC price bear market

These levels coincide with two historical support levels—the 200-day exponential moving average (200-week EMA; the blue wave) and the 200-day simple moving average (200-week SMA; the orange wave)—that marked the end of BTC’s previous bearish cycles.

BTC/USD weekly price chart. Source: TradingView

“Towards the downside, the $25,000 bottom from May 12th is the closest support level below $29,000,” further noted Arcane’s researchers Vetle Lunde and Jalan Mellerud, adding that Bitcoin’s “next critical support level” could be around $20,000, the 2017 peak. Excerpts:

“Towards the upside, $30,500 has been a strong resistance area over the last week. If BTC breaks out of resistance, $35,000 is the next key resistance area.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Monero enters ‘overbought’ danger zone after XMR price gains 75% in two weeks

XMR is also nearing a breakdown move led by the formation of rising wedge, a classic bearish reversal pattern.

Monero (XMR) price may witness a sharp pullback by June because its 75% rally in the last two weeks has left the gauge almost “overbought.”

Monero price RSI meets rising wedge

Downside risks have been mounting due to XMR’s relative strength index (RSI), which almost hit 70 this May 23, indicating that the market is considered overvalued. An oversold RSI could amount to a bout of declining moves, as a rule of technical analysis.

Additionally, Monero is also painting a bearish reversal pattern, dubbed the rising wedge. Rising wedges form when the price moves inside a range defined by two ascending, converging trendlines.

As they do, the volumes typically decline, underscoring a lack of conviction among traders about the upside price move.

Rising wedges typically resolve after the price breaks below their lower trendline, followed by an extended move downside to the level that traders locate after adding the maximum wedge’s height to the breakdown point. 

XMR/USD four-hour price chart featuring RSI and rising wedge setup. Source: TradingView

As a result of this technical rule, XMR risks falling toward $138.50 by June—down nearly 30% from May 23’s price—if the breakdown point comes to be around $180. A breakdown move that appears near the apex point around $200 would shift the wedge’s downside target to nearly $150.

A slightly bullish XMR setup

Concurrent with the rising wedge, XMR has also been forming an ascending channel pattern, confirmed by at least two reactive highs and lows across the past two weeks, as shown below.

XMR/USD four-hour price chart featuring ascending channel. Source: TradingView

XMR now trades in the middle of its ascending channel range, eyeing a close above $200, a historically significant support level, albeit acting as resistance. Meanwhile, the token holds its 200-4H exponential moving average (200-4H EMA; the blue wave) near $191 as its interim support.

Related: Indie Russian news firm raises $250K in crypto after sanctions cripple finances

If the price breaks above $200, it would invalidate the bearish reversal setup posed by the falling wedge pattern discussed above. XMR’s decisive jump would shift its interim upside target near $220, up about 15% from May 23’s price.

Conversely, failing to close above $200 would increase XMR’s risks of declining toward the $180–$175 range, marked as the “pullback target” in the chart above. The area coincides with the ascending channel’s lower trendline.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

OpenSea launches ‘Seaport’ ​​marketplace protocol allowing NFT bartering

“OpenSea does not control or operate the Seaport protocol — we will be just one, among many, building on top of this shared protocol,” said the platform.

Nonfungible token marketplace OpenSea has announced the launch of a Web3 marketplace protocol for “safely and efficiently buying and selling NFTs.”

In a Friday blog post, OpenSea said the marketplace protocol, dubbed Seaport, will give users the option to obtain NFTs by offering assets other than just payment tokens like Ether (ETH). According to the platform, a user “can agree to supply a number of ETH / ERC20 / ERC721 / ERC1155 items” in exchange for an NFT, implying bartering a combination of tokens as a method of payment.

In addition, SeaPort users can specify which criteria — e.g. certain traits on NFT artwork or pieces part of a collection — they want when making offers. The platform will also support tipping, as long as the amount does not exceed that of the original offer.

“OpenSea does not control or operate the Seaport protocol — we will be just one, among many, building on top of this shared protocol,” said the NFT marketplace. “As adoption grows and developers create new evolving use-cases, we are all responsible for keeping each other safe.”

Some on social media seemed to express confusion over concepts in the new marketplace protocol. Twitter user EffortCapital called for others to investigate how Seaport compared to 0x v4 NFT swaps, while user phuktep questioned how trading both NFTs and ETH for a single token would be declared on tax forms.

Related: 5 NFT marketplaces that could topple OpenSea in 2022

The launch marketplace protocol followed OpenSea announcing in April it had acquired NFT marketplace aggregator Gem, aiming to improve the experience of seasoned users. The platform said at the time that Gem would operate as a stand-alone product, with OpenSea planning to integrate Gem features including a collection floor price sweeping tool and rarity-based rankings.

OpenSea launches Seaport ​​marketplace protocol allowing NFT bartering

“OpenSea does not control or operate the Seaport protocol — we will be just one, among many, building on top of this shared protocol,” said the platform.

Nonfungible token (NFT) marketplace OpenSea has announced the launch of a Web3 marketplace protocol for “safely and efficiently buying and selling NFTs.”

In a Friday blog post, OpenSea said the marketplace protocol, dubbed Seaport, will give users the option to obtain NFTs by offering assets other than just payment tokens like Ether (ETH). According to the platform, a user “can agree to supply a number of ETH / ERC20 / ERC721 / ERC1155 items” in exchange for an NFT, implying bartering a combination of tokens as a method of payment.

In addition, Seaport users can specify which criteria such as certain traits on NFT artwork or pieces part of a collection they want when making offers. The platform will also support tipping, as long as the amount does not exceed that of the original offer.

“OpenSea does not control or operate the Seaport protocol — we will be just one, among many, building on top of this shared protocol,” said the NFT marketplace. “As adoption grows and developers create new evolving use-cases, we are all responsible for keeping each other safe.”

Some on social media seemed to express confusion over concepts in the new marketplace protocol. Twitter user EffortCapital called for others to investigate how Seaport compared to 0x v4 NFT swaps, while user phuktep questioned how trading both NFTs and ETH for a single token would be declared on tax forms.

Related: 5 NFT marketplaces that could topple OpenSea in 2022

The launch marketplace protocol followed OpenSea announcing in April it had acquired NFT marketplace aggregator Gem, aiming to improve the experience of seasoned users. The platform said, at the time, that Gem would operate as a stand-alone product, with OpenSea planning to integrate Gem features including a collection floor price sweeping tool and rarity-based rankings.

Ethereum preparing a ‘bear trap’ ahead of the Merge — ETH price to $4K next?

An ascending triangle setup promises major price rebound in the Ethereum price in 2022.

Ethereum’s native token, Ether (ETH), continues to face downside risks in a higher interest rate environment. But one analyst believes that the token’s next selloff move could turn into a bear trap as the market factors in the possible release of the Merge this coming August.

ETH to $4K?

Ether’s price could reach $4,000 by 2022’s end, according to a technical setup shared on May 20 by Wolf, an independent market analyst.

The analyst envisioned ETH moving inside a multi-month ascending triangle pattern, which comprises a horizontal trendline resistance and rising trendline support.

Notably, ETH’s latest retest of the structure’s lower trendline could initiate a big rebound toward its upper trendline, which sits around the $4,000-level, as shown below. 

ETH/USD three-day price chart featuring ascending triangle setups. Source: Wolf/TradingView

Wolf took his bullish cues from a similar triangle setup from 2016, whose formation preceded a major bull run from $1 to $27. Similarly, another ascending triangle occurrence in 2017 coincided with a bullish follow-up, wherein ETH/USD rose 270% to over $1,500.

The Merge vs. low liquidity “death spiral”

Wolf’s fractal-based analysis came as Preston Van Loon, one of the Ethereum core developers, confirmed that the blockchain project’s much-anticipated upgrade to a proof-of-stake consensus mechanism would occur sometime in August.

Wolf noted that Ethereum was setting up a “bear trap,” which would make sense prior to the upgrade, complimenting his technical setup, as discussed above.

The pending upgrade was one of the key catalysts behind Ether’s price rally in 2021, as many investors believed it would improve the long-standing scalability problem in the Ethereum blockchain while cutting transaction and gas costs. Nonetheless, Ethereum Foundation kept delaying the launch.

“Undoubtedly, this lack of progress has played a major role in Ethereum’s recent price decline,”  Bitfreedom Research, a tech-stock and crypto research entity, noted while predicting ETH’s price to decline toward $950–$1,900 by October 2022.

Related: Analysts note parallels with March 2020: Will this time be different?

The firm cited higher interest rates as the core reason behind its bearish outlook for Ethereum, noting:

“The crypto market moves extraordinarily fast, which means crypto companies need LOTS of cash to power rapid growth. With no cash available, this can lead Ethereum’s ERC20-token economy to move in a death spiral.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Aave price risks a 25% plunge as a classic bearish reversal pattern emerges

A handful of concerning factors, plus AAVE’s correlation with the Nasdaq, increases the possibility of the altcoin undergoing another massive sell-off.

Technical analysis suggests that a recent uptrend in the price of Aave (AAVE) is showing signs of exhaustion based on the early development of a classic bearish reversal pattern.

Is AAVE headed to $70?

Dubbed a “rising wedge,” the pattern surfaces when the price rises inside a range defined by two ascending, converging trendlines. As it happens, the trading volume declines, pointing to a lack of conviction among traders when additional buying is needed for continued upside momentum.

Therefore, falling wedges typically result in a bearish breakout where the price breaks below the pattern’s lower trendline and falls by as much as the maximum distance between the wedge’s upper and lower trendline.

AAVE has been painting a similar pattern amid its sharp upside move from nearly $61.50 on May 12 to over $93.50 on May 17. If a sustained breakdown pans out, AAVE will fall by at least $27, which is the wedge’s maximum height, as shown in the chart below.

AAVE/USD four-hour price chart featuring ‘rising wedge’ setup. Source: TradingView

This puts AAVE en route to around $70, down about 25% from the current price at $89.20.

Related: Bitcoin macro bottom ‘not in yet’ warns analyst as BTC price holds $30K

Bearish headwinds persist

The bearish setup for AAVE appears in the wake of the crypto market’s ongoing strong correlation with U.S. equity markets

The daily correlation coefficient between AAVE and the tech-heavy Nasdaq 100 stood at 0.91 as of May 17, underscoring that the two markets have been moving in a near-perfect tandem.

At the core of their synchronous trends is the Federal Reserve’s ultra-hawkish monetary policies, including the recent 0.5% hike in benchmark interest rates, against rising inflation.

AAVE/USD daily correlation coefficient with Nasdaq 100. Source: TradingView

Fear of continued sell-off remains as Wall Street veterans warn about a looming recession.

According to Lloyd Blankfein, the former CEO of Goldman Sachs, higher interest rates, coupled with supply chain issues, fresh lockdowns in China and the conflict in Ukraine could keep inflation high. The persistent combination of these factors is likely to make the Federal Reserve keep its hawkish policies and the knock-on effect is a reduction in U.S. economic growth.

Similarly, Michael J. Wilson, Morgan Stanley’s chief U.S. equity strategist and chief information officer reiterated the same catalysts while predicting a 15% decline in the benchmark S&P 500 index. As a result of its correlation with cryptocurrency, AAVE also risks similar downside moves heading further into 2022. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The Brazilian Stock Exchange will launch Bitcoin and Ethereum futures

Chief financial officer André Milanez said that the product will launch within the next si months.

B3, the Brazilian Stock Exchange, confirmed that within six months it intends to launch its first official product aimed at the cryptocurrency market — Bitcoin (BTC) futures trading. The group’s chief financial officer, André Milanez, made the announcement during a conference call on Monday.

Milanez did not provide many details on how the product will work. It is not yet known if B3 will form a partnership or if it will offer Bitcoin futures trading directly, but the timeline for launching this product was stated to be relatively short. “We plan to launch bitcoin futures in the next three to six months,” he said.

Currently, in Brazil, institutional and retail investors can trade 11 ETFs through B3 with exposure to cryptocurrencies, including CRPT11 from Empiricus with Vitreo; the NFTS11 of Investo; QBTC11, QETH11 and QDFI11 all from QR Assets and META11, HASH11, BITH11, ETHE11, DEFI11, WEB311 all from Hashdex. In addition, in Brazil, there are more than 25 investment funds approved by the Securities and Exchange Commission (CVM) that offer different types of exposure to the crypto-assets market.

In January Jochen Mielke de Lima, director of information technology at B3, had already said that the Brazilian stock exchange would launch several products with exposure to cryptocurrencies in 2022, including Bitcoin futures and Ethereum (ETH) futures

At the time, the executive highlighted that the Brazilian stock exchange had been looking closely at the cryptocurrency market from a technological point of view since 2016.

According to the statement, B3 only needed to settle the question on whether the negotiations would be carried out against the U.S. dollar or against the Brazilian real. Futures contracts need a reference index, so if the team chooses Brazil’s native currency, it will be necessary to compose a crypto-assets index in reais — something that does not exist now.

The B3 rep also said it is exploring ways to provide data inputs for the country’s central bank digital currency, or CBDC.

B3 and Cryptocurrencies

In addition to BTC and ETH futures, B3 also intends to offer services to national cryptocurrency exchanges and to be a kind of “centralizer” of custody and settlement operations, according to Jochen Mielke de Lima:

“We have around 30 national crypto exchanges, apart from the international ones that operate here. We could offer a service to facilitate and standardize their operations. I believe it has something to explore in providing custody services and in the settlement process.”

Mielke, also stated that the cryptocurrency market is very similar to the regulated stock market, as it involves issuing, trading, settlement and custody. He stated therefore that B3 could help solve common problems between exchanges.

“We are identifying points of friction that we can help resolve to face up, such as helping our customers provide the best access to their end customers,” he said.

In addition, B3 plans other products based on cryptocurrencies and blockchain to launch in 2022. Among them, there are studies on a platform for asset tokenization, cryptocurrency trading, cryptocurrency custody, among others.

“Trading and access to liquidity centers: this means mitigating the complexities of accessing a fragmented, global and 24×7 market; Digital Asset Custody: providing reliable custody (hence, purpose of blockchain transactions); Over-the-counter facilitation: thIn this way, it wants to provide more security and efficiency in the movement and DVP of digital assets; Capital efficiency gains: thus, it wants to mitigate the pre-funded nature of operations and Crypto as a service: make it easier for clients to explore the crypto market with low friction,” highlighted B3.

For 2022, B3 reps said they foresee the official launch of a reinsurance platform. This will work on the Corda blockchain R3, and is a partnership between the exchange and IRB Brazil.