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Crypto SWOT: India's Central bank starts a pilot program of its digital currency

Commentaries & Views

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Loopring, rising 45.35%.

  • India's central bank started a pilot program of its digital currency on Tuesday, allowing select banks to use it for settling secondary-market transactions in government securities. Banks traded 2.75 billion rupees of bonds on the first day using the new form of currency. The e-rupee will be tested for retail use within a month in some locations, the Central Bank of India said according to an article published by Bloomberg.

  • Supporters of the Cosmos blockchain are betting a revamp of the popular crypto protocol will boost the value of its native token amid the current digital-asset bear market. Similar to the newly upgraded Ethereum Blockchain, Cosmos uses proof-of-stake (PoS) mechanism to verify transactions, meaning that users, or so-called validators, can put their Atom tokens to secure the network.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Aptos, down 11.92%.

  • A group of Core Scientific convertible bondholders has tapped Moelis & Co. to facilitate debt talks with struggling Bitcoin miner according to people with knowledge of the situation. Core Scientific has said it wouldn't make payment due in late October and early November tied to some of its debts. Those creditors could accelerate payment, sue the company for nonpayment or take other actions which could then lead to default under a pair of convertible notes due 2025.  

  • Robinhood Markets reported Wednesday that its crypto transaction revenue fell to $51 million during the third quarter, a 12% decline compared to the previous quarter and below analysts' estimates of $56.1 million. Other companies have also suffered amid a sharp drop in crypto prices, as the industry continues to be battered by the collapse of major blockchain platforms, scams and layoffs writes Bloomberg.

Opportunities

  • Hong Kong laid out a master plan to become a top Asian crypto hub offering legalized retail trading and digital-asset exchange-traded funds part of a wider push to restore the city's credential as a financial center. A consultation will begin on how the retail segment "may be given a suitable degree of access' to tokens. The city invited global crypto exchanges to explore opportunities, adding that work toward a new virtual-asset licensing regime is intensifying.  

  • A parabolic surge in meme cryptocurrency Dogecoin over the past week is encouraging speculation that other so-called alt-coins could also catch a speculative tailwind. The coin represented by an image of a Shiba Inu climbed to almost $0.15 from roughly $0.06 over the period, an advance that in percentage terms far outstrips the performance of top token Bitcoin.

  • The crypto bulls are back with Bitcoin edging toward the higher end of its monthslong trading range. Smaller tokens such as Polygon, Litecoin and Solana also outperformed the digital-asset benchmark.  

Threats

  • Bitcoin miner Argo Blockchain warned that it could be forced to shut down after a $27 million share sale appeared to have collapsed, sending the stock plummeting the most since its 2018 IPO. The stock dropped as much as 73% in London on Monday and has fallen about 90% this year as a slump in cryptocurrency prices roiled the mining industry.

  • The IRS criminal Investigation unit seized about $7 billion in cryptocurrency in 2022, double the previous year's total, an agency official said Tuesday. The investigations unit identified $32 billion in fraud this year, three times the amount from the previous year, said Jim Lee the IRS chief of Criminal investigation, writes Bloomberg.  

  • Hackers inflicted more pain on the cryptocurrency sector by looting $28 million from derivatives exchange Deribit. A wallet connected to the internet was compromised Tuesday, Deribit said on Twitter. Deribit, one of the largest derivatives exchanges in crypto, is the latest victim in an ever-lengthening list of security incidents at crypto projects and protocols, writes Bloomberg.
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