Blackswan Coming to Crypto Markets?

Bitcoin and altcoins started falling again yesterday. On Saturday evening a tiny news event emerged that could potentially lead to something bigger.

Defunct crypto exchange Celsius has filed a lawsuit against Tether, seeking $3.5 billion in BTC returns, damages, and legal fees, alleging misappropriation of assets.

CoinGraph News

The key term is misappropriation of assets. Tether (USDT) has been criticized for not revealing its capital structure or ownership, held offshore. According to consumer protection organizations this poses a systemic risk to USDT holders. It is not known whether the company has the liquidity or even assets to stem outflows.

Over the weekend the CEO of USDT came out critizing the new European MiCa regulations with the same argumentation, systemic risk.

Tether CEO: MiCA regulation poses “systemic risk” to stablecoins and even the banking system

Tether CEO Paolo Ardoino criticized the EU’s MiCA regulation, stating it poses systemic risks to stablecoins and the broader banking system. He argues that instead of enhancing safety, MiCA introduces significant risks. Effective since June 30, MiCA imposes strict rules on stablecoin operations within the European Economic Area, including requiring at least 60% of reserves to be held in EU bank accounts. Ardoino noted that this could lead to vulnerabilities similar to those seen in bank runs due to the partial reserve banking system and the low insurance limit of $100,000 for cash deposits in the EU, which he feels is insufficient for large issuers like Tether.

@MONEY (Telegram Channel)

In 2018 an article was published on Hackernoon: “What Happens When the Tether Shit Hits the Fan?”.

Your material wealth in crypto is likely to take a heavy hit when Tether implodes.

BambouClub

It is possible that regulators will be taking a closer look at Tether in the near future.

In other news Trump’s son Eric posted on X that a big announcement is coming.

I’ve truly fallen in love with crypto and DeFi – Stay tuned for a big announcement.

Eric Trump

Last week, political meme token TrumpCoin plummeted as developers withdrew $50 million in liquidity. All developers of altcoins have at least some unlocked tokens, which means they can sell them. If crypto markets are rattled with Tether shocks, it is likely there will be plenty of selling going on and many coins will become less active or relevant.

Chart courtesy of @CoingraphNews

Will Bankruns Take Place?

The Federal Deposit Insurance Corporation (FDIC) has placed 63 lenders on its Problem Bank List. These institutions are at risk of insolvency.

The FDIC holds only 1.35% reserves, meaning there is a critical point where practically the entire banking system collapses. This applies to the European banking system as well.

If bank customers decide to bring their money into safety, a lot of the capital will find its way into precious metals and cryptos, with Bitcoin dominating the crypto market (around 55%).

There was a leaked video from an FDIC meeting where bankruns were discussed, but it has been removed from the internet. In the discussion FDIC officials confirmed that bankruns would of course take place.

Central banks and other financial institutions have the option to place all bank deposits on to a blockchain to handle liquidations and they are also working on an On-Demand-Liquidity tool, on the blockchain. Subscribers will receive more information on tis and other developments. Signups will be available in the coming week.

Russia to Allow Cryptos in Global Trade Settlement

Last week Russia passed a law to allow cryptos in trade settlements. The development comes as sanctions have delayed payments in trade with Russia’s partner such as China, India and UAE.

“The law is expected to go into force in September, and Russian central bank Governor Elvira Nabiullina, one of the backers of the new law, said the first transactions in cryptocurrencies will take place before the end of the year.”

Reuters

Today, Morgan Stanley’s 15,000 advisors will start pitching Bitcoin ETFs to clients with a networth above $1.5 million.

“This move marks a significant step in the mainstream adoption of cryptocurrency investments. The two ETFs in focus are BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund.”

CryptoNews

Cryptos Looking Towards Strong Q4

“Digital currency-backed exchange-traded funds will likely make their way into “model portfolios” toward the end of 2024, according to BlackRock’s chief investment officer for exchange-traded funds (ETFs).” 

Coin Telegraph

BTC/Altcoin prices are currently moving significantly lower reflecting tech stocks and the unwinding of the JPY carry trade position following a Bank of Japan rate hike on July 31.

BTC could even go below the $45K institutional buy range. 10% daily price swings are not rare. This chart was prepared at the end of June 2024.

Our subscribers will receive a signal once the market has cleared (signups will be possible by the end of this week).

The Only Thing That Could Break Bitcoin: Quantum Computing

The cryptography used in Bitcoin is secure. For now. In the future, a quantum computer could take over the network and basically render it useless. Some researchers suggest fully functional quantum computers could be 15-20 years away, but due to advances in technology this could be sooner.

US, UK accelerate quantum computing programs after China breakthrough.

Coin Telegraph

Read more here.

Quantum resistant blockchains already exist One example is CellFrame. It could also be possible for the Bitcoin mining community to run a a quantum resistant protocol over the network in order to make it secure.

It is good to keep an eye on these developments even if the risks are long term.

Democrats Now Selling BTC Reserve

After Trump revealed his plans for crypto, Bitcoin touched the $70k price level yesterday, and then retreated to below $67k.

The US Government holds BTC confiscated from Silk Road, a platform that was involved in illegal activities. The coins are now being sold and the position is larger than the German Government was selling earlier this month. The German Landeskriminalamt also had confiscated BTC that was dumped on to the market.

One does need to consider that these Bitcoins basically belong to taxpayers.

Kamala Harris campaign seeks ‘reset’ with crypto companies

Vice-president’s team aims to improve relations after industry criticism of Biden administration. Read more here.

The selling pressure could last for a month or two. Unless something happens. This chart from the end of June is still the likely development.

In other news, the SEC retracted its statement concerning security status of altcoins.

The SEC has retracted its request for a court ruling to classify tokens such as Solana, Cardano, Polygon and others as securities.

Coin Telegraph

Is Bitcoin Breaking Out?

After the Bitcoin 2024 conference in Nashville this past weekend, Bitcoin is pushing towards the all time high above $70k. The only problem is that this is not happening on increased volume. It is still better to wait for confimation.

Trump also held a keynote speech in Nashville. He promised, if elected, to end the SEC crusade against crypto by firing SEC Chairman Gary Gensler on day one, no CBDC during his term and a US Government Bitcoin strategic reserve.

Wants to make the US a BTC superpower

Meanwhile Elon Musk tweeted a Kamala Harris ad. The background music in the Youtube video is a bit annoying.

The situation remains interesting. So does the price of Bitcoin during the month of August 2024.

In Historic Shift, British Newspapers Begin Warning Of “Perils” Of Cashless-Society After Global IT Outage

The mainstream media has, until now, played a key role in advancing the Global War on Cash – a war that began with no official declaration but in which propaganda, as with all wars, is a vital weapon…

Read more here.