Main Takeaway: Another Man Down
The newest story to hit headlines is from a crypto lender and exchange called CoinFLEX, which recently halted withdrawals on its platform and is now launching a new token Recovery Value USD (rvUSD) for sale to cover losses from a $47 million dollar uncollateralized loan given to a ‘high-value customer’. As we’ve covered in previous updates, we will continue to gain more information about the financial health of a plethora of lenders, borrowers, and exchanges.
As a result of these issues, CoinFLEX will be providing greater transparency by allowing outside auditors to verify the platform’s security, leverage, margin, and collateral backing. This will be the trend moving forward – greater transparency, audits, and regulation.
Key Stories: Declaring War On Stables
During the past two months, we’ve seen an unprecedented amount of short-selling pressure on cryptocurrency stablecoins. For example, first came TerraUSD (UST), then came Magic Internet Money (MIM), then Tron’s USDD, and most recently, Tether (USDT). The Wall Street Journal yesterday reported that over the past month traditional hedge funds have been shorting Tether through Genesis Global Trading Inc, which is a crypto brokerage for professional investors. This story was confirmed by Tether CTO Paolo Ardoino. However, if we look at the charts, USDT has held its peg.
So despite having lost $20 billion dollars off its market cap, USDT retains its spot as the top stablecoin on the market, right in front of USDC.
Investor Insights: Gary Gensler Calls Bitcoin a Commodity
SEC Chairman Gary Gensler yesterday during an online interview with CNBC said that Bitcoin is the only cryptocurrency that he’s willing to call a commodity. If Bitcoin is labeled a commodity it would fall under the regulatory jurisdiction of the Commodity Futures Trading Commission (CFTC). The CFTC is generally believed to be the more favorable and friendly regulator to oversee the cryptocurrency industry versus the SEC. However, given the current climate and market condition, it’s impossible to say what kind of regulation the US government will try to enact. For this, we’ll ultimately need to watch the Fed because it’s still the most important financial institution in the world.
Today’s Top Gainers
The total cryptocurrency market is down over 2% on the day, but the top 10 coins by market cap are all holding up relatively well after a two-day increase, with slight drops in the 2% to 5% range (Bitcoin, Ethereum, Solana, XRP, Cardano, Dogecoin, Polkadot).
The top trading pairs on Phemex as of this writing are: