Bitcoin recoups losses as Ethereum founder questions his own platform

In this weeks crypto update,eToro’s market analyst and crypto expertSimonPeters discusses Bitcoins rebound, bitcoin reserves, fee payments and crypto tax payments in Rio.

Bitcoin broke through a key resistance level last week and soared overnight on Sunday.

The worlds largest cryptoasset has been on the rebound in March, with the token beginning last week below $41,000 but now trading around $46,400 – a rise of more than 13%.

The token broke through a key resistance level last night, having traded around $44,000 for much of the week. It has now hit a three-month high and is now close to reversing all of its losses from 2022. With the price of BTC through $45,000, all eyes will be on what range it settles in this week.

Ether meanwhile saw a jump for itself. Having begun the week below $2,900 it traded up to around $3,100 on Sunday. But overnight it has soared too and is now trading just below $3,300.

The strong rebound for the majority of major cryptoassets is particularly encouraging at the moment in the face of rising interest rates and global geopolitical uncertainty – both of which have the tendency to send investors away from risk assets and toward safe havens.

Interest rates in particular can have the effect of draining markets of capital, so to see crypto performing strongly despite this is a testament to the innate strengths investors now see in the future case for crypto assets.

Luna Foundation buildsreserves

The Luna Foundation has accumulated fresh reserves of around 24,955 bitcoins – worth roughly US$1.1 billion.

The foundation, which is behind the stablecoin TerraUSD (UST) and its blockchain, is accumulating bitcoin in order to stabilise UST. Crypto community sleuths have followed a trail of bitcoin buying in recent days that end with wallets believed to be held by the foundation.

Terras founder Do Kwon has recently made some very pro-bitcoin comments in the media, and there is now speculation that such large transactions over time arebeginning to move the crypto market positively. It has previously bought around $2.2 billion-worth of bitcoin meaning the foundation is now a serious whale in the market.

What this says for other cryptos is tough to judge. Terra is ultimately a competitor to the likes of Ethereumand it has built up a significant DeFi ecosystem in a short space of time as a result. The Terra Foundations goal is to build a $10 billion bank of bitcoin, so the support this movement is providing to markets could continue for some time.

Vitalik Buterin admits Ethereum fees are a problem

The founder of the second biggest blockchain in the world has conceded high fees on the Ethereum platform are a major challenge.

Vitalik Buterinhas admitted the high fees create issues for usability, especially outside of pure financial transactions. He also accused his own blockchain network of social problems which prevent important technical changes from being made. To add to this, hes warned the network could be used by bad actors after personal gains.

Statements such as this are a concerning development from the founder of a major network like Ethereum. But ultimately, much of its function is now beyond Buterins control, and is managed how it was designed to be, decentralised.

Major updates are in the works to improve areas such as fees and staking. This could impact positively upon the price as fees come down, and the token becomes deflationary.

Rio ready for crypto tax payments

Brazilian city Rio de Janeiro says it will soon be able to accept cryptoassets as payment for taxes, starting with property tax payments. However, the city will be using crypto firms to convert those cryptos paid for tax purposes back into Brazilian reais.

Theres seemingly a serious amount of competition among cities around the world to be seen to be at the forefront of crypto adoption and acceptance. From Miami to Denver, down to Rio and elsewhere, more and more it is becoming a reality that people can pay one of their most fundamental bills, taxes, via crypto.

The potential rewards of this cannot be understated. One of the issues with crypto at the moment is its limited intractability between holders and one of their biggest creditors – the state. We pay taxes through a myriad of ways to our governments, so making crypto an acceptable form of payment method is huge. While Rio is just one city, this is just a step toward Brazil as a whole adopting – a massive nation with huge potential for crypto adoption.