Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
Amid the ongoing crypto market crisis, US SEC Chair Gary Gensler has accused stablecoins and digital asset exchanges of “market-marking” against customers. He singled out major stablecoins like USDT, USDC and BUSD for their affiliation with exchanges, saying they had been “founded by the trading platforms to…potentially avoid anti-money laundering and KYC”. The market downturn has hit major cryptocurrencies hard, especially Terraform Labs’ stablecoin UST, which has seen a massive 90% dip.
A conspiracy theory that those involved in the GameStop short squeeze were responsible for UST’s collapse has been met with strong opposition from the parties in question. It alleges that Blackrock and Citadel Securities borrowed 100,000 BTC from Gemini and swapped 25% of this loan for UST, after which they dumped the UST and BTC, leading LUNA and BTC to crash. BlackRock has publicly stated it does not trade UST, Citadel Securities that it does not even trade in stablecoins, and Gemini that it approved no such . At present, LUNA is trading at 0.41 cents and UST at 0.68 cents.
In light of market frustration over an unexplained two-week delay and concerns about high fees charged by first movers in the ETF space, Cosmos Asset Management will not charge investors any fees in its Cosmos Purpose Bitcoin Access ETF (CBTC) for two months. CommSec, Australia’s biggest retail stockbroker, will henceforth allow its 760,000-plus customers to trade in the ETF, which is set for listing on the Cboe Australia exchange. CommSec’s last-minute support of Cosmos has reportedly raised market hopes that crypto ETFs could see trading volumes worth $1 billion or more in the near future.
Along with Cosmos’ ETF, two other crypto-focused ETFs — ETF Securities’ and 21 Shares’ Bitcoin ETF (EBTC) Ethereum ETF (EETH) — have chosen a challenging day to begin trading on Cboe Australia. The three ETFs are the first of their kind to go live in Australia and have thus far generated a total of over $1.3 million, with an estimated $1 billion worth of inflows predicted in the coming days. According to Cboe data, EBTC and EETH have seen 125,271 and 142,206 shares trade hands, accounting for around $519,874 and $416,663 in volume respectively. Meanwhile CBTC has seen 51,572 shares traded for a total of $398,135.
Grayscale met privately with the US SEC last week in an bid to convince the latter to approve the conversion of its flagship fund into an ETF. the asset manager said turning the Grayscale Bitcoin Trust (GBTC, the world’s biggest BTC fund) into an NYSE-traded ETF would widen access to BTC, improve protections and unlock up to $8 billion in value for investors. Grayscale explained that GBTC had traded at an average 25% discount on its underlying asset’s price since early last year, and conversion should remove the discount. The deadline for the SEC to approve or reject Grayscale’s application is 6 July.
Show me the money
SOL has seen a decline of over 36% in the last three days, falling from a $75 high to a $48 low. Analysts say a decisive weekly close below the $51.60 support level could trigger a 50% correction, whereupon SOL could fall to $26 or lower. Over the same period, AVAX has crashed by almost 50% after losing its $51.60 support level. Lower lows could lead to market participants selling more and result in a down-swing to $17 or even $10. Conversely, bulls would need to raise and defend AVAX above $37 to reverse the negative outlook, which could see sidelined investors re-enter the market and push AVAX to $51.
USDT has lost its parity with the US dollar after slipping 1.8% to $0.981662 in the past 24 hours, with traders selling USDT for US dollars amid a negative outlook for stablecoins among crypto communities. It is the latest stablecoin to lose its USD peg, after UST fell to as low as $0.22. At the same time, BTC has lost its $27,000 support level and fallen to $25,400 — levels not seen since Dec 2020.