This Week in Crypto

February 17, 2023

Welcome to this episode of “This Week in Crypto”, where we take a look at some major news that made headlines in the industry this week and decipher what it all means for our community and the wider crypto industry. Today, we are talking about the following topics:

Key Points

• BTC Short Squeeze Generates +8% Jump
• US PPI Indicates Lengthening Inflation
• US SEC Sues Do Kwon and Terraform Labs for Fraud
• MXController Rebrands to Flow

BTC Jumps +8%

One of the biggest, unexpected abnormalities in this week’s market was Bitcoin (BTC)’s positive price volatility of more than 8%, or as much as 10% depending on the prospective timeframe. Such a jump in price is rare, especially when the overall macroeconomic conditions are not particularly favorable. So what was the cause?

A potential answer may be found in technical indicators. The volatility appears to have been the result of a short squeeze, which liquidated more than $60 million USD worth of short positions within the 24-hour timeframe.

The jump in BTC price has also resulted in major cryptocurrencies such as Ethereum (ETH) going up in price by around 5%, followed by stocks of major Bitcoin-related companies to also skyrocket.

US PPI — Are We Looking at a Longer Inflation?

US PPI (Producer Price Index) is an index that measures the cost of goods from the producer’s perspective rather than the consumer’s perspective within the United States and often has a linear relationship with inflation. A high PPI would indicate that there is a likelihood of high inflation, which may lead to interest hikes. Statistics are in: US PPI has increased by 0.7% compared to last month. What does this mean?

This indicates that despite the US Federal Reserve’s continued increase in interest rates in order to combat inflation, there are still significant traces of inflation remaining within the American economy, and by extension, the world economy.

Hence, additional interest rate hikes are to be expected, which sets rather hostile grounds for investing in volatile assets such as cryptocurrency.

US SEC Sues Do Kwon and Terraform Labs

US Securities and Exchange Commission (US SEC) has announced that it is charging Do Kwon and his company, Terraform Labs, with securities fraud as it deems that Terraform Labs failed to disclose information properly and in a transparent manner to its investors. SEC also took issue with Do Kwon and his company over-hyping Anchor Protocol, which at its height paid a 20% APY interest rate on UST deposits. Moreover, the document released by SEC listed other potentially damaging claims such as Terraform Labs’ failure to disclose the risks involved in its stablecoin.

Do Kwon, who is believed to be in Serbia after fleeing his residence in Singapore, has not made a formal response at the moment. However, the future of Luna seems bleak despite the recent influx of new hope from holders.

MXController Rebrands to Flow

By popular vote, MXController has a new name: Flow by MXC. In a community round of votes held across all social media platforms, the MXC community has decided that out of the 4 options, Flow represented their vision the best. The new name has been passed onto the internal development team, and final design changes are in place.

With the launch of Flow, various IoT devices are able to register themselves on the MXC network and start using the connectivity and certification layers offered by thousands of MXC miners around the world. This results in increased network and token utilization, signaling the launch of the MXC Data Network.

We thank all those who have taken part in the vote, and look forward to unveiling Flow to the wider public soon.