Crypto Flipsider News – Bitcoin Hit $22k, Three Arrows Insolvency, Celsius CEO Speaks, Tether Conspiracy, TRON Gains 15%
Read in the Digest:
- Climbs Above $22k as FED Drops Record Interest Rate Hike
- Three Arrows Capital Faces Insolvency Amidst Claims of Misappropriating Customer Funds
- Celsius CEO Breaks 3-Day Silence, BitBoy Founder Threatens Lawsuit
- Claims Conspiracy Trying to Take USDT Down, Stablecoin Supply Drops in Q2
- Tron (TRX) Gains 15% as Fears of USDD De-Pegging Eases
Bitcoin Climbs Above $22k as FED Drops Record Interest Rate Hike
Bitcoin’s price was again tested on Wednesday as the United States Federal Reserve announced a 75-point hike in interest rate, the highest single increase since 1994.
Shortly after the announcement was made, the price of Bitcoin dropped close to $20,000 before a trend change. In the following hours, Bitcoin rallied as much as 6% to trade as high as $22,868.
The 24 hours price chart of Bitcoin (BTC). Source: CoinMarketCap
The price of Bitcoin took a major hit over the weekend to fall to an 18-month low after the Labor Department announced that inflation had hit 8.6% in May. Bitcoin now trades at $21,100 – a slight relief from the sub $20,000 scare.
- The U.S. central bank also announced it would continue reducing the size of its balance sheet throughout 2022.
Why You Should Care
Bitcoin and the broader cryptocurrency market have taken a beating in 2022 as macro-economic factors weigh heavily on the industry.
Three Arrows Capital Faces Insolvency Amidst Claims of Misappropriating Customer Funds
There is a lot of tension surrounding the multi-billion dollar crypto hedge fund Three Arrows Capital as rumors of insolvency hang in the air. The persisting market crash looks to have taken a toll on the fund, which has positions in BTC, ETH, SOL, AXIE, and others.
On-chain data tracker suggests that Three Arrows (3AC) recently sold $40 million worth of its Lido Staked (stETH). According to Nansen, 3AC sold the assets to avoid getting liquidated on a $264 million Aave loan and a $35 million Compound loan.
With fears of possible insolvency, Danny , the head of crypto trading firm 8Blocks Capital, has accused 3AC of misappropriating customer funds. The claims confirm reports from on-chain data trackers.
According to Yuan, Three Arrows had used about $1 million of 8Blocks’ funds to answer its margin call. Yuan knows this as 8Blocks partnered with 3AC in 2020 to use the latter’s trading accounts.
- While 3AC has yet to make an official statement, analysts have reported that if ETH prices drop as low as $1,040, the loans could get liquidated.
Why You Should Care
The insolvency of Three Arrows Capital could lead to a more unpleasant price turn for crypto investors.
Celsius CEO Breaks 3-Day Silence, BitBoy Founder Threatens Lawsuit
Alex Mashinsky, the CEO of the struggling crypto lending platform Celsius, has finally spoken up three days after announcing the suspension of all CEL withdrawals across all platforms.
Mashinsky once again took to Twitter (NYSE:) to tell the Celsius community that the company’s team is working “non-stop” on the issue. He also sought patience from the community while the team worked on fixing the issue.
Mashinsky didn’t answer when Celsius should be expected to resume operation. Afterward, affected Twitter users pleaded with the embattled CEO for assurances on customers’ deposit security, but Mashinsky gave no further reply
- The founder of BitBoy Crypto, Ben Armstrong, has issued legal threats against Celsius for not letting him make withdrawals from the platform without sending more money to it first.
- Armstrong also claims that the lawyer Celsius hired “specializes in mostly readying companies for bankruptcy.”
Tether Claims Conspiracy Trying to Take USDT Down, Stablecoin Supply Drops in Q2
Since the catastrophic collapse of Terra’s USD (UST), the FUD surrounding stablecoins has been at its highest. Just days after Tron’s USDD lost its parity to the dollar, has alleged a ‘coordinated’ conspiracy is trying to take the USDT down.
The UST collapse has only led to more scrutiny, with many accusing Tether of not having reserves to back its USDT stablecoin. In a statement the firm released on Wednesday, Tether explained that the rumors are just an attack from “coordinated” funds.
Tether dispels rumors that 85% percent of its holdings are commercial papers in China and Asia traded at a 30 percent discount. According to Tether, these funds would benefit if the USDT is depegged, while retail investors would suffer.
- The UST collapse has also resulted in the total supply of stablecoins experiencing its sharpest drop in history during Q2 2022.
- Excluding Terra’s $40 billion collapse, over $10 billion in stablecoins have been redeemed from reserves in Q1.
Why You Should Care
As the biggest stablecoin issuer, the stability of the USDT plays an important role in the sustenance of the entire crypto sector.
Tron (TRX) Gains 15% as Fears of USDD De-Pegging Eases
Tron (TRX) is experiencing a major trend reversal after suffering a huge blow as its algorithmic stablecoin USDD lost its parity to the dollar on Tuesday. TRX fell as much as 13% to a low of $0.04744.
Recovering from the sharp decline, TRX has gained more than 12% leading the altcoin rally. TRX is up by more than 27% since Tuesday. From an inter-day high of $0.06529, Tron (TRX) now trades at $0.06009.
The 24 hours price chart of Tron (TRX). Source: CoinMarketCap
Tron’s (TRX) resurgence happened as the TRON DAO stepped in to protect the USDD peg. The TRON DAO announced that it spent over $120 million worth of (USDC) purchasing TRX on Binance, thereby creating buying pressure among traders.
In a later announcement, the DAO revealed it had sent an extra $100 million to Binance to protect the USDD. Founder of Tron, Justin Sun, also revealed that he had at least another $280 million available for defending the peg.
- According to Defi Llama, the USDD unpegging continued to affect Tron’s total value locked. At the time of writing, the total value locked was at $3.99 billion, down 35.61% over the last 7 days.
Why You Should Care
The dedication from Tron to protect the USDD stablecoin ease the FUD surrounding the algorithmic stablecoin.