Crypto Morning: With Investors Eyeing U.S. Rates, Bitcoin Plunges Back More Than 7%

Charlie Taylor

Another decentralized finance platform in crisis and prospect of lower liquidity. This combination steers investors away from assets seen as risky, as they await more clues from the US central bank on the direction of interest rates in the country. US stock index futures show signs of an opening in the blue on Tuesday (14), while Bitcoin (BTC) is trading down 7.4% in the last 24 hours, quoted at $ 22,306, according to data from the CoinGecko. Ethereum, which has been in freefall for the past few days, is back down 4.4%, trading at $1,189. In Brazil, Bitcoin lost 5.2%, quoted at R$ 116,058, according to the Bitcoin Portal Index (IPB). On the other hand, some altcoins are rehearsing a recovery such as Binance Coin (+1.6%), XRP (+2.9%), Solana (+14.9%), Cardano (+14%), Polkadot (+13.8%) %), Dogecoin (+5.1%), Avalanche (+13%), and Shiba Inu (+9.5%). The decision by crypto lending platform Celsius to suspend withdrawals and transfers caused panic among investors, who had already been shaken by the melting of the Terra/LUNA ecosystem, and the market melted on Monday. With the volatility, Bitcoin withdrawals on Binance, the world’s largest cryptocurrency exchange, were unavailable for almost four hours on Monday (13) due to a “transaction stuck on chain”. The looting was normalized around 12:30 pm Brasília time. The problem has already hit the exchange at other critical times, and is usually caused when there is an increase in demand for withdrawals that cannot be processed in time. A Glassnode report points out that Bitcoin is facing lower demand from long-term investors combined with selling pressure from short-term holders. Still, weekly flows indicate that institutional investors bought low and at a discount. The ninth largest whale on the market, for example, acquired 7,000 BTC on Monday morning.

Fed decision

The Federal Reserve’s monetary policy meeting begins this Tuesday. The decision comes out tomorrow (15) and, while some analysts do not rule out a 0.75 percentage point increase, others say that if it does raise rates above forecast, the Fed could jeopardize the credibility of its estimates released to the market. . “As far as support levels are concerned, the coming days are sure to test digital assets if a faster pace of tightening and more aggressive rate hikes are announced,” wrote Rich Blake, financial advisor at Uphold, in a note to CoinDesk. “(…) High volatility should dictate the pace of the markets, the control points are at 22 thousand dollars of support and 28 thousand dollars of resistance for BTC. Altcoins will show even greater movements at this time of stress,” said Lucas Passarini, trader at MB, in an interview with Portal do Bitcoin.

less rich

The total cryptocurrency market cap, which surpassed $3 trillion in November, was less than $1 trillion as of Monday, data from CoinGecko shows. More than $1.1 billion was settled on the crypto market on Monday. The volumes of long and short positions were the highest in the last three months, according to data from Coinglass. It wasn’t just small investors who lost money. Since November, the fortunes of seven industry billionaires have plummeted by $114 billion in total, according to the Bloomberg Billionaires Index. Binance CEO Changpeng “CZ” Zhao’s equity, for example, declined 89% over the period to $10.2 billion.

vision of the evangelists

Michael Saylor, CEO of MicroStrategy, one of Bitcoin’s biggest “evangelists,” now faces an unrealized loss of more than $1 billion relative to his holdings in the largest cryptocurrency. Investors are watching Saylor’s footsteps as the analytics software company has a secured Bitcoin loan. In May, MicroStrategy said on a conference call that if BTC dropped to around $21,000, the company would have to put up more funds as collateral on top of the $820 million already pledged. For cryptocurrency analyst and trader Marcel Pechman, the MicroStrategy rumors are unfounded, as Saylor could wait until a price of $5,000 to have to liquidate his collateralized bitcoins. Mike Novogratz, founder and CEO of Galaxy Digital Holdings and another Bitcoin evangelist, says cryptocurrencies are closer to a floor than US stock indices, which could still fall by between 15% and 20%.

Other highlights

Strong volatility has also shaken stablecoin USDD parity with the dollar. from the Tron network, which dropped as low as $0.91 on Monday, according to CoinDesk. Tron founder Justin Sun said $650 million has been added to USDD reserves and that the blockchain also plans to inject $2 billion to ease selling pressure against the native TRX token.

With markets under pressure, Singaporean brokerage will lay off 260 people, about 5% of employees, according to the company’s CEO, Kris Marszalek. Lending platform BlockFi also announced cuts on Monday, which account for 20% of the workforce.

The crisis on the Celsius platform was quoted by Bank of England Governor Andrew Bailey at a hearing in the UK Parliament. “Crypto assets have no intrinsic value. This morning (Monday) we saw another collapse at a cryptocurrency exchange,” Bailey said.

Despite the sharp correction of cryptocurrency prices, consumer interest is still high, highlights a Bank of America survey released by CoinDesk. About 91% of the 1,000 respondents intend to buy cryptocurrencies in the next six months, the same percentage as those who said they bought it in the last six months.

In humorous articlethe columnist for the Financial TimesRobin Wigglesworth, says that the timing of publishing a four-page ad in the New Yorker Magazine with model Gisele Bündchen, alongside the “less photogenic” FTX CEO Sam Bankman-Fried – just on a day when the market was melting – was not the best.

Regulation, Cybersecurity and CBDCs

Investor Jeffrey Lockhart, who lost money from the collapse of TerraUSD, decided to sue BAM Trading Services, which represents Binance US, the US arm of the exchange. According to a class action filed Monday in federal court in San Francisco, the investor alleges that the exchange failed to comply with federal regulations by not being registered in the country and promoting the stablecoin as a more stable asset than it was. in fact, according to information from CoinDesk and Bloomberg. A Binance.US spokesperson said the lawsuit is baseless and that the exchange is registered with FinCEN, a US financial crime-fighting agency. In an interview at the Consensus 2022 conference in Austin, Texas, Binance’s CEO said that the exchange probably hasn’t offered enough alerts and risk management in the past, but the company intends to provide more financial education and information to users going forward. . A Bloomberg report highlights that Binance’s market share in Brazil could shrink with the new rules in Congress for cryptocurrencies, as adapting to regulations, such as the requirement to be headquartered in the country, should increase the exchange’s costs and also your rates. Binance is “working with Brazilian authorities to develop the best regulatory proposals,” said Daniel Mangabeira, the company’s director of institutional relations in Latin America. Julien Dutra, director of institutional relations at 2TM, the holding company that controls MB, expects the new regulation to be fully in place by early next year, although most companies already comply with many of the local rules. The Chamber of Deputies should guide the vote on the bill this week, shorter due to the Corpus Christi holiday, according to Valor.

Denelle Dixon, CEO of Stellar Development Foundation (SDF), told InfoMoney that Central Bank President Roberto Campos Neto’s plan for the digital real is the best solution to preserve the role of banks and ensure the digitization of money with blockchain technology.

The coordinator of the anti-corruption sector and financial crimes of the Federal Police, Isalino Antonio Giacomet, said in an interview with Estadão that some money changers have been seeking transactions in crypto assets. Giacomet highlighted the challenge of blocking these assets, citing the speed of transactions and the difficulty in identifying the real owners of the money.

In New York, Mayor Eric Adams will ask state governor Kathy Hochul to veto a bill passed June 3 that would impose a two-year proof-of-work cryptocurrency mining moratorium, according to information from Crain’s New York Business.

Metaverse, Games and NFTs

In a new phase under the command of BTG Pactual and with an investment plan of R$ 30 billion, V.tal, which was born from Oi’s fiber optic network, aims to expand with a network of mini data centers in Brazil, 5G services, metaverse and internet of things, highlighted Valor.

The non-fungible token market in Argentina continues to expand. NFTs Kephi Gallery, founded two years ago, was born out of four friends’ interest in finance and art. The big difference is the price of fees, starting at US$1.50, compared to the US$100 cost of other platforms, according to Bloomberg Línea. Most of Kephi’s buyers are from Southeast Asia and the artists from Latin America.

In addition to artwork, NFTs begin to enter the watch market, according to the New York Times. British watchmaker Backes & Strauss has partnered with Barcelona player Dani Alves and consultancy Metaverse ColossalBit to produce NFTs related to the Alves Trophy Collection, a series of 43 physical watches celebrating 43 trophy moments in Alves’ career.

João Doria Neto, son of former governor João Doria and advisor to Lide, is an NFT enthusiast, his most important work being a CryptoPunk. “I always wanted one. It was this collection that inspired the technological revolution we are experiencing”, Neto told Estadão.

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