Crypto News Headlines (14-Jun-2022)

Crypto-tracked futures lost over $1 billion in the past 24 hours, weighed down by a weak sentiment for bitcoin and other cryptocurrencies amid a weak global economic outlook, data shows.

Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).

The losses came as bitcoin lost a major support level at $25,000 on Monday, with crypto market capitalization reaching levels previously seen in January 2021. Major cryptocurrencies declined by an average of over 15%, as reported.

Bitcoin accounted for over $532 million of all liquidations, followed by ether at $317 million and Solana’s SOL tokens at nearly $20 million. Futures tracking Cardano’s ADA, Stepn’s GMT, and Binance ecosystem tokens BNB saw over $6 million in losses each, with some 213,000 individual trading accounts seeing liquidations in the past 24 hours.

PWC, a Big Four accounting firm, published its “4th Annual Global Crypto Hedge Fund Report” last week. It was produced together with the Alternative Investment Management Association (AIMA) and Elwood Asset Management (now part of Coinshares).

The data in the report comes from a survey conducted in April across a sample of 77 specialist crypto hedge fund managers, PWC explained, adding that their total assets under management (AUM) were $4.1 billion in 2021.

The report includes bitcoin price predictions. “We gave crypto fund managers the opportunity to contribute their estimates on where the price of BTC and the overall cryptocurrency market capitalization would be on 31 December 2022,” the Big Four accounting firm detailed.

The results showed that “while the overall crypto market was quite bearish, managers remained extremely bullish on BTC,” the report describes. Noting that “the median prediction of BTC price being $75,000,” PWC detailed:

The majority of predictions were within the $75,000 to $100,000 range (42%), with another 35% predicting the BTC price to be between $50,000 and $75,000 by the end of 2022.

A class-action lawsuit was filed today against Binance.US, alleging that the cryptocurrency exchange misled consumers about the safety of Terra’s stablecoin UST, and native token LUNA.

The suit also claims Binance violated federal law both by selling UST and LUNA, cryptocurrencies that the plaintiffs claim are securities that should have been registered with the SEC, and by operating as an unregistered securities exchange.

Filed this morning in the U.S. District Court for the District of Northern California, the class action marks the first major attempt to utilize the American court system to rectify the damage caused by the spectacular collapse of UST and LUNA early last month, which wiped out some $40 billion in value.

Decentralized finance (DeFi) developers looking to leverage the yield-generating potential of assets that live outside the crypto native kingdom might just find their prayers are being answered by Wall Street’s biggest bank: JPMorgan (JPM).

Speaking to CoinDesk at Consensus 2022 in Austin, Texas, the head of JPMorgan’s Onyx Digital Assets, Tyrone Lobban, described in detail the bank’s institutional-grade DeFi plans, as well as highlighting how much value, in terms of tokenized assets, is waiting in the wings.

“Over time, we think tokenizing U.S. Treasuries or money market fund shares, for example, means these could all potentially be used as collateral in DeFi pools,” Lobban said. “The overall goal is to bring these trillions of dollars of assets into DeFi, so that we can use these new mechanisms for trading, borrowing [and] lending, but with the scale of institutional assets.”

Institutional DeFi generally means imposing know-your-customer (KYC) strictures on crypto’s permissionless lending pools, which has started to happen in pockets of innovation such as Aave Arc, as well as the recently announced project involving Siam Commercial Bank (SCB) and Compound Treasury.

Institutional investors offloaded $101.5 million worth of digital asset products last week in “anticipation of hawkish monetary policy” from the United States Federal Reserve, according to CoinShares.

U.S. inflation rates hit 8.6% year-on-year at the end of May, marking a return to levels not seen since 1981. As a result, the market is expecting the Fed to take considerable action to reel in inflation, with some traders pricing in three more 0.5% rate hikes by October.

According to the latest edition of CoinShares’ weekly “Digital Asset Fund Flows” report, the outflows between June 6 and June 10 were primarily led by investors from the Americas at $98 million, while Europe accounted for just $2 million.

Products offering exposure to crypto’s top two assets, Bitcoin (BTC) and Ether (ETH), accounted for nearly all outflows at $56.8 million and $40.7 million a piece. The month-to-date figures also paint a grim figure at $91.1 million worth of outflows for BTC products and $72.3 million in total outflows for ETH products:

“What has pushed Bitcoin into a ‘crypto winter’ over the last six months can by and large be explained as a direct result of an increasingly hawkish rhetoric from the US Federal Reserve.”

The leading cryptocurrency was down by 9.94% in the last 24 hours to hit $22,668 during intraday trading, according to CoinMarketCap.

Glassnode believes BTC is entering the deepest part of the present bear cycle, given that even long-term holders are experiencing losses. The market insight provider explained:

“With Bitcoin prices selling off to the mid-$20ks, a plethora of macro indicators suggest the market is entering the deepest phase of this bear cycle. Fundamentals have deteriorated, and even Long-term Holders are now realizing significant losses.”

The Tron network’s stablecoin, USDD, lost its peg to the U.S. dollar on Monday, dipping to as low as 91 cents, as crypto markets nosedived as investors grew increasingly concerned about persistently high inflation, tightening financial conditions and a potential recession.

Tron founder Justin Sun tweeted Monday that the funding rate on the Binance exchange for betting against, or “shorting,” the Tron blockchain’s native TRX token stood at negative 500%, a whopping rate that suggests many investors are clamoring to get into that trade. According to Sun, TronDAO “will deploy $2 billion to fight them.”

More and more exchanges are trying to offer staking options for their customers, allowing them to earn money with the funds deposited on their platforms. Buenbit, an Argentinian exchange, is one of these, recently announcing the inclusion of two stablecoins as part of its yield investment instruments. The company confirmed that USDC and USDT-based investment structures were already available for users to gain yield on the deposits of these stablecoins.

According to reports from local media, the exchange will offer 11% for USDC deposits, and 9% on USDT deposits. These instruments join other coins such as BTC, ETH, DAI, BNB, DOT, ADA, SOL, and MATIC, allowing the customers of the exchange to gain yield without having to worry about price volatility. The interests of these products will be deposited daily.

The price of Bitcoin (BTC) briefly slipped below $21,000 in the early hours of Tuesday morning, a 52-week low for the world’s largest cryptocurrency by market capitalization.

Bitcoin dropped to lows of $20,950, according to data from CoinMarketCap, before recovering to its current price of around $22,620, down over 6% on the day.

With a current market capitalization of $430 billion, Bitcoin is down over 66% from its all-time high of $68,789 recorded in November 2021.

Bitcoin leads liquidation in the cryptocurrency market with $531.62 million liquidated over the past 24 hours, according to data from Coinglass.

The Bitcoin fear and greed index hit 8 out of 100, its lowest level since May 2022, suggesting extreme anxiety in the market.

Earlier today, Ethereum (ETH), the second-largest cryptocurrency, dropped to $1,094.70, also recording a 52-week low. Ethereum is currently trading at $1,220, up 1.3% on the day.

Illicit cryptocurrency activity in 2021 and the first quarter of 2022 has declined as a percentage of overall crypto activity, according to blockchain forensics firm CipherTrace.

The cryptocurrency industry has long held a reputation in some jurisdictions as a haven for illegal activity. However, CipherTrace estimates that illicit activity was between 0.62% and 0.65% of overall cryptocurrency activity in 2020. The firm reported that it has now fallen to between 0.10% and 0.15% of overall activity in 2021.

In its “Cryptocurrency Crime and Anti-Money Laundering” report released Monday, CipherTrace outlined that the top ten decentralized finance (DeFi) hacks in 2021 and Q1 2022 netted attackers $2.4 billion.

Over half of that figure came from just two events, the largest being the late March 2022 Ronin Network exploit worth about $650 million and the $610 million August 2021 hack of the Poly Network, most of which was returned by the anonymous hacker.