Welcome to our recap of the major stories in the crypto world! There’s a lot of negative news this week, and we hope that you’re all staying strong.
Here’s what has happened so far:
The Fed raises interest rates
The US Federal Reserve has raised its interest rates by 0.75%, which is the largest increase in 28 years.
BREAKING: Federal Reserve hikes its benchmark interest rate by three-quarters of a point, the biggest increase since 1994https://t.co/AFjnApY3Mf pic.twitter.com/J4USR8QSrS
— CNBC Now (@CNBCnow) June 15, 2022
This has been done to curb inflation which has been increasing over the past few months.
Soaring inflation is a truly global phenomenon, with the U.S. near the middle of the pack, according to an analysis of 111 countries. https://t.co/3Ji2Pgcolh
— Axios (@axios) June 13, 2022
Cryptocurrencies have benefitted from low interest rates. However, rising interest rates may result in investors selling off their crypto assets back to cash to receive returns in a lower-risk manner.
This could be one of the many reasons why cryptocurrency prices have been falling!
Celsius pauses withdrawals
Celsius announced that they will be pausing all withdrawals from their platform on Monday, citing ‘extreme market conditions’.
.@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2
— Celsius (@CelsiusNetwork) June 13, 2022
Ever since the collapse of Terra and UST, investors were starting to worry about Celsius’ yields, as they were higher than the current market rates.
As a centralised platform, Celsius will take your deposited funds to generate as much yield as possible.
Similar to Terra, the yields that Celsius were providing were seen to be unsustainable, and it further worsened due to the depegging of stETH to ETH, which is where Celsius had staked a significant portion of their customers’ funds.
Staked ETH issued by Lido is backed 1:1 with ETH staking deposits.
The exchange rate between stETH:ETH does not reflect the underlying backing of your staked ETH, but rather a fluctuating secondary market price.
— Lido (@LidoFinance) June 10, 2022
The depegging of stETH to ETH is due to delays in ‘The Merge’, which is set to transition Ethereum from Proof-of-Work to Proof-of-Stake.
If more people withdrew their funds from Celsius, they may not be able to process these withdrawals as Celsius did not have the required funds!
During this pause, Nexo, another centralised lending platform, has offered to acquire Celsius’ assets.
After what appears to be the insolvency of @CelsiusNetwork and mindful of the repercussions for their retail investors & the crypto community, Nexo has extended a formal offer to acquire qualifying assets of @CelsiusNetwork after their withdrawal freeze. https://t.co/JFtKTHRLcY
— Nexo (@Nexo) June 13, 2022
The offer lasts until 20th June, and it remains to be seen if Celsius will take it up.
Three Arrows Capital risks insolvency
Three Arrows Capital is a crypto hedge fund that has invested heavily in multiple crypto projects.
Previously, they invested millions into LUNA, which is now worth significantly less after Terra’s collapse.
If you're ever feeling down or angry at yourself about UST/LUNA, don't beat yourself up too much over it. It was highly sophisticated deception. A lot of brilliant minds fell for it.
For example, Three Arrows Capital bought 10.9M locked LUNA for $559.6m – it's now worth $670.45.
— FatMan (@FatManTerra) June 14, 2022
Currently, they are risking insolvency as they reportedly failed to meet a margin call.
One of the Biggest Crypto Hedge Funds Went from 18 billion AUM to almost insolvency & Even accused of stealing 😱
3 Arrows Capital insolvency rumors went viral on twitter yesterday & are now confirmed by @zhusu
How it happend:🧵 1/5
— Crypto Cobrex (@CryptoCobrex) June 15, 2022
As a huge investor in many projects like Avalanche, Solana and Polkadot, Three Arrows’ liquidation could lead to worrying implications for these projects.
Binance Pay partners with Splyt
Amidst the turmoil in the markets, Splyt has announced that they will be partnering with Binance Pay.
Book your ride with #Binance, and pay in crypto (no need to convert to fiat).https://t.co/ueGYyy6XVm
— CZ 🔶 Binance (@cz_binance) June 14, 2022
Splyt is a platform that helps to integrate on-demand services directly onto other platforms.
With this partnership, Binance Pay can be used by users of many different platforms, to pay for ride-hailing services, airport transfers, public transport or food delivery.
The @binance app is about to get a serious upgrade.
The world’s largest cryptocurrency exchange partners with Splyt, a “super app enabler,” to bring payment options to the Binance application.
(Reporting via @JoeNakamoto) https://t.co/Ir62ah3v9G
— Cointelegraph (@Cointelegraph) June 14, 2022
This shows that companies are still interested in promoting crypto adoption to retail users, despite the bear market that we’re currently experiencing.
OpenSea launches SeaPort protocol
To end off with some positive news, OpenSea has now launched its own SeaPort protocol.
Today, we're officially moving to the Seaport protocol!
We estimate the new contract will save $460m + in total fees each year. But, that’s not all 👀 Let’s go through the updates… https://t.co/89B1FJARnl
— OpenSea (@opensea) June 14, 2022
This new protocol is aimed at lowering the gas fees that both buyers and sellers incur when transacting on the NFT marketplace.
OpenSea claims that it is possible for you to save up to 35% in gas fees!
Any port in a storm.
The new Seaport protocol could save OpenSea users 35% on gas fees. https://t.co/ZUs6EECB3y
— Cointelegraph (@Cointelegraph) June 14, 2022
Gas fees are rather high on the Ethereum network, and it can be very costly for you to buy or sell NFTs on this network.
However, did you know that OpenSea also supports Klaytn, which is another Ethereum Virtual Machine (EVM)-compatible network?
The gas fees are much cheaper on Klaytn compared to Ethereum, and there are a huge variety of NFT collections on this network.
We’ve just recently integrated with Klaytn on our platform, so do look out for more exciting things to come out of this partnership!
Many of you guessed it, and you're right!
You can now send, receive and view @klaytn_official assets on Krystal!
More info 👇https://t.co/n37dRG80fx
— Krystal DeFi (@KrystalDefi) June 15, 2022
Do you think that we’ve reached the worst of the bear market? Have you tried out the SeaPort protocol on OpenSea? Do tweet us or send us a message on Telegram to let us know!
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