News
Bitcoin rises again, new stablecoins on the block
Key points
- Bitcoin is up about 10% over the past week and is approaching an all-time high of more than $73,500, reached less than a month ago.
- Do Kwon and Terraform Labs were found to have defrauded investors in connection with the collapse of the failed algorithmic stablecoin Terra USD.
- VanEck and Ripple are involved in two new stablecoins coming to the cryptocurrency market.
- Analysts continue to monitor spot inflows into bitcoin ETFs, as outflows from GBTC may slow now that Genesis has converted their holdings to actual bitcoin.
- The US government could sell $2 billion worth of bitcoin in connection with a cyberattack on the now-defunct darknet marketplace Silk Road.
Bitcoin (Bitcoin) shook off last week’s jitters and briefly traded above $72,000 on Monday, an indication that the rally is far from stalled ahead of its fourth halving at the end of this month.
Stablecoins have been in the spotlight this past week with VanEck and Ripple Labs involved in new offerings. Additionally, a New York jury found Terraform Labs and its founder, Do Kwon, liable on civil fraud charges.
Bitcoin rises again, closing the gap to the $73,000 high
What a wild ride it has been for bitcoin investors. After exceeding the all-time high of over $73,000, the cryptocurrency has fallen to close to $60,000 in the last month.
Bitcoin is currently trading at levels seen early last week, but had to find its way back after the sharp decline to fall below $65,000 before gaining ground and ending last week in the green.
Even if the bitcoin spot exchange-traded funds (ETFs) saw strong outflows of $85.7 million on the first day of the month, largely due to more than $300 million in outflows from Grayscale Bitcoin Trust (GBTC)—flows saw a turnaround to end the week with $484.5 million in net inflows, according to Farside Investors.
The recent increase in the price of bitcoin is next halving The event is expected to occur in less than two weeks. In particular, several recent reports indicated any potential effect of the halving on the price of bitcoin could be obscured by the supply and demand dynamics of spot bitcoin ETFs.
Additionally, Tether (FSO), which is the issuer of the world’s largest and most popular stablecoin, added 8,888 bitcoins (currently worth about $640 million) to its reserves during the first quarter of the year. According to The Block, the company’s bitcoin address is now the seventh largest on the network in terms of holdings with more than $5 billion worth of bitcoin held within it.
VanEck and Ripple involved in new stablecoin offerings
Talking about stablecoinsThere might be some new deals on the block soon.
Fintech firm Agora has raised $12 million ahead of launching its stablecoin offering the Agora digital dollar (AUSD), which will have the backing of reserves managed by VanEck. While VanEck already manages a bitcoin ETF: VanEck Bitcoin Trust (HODL)—this new offering expands its bet on cryptocurrencies. For Agora, the product leverages VanEck’s investment experience as well as family ties. Agora founder Nick van Eck is the son of VanEck CEO Jan van Eck.
Ripple Labs, the company behind the XRP token (XRPUSD), Also announced its venture into the stablecoin market with a US dollar-backed digital currency aimed at improving the synergy between cryptocurrencies and conventional financial systems. This initiative is designed to inject more liquidity and drive greater adoption of the XRP Ledger, especially when it comes to decentralized finance (DeFi) applications. Ripple’s stablecoin offering will be backed by assets such as US dollar reserves and short-term Treasury bonds, and will also be made available on Ethereum at launch.
Do Kwon and Terraform Labs found responsible for fraud
It took a New York jury about two hours to decide it Terraforming laboratories and its founder, Do Kwon, were responsible for defrauding investors in a civil lawsuit filed by the U.S. Securities and Exchange Commission (SEC).
The SEC alleged that the company and Kwon had made misleading guarantees about the reliability of their products algorithmic stablecoin UST, which was central to the Earth the dramatic $40 billion ecosystem collapse in May 2022.
THE SEC litigation pointed out that Terraform Labs and Kwon had painted an overly optimistic picture of UST’s stability mechanism and Terra blockchain’s features for investors, especially its price stability which was artificially supported by an unnamed US-based trading company United States on at least one occasion.
This is the second major outcome of cryptocurrency fraud litigation in recent weeks. Former FTX CEO Sam Bankman-Fried, who was also one of the darlings of the previous cryptocurrency market bubble, was condemned to 25 years in prison on fraud-related criminal charges on March 28.
What to expect from the markets this week
Precedents suggest a rise in bitcoin prices after the halving, but this time it is not a guarantee of performance. However, one thing is certain. Investors need to buckle up and prepare for short-term volatility, although there may be opportunities for profit over time.
Investors use Implied volatility to evaluate market sentiment on future prices. According to Kaiko research, for bitcoin options contracts with different expiration dates, that measure increased over the past weekend, reversing course from the start of the previous week.
Implied volatility for “maturities over the next two weeks rose the most, from 59% to 71% in the space of just two days. This suggests that expectations for near-term volatility are rising,” they said. Kaiko analysts wrote in a note on Monday. , attributing the uncertainty to demand for bitcoin ETFs.
Cryptocurrency market analysts will be closely watching inflows into spot bitcoin ETFs this week, as outflows from GBTC are expected to slow due to selling related to Genesis’ bankruptcy proceedings nearing completion, according to Bloomberg analyst James Seyffart . March was by far the strongest month on record so far in terms of spot bitcoin ETF inflows, and the first week of April gave no indication that inflows will stop anytime soon, according to another Bloomberg ETF analyst Eric Balchunas.
Another potential effect on the market this week will be the more than $2 billion in bitcoin tied to an attack on the long-defunct Silk Road darknet marketplace sent to Coinbase (CURRENCY) by the US government. It is unclear what happens to these funds, but it is possible that they could put downward pressure on prices if the coins were sold.
Price action is also likely to revive around the next halving; However, it’s unclear whether it could end up being a “sell the news“situation immediately following the event.