What’s Up with Crypto in Indonesia?

Jakarta, Indonesia, August 18, 2022 /PRNewswire/ — Currently, the global cryptocurrency market is experiencing a complete decline. Yes people consider the rise in recent years, the total market capitalization of crypto assets has reached more than US$3 trillionbut currently, it has been observed that the overall capitalization value falls below US$1 trillion or around 901 million US dollars on Wednesday (6/29). This figure is the lowest achievement for the first time since february 2021. This phenomenon of falling market prices of crypto assets is known as bear market, a cycle that crypto markets globally are currently facing. Unlike other asset markets, the crypto asset market cycle moves much faster.

In the crypto industry, bear markets are common and only temporary. From this bear market phenomenon, according to Asih Karnengsih, President of the Indonesian Blockchain Association (ABI), “bear markets have become commonplace in the crypto space, it last happened in 2018, and we all know it. What happened after that, this push is a natural process of weeding out players who enter this industry just by valuation or numbers, while the real players focus more and more on building and developing.” In addition, there are several factors that have influenced the condition of the crypto asset market in recent months, namely:

  • Bitcoin (BTC) showed its worst price movement in over a decade in Q2 2022, with BTC price touching $17,600 in June 18.
  • The drop in value of Terra and its two assets (LUNA and UST) which were previously crypto assets with a market capitalization of 40 billion US dollars in April, it was in the top 10 according to Coin Market Cap. In July, its market capitalization value was only 800 million US dollars. The LUNA coin is down 99% and the UST stablecoin lost its peg against the US dollar (depeg).
  • The Solana crypto ecosystem, which was in trouble after the discovery of thousands of Solana-based wallets, has been hacked. According to Bloomberg, Elliptic, a blockchain forensics company, said that more than 7,900 of Solana’s wallets had been stolen and the loss was estimated at more than US$5.2 million. Meanwhile, PeckShield, as one of the security firms, said that due to the Solana-based wallet hack, the victim had suffered a loss of approximately 8 million US dollars.
  • Several crypto asset service providers that are in financial trouble due to the current bear market conditions have filed for bankruptcy, as happened in:
  1. Capital of the three arrows (3AC) could not meet its liquidity in June 29 due to a default on crypto loan payments of more than 650 million US dollars.
  2. Celsius Network announced the termination of all dispositions for the bankruptcy of illiquid assets. However, Celsius is currently proposing another solution to restructure the company by mining BTC on Monday (7/18).
  3. Vault it has also suspended withdrawals for its more than 800,000 customers.
  4. Babel Finance has temporarily suspended the withdrawal and redemption of crypto assets because, according to management, Babel Finance is facing high liquidity pressure.

The existence of financial problems that led to the issue of bankruptcy amid bearish market conditions caused several companies that deposited their digital assets with these companies to experience a direct impact. One of them is Bappebti/CoFTRA-registered would-be physical crypto asset trader/exchange, Zipmex. In its official statement, Zipmex explained that it had deposited assets with Babel Finance and Celsius since the start of ZipUp+ operations and had announced a temporary suspension of the process of withdrawing funds and crypto assets. Zipmex has made various efforts to overcome these issues, including fundraising, legal action, and restructuring, and now Zipmex has revived the withdrawal of funds and digital assets in the Trade Wallet. Also, from August 2, 2022Zipmex has also released Solana, Ripple, Cardano, and Ethereum crypto assets from Z Wallet to users’ Trade Wallet on a regular basis. Zipmex through its official communication channel also announced that the management has signed three Memoranda of Understanding (MoU) that are part of the restructuring plan by introducing new funds to the company through a group of investors led by the shareholders. of Zipmex to maintain and maintain the company’s operations. its integrity.

So what will happen to the future of the crypto market industry? Asih said: “Actually, even from a valuation point of view, 2 years ago the value of bitcoin was around $8000currently even though it is a bear market, the value of bitcoin reaches $20,000 As far as you can see from a long-term perspective, crypto is here to stay.” oscar darmawanas CEO of Indodax he also shared his opinion that “in a bear market time like this, it is the right time for investors to accumulate crypto portfolios.”

With the challenges facing the cryptocurrency industry, the Bappebti/CoFTRA regulation has been very accommodating in terms of consumer safety with the need for a cryptocurrency futures exchange. Malikulkusno Utomo, who is often referred to as Dimas, General Counsel of PINTU, was involved in giving his opinion on the formation of a crypto exchange, according to Dimas, “the establishment of a crypto futures exchange can be done immediately to encourage the advancement of the crypto industry. Indonesia, increase public confidence, provide information distribution and protect investors, PINTU believes that “it is more appropriate if the futures exchange is an exchange that has gone through a series of strict processes and meets the requirements according to the applicable regulations “. Oscar also added that he hopes the relevant government “will soon be able to launch the Digital Future Exchange (DFX) crypto futures exchange which will then serve to help oversee crypto transactions to make them more secure and protect crypto asset traders. optimistic that the establishment of this futures exchange can advance the crypto ecosystem in Indonesia to be even better.”

Deputy Commerce Minister Jerry Sambuaga said that the establishment of the Indonesian Crypto Exchange is almost complete, “the point is that it is close, hopefully as early as this year,” Jerry said on Thursday (7/28). Regarding the preparation of the DFX consortium, Alex Kim as CEO of Upbit APAC who is part of the consortium said “risk mitigation for institutions regulated and supervised by Bappebti/CoFTRA, when market conditions are bad, commercial actors and consumer funds can be protected by this ecosystem. DFX as a possible crypto exchange is ready to operate and contribute to the Indonesian crypto industry ecosystem, as mandated by government regulations, especially Bappebti/CoFTRA. That is why we really welcome and look forward to the completion of the DFX.”

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