Bitcoin.com monthly recap for February 2022

Bitcoin.com monthly recap for February 2022

Here's a look at the feature upgrades we made in February, as well as a rundown of the biggest news of the month.

Bitcoin.com Wallet upgrades

✅ ERC-20 markets widget

Install live market-data widgets on your home screen. Track your favorite ERC-20 tokens throughout the day.

✅ WalletConnect upgrades

WalletConnect now supports signing requests, including EIP-712 message types, from your favorite DApps.

Read more about WalletConnect and how you can use it in the Bitcoin.com Wallet to connect to your favorite DApps.

✅ Import shared wallets

Now you can import Bitcoin.com shared wallets by entering the wallet's secret phrase. Find more information on shared wallets, how to set them up, and what they're used for here.

✅ Inbox revamp

A fresh new look! Plus, opt in to pop-up notifications on price alerts and more. Get pop-ups in app and track notifications in your inbox.

✅ SegWit and Taproot address send support
Now you can send to Bech32 "Segregated Witness" and Taproot Bitcoin addresses. Both of these upgrades support the security and privacy of the Bitcoin network.

News

February marks month three of the crypto market downturn that began November 10, 2021. February saw the intensification of considerable macro headwinds, culminating in geopolitical conflict. What once could've been considered a respite before bulls charged higher is now much less likely. All markets, crypto and traditional alike, have experienced increased volatility. Unlike last month, where NFTs and metaverse plays outperformed the broader crypto markets, this month NFTs and the metaverse began to succumb too.

Here's a recap of some of the biggest stories in February:

Volatility increases

Crypto social media is more dominated by the mention of bears, bear images, and bear memes — and with good reason. The increased volatility lends credence to the claim that we are in a bear market. February opened with a rally from below 37k on February 3, with Bitcoin up nearly 5% and ETH up 8% in a day. From the February low, Bitcoin would rally more than 25% to a monthly high on February 10. Bitcoin, Ethereum and the crypto markets reacted to U.S. inflation data that would eventually mark the monthly high. By the final days of the month, Bitcoin and Ethereum had roundtripped the entire move up. On news of Russia's invasion of Ukraine, markets across the world sold off and bought back.

Russia invades Ukraine

On February 24 Russian president Vladimir Putin made a speech announcing a "special operation." This was followed by missile attacks and Russian ground forces invading Ukraine. Traditional and crypto markets responded with significant drawdowns. It also sparked discussion of the current geopolitical risk and its future effects on the crypto economy. For example, the Ukraine Central Bank limited cash withdrawals amid the assault, which might be the cause of Bitcoin, Tether, and Ethereum trading for premiums within Ukraine. The West leveled sanctions against Russia, but sanctions might not affect Russia's access to crypto. If Russia is able to use crypto to evade sanctions, this might cause regulatory risk for crypto and centralized exchanges specifically. Finally, donations via crypto poured into Ukraine to help the Ukrainian military fight Russia, and the Ukrainian government.

Flight to stablecoins continues

As would be expected in volatile times, stablecoins continue to increase market share, with USDC's market cap crossing $50 billion in the opening days of the month. While USDC continues to be the standout stablecoin in terms of rate of growth, by the end of the month, the entire stablecoin economy had grown close to 10% in 54 days. If there weren't enough stablecoins already, another company is eyeing the lucrative stablecoin market. Silvergate Capital purchased Diem operations to develop its own stablecoin. Finally, Luna Foundation guard raised $1 billion from a who's who of crypto investment firms to safeguard the UST dollar peg.

Canadian catastrophe

Canadian political turmoil became relevant to crypto. Gofundme shutdown fundraising efforts, which then turned to crypto. Fundraisers raised $542k in Bitcoin within three days, and completed its goal of 21.75133856 BTC worth $932K just one day later. On Feb 14, Prime Minister Justin Trudeau invoked the Emergencies Act. The scope of Canada's anti-money laundering and terrorist financing rules were broadened to cover crowdfunding platforms and "all forms of transactions, including digital assets such as cryptocurrencies." Canada's national police sent letters to cryptocurrency exchanges asking them to freeze at least 34 crypto addresses. Canada's actions sparked a flurry of activity within the crypto community, including highlighting the importance of non-custodial financial alternatives resistant to this kind of government overreach. While some Canadian lawmakers are trying to encourage crypto sector growth, Trudeau's actions have arguably done more to promote crypto and sway crypto skeptics.

Taxes and crypto

As crypto adoption continues to increase, more governments are abandoning strident anti-crypto rhetoric and adopting pragmatic policy positions. Perhaps the clearest indication of a government's softening to crypto is the adoption of a crypto specific tax regime. The US state of Colorado has decided to accept cryptocurrency for tax payments. India proposed a 30% tax on crypto income, while Thailand is making its tax rules more friendly to cryptocurrency investors. Many South American countries this month made moves towards tax reform. Colombian tax authorities tightened control over cryptocurrency usage. The Venezuelan Government approved a new tax that would affect transactions made in cryptocurrency transactions, collecting up to 20% over transactions made in currencies different from the national fiat currency or the Petro. The Argentine Tax Authority will be able to confiscate digital wallets to collect tax debts. Finally, the Puerto Rican treasury department is looking to tax NFT sales.

Governments love CBDCs

It seems most countries are now in the process of developing a Central Bank Digital Currency (CBDC). Countries are in varying stages of development, from deployed to planning. Let's start with the most developed and work backwards from there. China used the Winter Olympics to showcase their CDBC, with usage of 2 million digital yuan per day. China is also a prime example of banning crypto, but cultivating a CDBC. The IMF agrees. The Bank of Russia reported its first successful CDBC transfer between users. India announced the upcoming launch of their CDBC, the digital rupee, and Jamaica will release the digital Jamaican dollar in 2022. The US Federal Reserve Bank of Boston and MIT released their CDBC research and open-source code. Meanwhile, a slew of countries are in the research phase: Jordan, Zimbabwe, Kenya, and Zambia.

Big hacks

In crypto there seems to be a background level of hacks always happening. February was no different, but it also had two very prominent hacks. First, Solana bridge, Wormhole, was exploited for over $320 million in Ethereum. Within hours of the hack, Jump Crypto replaced the $320 million in Ethereum, ensuring the Solana ecosystem did not suffer a cascade of liquidations. In a foreshadow of what was about to happen, Bitcoin.com News reported that $3.6 billion in Bitcoin from the 2016 Bitfinex hack consolidated into a single address. Seven days after that was reported, the US seized 94,636 bitcoin from the 2016 Bitfinex hack, and arrested two people. Check out this in-depth look at the couple arrested. The FBI also announced that it was launching a "virtual asset exploitation unit."

Crypto wallets

Canadian Prime Minister Justin Trudeau's use of the Emergency Act highlighted the pivotal role crypto wallets play in the crypto industry. There was plenty of crypto wallet related news this month. The team behind Phantom, prominent Solana-based web3 wallet, raised $109 million in a Series B Fundraise, putting its post valuation at $1.2 billion. Ethereum web3 wallet Rainbow raised $18 million from Alexis Ohanian's Seven Seven Six. Crypto asset manager Wisdomtree revealed it's digital wallet, while Consensys acquired Mycrypto Ethereum Wallet.

NFTs cool off

It seems the broader crypto markets have finally caught up with the NFTs. By mid February, NFT sales had nosedived as volume dropped around 30%. The NFT market might be cooling off, but adoption of NFTs continues to increase. Famous U.S. music festival, Coachella, partnered with FTX US to issue Solana-based NFTs. Famous Japan-based game publisher, Konami, reiterated its intent to sell NFTs. Iconic music and cultural magazine, Rolling Stone, partnered with Coinbase for a collaborative NFT collection. Perhaps the most famous venture capital firm, Andreessen Horowitz, is reported to be seeking investment in Bored Ape Yacht Club. Finally, Superbowl attendees got commemorative NFT tickets.