Log in
- > Crypto winter fears fade as Bitcoin rebounds to AUD $90k
- > Aussie crypto trader sentenced to three years in prison over AUD $10m transfer
- > Brazil approves Solana ETF – is the United States next?
- > Ripple begins beta testing for RLUSD stablecoin
Crypto winter fears fade as Bitcoin rebounds to AUD $90k
Bitcoin has weathered the storm and emerged close to damage-free following a global market crash on Monday the 5th of August.
Last Monday, August the 5th, the crypto market experienced carnage it hadn’t seen in years. Concerns around an impending global recession – caused by a weakening US job market – sent stocks and digital assets tumbling. In a single day, Bitcoin plummeted by more than 25% to drop beneath US $50k, while Ethereum and Solana fell 30%. Investors were rattled.
Chaos ensued in Japan, with the nation’s central bank raising interest rates to their highest-ever point (0.25%). Many investors had leveraged the Yen’s low rates to perform “carry trades”, which involves borrowing the Yen and re-investing it in another, high-yielding asset. But with the Yen gaining strength, traders had to liquidate their positions, causing bloodshed around the world.
The impact carried over to the crypto market, causing over US $1b worth of liquidations on Bitcoin long (bullish) positions.
After the dizzying heights of early 2024, the crypto market’s future looked grim.
But as Baron Rothschild once said, “the time to buy is when there’s blood on the streets.”
The next day of trading quickly assuaged fears of a long-term crypto winter. The reaction to the mediocre macroeconomic conditions was exposed, as the Japanese stock market recovered to pre-crash levels within only a few days of trading.
Investor confidence grew across the markets, and it didn’t take long for Bitcoin to hit back.
Spot ETF flows, heavily correlated with the day-to-day price movements of BTC, regained momentum following the August 5 crash, and the price of Bitcoin steadily moved upward.
In less than a week, BTC re-tested its AUD $90k ceiling, only to eventually break it a few days later.
The coin is now sitting pretty at approximately AUD$ 88k, marking a 26% increase from Bitcoin’s August 5th bottom.
Ultimately, the events of the past fortnight have proven two things:
- The market is very quick to overreact
- Bitcoin’s resilience continues to impress
Aussie crypto trader sentenced to three years in prison over AUD $10m transfer
An Australian man who spent millions of dollars mistakenly transacted to his account by the Crypto.com exchange will spend several years behind bars due to his “reckless” actions.
An Australian crypto investor has felt the full wrath of law enforcement after being sentenced to three years in prison. The story behind the legal case is quite interesting. The man, Jatinder Singh, was on the receiving end of AU $10.5m from Crypto.com due to a…rather significant accounting error.
Initially, Singh deposited AUD $100 into his Crypto.com account in May 2021 under his partner’s – Thevamanogari Manivel – name. Because of the inconsistencies between the names listed on his banking and trading account, the transaction was rejected.
However, instead of receiving a refund of $100, Singh’s bank account was credited with a whopping AUD $10.5m.
This kind of accident is something that many dream of – but unfortunately for Singh and co, just because money is in your bank account doesn’t always mean it’s actually yours.
Nevertheless, the Australian immediately began splashing the cash, picking up two Melbourne properties (which somehow didn’t exhaust the entire windfall) among other high-roller items. The remainder of the funds, worth AUD $4m, was transferred to a Malaysian bank account to prevent Aussie authorities from picking up on the strange influx in earnings.
This wasn’t enough to cover Singh’s tracks, as seven months later Crypto.com realised that their accounts were AUD $10m fewer than they should be.
The crypto exchange’s management team reached out to Singh and Manivel’s bank, Commonwealth Bank, who failed to contact the pair.
Soon after, in March 2022, the couple were arrested as they attempted to hop town. During the trial, Singh claimed he believed the funds were acquired legitimately via an online raffle – but this wasn’t enough to convince Judge Martine Marich.
Singh will face three years behind bars due to his misappropriation of Crypto.com’s funds, while Manivel must serve 18 months of community service.
Brazil approves Solana ETF – is the United States next?
The new Brazilian Solana ETF will begin trading on the B3 exchange, breathing life into the hopes of a SOL fund approval in the US before the end of 2024.
The Brazilian Government has been making pro-crypto moves for a while now, but they may have just opened the floodgates for the next ETF to hit the markets. Following the overwhelming success of spot Bitcoin and Ethereum ETFs, the crypto community has intensely discussed which digital asset should come next.
Certain industry figureheads, like the Head of Investment Research at Sygnum Bank, were downtrodden on the prospects of a potential Solana ETF in the USA.
However, Brazil has reignited hopes after the nation’s financial regulators officially approved a spot SOL ETF for trading on the local markets.
The fund will rely on the CME CF Solana Dollar Reference Rate, a collaborative effort between a major stock exchange and data provider Crypto Facilities. The figure is an amalgamation of transaction data from some of the world’s biggest crypto trading platforms, giving SOL ETFs a reliable price point.
For now, only one Solana-based fund will trade on the major Brazilian B3 exchange – headed by QR Asset and Vortx.
The news invigorated hopes among US investors that a spot SOL ETF is on its way, with Matthew Sigel, VanEck’s Head of Digital Assets Research, claiming an approval is “inevitable”.
VanEck was the first US company to file for a spot Solana fund, with 21Shares joining them a day later.
Ripple begins beta testing for RLUSD stablecoin
The company also warned investors to avoid buying any RLUSD until further official announcements, as approval for the stablecoin may still be a ways away.
Stablecoins – digital currencies pegged to the price of an underlying fiat currency asset (i.e. the US dollar) – have slowly bubbled away throughout 2024. Although spot ETFs and the Bitcoin halving have captured most of the attention, stablecoins have become entrenched as integral to the Web3 ecosystem, and may lead the sector into the mainstream.
Blockchain company Ripple – founders of XRP and Web3 network XRP Ledger – have joined the stablecoin party with the announcement of Ripple USD. As the name suggests, the digital asset will be tied to the US Dollar, which Ripple will hold in cash reserves at a 1:1 ratio.
To further improve transparency, Ripple will also conduct monthly third-party audits on their books to ensure the coin remains over collateralised, avoiding potential de-pegging risks like the one we saw with Terra stablecoin, UST.
On the 10th of August, Ripple’s official Twitter account announced the team will be taking their stablecoin project to its next stages. The developers have begun beta testing of RLUSD on the Ethereum Mainnet, as well as Ripple’s native blockchain XRP Ledger.
While the news is bullish for both Ripple and the stablecoin market, there’s a lot of water to go under the bridge. Although stablecoins aren’t typically under the jurisdiction of the Securities and Exchange Commission (SEC), some fear that Gary Gensler and co may make approval difficult for the project.
Nevertheless, tokenised assets are emerging as pivotal to the Web3 world’s evolution.
The growth of Solana has helped push a greater industry focus on stablecoins, with the DeFi network home to several major assets like PayPal’s PYUSD, USDC and USDT. At the start of the year, Solana’s stablecoin supply was US $1.9b – since then, it has exploded to $3.2b, an increase of 71%.
Meanwhile, the European Central Bank has put a lot of research into the potential release of a central bank digital currency (CBDC).
Ben Knight
