News updates June 19, 2022

1. Bitcoin Falls Below $18,000, Ethereum Under $900 as Selloff Intensifies

After BTC and ETH dropped below key support levels of $20,000 and $1,000 on Saturday morning, the selloff intensified as HODLers await the bottom.

Just after 3 a.m. on Saturday morning, Bitcoin finally fell below $20,000. One hour later, Ethereum followed it down and fell below $1,000. Those figures were seen as much-dreaded key support levels for the top two coins by market cap.

But by 5:15 a.m. EST, both began to slowly climb back, appearing to avoid the immediate precipitous slide many predicted would happen if $20,000 and $1,000 were breached. Some may have hoped $18,979 and $987 would be the lows of this crash.

The carnage has been highlighted by a series of crypto firm failures or alarms about insolvency, from Celsius freezing withdrawals to Babel Finance doing the same, to investors pulling out of Three Arrows Capital. Grayscale's GBTC is trading at an all-time discount to the spot price of Bitcoin.

2. Traders Shifting From USDT to USDC

Glassnode, an on-chain data analytics platform, disclosed  today that USDC, the world’s second largest stable coin, is gaining traction as crypto investors prefer it over USDT. This may be seen in the total number of supplies added to the coin in the last month alone.

USDC had a market cap of $4.1 billion in January 2021, but it has since increased by nearly 1000 percent to $55.27 billion. According to Glassnode, total stablecoin redemptions have totaled $9.92 billion since the beginning of May 2022.

According to the data, USDT witnessed the greatest redemptions of -$13 billion from the beginning of May to today, followed by DAI with -$2 billion, owing to investors closing down leverage or liquidation. Meanwhile, the market capitalization of USDC has increased by $5 billion in less than two months.

The overall market capitalization of the top four stablecoins (USDT, USDC, BUSD, and DAI) has now surpassed Ethereum’s market capitalization by $3 billion, according to the data. As a result of these developments, USD stablecoins have become the account and quote asset’s unit.

3.   72 of the top 100 coins have fallen 90% or more: Here are the holdouts

This week was a tough one for the crypto industry as prices across the board fell in dramatic fashion. Falling below the $1 trillion mark, the crypto industry’s total market cap posted a 24% decline. From their all-time high prices, 72 of the largest 100 crypto assets by market cap have dropped over 90%. During this bear market, even market leaders Bitcoin and Ether have posted 70.3% and 78% losses, respectively, from their all-time highs.

4. Celsius exodus: $320M in crypto sent to FTX, user withdrawals pause

Recent moves by Celsius have fueled speculation in the crypto community as to whether the digital asset lending and staking platform is dealing with its rumored liquidity crisis. In addition to temporarily closing user withdrawals, Celsius has moved hundreds of millions of dollars worth of digital assets around different platforms, such as FTX, with no explanation given. A subsequent report stated that Celsius is recruiting legal consultation.

5.Three Arrows Capital has failed to meet margin calls: Report

Plunging crypto prices and large exposure to the Terra ecosystem debacle have placed significant pressure on Three Arrows Capital (3AC). The Singapore-based hedge fund and venture capital firm reportedly failed to meet margin calls from its lenders. 3AC has reportedly faced more than $400 million in liquidations during the most recent bout of market turmoil and is now considering a bailout, among other options.

6. A virtual currency cannot be circulated in the market as a currency, therefore a vehicle sale contract wherein parties agreed that the buyer would pay with a privately issued digital currency is invalid, a Chinese court has ruled. The court asserts that a virtual currency does not have the same legal status as national fiat currency.

 *Not Protected by Law*

A Chinese court has ruled that a vehicle sale contract, in which the parties agreed that the buyer would pay via a virtual currency, violated mandatory provisions of laws and administrative regulations and is therefore invalid. According to the court, a virtual currency “cannot be circulated in the market as [a] currency.”

As stated in one Chinese language report, the Shanghai court’s ruling was made after an aggrieved vehicle buyer sought the court’s intervention. According to the report, a buyer only identified as Huang had signed a sale agreement with Shanghai Automobile Service Co Ltd in May 2019.

As part of the agreement, Huang would purchase an Audi sports vehicle “with Yurimi as a currency payment.” Upon receipt of 1,281 units of the Yurimi virtual currency, the seller was, as per the agreement, expected to deliver the vehicle. However, after the seller failed to deliver, Huang sought redress via the Shanghai Fengxian Court.

Arguing his case before the court, Huang insisted that Yurimi is a virtual commodity that could be exchanged for goods thus it “does not violate the prohibitive provisions and should be valid.” However, in its counterargument, Shanghai Automobile Service Co Ltd insisted the sale agreement is an invalid contract and therefore should not be protected by the law.

 *Virtual Currencies Lack ‘Legal Compensation and Compulsion’*

In its ruling, the Shanghai Fengxian Court said the country’s token issuance and finance regulations that were implemented in 2017 stipulate that tokens or “virtual currency” used in the financing of token issuance, are not issued by monetary authorities hence they lack attributes such as “legal compensation and compulsion.”

In addition, such virtual currency does not have the same legal status as national fiat currency, the report said. This, therefore, means they “cannot and should not be circulated in the market as a currency.”

According to the report, Huang, who was not pleased with the decision, went on to file an appeal with Shanghai No. 1 Intermediate Court. However, after reviewing Huang’s appeal, the superior court still ruled to uphold the lower court’s decision.

7. Market Makers Have Been Running Bots To Sell BTC On Coinbase

* Data from CryptoQuant shows that market makers (MMs) have been running trading bots to sell Bitcoin (BTC) on Coinbase.

* According to CoinMarketCap, BTC’s price has dropped 11.13% in the last 24 hours.

* BTC’s price movement has dragged prices of popular altcoins down in the last 24 hours.

According to data from CryptoQuant, market makers (MMs) have been running trading bots to sell Bitcoin (BTC) on Coinbase for the last 45 days. The continued selling of BTC has seen its price drop even lower in the last 24 hours according to crypto market tracker CoinMarketCap.

According to CoinMarketCap, BTC’s price has dropped 11.13% in the last 24 hours. This adds to its over 30% drop over the last 7 days as well. The market cap of the market leader currently stands around $344.91 billion and, at the time of writing, the price of BTC has broken below $20k to $18,127.80.

This is the first time since 2020 that BTC’s price has broken below the $20k level, which is a level that was set as an all-time high back in 2017.

Looking at other statistics for the largest crypto by market cap, its 24-hour trading volume has risen 78.01% to take the total to $44,605,716,357.

BTC’s price drop is dragging down prices in the rest of the crypto market as major altcoins all experienced a drop in price too over the last 24 hours. Ethereum’s (ETH) price has dropped 11.58%, Binance Coin (BNB) is down 9.54%; Cardano (ADA) is also down by 8.82%, and XRP 5.29%.

Dogecoin (DOGE) and Solana (SOL) are also down during this time period. However, SOL is only down 1.68%.