Monthly report of April
This monthly report reviews the most important cryptocurrency news in April and delves deeper into the legal status of cryptocurrencies, positive advances in Europe, and the increase of the Bitcoin Lightning Network use cases.
April in the cryptocurrency market
April was a negative month for the price development of cryptocurrencies. As in the stock market, the prices of cryptocurrencies were falling due to, among other things, the general uncertain economic situation. This is well illustrated, for example, by the 13 percent fall in the major US stock index, the Nasdaq Composite (measured in dollars), which was in line with the magnitude of the fall in the prices of Bitcoin and Ethereum. In turn, the prices of other cryptocurrencies offered by Northcrypto fell more than the two cryptocurrencies with the highest market cap. Litecoin survived with a drop of less than 20 percent, while the price of Aave dropped nearly 30 percent. On the other hand, the prices of Chainlink and Polygon ended up more than 30 percent lower at the end of the month than at the beginning of the month.
Legalizing the status of Bitcoin and cryptocurrencies
El Salvador, the first to make bitcoin the official currency of the country, gained a successor last month when the Central African Republic adopted Bitcoin as legal tender alongside the CFA franc. At the same time, the operating conditions of cryptocurrencies also improved overall. The Central African Republic is a Central African country of around 5 million inhabitants. Also, it is one of the poorest countries in the world in terms of gross domestic product. After El Salvador's announcement, many Bitcoin experts were confident that El Salvador would not remain the only one to make this move. Many of these individuals have also predicted that a "domino effect" is about to begin, with more and more countries adopting Bitcoin as legal tender at an accelerating pace. It will be interesting to see whether this prediction is true in the near future.
In addition to the Central African Republic, the Honduran special economic zone Prospera in Central America made Bitcoin and other cryptocurrencies legal tender in the region. Prospera, which has a population of just over 50,000, aims to act as a center for sustainable economic development and an attractive investment destination. There was also positive news from Central America in relation to Panama, which has a population of less than 4.4 million. In fact, the country is about to adopt a law that allows nine cryptocurrencies to be used as a payment method and for the payment of taxes. In addition, the law gives these cryptocurrencies a status that exempts them from capital tax. Among these cryptocurrencies, there are Bitcoin, Ethereum, and Litecoin which are offered by Northcrypto. There was a unanimous vote in favor of the law, which is currently awaiting the president's signature.
Positive advances for cryptocurrencies In Europe
In April, the British Government announced plans to turn the island nation into a global hub for cryptocurrency technology and investments. The UK is moving towards the goal, including a plan to identify stablecoins as a payment method. In addition, Rishi Sunak, the island nation's Minister for Economic Affairs, instructed the Royal Mint, the state-owned company responsible for creating the UK coins, to create an NFT by the summer. The UK's attitude towards cryptocurrencies is more positive, for example than that of the European Union. In March, the EU voted in favor of a bill negative for cryptocurrency operators and those using cryptocurrencies.
There was also positive news from Portugal, albeit slightly different news, when the Central Bank granted Bison Bank a cryptocurrency service provider license as the first bank. Under the license, Bison Digital Assets, the bank’s unit specializing in cryptocurrencies, will create a trading and custody service for cryptocurrencies. In Germany, too, steps were taken toward the first cryptocurrency license to be granted to the bank, as Commerzbank, one of Germany's largest banks, announced that it had applied to the German financial markets supervisory authority for a license to provide cryptocurrency services. The German bank applied for a license in the first quarter and, if the bank is licensed, it will be entitled to provide cryptocurrency trading and custody services. Commerzbank has more than 18 million retail customers and more than 70,000 institutional customers in more than 50 countries.
Bitcoin Lightning Network's use cases increase significantly
In addition to news related to different countries, April's most significant cryptocurrency news was probably related to the Bitcoin Lightning Network whose popularity and network capacity have grown rapidly, especially in the past year. With the collaborations published at the Bitcoin conference in Miami, USA, at the beginning of April, the Lightning Network’s use cases will increase considerably. Jack Mallers, CEO of Strike, a payments company specializing in the Lightning Network, announced the company's collaborations with NCR, the world's largest point-of-sale payment service provider, and Blackhawk Network, a payment company that offers alternative payment methods. These collaborations, for example, will soon make it possible to pay in millions of locations of major operators such as McDonald's and Walmart using the Lightning Network. In addition, Strike's partnership with Shopify, which specializes in e-commerce, allows about 1.7 million online retailers to accept payments using the Lightning Network.
Summary
The most significant cryptocurrency news in April related, among other things, to the legal status of cryptocurrencies, positive advances in Europe, and the growth of the Lightning Network use cases. Bitcoin and cryptocurrencies were first made legal tender in the world's less developed nations and regions from Central America and Africa. The reasons for this decision have been the desire to improve the economic situation and to bring an alternative to a weak own currency or another country's currency, such as the US dollar.
Fortunately, after the negative cryptocurrency regulatory news in March, there was positive news from Europe last month. The UK government's plan to become the world's cryptocurrency hub shows that the island nation's government recognizes the potential of cryptocurrencies and their role as an attraction factor for both labor and capital. In addition, news about banks' cryptocurrency licenses shows how the first traditional European banks are entering the cryptocurrency market following in the footsteps of several US banks.
Lightning Network, which has recently grown in popularity, gained even more momentum as Strike established significant collaborations with major players specializing in payment services and e-commerce. Soon, for example, in the US, it will be possible to utilize the virtually free and instant Lightning Network in almost all daily purchases. This will benefit merchants who accept payments through Lightning Network in particular, as they can save a few percent costs and the waiting days for final transactions which are things linked to the traditional credit card system.
Despite the fall in cryptocurrency prices due to general economic uncertainty, several positive cryptocurrency news items emerged over the past month. These once again reflect the future potential of cryptocurrencies and create a stronger belief in the future of cryptocurrencies.
Ville Viitaharju
Cryptocurrency specialist
Last updated: 10.02.2023 09:11
