Ethereum’s long-awaited Shapella update was a success. The EU approved the new MiCa regulation. In the United States, however, the confusion with the regulation of the crypto industry continues. Meme coins made headlines after a long hiatus. The unofficial Bitcoin club, Real Bedford FC, moved up the ladder in English football.
Ethereum’s Shapella update was successful
Ethereum’s Shapella update was the biggest talking point in early April. Shapella was activated just a couple of days after the previous news review. Now we can look at its effects on the Ethereum staking and the ETH token price.
The name Shapella is a combination of Shanghai and Capella updates. It was the first time that both the consensus and processing layers of Ethereum were updated at the same time. Technically, everything went well, and Shapella was activated in late April 12th European time.
Shapella, Ethereum's first major upgrade since The Merge, is now live https://t.co/zfXruJbSF9
— The Block (@TheBlock__) April 12, 2023
Shapella was a very important update, as it will release tokens locked up for Ethereum’s staking. As many of our readers surely know, Ethereum moved to the Proof Stake consensus in the fall of 2022 in connection with The Merge update.
Until now, the staked tokens have been locked, but Shapella opened the possibility for withdrawals. So, what has happened in two weeks? At the moment, the situation is as follows:
- Withdrawals: 1.66 million ETH
- Deposits: 1.08 million ETH
- Difference: -586K ETH
The amount of Ether staked has dropped from 18.1 million Ether to 17.5 million ETH after the Shapella update. This means a decrease of about 3.2 percent. In addition, there are still 613K Ether in the queue, but these are also offset by deposits.
It should be noted that a significant part of the repatriations has been dictated by necessity. About a quarter of all withdrawals are caused by the Kraken exchange alone. Earlier this spring, the SEC, which oversees the US securities market, forced Kraken to shut down its staking service.
Even after withdrawals, Kraken has more than 900,000 Ether staked, which will also be withdrawn over time. This will likely have no effect on Ether’s price, as nothing is forcing stakers to sell their ETH tokens. This has also been well seen with other repatriations.
As a result, we can say that Shapella was exactly the kind of non-event we expected. The price of Ethereum did not crash but actually increased by more than ten percent right after the update.
Shapella and The Merge were huge updates and very important for the future of Ethereum. They have removed many of the uncertainties surrounding Ethereum. This is likely to further increase interest in Ethereum and its staking.
The EU approved the MiCa regulation
Last week we received important news from the EU, which will affect every crypto investor in the continent in the coming years. The EU Parliament approved the MiCa (Markets in Crypto assets) regulation with 571 votes for and 38 against.
Last week’s vote was the seal of a multi-year process. The contents of the MiCa regulation had already been decided in the summer of 2022, but the translation of hundreds of pages of legal text into different languages took time.
MiCa is also a significant achievement globally. It is the most comprehensive set of regulations for cryptocurrencies in the world. It is very likely that many non-EU countries will follow suit and adopt the MiCa rules into their own legislation as well. For example, Norway and Great Britain.
Patrick Hansen, who follows EU regulation, tweeted this about the topic. The tweet also contains a link to Hansen’s comprehensive blog post.
Habemus MiCA! 🇪🇺🚀
After more than 2.5 years of consultation, heated debates, last-minute amendments, and very close votes in the committee, the EU Parliament's plenary today passed the new EU crypto framework with an impressive majority of 517 MEPs for and 38 votes against.… pic.twitter.com/iS6GCcElnp
— Patrick Hansen (@paddi_hansen) April 20, 2023
MiCa defines the rules, e.g. for cryptocurrency issuers. So far, NFT and DeFi have been left out of the frame. However, MiCa will develop in the coming years, so the NFT and DeFi sectors will definitely get regulated too.
The new regulation primarily affects cryptocurrency exchanges. MiCa sets the rules of the game for these companies, which are abbreviated CASP (Crypto Asset Provider). MiCa does not cause major issues for Scandinavian operators, as they largely meet the new requirements already within the framework of the current regulation.
In the future, the service provider can obtain the required licenses from one EU country and offer services throughout the EU. Until now, companies have applied for permits from regulators in each country.
In addition to MiCa, the TFR package was also approved, which means AML regulations for cryptocurrency transfers. The TFR specifies the sections that CASP must follow when monitoring crypto withdrawals and deposits. This affects every crypto investor.
At the moment, it seems that transfers over 1000 euros will be closely monitored. Most likely, CASPs are required to identify the recipient (or sender), but how does this happen in practice? There is no more detailed information about it yet. It might also depend on the service provider.
The EU’s new crypto regulation is generally seen as a positive step. It’s reasonable as a whole, and it could have been a lot worse. MiCa clarifies the rules of the game in the industry and, at least at this stage, does not set too many restrictions.
SEC boss Gary Gensler grilled by Congress
At the same time as new crypto regulation was approved in the EU, the confusion regarding regulation continues in the US. We have reported several times this year about attacks by the SEC against crypto industry players. Practically all of the largest and most important crypto companies in the US have received a court summons from the SEC. Attacks on the banking sector can be added to this.
SEC boss Gary Gensler has received a lot of criticism for a reason. Last week, he was in front of the US Congress to answer for his actions. Gensler was carefully grilled, but not much clarity was squeezed out of the man.
Many were amused (and enraged at the same time) especially by Genlser’s meandering on the question of whether Ethereum is a security or not. The SEC boss did not agree to give a clear answer once and for all. You can see what happened in the video below.
Gary Gensler getting grilled on whether he thinks ETH is a security or commodity
— sassal.eth 🦇🔊 (@sassal0x) April 18, 2023
The actions of the SEC have brought US crypto investors to the brink of rage. Chamath Palihapitiya, a well-known investor, and former crypto enthusiast, bluntly stated in a recent CNBC interview that “Crypto is dead in America”.
The companies in the industry are slowly starting to get fed up with the chase of regulators. Coinbase, the country’s leading crypto exchange, announced last week that it had received a license from Bermuda. The company’s CEO Brian Armstrong also visited Great Britain and commented: “Anything is on the table, including relocating or whatever is necessary. ”
The Gemini exchange, owned by the Winklevoss brothers, has also announced its intentions to launch an offshore exchange outside the United States.
Gemini and Coinbase are certainly also playing the media game, but there is also a genuine interest in moving to a more sensibly regulated jurisdiction. Almost everyone who follows the industry believes that the US is making a huge policy mistake by driving innovation, jobs, and tax revenue from the crypto sector out of the country.
In the 15th century, the Chinese state burned its own navy, which at that time was the most developed in the world. The United States has become the world’s leading country in the crypto sector. Now it is going to destroy its position the same way the Chinese did over 500 years ago. It is difficult to understand the reasoning behind such a decision.
Meme coins made headlines
Meme coins like Dogecoin and Shiba Inu were the main attraction of the 2021 crypto boom along with NFTs. Hundreds of different meme coins were created, which disappeared from the headlines during the long bear market of 2022.
However, you would be a fool to assume that memes just disappear. Memes are here to stay in the crypto world and have an incredibly strong appeal. Last week saw the first signs of new meme coins. Though, we can’t talk about a boom yet.
Many investors surely noticed the newcomer to the top 100 list: Baby Doge Coin. The coin in question was the hottest mover of the day several times. There are now even Baby Doge NFTs!
— Baby Doge NFT (@BabyDogeNFTs) April 21, 2023
The biggest headlines have been made by Pepe Coin, which was launched on the 17th of April. That is, just over a week ago. One lucky investor exchanged 0.125 ETH (about $250) for 5.9 trillion PEPE tokens. At the time of writing, this bag of Pepes is worth $1.4 million! You can check the balance yourself at this link.
In practice, this Pepe millionaire is not quite that wealthy. According to Decrypt, the sale of coins would last 46,200 years with the current trading volume. The lucky trader cannot practically dump his coins on the market without collapsing the price.
Pepe Coin is based on the popular Pepe The Frog meme, and according to its founder, it is “the most memeable memecoin in existence.” In addition to the PEPE token, a WOJAK token has also been created, which is based on the popular Wojak meme as the name suggests. A GENSLR token has also skyrocketed in the past week. This is a token that makes fun of the previously mentioned SEC boss, Gary Gensler.
We do not recommend investing in such coins. You are in great danger of losing your investment.
The unofficial Bitcoin team secured a promotion
The unofficial Bitcoin team Real Bedford FC secured promotion from England’s 10th-highest league two weeks ago. Bedford has an impressive record of 31 wins, 3 draws, and 3 losses with one round of the season remaining.
Real Bedford FC is called the unofficial Bitcoin team because the popular Bitcoin podcast host Peter McCormack bought the club in 2021. It was McCormack’s hometown team. He finalized the deal and took over as chairman of the club in the spring of 2022. The current season is Real Bedford FC’s first under McCormack’s command.
McCormack has stated that the club’s goal is a promotion to the Premier League. The first step has been taken, there are still eight more promotions to go!
The moment @realbedford were crowned champions.
Special scenes to commentate on, the start of something special from @PeterMcCormack and the club. pic.twitter.com/oJwXN86Svq
— Will Stace (@willstacesports) April 16, 2023
It’s not just a publicity stunt, as McCormack has brought Real Bedford not only visibility but also a lot of sponsors. The Gemini crypto exchange, owned by the Winklevoss brothers, is the club’s shirt sponsor. Of course, the jersey also has the Bitcoin logo.
Ledger, Casa, Compass Mining, and many other global crypto companies are also sponsoring the team. McCormack has also improved the club’s facilities. In addition, all matches are streamed. And of course, the game day publication is called The White Paper.
We hope to see a strong push for the promotion in the next season as well! You can follow the team’s skyward journey to the Premier League from e.g. the Twitter account @realbedford.