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After the Terra collapse, big players could be targeting another stablecoin. If this one goes down, it’s taking us all with it.
Is USDT going to be attacked by a major hedge fund? And if so, can it survive?!

Is USDT going to be attacked by a major hedge fund? And if so, can it survive?!

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Is USDT going to be attacked by a major hedge fund? And if so, can it survive?!

Overview

  • Hedge funds looking to depeg USDT?
  • Anonymous targets the befallen.
  • Celsius rejects bankruptcy claims.
  • Crypto asset transfers reach record levels.
  • Could this chart be signaling the breaking of demand by the Fed?
  • FTX looks to purchase another major exchange.

Anonymous targets the befallen.

Good Morning Banter Fam,

The plot has thickened in the cryptoverse.

While the contagion effect of the Terra collapse continues to plague the market in its various forms, including the liquidations of 3AC, Blockfi, and Celsius (all of which had ties to Terra or Luna assets), dark forces could be plotting an attack against another stablecoin. And not just any old stablecoin, none other than the daddy itself, USDT. 

Yep, in reports thus far unconfirmed, Tether CTO, Paolo Ardoino, has revealed coordinated efforts to short USDT at scale, most likely from a hedge fund seeking to copy the ‘success’ of the UST collapse. 

As outlined in a Twitter thread yesterday, Ardoino suggest that big money has been attempting to short USDT through the Genesi Global Trading exchange. 

However, he also goes on to suggest that any such attempts may be misguided, based on weak intel, and therefore doomed to fail. 

None of the above, it would seem, at least according to the CTO himself, is true. 

Plus, the fragility of many crypto institutions currently struggling to stay afloat was due to overleverage and exposure to risky assets. Tether, meanwhile, claims to have stayed well away from anything with the potential to compromise its integrity. 

So USDT should be pretty invulnerable, at least for now. Which is good news for us all. It truly is too big to fail! 

Unlike UST. 

In case you missed it, yesterday saw hacker group Anonymous set its sights on the former ‘master of stablecoins’, the man who flew too close to the sun, Do Kwon. 

In a recent video, Anonymous declared its intentions to hold Do Kwon and the Terra team to account (video below). Personally, I’d be shaking in my boots if I were implicated!

Eesh. Spare a thought for Do. Six months ago, he was cryptos golden boy. The chosen one. Now he’s fighting to stay out of jail. 

Market update 🌍

BTC/USD

In line with yesterday’s newsletter, Bitcoin’s (BTC) price appears to be losing steam as it neared strong resistance at the 22k levels. Additionally, the Relative Strength Index (RSI) has entered an oversold zone, all supporting a retracement in price. Unless some surprise factors appear this week, bitcoin will likely remain in a low volatility range between recent supports and resistances. BTC ended the US sessions down 1.56% to $20,699.

High-resolution chart

Moving from crypto and into macro, light crude oil future (CL1!) price appears to have broken a seven months uptrend in price and looks to retest the trend bottom. The goal of the Federal Reserve has been to reduce demand across the board; this trend breakage could be one of the first signals of a successful campaign. Although the supply side of Crude could hold significance in price, it’s beyond the scope of the newsletter to explore this aspect!

LIGHT CRUDE OIL Futures CL1!/USD

High-resolution chart

Digital Asset Fund Flows Weekly

The weekly Asset Funds Flows Report released by CoinShares shows a staggering number of outflows, totaling US$423m last week. The outflows mainly focused on Bitcoin, which saw a record total of US$453m. According to the report, the outflows were primarily from one Canadian exchange and may have been responsible for Bitcoin’s decline to US$17,760.

On the other hand, Ethereum saw inflows of US$11m for the first time in 11 weeks. The report focuses on institutional interest in crypto assets available on stock exchanges.

High-resolution chart

US markets closeGain
S&P 500-0.31%
Nasdaq-0.81%
Dow-0.11%
VIX+1.10%
Protocol (Coin)Price ($)Gain (%)
Chillz (CHZ)0.117+17.5
Kava (KAVA)2.06+11
Stacks (STX)0.47+9
Chain (XCN)0.09+8.5
Stratis (STRAX)18.56+138
Hive (HIVE)0.47+20
Lisk (LSK)1.24+17
Casper Network (CSPR)0.03+14
Metis (METIS)22.55+13
Ark (ARK)0.47+7
Power Ledger (POWR)0.23+7
Bitcoin Fear and Greed Index10 Extreme Fear
“Crypto” Google Trends 90d20
“Bitcoin” Google Trends 90d42

Newswatch 📰

Voyager comes after 3AC. Voyager Digital LLC has issued a notice of default to Three Arrows Capital for failure to make the required payments on BTC and USDC loans worth US$655m. Voyager intends to pursue recovery efforts, according to Cision Newswire.

Celsius team resists bankruptcy. The lawyers overseeing the Celsius insolvency issues have recommended the firm file for chapter 11 bankruptcy, but the team believes clients would prefer to avoid proceedings. Celsius believes avoiding a bankruptcy declaration will result in more value for clients while the firm unlocks illiquid positions. In addition, bankruptcies could enter Celsius into years-long proceedings, such as in the case of Mt. Gox, where users waited eight years to complete.

FTX to purchase Robinhood? Sam Bankman-Fried’s crypto exchange FTX is internally discussing a possible acquisition of stock/crypto exchange app Robin Hood. Earlier in the year, Sam Bankman-Fried purchased a 7.6% stake in the firm. FTX, alongside SBF, continues to expand while most of the industry struggles. SBF knows when he sees a good deal!

News tidbits:

  • Coinbase adds support for Chain (XCN), MetisDAO (METIS), Monavale (MONA), AirSwap (AST), and Media Network (MEDIA).

At the protocol level

Protocol Level Tidbits:

  • Totem wins the #20 Polkadot parachain auction supporting a slot for the KAPEX parachain.
  • Messari report on THORChain native THORswap (THOR).

NFT & metaverse update 🐵

NFTS tidbits:

  • Mars INC files crypto and metaverse trademark applications for M&M’s.

Banter’s take

The events of the past few weeks have taught us something invaluable: the bigger you get, the further you can fall. Celsius is on the brink. 3AC is underwater. And while Tether FUD is as old as time, the fact that it endures should give us pause for thought. 

The Tether CTO has spent a lot of time firefighting, defending USDT against the naysayers. And while we’re not suggesting he’s wrong, it’s always worth investigating any potential pitfalls or vulnerabilities. After all, many of us believed Do Kwon was indeed creating an algorithmic stablecoin and treasury reserve that made UST as close to invulnerable as possible. And, well, you all know what happened next. 

Remember not to fall for the cult of the personality and always consider the fact that even the strongest protocols or institutions may not survive. Putting all of your eggs in one basket, be it a stablecoin, lending institution, you name it, may be opening yourself to a grim surprise further down the line. 

In the words of Batman himself, “ You either die the Hero or live long enough to see yourself become the villain.”

In this space, nothing is guaranteed. Planning your risk according to that principle could be the most important thing you’ll ever do. 

Thanks for reading!

Gabri

Follow me on Twitter for daily updates!

Disclaimer

Good Morning crypto (issued by Crypto Banter) is a newsletter for entertainment purposes only.

All opinions expressed by the publisher, writers, and chartists should not be construed as financial advice and do not necessarily reflect the views of Crypto Banter. The publisher, writers, and chartists may hold positions in the tokens and assets discussed. Readers are encouraged to do their own research.

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