For the third week in a row, bitcoin is at exactly the same stage at the time of writing. The latter is fighting to stay above $20,000. As was the case during the same period, it achieves this when the NASDAQ experiences a bullish day, while in the opposite case it returns below this threshold. In short, the same correlation in an overall macroeconomic picture of uncertainty continues to drive the markets.
The decline of the past few months in the cryptocurrency market continues to take its toll. Indeed, after Singapore’s giant investment fund Three arrows capital filed for bankruptcy last week, it’s the Canadian firm’s turn trip to follow. The Toronto-headquartered company filed for Chapter 11 bankruptcy protection in New York’s Southern District on Tuesday, estimating it had more than 100,000 creditors and assets between $1 billion and $10 billion. It also registered the same range for its commitments. The two bankruptcies have a direct link. According to information collected by Frances Coppola, Voyager’s loan portfolio represented nearly half of its total assets, and nearly 60% of this portfolio consisted of loans to Three arrows†
Following the announcement, CEO Steven Ehrlich posted that “customers with crypto in their account(s) will in return receive a combination of the crypto in their account(s), proceeds from the liquidation of 3AC, common stock of the newly reorganized company and Voyager. receive. Coins”. After Celsius, CoinLoan, CoinFLEX, and Voyager themselves have all announced restrictions or outright withdrawals in recent days.
Speaking of Celsius, according to blockchain data, the company has repaid $183 million of its debt to decentralized exchange Maker. The most plausible hypothesis is that the goal is to recover collateral linked to bitcoins that would otherwise remain blocked. The transactions not only resulted in the debt forgiveness, but also in Maker’s release of 2,000 packaged bitcoins, worth $40 million, which were deposited as collateral, according to the data.
Peter Schiff, a longtime proponent of gold as an investment and major critic of cryptocurrencies, is faced with a particularly ironic situation. Indeed, the Puerto Rico bank that he partially owned was closed by regulators for failing to meet minimum net capital requirements. The key stakeholder continued with a rant on Twitter, criticizing the pivotal decisions that led to this conclusion and his inability to handle the situation, leaving him completely vulnerable to outside actors. While acknowledging that “customers could lose money,” Schiff said he was unaware of the legal minimums and did not receive any form of legal notice prior to the abrupt shutdown. The crypto community has not failed to point out the incredible irony, the economist is the victim of the structures of centralized finance, he who continues to disapprove of his opposite.
A national stablecoin no longer appears to be a near-term priority in the United States. At a conference Tuesday on the dollar’s international role, economic advisers and Fed heads discussed digital assets and whether a CBDC could benefit the country. Panelists generally agreed that technology alone would not lead to profound changes in the global monetary ecosystem. The idea is that countries can go cashless while increasing security and speeding up payments. However, the central bank of the world’s largest economy has repeatedly said it is only in exploration mode for a digital dollar. Tuesday’s conference seemed to confirm that there was no rush to develop one.
The biggest proponents of cryptocurrencies are not afraid of the recent price drops, quite the contrary. Undeterred by the losses he incurred from his strategy of using public funds to invest in bitcoin, El Salvador president Nayib Bukele announced last week that he had spent an additional $1.5 million to acquire 80 BTC. buy at $19000 each. “Bitcoin is the future, please sell it low,” he said.
The strategy of collecting bitcoins after huge declines has also been replicated by other long-term bitcoin investors. Michael Saylor, CEO of MicroStrategy, recently announced a new purchase of $10 million worth of bitcoins, bringing his company’s cash to 129,699 BTC at an average price of $30,664. That’s about $1.3 billion in losses, but like Bukele, Saylor doesn’t seem too concerned about bitcoin’s short-term fluctuations.
As mentioned at the beginning of the Communication, macroeconomic factors currently appear to be driving all global markets. So which fundamentals can have a real impact on prices? There is no doubt that the next expected data for everyone will be the consumer price index in the United States next Wednesday, which will provide an up-to-date picture of inflation. This will be followed by the Fed’s rate hike decision at the end of the month. A 75-point increase has already practically been announced, unless next week’s data surprises and changes the decision. Then, on July 28, the Office of Economic Analysis (BEA) of the United States will release a preliminary estimate of United States GDP for the second quarter of 2022. After a GDP decline of -1.6% in the first quarter of 2022, GDPNow tracker The Federal Reserve Bank of Atlanta now forecasts GDP growth to decline by -2.1% in the second quarter of 2022. A second consecutive quarter of GDP decline would send the United States into a technical recession.
Technically speaking, bitcoin trades in an increasingly narrow consolidation channel. If the $20,900 breaks, the price could quickly retest levels around $23,000. On the other hand, bitcoin continues to find a good number of buyers below $19,000.
This article is brought to you by Fonds Rivemont. The Rivemont crypto fund is the first and only actively managed cryptocurrency fund in Canada. RRSP and TFSA are eligible. Accredited investors can learn more here†
Disclaimer: This column does not necessarily reflect the views of CryptonewsFR and does not constitute investment advice or instructions to trade.†
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