Crypto SWOT: A crackdown by the Taliban has led to a collapse in cryptocurrency use in Afghanistan

Strengths

• Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Casper, rising 21.84%.

• In Mastercard’s latest step into crypto, the credit card behemoth is leaning on a recently acquired blockchain analytics company to do due diligence on digital assets merchants, reports Bloomberg. The company is leveraging data from CipherTrace, acquired in 2021, to launch a solution that ought to keep Mastercard compliant with crypto regulation, the article explains.

• The European Union (EU) is looking to exchange views on the development of crypto legislation with U.S. officials during next week’s IMF-World Bank annual meetings. The EU is moving ahead with key legislation to regulate the crypto sector with common rules across all 27 member states, reports Bloomberg, marking the first time globally that lawmakers have attempted to supervise the industry on such a scale.

Weaknesses

• Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Unus Sed Leo, down 11.19%.

• The growth in Texas crypto-mining capacity will be stunted as Russia’s war on Ukraine drives up global energy prices and Bitcoin prices languish. Mining capacity in the Lone Star State will increase by 2 gigawatts to 3.5 GW by the first quarter of 2024, rather than the former forecast of up to 5 GW, writes Bloomberg.

• Executives at bankrupt crypto lender Celsius withdrew more than $56 million of cryptocurrencies before suspending customer withdrawals from the platform. Celsius CEO Alex Mahinsky, co-founder Daniel Leon, and CTO Nuke Goldstein withdrew the money largely from custody accounts, denominated in Bitcoin, Ether, USD and Celsius’ own CEL token between May and June, according to documents filed for the Southern District of New York, Bloomberg writes.

Opportunities

• Modular Asset Management’s crypto hedge fund has been buying tokens like Algorand and Polkadot in a bet that coins with stronger sustainability characteristics will outperform after a $2 trillion shakeout in digital assets, writes Bloomberg. The Modular Blockchain Fund has also stepped-up purchases of Cosmos in recent weeks. CIO Daniel Liebau said he is seeking to gain edge in choppy markets by picking coins he believes will better withstand rising scrutiny of the ESG characteristics of crypto, the article continues.

• Cboe Global Markets is making some real-time market data freely available over blockchain, as the exchange operator makes its entry into decentralized finance. The Chicago-based firm is joining the Pyth Network, the Jump Trading Group-backed decentralized publisher of crypto and other market data, as a contributor. It will provide data on 10 equities starting in the fourth quarter, reports Bloomberg.

• Grayscale Investments, the largest crypto asset manager, is shifting strategy during the midst of the market downturn by setting up an entity seeking to buy Bitcoin mining equipment at distressed prices. The Grayscale Digital Infrastructure Opportunities LLC will purchase the computer rigs used in mining and hopes to profit by selling the Bitcoin earned in the process, writes Bloomberg.

Threats

• Kim Kardashian will pay $1.26 million to settle SEC allegations that she broke U.S. rules by touting a crypto token without disclosing she was paid for the promotion. The SEC said Kardashian was paid $250,000 to post on her Instagram account about EMAX tokens, a crypto asset offered by EthereumMax, writes Bloomberg.

• A crackdown by the Taliban has led to a collapse in cryptocurrency use in Afghanistan following a surge last year when the nation was cut off from global banking and international aid. The value of crypto received by the country has fallen to an average of less than $80,000 a month since November, down from a peak of more than $150 million in September last year just after the Taliban swept back to power, according to a report by blockchain research firm Chainalysis.

• Top Bitcoin mining firm Marathon Digital Holdings disclosed it has over $80 million of exposure in the bankrupt data center firm Compute North Holdings. The total includes investments comprised of $10 million in convertible preferred stock of Compute North and $21.3 million related to an unsecured senior promissory note with the firm as well as $50 million in operating deposits to Compute North entities for its hosting services, writes Bloomberg.