The big talk ??
Crypto isn’t dead! This week, if you listen really hard, you can hear a faint cheer in the air. Crypto has avoided certain death, and, it appears to be showing signs of life in the murky depths of a market collapse.?
The total value of all cryptocurrencies - depending what tracker you’re using - climbed briefly above the $1 trillion mark for the first time since early June. That’s largely driven by an improvement in Bitcoin’s performance, which is up 10% this week. ETH too, has seen a 6% gain, with additional upticks in volume and activity across its biggest DeFi protocols.?
Companies too are finding their feet. Celsius, the broken crypto lender, has managed to pay off most of its debts, giving it a fighting chance of allowing users to access their locked funds again. But what’s going on? Well, it depends on who you ask.
The safest assumption is the NASDAQ, the tech heavy stock exchange has seen an improvement in fortunes. When the NASDAQ is up, crypto tends to move up as well. A recent report suggests these two now are now inextricably entwined, thanks to investors holding tech stocks, are more likely to hold crypto, and vice versa.?
Why is the NASDAQ up? A report this week on the jobs market in the US shows that employment numbers are down, but still healthy. This has been interpreted as a good sign that the US economy will only dip in the coming months instead of dive. That’s lead to talk among investors that the Fed’s aggressive interest rate hikes won’t be as harsh going forward, as they’ve started to have the desired effect of cooling the economy down.?
For crypto heads, some are suggesting because the collapse of Three Arrows Capital didn’t quite cause the meltdown everyone fears, investors are now dipping their toes back into the water.?
But we’re not out of the woods yet, ladies and gentlemen, those purse strings you're clinging on to should remain closed, for now. That’s because there are likely further loses hiding in the crypto space that haven’t been unearthed yet. Tether appears to have liquidity issues, see story below, and the Celsius saga has revealed the crypto lender was using customer cash to go on a high-risk gambling spree through a third party.??
Tron’s attempt at a stablecoin is sputtering, too. Short sellers keep piling pressure onto the algorithmic token, forcing the DAO running it to keep buying more currency to prop it up.
We’re not out of the woods yet, but at least this little clearing is providing a bit of light relief from the burning hellscape that is crypto right now.?
What people are shouting about: ???
- Celsius sued for being an alleged ponzi scheme - While the outlook for crypto has shifted marginally from, “it’s the end, tell my family I love them,” to “it’s ok guys, I was only joking”, Celsius, one of the biggest casualties from the market rout, is being taken to court. In the lawsuit, Jason Stone, the CEO of KeyFi, a DeFi aggregator, reckons Celsius used customer funds to “manipulate crypto asset markets, had failed to institute basic accounting controls which endangered those same deposits, and had failed to carry through on promises.” Yikes!?
- Reddit is launching its own NFT marketplace - The social network is allowing users to create and customise their avatars. But with a twist. Built on Polygon, there won’t be an auction for Reddit avatars, instead, profile pictures will be available for sale at a fixed rate and users won’t need to hold crypto to buy them.?
- Jim Cramer (after losing money) now hates crypto - the presenter of finance programe Squawkbox on CNBC has declared “there’s no real value here” after the market rout. While that might sound typical of mainstream news media to proclaim the death of pretty much everything, what makes Cramer’s declaration unique is that only months ago he was a self-described “believer” in Ethereum, and was telling all his investor buddies they could make 40% returns if they got into ETH. He also had told reporters he had bought ETH, at what now looks like the peak of the market. Oh, Jim.?
- RadioShack is back as a crypto company and all it seems to do is insult people on Twitter - The 100 year old electronics retailer is back as a crypto exchange. But it seems to have developed a foul mouth when it comes to posting on Twitter. In a series of tweets, that it keeps deleting, and apologising for the new owners - a company that speicalises in turning round struggling brick and mortar stores - is using offense to drum up interest in its exchange, which no one asked for. Oh, and it’s flogging terrible merch to keep things ticking along.??
- The house of cards that is Tether is found to be… a house of cards - Whenever someone has to ask, “excuse me, sir, but how stable is your stablecoin?”, be worried. That’s what journalists have been asking this week about Tether, which has spent the last two months trading below its promised 1:1 peg with the US dollar. It’s not supposed to do that. When Bloomberg went sniffing around how much Tether was actually being used, it found that most of it was sat in liquidity pools or being used to swap into other coins like USDC and DAI. What does this mean? It means that Tether’s usage is in free fall - it’s lost $600 million in market share - this week alone, and hedge funds are moving in to short the currency further. If these bets pay off, expect more doom and gloom to come.?
The at first glance incredibly boring, but in reality, incredibly insightful and interesting thing you should read this week ??
GPU prices are collapsing. Wait! Come back! This is important. Gaming Processing Units (GPUs) - big hulking slabs of silicon used to make games run more smoothly - were also surprisingly good at solving the puzzle at the heart of networks like Bitcoin and Ethereum.?
Miners bought so many of them it lead to a global shortage. Some $3 billion worth of graphics cards were bought by miners since the beginning of 2021. But that’s a changing. The second hard market has dropped by 50% as many miners no longer see long-term profitability in buying the cards.?
Why is this important? If miners are leaving the game, networks are likely to become more centralized as fewer remain.?
Chart of the week ??
The slow decline of Tether. Over the last two years, the dominance of Tether has been in decline. At its peak it captured 88% of the stablecoin market, now it’s down to 45% according to Glassnode.?
Strange but true ??
- Luxury British jeweller Graff Diamonds has been forced to pay hackers $7.5 million in Bitcoin after the group leaked information about its clients - The jewellers’ clients, which include the Saudi, UAE and Qatar royal families had their details leaked by a hacking group called Conti, who weirdly apologised to the families concerned for doxxing them on the web.?
- Crypto exchange u-turns over charging in-active users to errr… stay in-active - Bitstamp, a crypto exchange based in Luxembourg announced last week it was going to charge users for not using its platform. Because, you know, people not using their accounts is expensive, apparently. After the subsequent shit storm, the exchange announced in the briefest statement to a misstep ever that they’ve totally listened and they’re totally not going to charge users. Thank heavens.??
- Shiba Inu to launch a stablecoin - Yep, the seemingly useless memecoin wants to get serious. In a Medium post that reads more like the ramblings of a diminished cult leader than a product announcement, the developers behind Inu are about to release a range of new currencies for kool-aid drinking investors to buy. Chief among them is a stablecoin that they promise won’t explode at the slightest sign of trouble. Let’s see.?
- The President of El Salvador trolls American stock broker over seized funds - no, this isn’t a headline from The Onion, this is what happens in crypto land. Earlier this week, regulators in Puerto Rico closed down Euro Pacific International Bank - which celebrity investor Peter Schiff owns - after it failed to meet requirements. So Nayib Bukele, the President of El Salvador and proponent of using state funds to buy Bitcoin, decided to troll Schiff by asking, “How’s your bank going?”??
- NFT companies are hiring “vibe managers” to keep spirits up - People lucky (or not) enough to still be working companies that make and manage NFTs are feeling blue. So a slew of projects have been posting job ads for “Chief Vibes Officer” or “Director of Vibes” to help keep morale up. And my god do they need it - most NFT projects have seen their collection values collapse by as much as 90%. Chin up, guys!??
Woah, you made it, with your sanity in tact! Congrats! With that sanity you should promptly subscribe and share this newsletter with all your sane friends, and the mad ones too.
