Last week’s biggest crypto news with a special bonus deal inside.
Crypto Espresso – Top Crypto News Weekly!
May 12, 2023
Crypto Espresso – Top Crypto News Weekly!
May 12, 2023
Top Crypto News Stories Last Week
Last week in the crypto world we saw the crypto meme coin frenzy blow up and blow out, the EU present a new crypto tax plan, and Lightning Labs aim to help with congestion caused by Bitcoin’s Ordinals.
Crypto Meme Coin Frenzy Blows Up and Dies Down
The meme coin frenzy of the past few weeks finally seems to have blown out, with coins such as PEPE, BOB and BEN making headlines and outsize gains. The frenzy, led by whales and influencers, has made millionaires of early investors and has even seen individuals creating vanity coins in their own names, but the practice comes with huge risk.
According to Lim Yu Qian of CoinGecko, “Meme coins are a very risky type of crypto because they are based on Internet cultural references. The price movement depends on whether the meme coins can stay relevant by driving hype.”
Meme coins typically have no use other than to exist and be temporarily popular, with price surges occurring for one of a number of reasons and typically for a short period of time. For example, the LADYS token, associated with the Miladys NFT collection, rocketed over 12,000% when a Milady meme was tweeted out by Elon Musk.
As the meme coin frenzy cools and prices start collapsing as quickly as they rose, buyers have started complaining of price manipulation by whales, influencers, and pump-and-dump scheme orchestrators.
Such manias usually occur at the end of a bull run as buyers try and eek out as much capital as they can from a waning market, and with Bitcoin having potentially topped out after a 100% rally, this could signal the beginning of a period of stagnation or reversal.
EU Crypto Tax Plans Include Foreign Companies and NFTs
A new EU bill called the eighth directive on administrative cooperation (DAC8) announced last week will see crypto companies required to register with tax authorities, including organizations that sell non-fungible tokens (NFTs).
The European Commission had previously said it would exclude these tokens from the scope of the law, but the new bill suggests that it has reversed this decision.
The DAC8 would also require crypto companies to register with tax authorities even if they’re based outside the bloc. This means that exchanges and other platforms located in non-EU countries such as Switzerland or Liechtenstein will have to register with EU tax authorities if they offer services to EU customers.
In addition, the DAC8 requires companies to provide information about their clients’ holdings, including their name, address, and date of birth, while they must also report on any transactions over €1,000 ($1,200) in value. This isn’t all; the entities must also provide details of any transfers between hosted crypto wallets or exchanges.
The DAC8 is part of a wider effort by the European Union to crack down on tax avoidance by its citizens. The bloc has already introduced measures such as the Common Reporting Standard (CRS), which requires financial institutions to share data on customers’ accounts with each other and with tax authorities in other countries.
The new law is set to be approved next week by finance ministers at a meeting in Brussels, after which it will be sent for formal adoption by the European Parliament before becoming law across all 27 member states.
Lightning Labs Aims To Help With Congestion Caused by Bitcoin’s Ordinals
Crypto entities such as exchanges are looking to the Lightning Network to resolve congestion issues caused by the Ordinals project. The Ordinals Protocol has enabled users to make these inscriptions on the Bitcoin blockchain, which has led to an increase in average block size as well as an increase in transactions per second.
Bitcoin ordinals, also known as Satoshi inscriptions, are digital assets inscribed on the smallest denomination of a Bitcoin – the Satoshi. This new technology has caused a resurgence in Bitcoin development and is helping to push Bitcoin beyond $25K.
However, it has come at the cost of clogging up the Bitcoin blockchain, with some 400,000 transactions stuck in its queue, or ‘mempool’. As a result, exchange giant Binance had to halt Bitcoin withdrawals twice in the space of 24 hours before restarting them with higher withdrawal costs to ensure that transactions went through in time.
The solution appears to be the Lightning Network, which multiple exchanges have already implemented. The Lightning Network is a second-layer solution that allows users to send payments instantly without having to wait for confirmations from miners or other nodes on the network. It also helps reduce congestion on the main chain by allowing users to transact off-chain while still benefiting from all of its features and advantages.
Binance announced on Twitter that, having held off from implementing the Lightning Network thus far, it is finally working on doing so in order to reduce pressure on the main Bitcoin chain. For many, this has been a move it should have implemented years ago, but others have argued that the network wasn’t quite ready for such widespread adoption until now.
Trending stories:
- Bakkt has delisted several digital assets, including popular DeFi tokens, due to regulatory guidance and industry developments.
- Riot Platforms, formerly Riot Blockchain, is suing Bitcoin miner Rhodium Enterprises for more than $26 million in allegedly unpaid fees.
- Bittrex has filed for Chapter 11 bankruptcy, with the U.S. Treasury’s Office of Foreign Assets being one of its biggest creditors
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