Schlagwort: blockchain markets

A proposal to have the Aave DAO introduce a decentralised, multi-collateral-backed stablecoin dubbed GHO, has passed following a community vote, Aave Companies has announced.

According to the platform, the USD-pegged stablecoin received a greenlight from the DAO community with an overwhelming support of 99.99%.

The community has given the greenlight 🟢 for GHO 👻 The next step is voting on the genesis parameters of GHO, look out for a proposal next week on the governance forum https://t.co/ba4oK50Wb8

— Aave (@AaveAave) July 31, 2022

Aave’s GHO stablecoin

The GHO proposal came out on 7 July this year, with the governance vote required to allow for the launch of the decentralised stablecoin on the Aave Protocol.

In the request, the Aave Companies said the algorithmic stablecoin would allow community participants to mint the token against their collaterals. Accordingly, GHO had been envisioned to be backed by assets the users choose and would see borrowers continue to earn interest on whatever they put out as collateral.

When borrowers repay against their collateral, the Aave Protocol will burn the GHO associated with that account.

“If approved, the introduction of GHO would make stablecoin borrowing on the Aave Protocol more competitive, provide more optionality for stablecoin users and generate additional revenue for the Aave DAO by sending 100% of interest payments on GHO borrows to the DAO,” the Aave Companies proposal offered.

The governance vote began on 28 July after a snapshot a day earlier, and closed on 31 July with 99.99% of the 1,793 total votes giving the proposal a thumbs up. The approval now sets the GHO stablecoin onto the next step, which will involve a vote on the token’s genesis parameters.

A proposal for the same is expected this coming week and will be posted on the Aave DAO governance forum.

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Bitcoin touched a high of $24,666 on Coinbase to leave the benchmark cryptocurrency on the cusp of its best monthly performance since October 2021.

Bitcoin (BTC) rose to highs of $24,666 on US crypto exchange Coinbase on Saturday, hitting its highest price level since mid-June.

BTC/USD is looking to establish fresh support after retesting the 200-week moving average zone, which could be key to bulls plans to edge higher.

Chart showing BTC/USD monthly performance. Source: TradingView

Bitcoin on track for best month since October

The flagship cryptocurrency, which remains above the $24,500 level despite a brief lull late Saturday, is also on track to record its best monthly performance in nine months.

With gains of over 23% in July, BTC/USD is positioned to see its monthly returns the best since seeing nearly 40% in October 2021.

Bitcoin is also registering a positive monthly return for the first time since March when the 30-day performance stood at around 5.4%. Over the three months of April, May and June, Bitcoin price fell by almost 68%, which leaves July as a very good month for bulls.

On-chain, exchange macro outflows have continued as hodlers dug in amid the crypto winter. According to Glassnode, exchange balances have fallen to just about 12.6% of circulating supply, representing 2.4 million BTC.

#Bitcoin balance on exchanges continues its macro decline, reaching 12.6% of the Circulating Supply (2.4M $BTC).

Exchange balances have now seen a macro outflow of over 4.6% of the circulating supply since the March 2020 ATH.

Live Chart: https://t.co/zJnfaG05zt pic.twitter.com/vhKCudqGUr

— glassnode (@glassnode) July 29, 2022

Bitcoin’s latest upside followed a broader market reaction to the US Federal Reserve’s rate hike last Wednesday, and mirrored gains across the US indexes where the S&P 500 closed the week more than 4% higher and Nasdaq ended with +4.7%. 

Over the month, the S&P 500 gained more than 9%, while the Nasdaq added over 12%.

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Bitcoin (BTC) is likely to outperform in the face of a dovish flip from the US Federal Reserve and a weaker US dollar, according to digital assets manager CoinShares.

The firm’s bullish outlook for BTC comes amid a sharp bounce for cryptocurrencies on the back of the Fed’s 0.75% interest rate hike and recession talk. But this upside also comes in a bearish run that saw BTC price fall to $17,600 and then struggle to break above $22,000.

CoinShares says the “hiatus” could give way to an outperformance for the flagship cryptocurrency, including a decoupling from equities.

“Although Bitcoin’s price performance has been weak in the face of an aggressive FED, this current hiatus in price performance may be short-lived,” the firm explained in the Twitter thread.

A dovish Fed will be bullish for BTC

The Fed’s hawkish tilt has been necessary as the central bank looks to control rising inflation, but market analysts believe the monetary policy could flip dovish to aid economic growth and employment. In its assessment, CoinShares suggests such a move could result in weakness for the US dollar – a combination of macro factors that could buoy a fresh rally in Bitcoin.

“While we believe we are likely to see the US Federal Reserve continue to hike interest rates through the summer,” the asset manager noted, “we also believe they are likely to adopt a softer outlook on economic growth thereafter, prompting considerable dollar weakness.”

On what could happen in the market due to these factors, the firm says a decoupling from stocks is likely, with this scenario more likely amid “recession or stagflation.”

[4/5] We believe a policy mistake is highly likely, where Bitcoin prices are likely to diverge from growth equities, with the former likely to benefit from a dovish FED and weaker USD, while the latter underperforming in the face of a recession or stagflation.

— CoinShares 👩‍🚀 (@CoinSharesCo) July 29, 2022

Bitcoin was trading around $24,600 on Saturday evening, up more than 8% this past week and 23% in the past 30 days. 

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Babel’s losses included 8,000 BTC and 56,000 ETH wiped out in unhedged proprietary trading positions, a proposal deck cited in a recent report detailed.

Babel Finance, an embattled crypto lender that froze customer withdrawals in June amid the crypto market crash, reportedly lost over $280 million of its customers’ funds in bad trading bets, The Block reported citing the crypto company’s restructuring proposal deck.

Per details in the proposal, the Babel Finance’s losses came via proprietary trading of 8,000 bitcoin (BTC) and 56,000 ether (ETH). The failed bets happened last month as the platform faced liquidation amid massive deleveraging across the crypto market.

The firm says in the deck that as BTC price plunged from $30,000 to $20,000, unhedged positions “chalked up significant losses, directly leading to forced liquidation of multiple Trading Accounts.” 

It’s these accounts that wiped out approximately 8k BTC and 56k ETH worth over $280 million in customer funds.

Capitulation and restructuring plans

Babel’s capitulation spiraled as its lending and trading units failed to meet margin calls – and no customer funds to continue honouring withdrawals.

Trouble hit not long after the financial services provider raised $80 million in its Series B financing round in May. The financing, secured at a valuation of $2 billion, saw investments from Jeneration Capital, BAI Capital, 10T, Circle Ventures and Dragonfly Capital among other investors.

The market downturn and the proprietary trading failure has Babel Finance trending alongside other troubled crypto firms like Voyager Digital and Celsius Network, which have both filed for bankruptcy. 

The collapse of crypto hedge fund Three Arrows Capital (3AC) and the contagion that followed only heightened the uncertainty.

As part of its restructuring plans, the Babel team is looking to convert $150 million of its largest creditors’ debt into convertible bonds. The lender also seeks to add to its survival kit $250 million to $300 million via convertible bonds, with further funds likely to come from a $200 million revolving credit facility.

The plan, per the proposal deck, is to ultimately incorporate Babel Finance’s major creditors as shareholders.

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The FDIC says the public should note that deposit insurance does not cover non-bank entities and non-deposit products, including stocks and cryptocurrencies.

The Federal Deposit Insurance Corp (FDIC), an independent US agency that insures deposits and helps protect customers in case of given bank failures, has released a clarification message for crypto investors concerning its mandate.

In a fact sheet released on Friday about the FDIC deposit insurance and crypto companies, the agency warns the public that claims crypto deposits being insured are inaccurate.

Per the agency, some cryptocurrency platforms have “misrepresented” information concerning crypto products and their eligibility for FDIC deposit protection.

“These sorts of statements are inaccurate and can cause consumer confusion about deposit insurance and harm consumers under certain circumstances,” the Fact Sheet noted, making it clear that crypto isn’t FDIC-insured. Specifically, the deposit protection doesn’t cover failed non–bank entities, such as crypto companies.

The Fact Sheet also states that “deposit insurance does not protect consumers with non–deposit products such as stocks, bonds, mutual funds, securities, commodities, or crypto assets.”

In good and bad financial times, one thing remains the same: your money up to $250,000 is protected at FDIC-insured financial institutions. Since 1934, no FDIC-insured depositor has lost a penny of their insured funds. https://t.co/059yrVwiiH pic.twitter.com/iSP2OZEO08

— FDIC (@FDICgov) July 29, 2022

Non-bank deposits and an insured bank’s products

An FDIC advisory also sought to clarify that while it offers depositor protection to insured banks’ customers, the same does not extend to a non-bank entity or the customers even if the entity offers products via a depository-insured bank.

“In dealings with crypto companies, FDIC-insured banks should confirm and monitor that these companies do not misrepresent the availability of deposit insurance,” read the advisory.

The FDIC’s message to the public follows developments with the bankrupt crypto lender Voyager Digital.

The crypto company, which had some customer deposits with an FDIC-insured bank (the Metropolitan Commercial Bank) has been asked not to misrepresent facts about deposit insurance to its customers.

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