The Crypto Compass Issue #82

Hello readers,

The cryptocurrency market experienced a stark shift in sentiment this week. Last week, Bitcoin was on the verge of hitting $70,000, buoyed by bullish news and political endorsements. However, recent developments have brought a sudden reversal, with the market facing significant sell-offs and liquidations.

As we delve into this week's events, we explore the factors contributing to the current downturn and what it means for the future of cryptocurrencies.

Crypto Market Liquidations Exceed $1 Billion Amid Market Sell-Off

Crypto-tracked futures saw over $1 billion in liquidations in the past 24 hours, driven by a stronger Japanese yen and rumors of Jump Trading exiting its crypto business. Bitcoin futures led with $420 million in losses, followed by Ether with $340 million. Solana, Dogecoin, XRP, and Pepe futures faced $75 million in combined liquidations. Over 275,000 traders were liquidated, mostly long positions. Bitcoin fell more than 11%, and Ether experienced its worst single-day drop since May 2021. The sell-off was exacerbated by geopolitical tensions, poor tech earnings, and expectations of further rate hikes by the Bank of Japan.

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Morgan Stanley to Offer Bitcoin ETFs to Select Clients

Morgan Stanley announced it will allow its financial advisors to actively promote Bitcoin ETFs, such as BlackRock's iShares Bitcoin Trust and Fidelity's Wise Origin Bitcoin Fund, to eligible clients starting next Wednesday. This marks a significant step as the first major Wall Street bank to embrace Bitcoin ETFs. The move is expected to set a precedent for other large banks to follow, potentially expanding marketable assets under management by over $10 trillion. This development follows the SEC's approval of 11 spot Bitcoin ETFs in January, enhancing accessibility for Bitcoin investments. However, Morgan Stanley will initially offer these ETFs only to a select group of clients who meet specific criteria.

Circle Launches EURC on Base Mainnet, Expanding Stablecoin Offerings

Circle has launched EURC, a euro-backed stablecoin, on the Base mainnet, making it accessible to developers and users. EURC, along with USDC, is the first stablecoin from a major issuer to comply with the EU's new Markets in Crypto Assets (MiCA) regulation. The launch is supported by partners including Aerodrome, Coinbase, Coinbase Wallet, and Uniswap Labs. Businesses and developers can use EURC on Base for trading, lending, payments, and more. USDC remains the largest stablecoin on Base, with nearly $3 billion in circulation. Both EURC and USDC are fully reserved and redeemable 1:1 for their respective currencies, offering a regulated and reliable option for on-chain finance and other applications.

Happenings of the week

• Jump Trading continues to liquidate holdings

• USDB fell to below $0.90 in the crash

• Robinhood halts 24 hour trading

• BaseCamp continues with Vitalik Buterin joining Jesse Pollak to talk about his vision for the future of Ethereum

Tether Reports Record $5.2 Billion Net Profit for H1 2024

Tether, the issuer of the world's largest stablecoin USDT, reported a record net profit of $5.2 billion for the first half of 2024, with a net operating profit of $1.3 billion in the second quarter. The profits were primarily driven by yield-bearing investments and reserves, including U.S. Treasuries. Tether's market capitalization for USDT has reached nearly $115 billion. Despite controversies and past legal issues concerning the transparency of its reserves, Tether continues to see growing profits and has reinvested in projects such as decentralized AI, Bitcoin mining, and the peer-to-peer messaging platform Keet.

Stay tuned for more updates next week! If you haven't yet, hit that subscribe button to ensure you never miss an issue. Found value in this edition? Please consider sharing it with your friends, colleagues, and fellow crypto enthusiasts. Together, let's navigate the world of crypto with clarity and insight!