A roundup of the week’s crypto news, from mass liquidation worries, to the Fed’s interest rate hike, and Dogecoin returns to bite the hand of the Musk that feeds it.
Big players take steps against liquidation
Potential liquidation has unfortunately been the theme of the week, with financial problems looming for crypto hedge fund 3AC, and many other companies with large amounts of capital locked up in either Lido Finance’s stETH, or affected applications like Celsius Network, which have frozen all user withdrawals.
The Tether USDT team stated in a blog post that they have no lending exposure to either 3AC or Celsius, and that their only dealing with the lending app was a “small investment” in equity. Celsius itself, which launched on the fanfare of “unbanking yourself” and “no lockups”, is likely to be the subject of multiple planned lawsuits, coming from retail investors to notorious YouTube shillers like BitBoy.
In other precautionary moves, the MakerDAO community voted to disable direct DAI deposits from fellow DeFi protocol Aave, which will prevent Aave users from being able to mint new DAI, and encourage re-payment of outstanding debt positions.
Meanwhile, Microstrategy’s laser-eyed permabull Michael Saylor surprised no-one when he announced that he’s never-selling-ever.
Fed hikes rates, Congress debates BTC energy efficiency
The federal reserve confirmed that inflation fears were worse than initially projected when they raised their target interest rate by 0.75%, the largest hike since 1994. Bitcoin has so far managed to hold the psychologically important 20k support, suggesting that the announcement may already have been priced in.
Also in Washington, a group of 14 U.S Congress Members have sent a letter to the Environmental Protection Agency, explaining that Bitcon mining, when harnessed properly, can have certain benefits. This comes on the back of a research paper published yesterday, which argues that the “inefficient” legacy finance system uses 56 times more energy than Bitcoin.
And with more nuanced debate being launched, perhaps corporate media channels will be forced to move away from the overly-simplistic “Bitcoin is bad for the environment” narrative.
Crypto BUIDLing for another day in the sun
Speaking of energy, researchers at The Lawrence Livermore Centre in California are working on blueprints for a stablecoin that is backed by electricity instead of money or precious assets.
Blockchain analytics company Nansen is launching “Nansen Connect”, an encrypted messaging app that can be accessed from user’s crypto wallets. The end result will be a more secure version of Discord or Telegram, but where scams are not able to proliferate.
And many other crypto linchpins keep on building, with Kraken and Binance in particular doubling down by launching new hiring campaigns.
Elon Musk has found himself in the Doge house, having been accused of “deceptively claiming that Dogecoin is a legitimate investment” by investors who lost money trading Dogecoin. The case is seeking a massive 258 billion dollars in damages.
It seems unlikely that Musk’s tweets (which consisted mostly of memes) will be considered part of a “racketeering scheme”, but stranger things have happened in US courts. Here’s hoping that the very public tweets don’t spin around to bite Musk in the rear.
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