Israel crypto industry pushes regulatory changes amid strong public support
The Israeli Crypto Blockchain & Web 3.0 Companies Forum last week launched a lobbying effort to push regulatory reforms that research from KPMG says may add 120 billion shekels ($38.36 billion) to the country’s economy by 2035 and create 70,000 new jobs.
At a Feb. 3 event in Tel Aviv, Forum leader Nir Hirshman-Rub said there is broad public support for legislation that would relax rules on stablecoins and tokenization, along with simplifying tax compliance requirements.
In the wake of the US-brokered ceasefire of the Gaza war, 2026 is seen as a “defining year” for the local digital assets industry, Hirshman-Rub said.
Impact of Oct. 7, 2023, attacks on Israel ‘s crypto ecosystem. Source: Chainanalysis
“The Israeli public is already there and the politicians need to act,” Hirshman-Rub told Cointelegraph on the sidelines of the Tel Aviv event. “More than 25% of the public already has had crypto dealings in the last five years and more than 20% currently hold digital assets,” he said, citing the KPMG research.
Steady growth as digital asset landscape evolves
An October Chainalysis report showed that the G-20 country’s crypto economy has showed steady growth, with inflows topping $713 billion last year. Those levels reflect a sharp increase in crypto volumes in the aftermath of the October 2023 Hamas attacks, which were sustained by strong retail activity, the report said.
Israeli companies, such as Fireblocks and Starkware, have established leadership positions in the global digital assets landscape and are among the Forum’s sponsors. According to NGO Startup Nation Central, more than 160 locally founded companies have attracted more than 5% of the $30 billion invested worldwide in the sector, employing more than 2,500, primarily in the greater Tel Aviv area.
Blockchain and digital assets startups have a large share of Israel’s Fintech sector. Source: Startup Nation Central
“The problem is that once a company here disclosed that it deals with digital assets, Israeli banks refuse to serve the company or require the company’s attorneys to make an impossible declaration that funds originating in a digital asset will not be deposited in an Israeli bank account,” said Hirshman-Rub. “It may not be outright refusal, but simply dragging their feet, adding demands in a never-ending due diligence process.”
Among other barriers that the group seeks to reform is an income tax ordinance that penalizes token distribution to employees as stock options. While traditional stock options provided to employees are taxed at a 25% rate, tokenized options will pay a 50% rate for similar value.
A national atrategy
In July, the country’s National Crypto Strategy Committee presented an interim report to the Israeli Knesset for parliamentary review. The committee outlined a strategic framework underpinned by five pillars, including establishing a unified regulator, creating token issuance rules, and banking integration.
In August, the Israel Tax Authority published a new Voluntary Disclosure Procedure that would offer taxpayers a path to disclose previously unreported income and assets, including digital assets, and obtain immunity from criminal proceedings. It was the agency’s third attempt to implement a disclosure regime.
However, last month, the agency said taxpayer participation has so far fallen short of expectations, but committed to seeing the initiative through to the end of August 2026.
“The Israeli banking system is not willing to accept cryptocurrency, and it is also very difficult to bring in funds as a result of selling cryptocurrency,” Tax Authority director Shay Aharonovich said, according to local media reports. “There is no doubt that this also affects the willingness to make voluntary disclosure, because in the end people do not just want to pay the tax, but to use the money."
Magazine: Here’s why crypto is moving to Dubai and Abu Dhabi
Bitcoin’s relief rally is facing selling near $72,000, but a positive sign is that the bulls have not ceded much ground to the bears.
Several major altcoins are facing selling at higher levels, indicating that the sentiment remains negative.
Bitcoin (BTC) has slipped closer to $69,500, indicating that the bears are selling on rallies. Several analysts believe that BTC’s bottom is still not in. Trader BitBull said in a post on X that BTC’s “real bottom will form below $50,000, where most of the ETF buyers will be underwater.”
A different view point was put forth by crypto sentiment platform Santiment. In a report on Saturday, the Santiment team said that data suggests the fall to $60,000 may have been a genuine bottom. However, for a sustained recovery, the market has to sustain above the key support level, and whales must continue their tentative accumulation.
Crypto market data daily view. Source: TradingView
Another positive for the bulls is that the BTC Sharpe ratio has fallen to -10, which historically indicates the final phases of bear markets, according to CryptoQuant analyst Darkfost. Although the readings do not confirm that the bear market is over, it indicates that the risk-to-reward profile may be reaching extreme levels.
Could BTC and the major altcoins start a strong relief rally, or will the downtrend resume? Let’s analyze the charts of the top 10 cryptocurrencies to find out.
S&P 500 Index price prediction
The S&P 500 Index (SPX) fell below the ascending channel pattern on Thursday, but the bulls could not sustain the lower levels.
The index came roaring back on Friday and surged above the moving averages. That shows the break below the channel may have been a bear trap. The bulls will attempt to push the price to the resistance line, where the bears are expected to step in.
The 20-day exponential moving average (6,917) is flattening out, and the relative strength index (RSI) is just above the midpoint, signaling a balance between supply and demand. A close above the resistance line might start the next leg of the uptrend toward 7,290.
US Dollar Index price prediction
The US Dollar Index (DXY) rose above the 20-day EMA (97.67) on Thursday, but the bulls could not sustain the higher levels.
The price plunged sharply below the 20-day EMA on Monday, signaling that the bears are attempting to take control. There is strong support in the 96.21 to 95.51 support zone, but if the bears prevail, the index might collapse to 91.88.
Instead, if the price turns up sharply from the current level or the support zone and rises above the moving averages, it signals that the index might extend its stay inside the 96.21 to 100.54 range for some more time.
Bitcoin price prediction
BTC’s recovery is stalling just below the breakdown level of $74,508, indicating that the bears are attempting to flip the level into resistance.
The downsloping 20-day EMA ($78,142) and the RSI in the negative territory indicate an advantage to sellers. If the price turns down from $74,508 or the 20-day EMA, the bears will again strive to pull the BTC/USDT pair toward $60,000.
This negative view will be invalidated in the near term if the Bitcoin price breaks above the 20-day EMA. That suggests solid buying at lower levels. The pair may then rally toward the 50-day SMA ($86,636).
Ether price prediction
Ether’s (ETH) relief rally is facing selling at the $2,111 level, but a positive sign is that the bulls have not ceded much ground to the bears.
If the price decisively closes above the $2,111 level, the ETH/USDT pair may climb to the 20-day EMA ($2,447). This is a crucial resistance to watch out for, as a break above it suggests that the bearish momentum has weakened. The Ether price may then rise to the 50-day SMA ($2,877).
Sellers will have to aggressively defend the $2,111 level to retain their advantage. If they do that, the $1,750 level may be at risk of breaking down. The pair may then slump to $1,537.
BNB price prediction
BNB’s (BNB) relief rally is facing selling near the 50% Fibonacci retracement level of $676, indicating a negative sentiment.
If the price slips below $602, the bears will attempt to yank the BNB/USDT pair below the $570 support. If they manage to do that, the pair may plummet to $500.
Contrarily, if bulls push the BNB price above $676, the pair may ascend to the breakdown level of $730. Sellers are expected to defend the $730 to $790 zone as a break above it suggests that the bulls are back in the game. The pair might then surge to the 50-day SMA ($849).
XRP price prediction
Buyers have maintained XRP (XRP) above the support line of the descending channel pattern but are struggling to push the price to the 20-day EMA ($1.63).
If the price turns down and breaks below the support line, it indicates that the bears remain in charge. The XRP/USDT pair may then retest the $1.11 level. Buyers are expected to defend the $1.11 level with all their might, as a break below it may sink the pair to $1 and then to $0.75.
Buyers will have to propel the XRP price above the 20-day EMA to gain the upper hand in the short term. The pair may then march toward the downtrend line. A close above the downtrend line suggests the start of a new up move.
Solana price prediction
Solana’s (SOL) relief rally is facing selling just below the breakdown level of $95, indicating that the bears are attempting to flip the level into resistance.
If the Solana price continues lower and breaks below $77, it suggests that the bears remain in command. The SOL/USDT pair may then retest the $67 level, which is likely to act as a strong support.
Sellers are expected to defend the zone between the 20-day EMA ($104) and the $95 level, as a close above it signals that the bulls are back in the driver’s seat. The pair may then march toward the 50-day SMA ($123).
Dogecoin price prediction
Sellers are attempting to halt Dogecoin’s (DOGE) relief rally at the psychological level of $0.10.
If the Dogecoin price turns down from the current level, it increases the possibility of a break below the $0.08 level. The DOGE/USDT pair may then resume its downtrend and nosedive to $0.06.
Time is running out for the bulls. They will have to push the price above the 20-day EMA ($0.11) to suggest that the bearish momentum is weakening. The pair may then march toward the $0.13 level.
Cardano price prediction
Cardano’s (ADA) shallow bounce off the support line of the descending channel pattern indicates that the bears are selling on rallies.
If the Cardano price turns down from the current level, the bears will again attempt to tug the ADA/USDT pair below the support line. If they can pull it off, the pair may collapse to the next support at $0.20.
Conversely, a break above the 20-day EMA ($0.30) suggests that the pair may remain inside the channel for some more time. The buyers will gain the upper hand on a close above the downtrend line. The pair may then ascend to the breakdown level of $0.50.
Bitcoin Cash price prediction
Bitcoin Cash’s (BCH) relief rally is facing resistance at the 20-day EMA ($543), indicating a bearish sentiment.
If the price continues lower and breaks below $497, it suggests that the bears remain in control. The BCH/USDT pair may then drop toward the crucial support at $443, where the buyers are expected to step in.
On the upside, the bulls will have to push and maintain the price above the 20-day EMA to negate the bearish view. If they do that, the Bitcoin Cash price may climb to the 50-day SMA ($585).
How client-side validation complicates wallet SDK architecture: RGB-WDK integration analysis
Interoperability is crucial for a seamless experience with blockchains and cryptocurrencies. However, it is largely missing in integrations between many existing wallet SDKs and RGB, a protocol for issuing assets and running smart contracts on Bitcoin.
Utexo, a CTDG Dev Hub participant, has introduced RGB support for Tether’s Wallet Development Kit (WDK) via the Utexo SDK. The support essentially reconciles two fundamentally different views of asset state.
Why wallet SDKs and RGB are a mismatch
Most wallet SDKs are designed around a narrow and well-defined set of responsibilities: managing keys, tracking balances, constructing transactions and interacting with the underlying chain. They assume that asset state is globally observable, derived from the blockchain and updated monotonically.
These assumptions map cleanly to Bitcoin’s UTXO model or to account-based systems, like Ethereum.
However, RGB breaks all of them by design. RGB does not publish asset state onchain; it is validated client-side and transferred offchain. Onchain Bitcoin transactions only serve as anchors.
This creates a structural mismatch, especially in three areas:
Balance tracking: As validity depends on locally stored proofs and consignments, there is no onchain source of truth for RGB balances.
Transaction lifecycle: Coordination is required between a Bitcoin transaction and an RGB state transition, but neither fully represents the transfer on its own.
State persistence and recovery: Replaying the blockchain fails to recover wallets; local RGB state must also be preserved and validated.
While RGB preserves Bitcoin’s security and scalability, it assigns additional responsibilities to wallet SDKs, such as managing RGB state, validation data and persistence, as well as coordinating these elements with Bitcoin transaction flows.
What the integration introduces
Tether’s WDK is a modular, multichain SDK with core wallet responsibilities similar to other SDKs. The WDK deliberately avoids embedding protocol-specific logic to allow applications to stay decoupled from individual chains.
To fix this mismatch, Utexo’s RGB support introduces a dedicated adapter layer into WDK. The layer translates RGB wallet operations into WDK-compatible abstractions.
This wdk-wallet-rgb module still keeps RGB validation, consignments and state management outside the WDK core, but exposes RGB balances through wallet-facing account interfaces and aligns RGB issuance and transfers with existing wallet transaction workflows.
Without the module, developers have to manage RGB keys, validation and persistence as a separate subsystem alongside the wallet. A custom coordination between Bitcoin transactions and offchain state changes is required when executing RGB transfers. Backups and restores also require bespoke handling of the RGB state.
Instead, the wdk-wallet-rgb module derives RGB keys from standard BIP-39 seeds and integrates them into the wallet’s existing key management flow. RGB issuance and transfers follow the same structured transaction workflows used elsewhere in the wallet. Meanwhile, RGB wallet state can be backed up and restored in encrypted form alongside other wallet data.
The module’s limitations
The module comes with some limitations. It:
does not provide RGB Lightning node functionality.
does not manage network configuration or node discovery.
does not define application-level UX or payment flows.
does not eliminate the inherent UX complexity of client-side validated assets.
The limitations exist because the module is intentionally scoped as a wallet integration layer, and it does not aim to replace RGB infrastructure or automate deployment concerns.
The module rather provides a structured way to integrate RGB asset functionality into the WDK ecosystem without breaking existing wallet abstractions. Its approach reflects how wallet infrastructure needs to evolve as more Bitcoin-native protocols move validation and state offchain.
A hub nurturing the blockchain ecosystem
The module’s developer, Utexo, is a member of the CTDG Dev Hub. A part of the CTDG initiative by Cointelegraph, the hub provides a meeting point for developers and users of various blockchains.
On CTDG Dev Hub, Utexo accesses a global workforce that can spark ideas, work on innovative solutions and provide valuable feedback, while also contributing to the Bitcoin ecosystem itself.