Crypto Morning: Bitcoin (BTC) and Ethereum (ETH) Retreat as Cryptocurrency Bill Returns to Radar in Brazil

Charlie Taylor

The cryptocurrency market starts this Tuesday (28) lower, in the opposite direction of the stock indices. Despite lingering concerns about inflation and the global recession, equity investors were more encouraged by the announcement of more flexible quarantine rules for those arriving on international flights to China. But this movement is still not reflected in the trading of the main cryptocurrencies. Bitcoin (BTC) is down 1.8% to $21,071, data from CoinGecko shows. Ethereum (ETH) lost 1% at $1,222.28. In Brazil, Bitcoin dawns down 1.8%, trading at BRL 110,539.78, according to the Bitcoin Portal Index (IPB). Major altcoins also operate in the red such as Binance Coin (-0.9%), XRP (-3.8%), Cardano (-3.3%), Solana (-5.5%), Dogecoin (-7, 2%), Polkadot (-5.1%), Shiba Inu (-6.6%) and Avalanche (-7.1%). BTC rallied as high as $21,868 over the weekend, but the absence of macroeconomic factors that increase risk appetite has dampened interest in the biggest cryptocurrency. “Increased recession risk, weak earnings and company forecasts could further affect equity market prices. Given recent correlations, cryptocurrency prices could also be hit,” Simon Peters, crypto analyst at eToro platform, told CoinDesk. Over the course of June, long-term investors sold around 181,800 BTC, which brought the total balance to levels seen in September 2021, according to Glassnode. And Bitcoin-focused investment funds saw outflows of $453 million last week, which brought inflows to zero year-to-date. With this, the total BTC under management now amounts to US$ 24.5 billion, the lowest level since the beginning of 2021, shows a report from CoinShares.

Regulation in Brazil

The bill that regulates the Brazilian crypto market runs the risk of being emptied if the version presented by the rapporteur, deputy Expedito Netto (PSD-RO), is approved by the Chamber of Deputies in the coming days, according to a report in Folha, which had access to the draft of the PL corrected by the Sub-chief of Government Analysis , of the Civil House, and the deputy’s report presented to the leaders. One modification refers to the easing of the requirement of equity segregation between the broker’s assets and the clients’ investments. The deputy also decided to release companies from reporting any type of transaction above R$10,000 to the Financial Activities Control Council (Coaf). The bill has been on the House agenda for more than a week, but has not yet been put to a vote.

Robinhood on the radar

Amid the losses, there are more signs of consolidation in the sector. FTX founder and CEO Sam Bankman-Fried is considering buying equity trading platform Robinhood, people familiar with the matter told Bloomberg. In a statement, the executive denied that he is in negotiations with the platform. “There are no active M&A talks with Robinhood,” Bankman-Fried said in an emailed statement released by Reuters. “We are excited about Robinhood’s business prospects and potential ways to partner with them.” Robinhood did not comment. FTX is currently the second largest cryptocurrency exchange in the world by value traded in daily transactions. In May of this year, Sam Bankman-Fried had already acquired a 7.6% stake in Robinhood, which has been increasing the offering of cryptocurrency services, but whose market value has already shrunk by 75% since going public last July.

Other highlights

Cryptocurrency exchange Voyager Digital has issued a notice of default against the crypto hedge fund Three Arrows Capital (3AC). The loan was for 15,250 bitcoins (equivalent to US$ 322 million) and 350 million in USD Coin (USDC), Circle’s stablecoin, and the payment deadline expired on Monday (27).

CoinFlex cryptocurrency exchange plans to raise funds by issuing a new token that will offer a 20% annual return, a way to free up withdrawals stuck after a customer defaults on $47 million in debt, according to Bloomberg. The platform will issue $47 million of the token, called “Recovery Value USD”, starting this Tuesday (28). The release of withdrawals, scheduled for June 30, will depend on the level of demand for the new tokens.

The Celsius Lending Platform appears to resist lawyers’ recommendation to file for bankruptcy in the US, sources told The Block. In the company’s view, this would not be the option preferred by customers and therefore users can demonstrate their support with a “HODL Mode” on their accounts. Celsius did not comment.

Amid the bear market, investors earning returns with cryptocurrency loans begin to review strategies. Before the wave of blocked withdrawals, Craig Bowman, an investor who works in law enforcement, estimates that he was earning the equivalent of 25,000% a year from borrowing his cryptocurrencies. Returns have plummeted, but he intends to continue lending the USD Coin stablecoin. “If I can earn 9%, it’s better than not earning anything,” Bowman told Bloomberg.

Focused hedge funds cryptocurrencies are increasingly betting on the fall of the Tether (USDT) stablecoin to try to increase profits, according to an article in the Wall Street Journal. Several investors have been betting against Tether for at least 12 months. But now more hedge funds are looking to cash in on the token’s devaluation following the collapse of TerraUSD, according to Genesis Global Trading.

And layoffs in the sector continue. The cryptocurrency payments operator Banxa announced that it will reduce 30% of the workforce to cut operating costs, according to information from the Australian Financial Review. Banxa CEO Holger Arians believes the current bear market could last a year. The company’s shares show a 74% devaluation in the last 12 months.

Coinbase, the largest US crypto exchange, also recorded strong losses this year and fell on Monday (27) after Goldman Sachs recommended the sale of shares. Before, the exchange had a “buy” recommendation. The bank assesses that the devaluation of cryptocurrencies and falling trading volume will continue to affect Coinbase’s revenue, according to The Block.

Singapore-based Bybit exchange, will offer futures contracts settled on USD Coin stablecoin. This is the first time that Bybit will offer futures settled in USDC instead of Bitcoin. The aim is to provide users with stable prices for the duration of the contract, according to the statement.

The Grayscale prepares for a decision on converting its Grayscale Bitcoin Trust (GBTC) into an index fund (ETF) next week. The US Securities and Exchange Commission (SEC) has repeatedly delayed the decision on the GBTC conversion, which would mark the first spot Bitcoin ETF available in the US. The decision is scheduled for July 6, The Block reported. If given the green light, GrayScale intends to work with market makers Jane Street and Virtu Financial.

The brothers Dylan and Ian Macalinao, Solana’s most prominent developers, decided to release the venture capital fund itself, according to CoinDesk. The brothers will divide their time between developing and investing in crypto projects. The Protagonist fund (formerly Ship Capital) has raised at least $33 million, according to website information and regulatory documents.

The interest of many entrepreneurs and companies in the so-called Web3 builds on the potential of businesses that combine non-fungible tokens, NFTs, cryptocurrencies and other technologies, Forbes analysis shows. According to Gartner, this ecosystem should move more than BRL 14 trillion by 2030.

Regulation, Cybersecurity and CBDCs

The Hacker Responsible for Stealing $100 Million in Ethereum from the Horizon Bridge, linked to the Harmony protocol, has started laundering the money, according to data from blockchain security firm PeckShield. Three transactions were sent from the address used in the June 23 hack, totaling 30,000 ETH (about US$36 million), to Tornado Cash. According to Decrypt, $64 million is still in the hacker’s Ethereum wallet. Harmony offered $1 million as a reward for the stolen money.

Federal Revenue Report handed over to the Federal Police claims that former waiter Glaidson Acácio dos Santos, known as the “Pharaoh of Bitcoins”, would have used a lawyer as an orange to convert cryptocurrencies into R$ 228 million even after his arrest, reveals a report by Folha.

Bitcoin and Other Cryptocurrency Hackers made another victim on Monday (27) by invading the FLA TV channel on YouTube, which belongs to Flamengo. The action, however, did not last long, and the transmissions were already normalized. Hackers broadcast a fake live with entrepreneur Michel Saylor, CEO of analytics software company MicroStrategy, talking about Bitcoin.

European Union negotiators meet this week for a last-ditch effort to craft anti-money laundering rules and a new authorization regime for cryptocurrency service providers. According to CoinDesk, the meetings on Wednesday (28) and Thursday can determine the future of the regulatory framework for the sector in the coming years. The most controversial topics include rules for non-fungible tokens, the energy impact of Bitcoin mining and the use of private digital wallets.

MEP Aurore Lalucq has asked the regulator of markets in France to reconsider its “incomprehensible” decision last month to grant a license to cryptocurrency exchange Binance, according to the Financial Times. The parliamentarian wants the Autorité des Marchés Financiers (AMF) to review the authorization.

In an interview with CNBC, the chairman of the SEC, Gary Gensler has stated that Bitcoin is the only cryptocurrency he considers viable to be classified as a commodity in the US, as opposed to the bipartisan bill, which proposes that most digital assets be classified as commodities regulated by the CFTC agency.

Tribal, a “B2B” financing and payments platform focused on emerging markets, said on Monday (27) that it is now part of the Blockchain Association, a lobbying group for the crypto industry. In January, Tribal raised $40 million with the Stellar Development Foundation (SDF) and Partners for Growth (PFG).

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