“The U.S. Federal Reserve on Wednesday raised interest rates by 75 basis points, or three-quarters of a percentage point. It is the biggest rate hike in 28 years, part of an ongoing effort to bring down soaring inflation. The Fed Funds rate will rise to a range of 1.5%-1.75%. Bond traders are pricing in a range of 3.25%-3.5% by the end of the year, implying an unusually rapid and harsh pace of monetary tightening.
Powell said the U.S. central bank will not “declare victory” until officials see “compelling evidence” that inflation is coming down. ‘The labor market is extremely tight, and inflation is much too high.’
Bitcoin (BTC) was changing hands around $21,444 about an hour after the meeting, up from $21,076 when the decision was released. Most analysts had already priced in the hike in the days leading up to the meeting.
Overall economic activity appears to have picked up after edging down in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low.”
“Dubai-based crypto fund Three Arrows Capital is facing possible insolvency after incurring at least $400 million in liquidations. Three Arrows, popularly known as 3AC, was liquidated by crypto lending firms and is currently in the process of repaying lenders and other counterparties.
3AC’s troubles come amid reports that crypto lender Celsius may be insolvent. Meanwhile, on-chain data suggests 3AC is selling its existing crypto positions to lower collateral requirements for certain positions. One of 3AC’s wallets has a debt totaling $183 million.
We are in the process of communicating with relevant parties and fully committed to working this out.”
“Crypto lending firm Celsius has hired lawyers specializing in business restructuring to help it navigate its thorny financial situation. Lawyers from the Philadelphia-based Akin Gump Strauss Hauer & Feld LLP are working with Celsius, which at its peak held over $10 billion in client assets.
Celsius took the dramatic step of freezing account withdrawals Monday amid the broader crypto market downturn.”
“The stETH price drop has fueled some worries on Twitter and elsewhere that Lido is “the next Terra.” Fortunately, such worries aren’t grounded in actual understanding of how stETH works under the hood.
First off, while Terra’s UST stablecoin was “pegged” to the price of $1, stETH was never pegged to the price of ETH. So long as stETH is not redeemable for ETH, there’s nothing guaranteeing the two should sell at the same price until they are interchangeable.
The price of [Lido] staked ETH prices in some risk of not doing the Merge, some risk of [Ethereum not allowing] withdraws, and some opportunity cost of having your ether locked up for along time.
Unless you believe ether is going to zero or you think it will never successfully merge into a proof-of-stake network, you can rest easy knowing you can wait it out and eventually trade stETH back for ETH. The relationship between stETH and ETH does not have the sort of feedback loops that doomed Terra.
The people selling stETH at a discount to ETH either need to cash out now (like Celsius needing to pay off loans), or figure ETH’s price will be lower than it is today even after The Merge. Even if it trades at a discount to ETH currently, stETH is unlikely to crash (similar to Terra) unless ether itself crashes.”
“Investors pulled out about $1.6 billion in 48 hours from Tether’s dollar-pegged USDT stablecoin, reducing its circulating supply to $70.8 billion, the lowest since October 2021.
Paolo Ardoino, chief technology officer of Tether, said that Tether liquidated its Celsius position without a loss and has no exposure to Three Arrows Capital. USDT’s price has been holding up its anchor to the U.S. dollar.
The composition of Tether’s reserve to back the price of USDT has long since been an area of concern in the crypto market, with questions surrounding the nebulous “commercial paper” holding and digital asset investments.”
“The proposed addition in Article 835 of the Civil Procedure Code states that while crypto assets are not a currency in and of themselves, they could be ‘used as a financial asset, means of exchange or payment, or instrument of access to goods and services or investment.’ A broad interpretation of the proposal suggests that cryptocurrencies such as Bitcoin (BTC) or Ether (ETH) could be used to pay for goods and services across the country.
The proposal also discusses the new powers and limitations that Brazilian courts would have once crypto is recognized as a financial asset, such as freezing exchange accounts. However, the proposal has also stopped short of giving the court power to seize users’ private keys.
Access, by the Judiciary, to the users’ private key is prohibited.”
“Blockchain analytics platform Nansen has launched what is said is an end-to-end encrypted messaging app for global crypto participants to engage with each other while enhancing developer accountability. The transparency should help reduce scams such as the Discord moderator hacks.
Nansen Connect will allow users to log in via their crypto wallets, select a username based on their Nansen wallet labels and join groups based on crypto holdings and on-chain behaviors.”
“Forta takes a decentralized approach to security by working with a loose federation of researchers who deploy bots to patrol various corners of the blockchain world. The bots are deployed by a network of nodes to act as a kind of security camera network to monitor for abnormal activities.
Beal says blockchains evolve so rapidly that it doesn’t make sense to rely on centralized cybersecurity giants in the way that the Web 2.0 world does. But to ensure the node operators act in the best interest of the network, Forta is introducing incentive systems like the FORT token.
The FORT token will allow the Forta Network to continue growing and attracting quality contributors.
A number of major blockchain projects—including Lido, Compound and Polygon—are already using Forta to monitor their activities.”