Bitcoin Crashes, Whales Buy, Tether FUD Dies
Welcome to the first edition of our brand new newsletter, a place for staying up to date on the latest trends, news, and events in the cryptocurrency industry.
Digital assets evolve and move faster compared to any other market. For those who do not have time to constantly scroll Crypto Twitter, we wrote a special weekly update that covers everything major that happened this week.
Summary
Bitcoin took a severe hit for the first time in months as it decreased by $10,000 in a single day.
Square and MicroStrategy bought Bitcoin following the recent dump.
Tether FUD is finally cleared after Bitfinex reached an $18.5 million settlement with the NYAG.
High Ethereum fees forced Binance and FTX to implement ERC20 withdrawal restrictions.
Coinbase filed for a public listing on the Nasdaq.
The Fed announced its initiative for developing a digital dollar CBDC.
Bitcoin Bulls wake up to a red Monday
Following a choppy weekend, the leading cryptocurrency fell 10% by plunging from $58,000 to $52,000 on Monday morning. Failing to break out at $55,000 later that day, Bitcoin experienced another crash - this time dropping down to $45,000.
Increased volatility caused cryptocurrencies to take heavy losses all across the board. In anticipation of Tether’s legal resolution with the state of New York, whales have most likely sold their assets. More than billions of dollars have exchanged hands that day, with massive liquidations decimating bullish investors.
Coinbase Files IPO and direct listing on Nasdaq
The leading U.S. cryptocurrency exchange Coinbase has filed for an initial public offering (IPO) via the SEC for a direct listing route on Nasdaq. Coinbase shared a Form S-1 registration statement with the regulator, which revealed bullish data.
The form shows that Coinbase serves approximately 43 million retail users and 7,000 institutions in more than 100 countries.
If approved, the U.S. crypto exchange will go public on Nasdaq under the COIN ticker. Per Coinbase, they will be treated as an ‘emerging growth company’ until the listing is completed.
Tether FUD narrative comes to an end
The New York Attorney General’s (NYAG) investigation reached a conclusion on Tuesday after settling on an $18.5 million fine with Bitfinex and Tether. However, the two companies are now banned from the state of New York, and the regulator will carefully monitor their financial activities.
Court documents revealed that Tether’s reserves did not fully cover the supply of USDT tokens, as it was previously claimed. NYAG’s Letitia James stated that the two entities have “recklessly and unlawfully covered up massive financial losses,’ and that they were operated by unlicensed and unregulated individuals.
Microstrategy and Square invest in Bitcoin...again
Institutional investors have once again bought the dip despite the market’s temporary gloomy outlook. Square’s Jack Dorsey and Microstrategy’s Michael Saylor have both announced their company investments at the start of the week.
Square announced a $170 million investment in Bitcoin on Tuesday, which increased the payment processor’s total crypto holdings to 5%. Dorsey added a total of 3,318 BTC to Square’s portfolio for an aggregated purchase price of $51,235.
Microstrategy announced a $1 billion investment on Wednesday, buying 19,452 Bitcoins at an average price of $52,765 per Bitcoin - increasing the software developer’s total holdings to 90,531 BTC.
Binance and FTX limit ETH withdrawals
Heavy network congestion on the Ethereum blockchain prompted two major crypto exchanges to implement constraints for all ERC20 withdrawals.
On more than two occasions, Binance temporarily disabled ERC20 withdrawals in the wake of high volatility and enormous gas fees. Likewise, FTX also decided to disable free ERC20 withdrawals, limiting them only to users who stake 150 FTT.
Three attacks on Bitcoin:
1. Janet Yellen doubles down on Bitcoin statements. U.S. Treasury Secretary Janet Yellen told CNBC that Bitcoin is an ‘extremely inefficient way of conducting transactions’ and that rarely anyone uses it for that purpose
Yellen based her opinion on the fact that Bitcoin is a highly speculative asset and that it spends too much power processing existing transactions.
Only a day later, after making her remarks, the real-time gross settlement funds transfer system operated by the Federal Reserve, called Fedwire, went temporarily offline.
2. Charlie Munge advises investors not to invest in Bitcoin. Berkshire Hathaway’s vice chairman and long-time business partner of Warren Buffet stated that cryptocurrencies are too volatile to serve well as a medium of exchange.
Munge also shared that he doesn’t know what is worse: Tesla reaching a $1 trillion market cap or Bitcoin hitting $50,000.
The veteran investor advocated that Bitcoin is an artificial substitute for gold and that since he does not buy any gold, he would never buy any Bitcoin either.
3. Bill Gates comments on Elon Musk’s BTC investments. In a live chat on the social network Clubhouse Bill Gates stated that those who have less money than Elon should “probably watch out” if investing in Bitcoin.
Gates said that Bitcoin is not for him since he prefers to invest in companies that make products.
As a reminder, Microsoft’s founder was also skeptical about Bitcoin in 2018, when he admitted in an interview that he would short it if he could.
The Fed announces a public dialogue for the Digital Dollar
Federal Reserve Chairman Jerome Powell declared that 2021 will be an important year for the digital dollar project and that the U.S. central bank will engage with the public regarding the CBDC.
Powell emphasized that there will be a public dialogue for the sake of resolving challenging issues such as policy questions and technical questions. The digital dollar should be designed in a way that does not “undermine healthy market function.”
Powell’s latest statement differs considerably compared to his previous ones, where he usually cautioned against a digital dollar since it carries a risk to the U.S. monetary stability.
Mt. Gox victims to vote on a rehabilitation plan
On Thursday, the Japanese trustee of Mt. Gox declared that creditors can now approve a draft of the rehabilitation plan. Email and online voting methods have a deadline until October 20 this year, after which a final resolution will be reached.
The daft was earlier approved by the Tokyo District Court’s examiner. If it reaches a positive conclusion, Mt. Gox victims will be eligible to receive the assets that they have originally deposited.
Quote of the week
The Good News
A digital artist sold a Trump-themed NFT for a record sum of $6.6 million in Ether on the Winklevoss-owned Nifty Gateway marketplace.
The FATF seeks to create amendments to its Crypto Travel Rule guidelines in order to help blockchain service providers with transferring money.
Once approved, a new funding round for the Kraken exchange would increase its valuation from $4 billion to $10 billion.
The Bad News
SEC’s Hester Peirce commented that DeFi needs legal clarity, stating that it is a very good test for regulators.
Coinbase CEO Brian Armstrong noted that DeFi could hurt the exchange and that U.S. regulators prevent them from competing with the market.
The SEC will reportedly launch a probe relating to Elon Musk’s Dogecoin tweets.
Crypto Twitter Highlights
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