FTX shoots down Robinhood rumors
Good morning. FTX denies rumors of a Robinhood acquisition, Grayscale is optimistically preparing for an ETF conversion, and hedge funds are lining up to short tether. All that and more today!
Market Update (as of 7:58am ET):
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Top 5:
1. FTX cuts down claims that it plans to acquire Robinhood. Robinhood's stock price shot up as high as 12% Monday afternoon after a report from Bloomberg indicated that crypto exchange FTX may be considering an acquisition of the company. No official offer has been made as of yet and FTX issued a statement denying the rumors saying, "We are excited about Robinhood’s business prospects and potential ways we could partner with them...That being said there are no active M&A conversations with Robinhood." FTX founder Sam Bankman-Fried already owns 7.6% of the popular no-fee trading app.
2. More hedge funds are betting against tether as crypto melts down. Over the past month hedge funds have shorted tether to the tune of "hundreds of millions" of dollars in notional value. Interest in shorting the world's largest stablecoin shot up after the collapse of TerraUSD in early May. During the Terra collapse, tether briefly lost its peg to the US Dollar trading as low as $0.95 before recovering. According to Leon Marshall, head of institutional sales at Genesis Global Trading, hedge funds are shorting tether for two main reasons. First, some firms view shorting tether as a way to profit off rising interest rates, which historically scare investors away from riskier assets, including crypto. Second, short sellers believe that tether's commercial paper holdings are made up of heavily indebted Chinese property developers, making tether an extremely risky asset that is likely not backed one-to-one against its issuance.
3. Grayscale lines up Jane Street and Virtu as 'authorized participants' if GBTC converts to ETF. A decision on Grayscale's application to convert the Grayscale Bitcoin Trust (GBTC) is due from the SEC on or before July 6th and the investment firm is optimistically preparing for an approval that seems unlikely to come. Grayscale announced on Monday that they would work with market-making firms Jane Street and Virtu Financial to facilitate the ETF conversion. While GBTC is currently trading at almost a 30% discount to its NAV most crypto market participants view SEC approval as a long shot this time around. Ryan Selkis, founder of crypto data provider Messari, lays out a compelling case for bitcoin exposure on the cheap via investment in GBTC (assuming you have a long term investment horizon).
Now that the worst of the 3AC liquidations seem to have passed, $GBTC seems like a good risk-reward. The current discount pays for 15 years of fees assuming no ETF conversion.
— Ryan Selkis 📖 🖊🔑 (@twobitidiot) June 27, 2022
If you think redemptions / spot ETF happen by 2030s, it's a good way to get BTC exposure. pic.twitter.com/hmf3glSODM
4. One of the most prominent crypto hedge funds just defaulted on a $670 million loan. Yesterday morning Three Arrows Capital officially defaulted on their loan to Voyager Digital. Voyager issued a noticed stating the crypto fund failed to repay a loan consisting of $350 million in USDC and 15,250 bitcoin (~$323 million). At this point it seems extremely unlikely that Voyager will recoup those funds, but the firm has stated they intend to pursue recovery from Three Arrows. Voyager also issued a statement clarifying that the default by Three Arrows did not also cause a default in the financing agreement that Alameda Ventures provided to Voyager. The company has already drawn $75 million from the $500 million line of credit.
5. Harmony attacker moves over $44M worth of stolen ether, authorities alerted. The attacker behind the $100 million exploit of the Horizon bridge on the Harmony blockchain has started moving funds into the privacy swap service Tornado Cash. Over the past day, the hacker has moved over $44 million dollars in an attempt to launder the stolen funds. $59 million of ether still resides in the wallet that originally received the stolen funds.
1/ We are aware the hacker has begun to move funds through Tornado Cash. The team is working with two highly reputable blockchain tracing and analysis partners, and collaborating with the FBI as part of an investigation into this criminal act. 🧵
— Harmony 💙 (@harmonyprotocol) June 28, 2022
Updates and other stories:
- Celsius clashes with lawyers over Chapter 11 bankruptcy...Read More
- CoinFLEX plans to raise missing funds with new token...Read More
- Crypto.com removes Dogecoin, Shiba Inu, others from Earn program...Read More
Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN
External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings
Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.