October 5, 2021
Introduction
On the day Circle announces an SEC investigation against itself, Bitcoin makes – as if there was nothing to fear – its way back above the $50k mark. Will BTC break the macro consolidation pattern outlined below and kick off a glorious Q4 bull run? Or will the first attempt fail with more short-term downside and consolidation? The stage is set for an imminent decision.
Crypto Behaving in a Non-Correlated Way – Once Again
It’s always nice to see the crypto markets in positive territory. But it’s even better when crypto is behaving in the non-correlated way it is supposed to – to be fair, that hasn’t happened too often lately.
In the last few months, we have seen the crypto correlate strongly with other risk assets (aka stocks) when uncertainty and no strong trend prevail. However in times of extreme bullishness (such as in January and February) or fear (Elon & China FUD), crypto tends to decouple at least partially from other markets.
Circle Investigated by the SEC
In not very surprising but nonetheless important news: USDC-issuer Circle disclosed yesterday that the company is under investigation by the SEC – notably already since July of this year.
While we don’t know many details at this point, the SEC investigation could target Circle’s main product, the USDC stablecoin, but also Circle’s high-interest yield product, which the company announced just a month before the subpoena. Of course, there is also the worst case, where the SEC is investigating both USDC and Circle’s yield product…
It’s important to know that this isn’t the first encounter of Circle with the SEC: In August the company agreed to settle charges with the SEC after being accused of operating an unregistered digital asset exchange… and Circle paid a mere $10 million. Let’s hope that the current case will end similarly lenient!
One way or another, it has become clear that the time for the crypto community to stand together and fight for its future has come. Luckily, we have influential players such as FTX and Coincenter who are taking the lead.
The 5th Largest US Bank Now Offers Crypto Custody
Meanwhile, the race to serve institutional investors in the US who want to trade cryptocurrencies is heating up. After several announcements by banks earlier this year, we now see crypto services actually going live, which is a big deal for the entire crypto space.
The Facebook Outage – an Advertisement for Web3
Yesterday, the hours of downtime of many Facebook-owned services was the talk of the day. It showed clearly how vulnerable today’s online world is: One centralized piece fails and a whole communication network goes offline.
For crypto-natives it has been painfully obvious for a long time that Web3 and decentralized infrastructure are the future. But yesterday’s Facebook outage made the necessity to build towards a decentralized future even more apparent.
Of course, central Web3 infrastructure pieces are decentralized hosting and data storage, two areas we have touched on several times in the past but whose time to shine is yet to come. Even Bust Rhymes agrees that decentralization is the way to go (while of course, not understanding all technicalities yet 😄)
