JPMorgan Readies Trillion Dollar Crypto Bazooka As Celsius Crisis Fuels Huge Bitcoin And Ethereum Crash—CryptoCodex

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Extreme market conditions 📉

The combined cryptorency market has dropped below $1 trillion for the first time since early 2021 with fears over inflation, the broader economy and just how far the Federal Reserve will go tightening its monetary policy severely in weighing on prices. Markets in the US are set to open sharply lower, following declines in Asian and European stocks.

The bitcoin price has crashed to under $24,000 per bitcoin, its lowest since late 2020, and looks set to fall further. ether

ETH
it is a
has suffered even sharper declines, losing almost 20% in the last 24 hours alone and dropping under $1,200 per ether. Major coins making up the crypto top ten, as measured by CoinMarketCap, are all down at least 10% with Ripple’s XRP

XRP
holding up better than the rest.

Outside of the top ten, tronan ethereum rival that’s tried to pivot to become a support coin for its stablecoin USDD in recent months, has crashed 18% after founder Justin Sun said the Tron DAO Reserve would deploy $2 billion to fight alleged short-sellers in a scenario reminiscent of the landUSD (UST
UST
) and moon collapse. The Block has a write-up.

Crypto lending platform Celsius’ cell cryptocurrency has lost a face-melting 50% over the last 24 hours due to the platform suspending withdrawals, citing “extreme market conditions,” sparking fears of an imminent collapse. See below for details.

Now read this: Who pays for crypto’s collapse?

Celsius overheats 🥵

Mercury rising: Major crypto lending platform Celsius has suspended all withdrawals from its platform due to what it called “extreme market conditions” as cryptocurrency prices go into free fall and users rush to get their coins off the platform. “We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” the company said in a blog post, adding it needed time to “stabilize liquidity and operations.” Mere hours before suspending withdrawals, Celsius chief executive Alex Mashinsky hit out at critics on Twitter, denying users were having trouble withdrawing funds and accusing them of spreading FUD—a popular crypto acronym for “fear, uncertainty and doubt.” Read the full story on Forbes.

Quick catch up: After the dramatic collapse of the terraUSD (UST) stablecoin and its support coin luna last month, crypto traders had been nervously watching the likes of Celsius, fearing similar high-interest accounts could also face difficulties as the bitcoin price continued to crash. Celsius allows investors to earn interest in their crypto holdings as well as use it as collateral for loans.

Cell off: The price of Celsius’ cel cryptocurrency has collapsed by 50% over the last 24 hours, down almost 98% from its all-time highs as panicked sellers offload the coin.

Why it matters: Questions have been raised and rumors are swirling about how connected Celsius is to the wider crypto ecosystem and if the contagion will spread. The issuer of the $72 billion tether stablecoin has this morning distanced itself from Celsius. “While Tether’s
USDT
investment portfolio does include an investment in the company, representing a minimal part of our shareholders equity, there is no correlation between this investment and our own reserves or stability,” Tether wrote in a statement. “Also Tether lending activity with Celsius (as with any other borrower) has always been overcollateralized and has no impact on our reserves.”

Meanwhile… Rival crypto lending platform Nexo
NEXUS
has offered to buy some of Celsius’ assets “after what appears to be the insolvency of [Celsius],” Nexo wrote in a Twitter post.

Good to know: Edward Snowden thinks bitcoin “is failing as an electronic cash system”

📢 News overflow

It’s been a busy weekend for news. Here’re some important headlines you might have missed.

👉 Coin Center sues US Treasury over ‘unconstitutional’ tax reporting rule

👉 Jack Dorsey trolls the crypto community and web3 developers with a decentralized web platform on top of bitcoin called web5

👉 Peter Thiel bitcoin ally Erik Finman tries to sway 2022 midterms with up to $20 million for GOP campaigns

JPMorgan’s DeFi dream ✨

⚙️ Wall Street giant JPMorgan is gearing up to bring trillions of dollars of tokenized assets into the world of blockchain-based decentralized finance (DeFi) as it looks to tap the yield-generating potential of non-crypto assets “with the scale of institutional assets .”

🎤 “Over time, we think tokenizing US Treasurys or money market fund shares, for example, means these could all potentially be used as collateral in DeFi pools,” Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, said on stage at coindesk‘s Consensus 2022 conference in Austin, Texas (where no one was talking about “crypto winter”). “The overall goal is to bring these trillions of dollars of assets into DeFi, so that we can use these new mechanisms for trading, borrowing [and] lending, but with the scale of institutional assets.”

🤫 JPMorgan, after “quietly” exploring digital identity in the context of blockchain and digital assets over the last two years, is trying to balance traditional finance’s know-your-customer (KYC) rules with DeFi and crypto’s permissionless lending pools.

Now read this: ‘The IMF is evil’—Rich countries take aim at nations adopting crypto

The week ahead 📅

👀 Look out for these cryptocurrency and crypto-adjacent events this week.

🗣 Tomorrow, the US Securities and Exchange Commission (SEC) chairman, Gary Gensler, will deliver remarks on the SEC’s agenda at an event organized by the Wall Street Journal. Speaking last month, Gensler warned of more pain to come for the crypto market and said he feared “there’s going to be a lot of people hurt.”

🏦 On Wednesday, the US Federal Reserve will announce its latest interest rate decision with economists widely predicting another 50 basis point hike. However, higher-than-expected inflation numbers on Friday did put the prospect of a 75 basis point hike on the table, though that remains unlikely.

💬 European Central Bank president Christine Lagarde is speaking at the London School of Economics event on Wednesday. Last month, Lagarde, an outspoken crypto critic, said cryptocurrencies are “worth nothing,” “based on nothing” and should be more closely regulated to prevent people speculating on them with their life savings.

💷 On Thursday, the UK’s Bank of England will make its interest rate decision. While it’s expected to follow the Fed in raising rates, the latest economic growth numbers out this morning, revealing the UK’s economy contracted by 0.3% in April after it shrank by 0.1% in March, there is increased the possibility it will put its planned hikes on hold.

– Britain makes crypto technology a priority for streaming markets

Now read this: As energy prices soar, the bitcoin miners may find they have struck fool’s gold

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