Crypto Flat as Powell Goes to Congress
Good morning Asia, this is how the markets are moving today.
Bitcoin and Ether Open Asia’s Business Day Flat. The world’s largest digital asset is down 0.2% at $22,412 while ether is stuck at $1,565.
Trading volume has decreased significantly, according to CoinGecko datawith 24-hour bitcoin volume at $16 billion on Monday, March 6, compared to $27 billion on Friday, March 3.
A report from CryptoQuant points to funding rates and claims the current market is bearish and bets on further declines.
“I don’t think we’re out of the woods yet, it’s clear that inflation is still rampant both here and here,” Hany Rashwan, CEO of the crypto investment products company 21.co, said on CoinDesk TV. “How much the market has priced it right now is hard to tell.”
All eyes are likely to be on Fed Chairman Jerome Powell as he heads to Congress to testify Tuesday morning before the Senate Banking Committee and Wednesday before the House Financial Services panel.
Powell is in a bind, as the economy appears resistant to the chilling effects of rate hikes.
January blowout job number, there The US added almost three times as many jobs as expected, observers indicated the Fed has some work to do to bring down inflation.
CME’s FedWatch tool puts a 69% chance of a 25 basis point increase and a 30% chance of a 50 basis point increase. Prediction market PolyMarket shows an 80% chance of a 25bps increase during the March meeting and a 23% chance of a 50bps increase after.
Filecoins China, Cost Woes
Filecoin has a market cap of just over $2.4 billion and has a storage capacity of more than 13.41 exabytes (1 exabyte equals 1 million terabytes). Of these 13.41 exabytes, 626 petabytes (1 petabyte is 1,000 terabytes) is currently used.
The $2.4 billion question is what is stored within those 626 petabytes?
On the one hand, it is easy to answer. When asked, the Filecoin Foundation is quick to provide a table of some high-profile customers:
A Protocol Labs spokesperson also emphasized that NFT marketplace OpenSea stores metadata for its NFTs on Filecoin. Important, yes, for the continuity of the NFT industry in the face of disasters but not exactly something that requires a lot of storage.
Filecoin’s centralization in China
There is no doubt that the Filecoin protocol is being used and the demand for storage is increasing.
On-chain data shows that the daily active Filecoin trades are trending upwards.
But perhaps the reason you don’t see a large number of true enterprise-class customers using Filecoin – and only scientific data warehouses and proof-of-concept initiatives – is because of Filecoin’s heavy exposure to China.
Bella Yang, a research director with IDC China’s enterprise research team, told CoinDesk in a note that Filecoin miners bought a large number of storage servers known as JBODs. These are straightforward arrays of hard drives designed to scale a company’s ability to quickly archive data.
“During this time, a large number of JBOD products were sold directly to mining companies, and the prices of high-capacity hard drives began to rise, even driving many stockouts when there was a shortage of 8 terabyte-plus hard drives,” Yang said. explains that the Filecoin-induced demand for hard drives came when COVID shut down factories in China.
Although bitcoin mining has largely left China, and ether mining has become redundant with the merger, Filecoin miners still have a large presence in the country.
“The fact that the main miners are linked to cloud storage companies highlights that Filecoin is far from concrete decentralized market storage as these companies dominate the storage market and monopolize mining,” the authors wrote.
Filecoin knows the market is skeptical
For Filecoin, the answer to its woes is Filecoin Plus (FIL+), which seeks to cut out quality storage providers from those polluting the protocol with junk data, as many miners in China did in the protocol’s early days.
Data from Token Terminal shows that revenue for the protocol has imploded over the past year despite more use of the protocol. In February, heavy incentives meant revenue was net negative at $43.4 million on revenue of $1.2 million.
“What I think will be the most important thing to watch there is whether demand for storage can still keep up when storing data is no longer free,” Messari corporate research analyst Sami Kassab previously told CoinDesk.
Silvergate Bank, which last week warned about its ability to continue in business, suspended its SEN platform that institutions used to move money to crypto exchanges. 21.co co-founder and CEO Hany Rashwan shared his crypto market reaction after bitcoin’s (BTC) price changed little over the weekend. And Puerto Rico has extended its 4% tax incentive to crypto assets and blockchain activities, including staking. Puerto Rico Blockchain Trade Association’s Keiko Yoshino joined the conversation.
#Mover #Asia #Filecoin #Struggles #China #Exposure #Subsidy #Costs
