Day: March 30, 2021

Tether (USDT) is Fully-Backed According to a Cayman Islands-based Accounting Firm

by Btcmanager

Each Tether (USDT) in circulation is fully-backed according to an assurance opinion, on Mar 30, from Moore Cayman, a part of Moore Global—a London-based accounting firm and one of the largest globally.

The Moore Cayman’s Attestation

The attestation provided by Moore Cayman is an independent account service whose lenses were on Tether Limited’s company controls and processes.

This involved digging deeper into their reserves to improve the public’s quality or context of information due to what Tether Limited terms as increasing “public’s interest.”

Amid the growing significance of USDT, the aim was to provide assurance. Consequently, with risk mitigation and more transparency, token users—especially deep-pocketed investors-can make informed decisions, especially on trades.

In response, Tether Limited, the official issuer of USDT, said this is confirmation of what they had known all along that tokens were fully pegged.

“Tether has always been fully backed, and the assurance opinion we made available today confirms it once again. As Tether’s growth in the market continues to validate our business, we understand the public’s interest in this matter. We are pleased to share this attestation as part of our ongoing commitment to transparency.”

Crypto Community Wants a Formal Audit of Tether Limited’s Reserve

The question of whether each USDT token is backed an equivalent amount of USD is contentious.

Critics of crypto and Bitcoin argue that the whole system is manipulated by billions of stablecoins. Precisely, USDT reserves haven’t been verified by any of the top four professional auditing firms and, therefore, introduce a system’s weakness.

While Moore Cayman checked and made the confirmation, they aren’t an accredited audit firm. They also don’t belong to any formally recognized auditing body.

Consequently, according to critics, their “assurance opinions” will remain simple attestations and not formal audit statements.

USDT is critical to crypto. As of Mar 30, the stablecoin had a market capitalization of $36.5 billion. It finds use, especially in DeFi, where due to the explosion of open finance protocols, over $1 trillion of stablecoins were processed in 2020.

Earlier on, BTCManager reported that USDT’s on-chain volume surged above $232 billion in Feb 2021.

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Bitcoin Adds Back $150 Billion As Visa, PayPal Rev Up Crypto Offerings And Institutions ‘Buy The Dip’

by Forbes

Topline

After a stark plunge Thursday that wiped out $100 billion in market value, the world’s largest cryptocurrency is back near all-time highs Tuesday as corporations like Visa and PayPal join other institutional players in expanding their crypto offerings.

Key Facts

As of 4 p.m. EDT, the price of bitcoin has climbed 2% over the past 24 hours, pushing its market capitalization up to $1.1 trillion–about $40 billion shy from an all-time high on March 13 and pushing gains to roughly $144 billion since a sharp correction on Thursday, according to crypto-data website CoinMarketCap.

‘Analysts are pinning the resurgence to still-booming institutional adoption, including PayPal’s new cryptocurrency checkout service, which launched Tuesday and allows the company’s more than 375 million customers to shop using cryptocurrency at millions of online merchants (PayPal didn’t specify an exact figure, but says the program will expand in the coming months).

Oanda Senior Market Analyst Edward Moya calls the move “another massive cryptocurrency endorsement from Wall Street” and “further proof of mainstream acceptance” just one day after Visa said it will start settling transactions with cryptocurrency partners using a token built on the Ethereum blockchain, which underpins the world’s second-largest cryptocurrency, ether.

Moya notes that bitcoin, which is priced at about $59,080, could struggle to push past $60,000 again but says the recent developments “should be enough to keep the bullish trend going strong.”

Nigel Green, the CEO of $12 billion wealth advisory deVere Group, said in an email Tuesday that growing corporate investments from the likes of Tesla and billionaire Jack Dorsey’s Square are signs that institutions are employing the “buy the dip” mantra popularized by retail investors—meaning they’re loading up on bitcoin when prices plunge.

What To Watch For

Regulation. Though Wall Street is warming up to bitcoin, legendary hedge fund manager Ray Dalio warned last week that he thinks there’s a “good probability” bitcoin could be banned by the U.S. government, similar to how it banned gold nearly a century ago. The Securities and Exchange Commission has been slow to issue regulation for cryptocurrencies, but in an interview with Forbes, SEC Commissioner Hester Peirce said Gary Gensler, President Joe Biden’s nominee to head up the agency,  would likely be “sympathetic to the call for regulatory clarity.” When nations like South Korea started cracking down on cryptocurrency three years ago, prices crashed as much as 80% over the course of one year, though it’s unclear how such a development could affect markets today.

Key Background

Bitcoin prices have skyrocketed over the past year amid booming institutional adoption and inflation fears sparked by unprecedented government spending to combat the pandemic. Last week, billionaire Elon Musk tweeted that Tesla would start accepting bitcoin for vehicle purchases and retaining the cryptocurrency tendered, as opposed to converting it to U.S. dollars. Also this month, Fidelity Investments filed an application for its first bitcoin exchange-traded fund, and banking powerhouse Morgan Stanley said it would open up bitcoin exposure to its wealthy clients, though it’s limiting such funds to investors with “an aggressive risk tolerance.” 

Surprising Fact

Bitcoin has surged nearly 800% over the past year. Its return of about 96% this year is more than any sector tracked by the S&P 500.

Further Reading

SEC Commissioner Explains Why A Delayed Bitcoin ETF Has Consequences (Forbes)

Bitcoin Plunge Erases $100 Billion In 24 Hours–Here’s How Long The ‘Bloodbath’ Could Last (Forbes)

Legendary Investor Warns Bitcoin Ban ‘Likely’ As Price Suddenly Soars Toward $60,000 (Forbes)

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Bitcoin futures premium hits 30% but analyst says ‘This time it’s different’

by Cointelegraph

March 30 could become a historical day that will be remembered by Bitcoin (BTC) fans for a long time. Besides marking a 17% recovery from the $50,300 bottom on March 25, PayPal officially confirmed that it will support crypto payments for U.S. customers. Moreover, CME Group announced that its Micro Bitcoin futures contracts will launch on May 3 with the contract size starting at 0.1 BTC each. 

Additional bullish news came as Morning Brew, a daily business newsletter with 2.5 million subscribers, finally dropped gold and is now exhibiting Bitcoin price in its markets section alongside the S&P 500, Nasdaq, Dow, 10-Year Treasury and JPMorgan stock.

March 30 also marks 3 weeks of BTC price having a daily candle close above $50,000. Thus, as the market indicates a healthy consolidation period, traders should closely monitor the levels of leverage being used by investors. Historically, crashes tend to occur when buyers are excessively optimistic and any sharp price movement larger than 8% tends to trigger larger cascading liquidations.

BTC price at Binance, USD. Source: TradingView

The open interest on Bitcoin futures shows the size of the current longs and shorts and whenever this number increases substantially, it means investors have a larger risk exposure. Thus, it shows increasing market interest in the asset but this also comes at the cost of potentially sizable liquidations.

BTC futures aggregate open interest in USD terms. Source: Bybt

The above chart shows a 105% increase in futures open interest over the last two months. Meanwhile, the current $22.6 billion indicator remains only 2% below its all-time high.

Even though Bitcoin’s price surge can explain part of this hike, it also reflects renewed confidence as longs have been liquidated on $7.4 billion between March 14 and March 24.

To understand how bullish or bearish professional traders are leaning, one should analyze the futures basis rate. Basis is also frequently referred to as the futures premium and it measures the difference between longer-term futures contracts and the current spot market levels.

A 10% to 20% annualized premium (basis) is interpreted as neutral, or a situation known as contango. This price difference is caused by sellers demanding more money to withhold settlement longer.

OKEx BTC 3-month futures basis. Source: Skew

On March 13, BTC markets entered an excessive-leverage situation as the basis rate neared 35%. Being optimistic, especially during a bullish market, should not be deemed worrisome. However, as the price dropped 11% following the $61,800 all-time high, these ultra-leveraged buyers had their positions terminated.

This time around, the basis rate hovers around 29%, which is reasonably high but the figure could adjust itself over the next couple of days. These leveraged buyers might increase their margins or buy BTC on regular spot exchanges to subsequently reduce their futures position.

Although longs seem to be excessively leveraged, there are currently no signs of potential market stress that hint at a negative outcome if BTC price drops to $53,000. As most of the recent open interest increase happened in early-March, the long’s average price is likely not much higher than this.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.