5 Things to Know in Crypto Today
- Crypto prices are consolidating ahead of key macro events with Bitcoin near $21,000 and Ethereum just above $1,200.
- Tether’s CTO hit back against USDT short-sellers in a new Twitter thread as the stablecoin hovers just below its peg.
- SEC Chair Gensler reiterated his view of Bitcoin as a commodity, but analysts don’t expect imminent spot Bitcoin ETF approval.
Cryptocurrencies Consolidate Ahead of Key US Data Releases & Central Bank Speak
Major cryptocurrencies are for the most part trading within recent weekly ranges, with Bitcoin last up about 1.5% on the day near $21,000 and Ethereum up about 2.5% just above $1,200. Binance’s BNB was last trading just under $240, as it continues to pivot close to its 21-Day Moving Average and with recent $230-$240ish ranges. Ripple’s XRP was last changing hands just under $0.35 per token but with the 21DMA, for now, offering support. Total cryptocurrency market capitalization was last around $920 billion, roughly flat so far this week.
It’s been a quiet start to the week for broader markets, with S&P 500 futures stable at two-and-a-half week highs in the 3,900 area, though US yields continue to nudge higher from last week’s lows. The 10-year was last in the low 3.20s%, up 20 bps from last week’s lows. Traders are awaiting further updates on the health of the US economy later this week including Consumer Confidence figures later this Tuesday, May Core PCE inflation on Thursday and June ISM Manufacturing PMI data on Friday.
Various leaders of major global central banks including Fed Chair Jerome Powell will be orating on Wednesday at the ECB’s annual Sintra event. The main downside risk to crypto remains that 1) inflationary pressures fail to abate resulting in 2) the Fed signaling intentions to tighten monetary policy even more.
Tether CEO Hits Back as USDT Short Bets Build
Paolo Ardoino, the CTO of Tether, the issuer of the largest USD-pegged/backed stablecoin, hit back against short-sellers of USDT in a new Twitter thread on Monday. He accused short-sellers, who have reportedly been borrowing USDT in the hundreds of millions, of “seeking to harm Tether liquidity and eventually buy back tokens at a much lower price”.
Ardoino revealed that Tether had processed over $7 billion in redemptions over the last 48 hours (10% of total assets), “again proving that our operations, portfolio, banking infrastructure and team are solid and battle-tested”. “Tether is the only stablecoin that is proven with fire under extreme pressure,” he stated. USDT was last trading at $0.999, having consistently traded slightly below its $1.0 peg since TerraUST’s crash back in early May.
SEC Chair Reaffirms View of Bitcoin as Commodity, But Spot ETF Approval Remains Unlikely
Gary Gensler, the chairman of the US Securities and Exchange Commission, reaffirmed his view that Bitcoin is a commodity, whilst warning that many other crypto assets have the key attributes of securities. His comments come ahead of the conclusion of an SEC review of an application by Grayscale to convert its Bitcoin Trust (GBTC) into a spot Bitcoin Exchange-Traded Fund (ETF) due on 6 July.
Meanwhile, a less high-profile SEC decision on an application from Bitwise to convert its Bitcoin ETP Trust to a spot Bitcoin ETF is expected on Wednesday. The SEC has already moved to approve various Bitcoin futures-linked ETF products. But analysts think that the lack of regulation of major crypto exchanges where Bitcoin is traded on the spot market means that the imminent approval of a spot ETF is unlikely.
FTX Looking at Robinhood Acquisition
Major global crypto exchange FTX is mulling an acquisition of zero-commission trading platform Robinhood, Bloomberg reported on Monday. The news caused a spike in Robinhood’s share price at the time. In a statement to CoinDesk, FTX CEO Sam Bankman-Fried said “we are excited about Robinhood’s business prospects and potential ways we could partner with them, and I have always been impressed by the business”, although he added that “there are no active M&A conversations with Robinhood”. Bankman-Fried was revealed in an SEC filing back in May to have purchased a 7.6% stake in the company.
Crypto Winter Update: Huobi Joins Throng of Crypto Firms in Downsizing, Voyager Digital Issues Default Notice to 3AC
Major global crypto exchange Huobi has joined a throng of other exchanges in announcing layoffs as much of the crypto industry continues to downsize amid the ongoing so-called “crypto winter”. Reportedly, the exchange will lay off at least 30% of its workforce, amid a sharp drop in revenue after the loss of users in China, though Huobi is yet to confirm reports.
Meanwhile, major crypto broker Voyager Digital announced on Monday that it had issued a default notice to beleaguered crypto hedge fund Three Arrows Capital (3AC) after it failed to make payments on its loans of 15,250 Bitcoins and 350 million in USDC. The broker also said it had used $75 million of a $200 million emergency credit facility provided to it by FTX CEO Sam Bankman-Fried’s Alameda Ventures. “We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands,” the company’s CEO Stephen Ehrlich said.