1. Market Wrap: Bitcoin Back Above $30K in Volatile Trading Session
Bitcoin’s near 50% decline from all-time highs surprised analysts as China’s crackdown fueled bearish sentiment.
Bitcoin had a volatile Tuesday, briefly dipping below $30,000 for the first time since January before settling around $33,000 at press time. The world’s largest cryptocurrency by market value is still up about 11% year to date.
“The primary reason for the sell-off has been the crackdown in China on mining operations and banking services,” wrote Simon Peters, analyst at multi-investment platform eToro.
Bitcoin (BTC) $32542, -0.5%
Ether (ETH) $1907.71, -2.16%
S&P 500: 4248.67, +0.57%
Gold: $1776.9, -0.34%
10-year Treasury yielded 1.475% versus 1.493% on Monday
Regulatory pressure from China has always been a headwind for cryptocurrencies, which is why the near-50% decline from all-time highs surprised some analysts.
2. Goldman Sachs Taps JPMorgan’s Private Blockchain for Repo Trade
“We firmly think this will change the nature of the intraday marketplace,” said Mathew McDermott, head of digital assets for Goldman.
Goldman Sachs has conducted its first repo trade using JPMorgan’s private blockchain network.
According to a report by Bloomberg on Tuesday, the initial trade was conducted by Goldman on June 17 and came in the form of a tokenized version of a U.S. Treasury bond swapped for JPMCoin. The transaction took three hours and five minutes to complete.
JPMCoin is the investment bank’s stablecoin pegged 1:1 to the U.S. dollar.
3. Polkadot on Coinbase Went Up More Than 70% in the Midst of Crypto Market Sell-Off
DOT was one of the day’s biggest winners.
Polkadot, the token for the smart contract blockchain of the same name, rose by more than 70% in just four hours on U.S.-based crypto exchange Coinbase. However, the price on other exchanges followed the larger market sell-off.
The crypto market has experienced a massive sell-off since Monday as bitcoin (BTC, +4.4%), the №1 cryptocurrency by market cap, plummeted below $30,000 during early trading hours Tuesday in the U.S., for the first time since January. DOT’s price, along with most of the major alternative cryptocurrencies, also declined, sinking as low as $13.04 in the past 24 hours.
However, DOT’s price was one of the biggest winners of the day on Coinbase; it went as high as $22.80 around 12:00 p.m. ET Tuesday, up more than 70% in four hours, according to data from TradingView and Coinbase.
A spokesperson from Coinbase told CoinDesk the team is currently investigating what happened, and said the price discrepancy of DOT (+0.75%) between Coinbase and other major exchanges is likely due to the “send and receive” function being disabled as part of “the incident.”
4. China’s Anti-Crypto Crackdown Is Different This Time
Miners leaving China show the seriousness of new enforcement. But constrained trading and investment are more likely to really matter.
Old crypto hands have been through so many waves of China FUD they might shrug off the current round of anti-cryptocurrency enforcement there as insignificant. Sure, the market is crashing, in part, because of the news, but we’re also coming off a major market top. It’s all just part of the cycle, right?
Unfortunately, that thinking seems suddenly and dramatically outdated. China is more serious about this anti-crypto crackdown than it has been in the past, and the impacts could be more lasting and deeper.
We’ve already seen evidence of a new kind of seriousness in the exodus of cryptocurrency miners from China in recent weeks. The good news is that, as Nic Carter has broken down for CoinDesk, the big miner migration will not have a defining influence on the robustness of the Bitcoin network. In fact, it could even be a net long-term positive if it spreads mining, and its risks, to more countries. And there’s no strong, direct line from mining activity to the market price of bitcoin.
5. Daniel Loeb’s Third Point Leads $27M Investment in Crypto Compliance Startup CipherTrace
The hedge funder’s latest crypto bet adds fuel to CipherTrace’s growing crypto compliance and investigations business.
CipherTrace, a security firm that tracks crypto crimes, has closed a $27.1 million Series B round of funding led by Dan Loeb’s Third Point Ventures, we learnt.
The fundraising round was also backed by early investors Neotribe, Acrew Capital and Seraph Group.
A representative for Third Point Ventures, which received a CipherTrace board seat, confirmed its participation in the funding. Loeb’s investment companies have now backed three crypto startups, including Bitwise and eToro.
CipherTrace plans to double its 100-person operation by June 2022 as it tries to capitalize on the growing market for crypto intelligence. It’s hardly alone in the field. TRM Labs and Chainalysis have raised capital in the last three months, Blocktrace unveiled a new software product on Monday, and Elliptic announced today that it has completed a pilot project with Santander, Spain’s largest bank, to detect suspicious activity.
“It’s a good time to be in our space,” CipherTrace CEO Dave Jevans told us in an interview. He said he has had 12 months of steady business from asset recovery and insurance companies, and is looking to banks next. “We’re seeing a lot of growth in basically everything we’re doing now.”
CipherTrace sells compliance tools to crypto exchanges, government investigators and banks. It compiles intelligence on wallets to help organizations track transactions, but doesn’t share data on individuals.
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June 23, 2021