All Been Crypto — Week 30 June 2022
Right back where we ended last week spot on 20k BTC. We had a brief rally but that was faded quickly and continue to hover below 1tn market cap. Market continues to be nervous about more withdrawal halts and insolvency issues emerging, we are def not out of the woods yet. However underneath price action we actually had some interesting developments this week. Solana labs revealed a mobile phone, Maker is voting on how much US treasuries they should buy, Microstrategy snached up another 480 BTC, Gavin Wood revealed a new governance proposal for DOT ecosystem and Grayscale is going after the SEC in a lawsuit over their bitcoin Spot ETF rejection. Never a dull moment in crypto. Enjoy reading and stay safe out there!
Bat Tai Chi — btc21@mail.com
HEADLINES:
SOL Phone
Solana Labs revealed a mobile platform called SMS and an Android smartphone device. This is quite a big news given it means entering hardware and competing with the likes of Samsung and Google in a crowded and also slowing down market. I really like the idea of having a secure private key vault built into a mobile device but its a bit far out of my imagination how this might work. Nevertheless it’s a very interesting move that they want to enter the space. The device looked premium and my guess is would be harder to gain market share in that segment, a cheap version for developing countries who don’t have penetration yet sounds more like an untapped market to me. Also expect little support from generally hostile-to-outsiders iOS. One to watch for the bear market though
Maker DAO buys Treasuries
The OG of DAOs has passed a proposal to invest 500mm into liquid bond strategies. Yes that’s right the Decentralized Autonomous Organization that is behind the only major decentralized stable coin DAI is putting their treasury into US Government bonds. Let that sink in for a moment. The precise allocation is up for voting still but looks like it’s all going into Treasuries. I get it we are in turbulent times and they are also reeling for survival, this one only seems controversial in the current context but remember when they started accepting USDC/USDT as collateral, basically stepping away from crypto only backed stable coin. Now if you want to have assets most correlated with USD then your prime asset is US Treasuries of course, only you are becoming another Circle and creating a number of real world attack vectors that we were hoping to get away from by being decentralized. But then again if the large junk of your assets are already other stable coins we are far from there already and its not like they were not thinking of actually getting loans on their balance sheet. Before Luna uncollateralized lending platform Maple and TrueFi already passed on-boarding Votes to create pools to lend to more ‘traditional credit’ opportunities.
New to trading? Try crypto trading bots or copy trading
Bailouts and Insolvency updates
So we had a round of SBF bailouts last week that now have surfaced to be more deserving the title handouts. A leaked call from Morgan Creek, one of the major investors at BlockFi, gave us insights into how bad things actually are at the lender. According to the leaked call FTX was the only one willing to subordinate debt claims to user withdrawals and in exchange would receive the option to buy BlockFi “at essentially zero price”. No surprise they hastily tried to put together a counter offer. The leak also suggests BlockFi had 1bn loan exposure to 3AC backed by a mix of BTC and GBTC collateral. Speaking about 3AC a BVI court ordered them into liquidation earlier this week and Voyager Digital issued them a notice of default for their loan of 15,250 BTC and $350 million USDC. But pressure is not just on the lenders side of the market, we start to see rising energy prices and ‘cheap’ BTC impacting miners as well. Compass Mining was accused of failing to pay utility bills and other monthly expenses, they deny the claim but their CEO/CFO still resigned. Another sign of the pressure miners are under is the amount of BTC they sell — it was already >100% in May and unlikely to be much better in June.
So it is no wonder with all these distressed assets coming to the market that funds are also gearing up to bargain hunt. Goldman appears to be gauging interest and soliciting commitments from Web3 crypto funds, funds specializing in distressed assets and traditional financial institutions with ample cash on hand. They are apparently trying to get 2bn together for Celsius Assets. My guess is there will be a lot more
Russian parliament approves tax break for issuers of digital assets
Russia being hit hard by western sanctions is exploring options in digital assets. They approved a draft bill to exempt cryptocurrency issuers from VAT in order to foster the industry’s development and reduce reliance on western payment rails. To bring home the point they defaulted on a $100 million international bond interest payment for the first time in over 100 years on June 27. The Kremlin said it has the means to meet its obligations thanks to oil and gas revenue and they are actively trying to use crypto for international payments. See April ABC. I would expect this to lead to further KYC and fungibility issues down the line with crypto currencies.
QUOTES:
We’re willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilize things
Sam Bankman-Fried
Governance v2 demonstrates Polkadot’s forkless upgrade capability is even capable of upgrading its own governance mechanism without a hard fork
Robert Habermeier, Polkadot’s co-founder
I think all self-respecting states will have a national digital currency within three years. […] We should be ready as soon as possible. Plus, this will settle the issue of being blocked from SWIFT, because this integration will make SWIFT unnecessary
Olga Skorobogatova, Russian Central Bank first deputy chair
Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing
