5 Things to Know in Crypto Today: BTC Rises Towards $21,000 as Markets Pare Fed Hike Bets

Key Points

• Major cryptocurrencies have been rallying with Bitcoin nearing $21,000 and Ethereum back above $1,200.
• Fed policymakers reiterated support for a 75bps rate hike despite this week’s inflation figures, easing fears of a 100bps move.
• UNI surged after Robinhood announced it was listing the token on its platform.

Cryptocurrencies Rally as Fed Tightening Bets Pared

Cryptocurrency markets have been on the front foot over the past three days, despite Wednesday’s hotter-than-expected US Consumer Price Index figures for June. Bitcoin was last trading in the $20,800s, after breaking above its 21DMA at $20,400 on Thursday and testing the $21,000 level on Friday. Since Wednesday’s sub-$19,000 lows, the cryptocurrency has bounced over 10% and is up about 5.5% in the last 24 hours, according to CoinMarketCap.

Ethereum is up around 12% in the last 24 hours above $1,200 and has bounced over 20% since Wednesday’s lows near $1,000. The cryptocurrency is once again eyeing a test of recent highs in the $1,280 area, a break above which could open the door to a quick run higher.

Traders cited comments from Fed policymakers on Thursday as boosting risk appetite in cryptocurrency markets. Fed’s Christopher Waller and James Bullard both reiterated their support for a 75 bps rate hike later this month, despite the latest inflation surge. This resulted in markets pulling back on bets for a 100 bps rate hike at the upcoming July Fed meeting. According to the CME’s Fed Watch Tool, whether the Fed goes with a 75 or 100 bps rate hike is now seen as a coin toss.

UNI Surges on Robinhood Listing News

UNI, the native token that powers the largest decentralized exchange (DEX) Uniswap, surged on Thursday after Robinhood announced that it had listed UNI for trading on its popular platform. UNI/USD was last trading just below $7.0 on Friday, close to its highest level since early May and last up about 10% in the past 24 hours. UNI has been in a technical uptrend since mid-June.

Crypto Winter: OpenSea Lays off 20% of Workforce, CoinFLEX Partially Restarts Withdrawals

Devin Finzer, CEO of the largest Non-fungible Token (NFT) marketplace OpenSea, announced on Twitter on Thursday that the company has laid off roughly 20% of its workforce. Finzer cited “an unprecedented combination of crypto winter and broad macroeconomic instability,” and said that “we need to prepare the company for the possibility of a prolonged downturn”. OpenSea joins a growing list of other crypto firms, including the likes of Coinbase, Gemini and Crypto.com to have downsized recently.

Elsewhere, CoinFLEX announced on Thursday that it is allowing depositors to withdraw up to 10% of their account. However, users will not be able to withdraw flexUSD, the platform’s own stablecoin, until further notice, CoinFLEX said. CoinFLEX was one of many crypto lending platforms to have halted customer withdrawals last month, with the most high profile being Celsius Network.

Celsius has a $1.2B Balance Sheet Hole

Speaking of Celsius Network, the company filed for Chapter 11 Bankruptcy protection earlier in the week and, in its filing, revealed that it has a $1.2 billion hole in its balance sheet. The companies staggering financial woes have deterred potential buyouts, with FTX reportedly walking from acquisition talks last month.

Ryan Preston Dahl, a restructuring lawyer at Ropes & Gray LLP, told CoinDesk that Celsius is entering “uncharted territory” in filing for Chapter 11 bankruptcy protection. There is no precedent for a crypto firm like Celsius in navigating through a reorganization process rather than liquidation, he said.

Circle Releases Detailed Report on Assets Backing USDC

USDC has been growing in market cap in recent months while other stablecoins have suffered outflows, with many investors favoring Circle Internet Financial’s (USDC’s issuer) comparatively transparent approach towards reserve management. Circle released a detailed report on Thursday detailing the assets it holds to back USDC.

The report showed that Circle holds $42.1 billion in short-term US government bonds with a maturity of fewer than three months and $13.6 billion in cash. That adds up to $55.7 billion, slightly more than the $55.4 billion worth of USDC tokens in circulation.