ProBit Bits — ProBit Global’s Weekly Blockchain Bits Vol. 9
Last Week Was Tough For Bitcoin, Cryptos In General
The past week was a historical one for Bitcoin as the top cryptocurrency by market cap fell below $20,000 for the first time since 2020. The week also saw the Bitcoin dip below its previous halving cycle’s high of about $19,700 in December 2017 (according to data from CoinGecko) for the first time.
For instance, Mike Novogratz, the founder of Galaxy Digital had earlier said that he expects Bitcoin to bottom at around $20,000 while BitMEX founder, Arthur Hayes, maintains that June 30 to July 5 would be a wild ride to the downside as fiat liquidity situation will be “brutal for the next 6 to 12 months”, retracting his earlier prediction that Bitcoin would bottom out at $25,000.
Fingers Pointed at US Interest Rate Hike for Market Downturn
The fall in the price of Bitcoin as well as alternative coins (altcoins) which saw the entire crypto market cap drop below $1 trillion coincided with the US Federal Reserve announcing a 75 basis points hike in interest rates — the largest since 1994.
The move, aimed at tackling high inflation rates, triggered a similar action in England where they announced a 25 bp raise as well as Switzerland which had a 50 bp raise.
The CEO of FTX, Sam Bankman-Fried, claims the Fed’s interest rate hike led to a “recalibration” of risk expectations, resulting in the market downturn.
One of Crypto’s Largest VC Firms Becomes Insolvent, Triggers Widespread Contagion
A contentious topic across the space is the rumor that one of the largest crypto venture capital firms, Three Arrows Capital (3AC) has become insolvent. With assets under management estimated to be between $10 billion and $18 billion, the positions of the top-5 crypto VC firm that high school classmates Zhu Su and Kyles Davies started in 2012 have reportedly been liquidated by FTX, Deribit, and BitMEX exchanges.
Matrixport’s John Ge notes in a message that the issue with Celsius Network and, now, 3AC, “has left many unsettled and on edge”.
According to Bitfinex, 3AC lost over $31 million in trades on its exchange in May and WSJ reported that the firm has hired legal and financial advisers to help it work out a way to manage the ongoing crisis.
Elon Musk Sued for ‘Promoting’ Dogecoin
A complaint was filed against avid Dogecoin supporter, Elon Musk, last week in a federal court in Manhattan, by a Dogecoin investor who accused him of running a pyramid scheme to support the cryptocurrency.
Musk, who also happens to be the world’s richest man, was sued for $258 billion for promoting “Dogecoin to profit from its trading” starting in 2019 knowing that the cryptocurrency had no value.
Musk is a known figure that has long been identified with Dogecoin and has also talked, made memes, and tweeted about other cryptocurrencies like Bitcoin which one of his companies, Tesla, accepted as a means of payment for their electric vehicles at some point.
A transcript of the Tesla CEO’s interview has been making the rounds and at one point Musk appears to point to a possible crypto payment integration for Twitter.
Check out this link to view a comprehensive timeline of Musk’s interactions and acquisitions leading up to his proposal to purchase Twitter.
The Coming of EUR Stablecoin Announced
Circle announced the release of a euro stablecoin called Euro Coin backed by full reserves. Set for a June 30 official launch, the new stablecoin — like its contemporary, USDC — is designed for stability.
Circle says Euro Coin, its second digital currency built to the same regulatory standards, is 100% backed by euros held in euro-denominated bank accounts so that it’s always redeemable 1:1 for euros.
It adds that the new stablecoin has so far received support from a broad range of ecosystem leaders ranging from exchanges, DeFi platforms, and custodial services.
Former NYSE President Joined Uniswap
The week saw the first female president of the New York Stock Exchange (NYSE), Stacey Cunningham, join Uniswap Labs as an Advisor. Uniswap says the former NYSE president joined the platform “because she believes in the potential of a decentralized exchange and in Uniswap’s commitment to fairer markets.”
With the aim to “enable more transparent and fair markets for all”, Uniswap says Stacey has seen “how it’s done in TradFi” and will be working with them to achieve a better system in DeFi. Cunningham says she will work to democratize new markets.
The UK Still Keen to Make Crypto Big at Home But Russia Doesn’t
Meanwhile, UK digital minister Chris Philip said they plan to make the United Kingdom and London crypto centers but only after ensuring that crypto was not used to launder money or circumvent sanctions.
Philp said the UK Treasury, which announced in April that it plans to make the country a global crypto hub, is working with the Bank of England, the Financial Conduct Authority, and the Prudential Regulation Authority to make sure that “balance is struck in the right way.”
In stark contrast to the digital minister’s willingness to embrace crypto with proper regulations and investor safety in place, the head of the Central Bank of the Russian Federation, Elvira Nabiullina, reiterated at the St. Petersburg Economic Forum that Russia is only open to the use of Bitcoin and other cryptocurrencies for international trade, not within the country’s financial system.
Panama Wants a Crypto Bill Discussed Again, While Kazakhstan Tests Something Similar
In Panama, President Laurentizo Cortizo partially vetoed a bill regulating the use of crypto as a means of payment for transactions. The bill, which was initially passed by the country’s lawmakers in April, would have made it easier for crypto exchanges to get a license to operate in the country.
But President Cortizo rejected the proposed legislation on the grounds that it didn’t align with the laws currently overseeing the country’s financial system, hence it has been sent back to be discussed again.
Meanwhile, as part of measures to develop the cryptocurrency industry in Kazakhstan, a special working group approved the rules of interaction between cryptocurrency exchanges and second-tier Kazakhstani banks.
The pilot will continue running until the end of 2022 while the involved crypto exchanges will receive a provisional digital asset license during the course of the project due thanks to their partnership with second-tier banks.
