Bitcoin’s Roller Coaster, MicroStrategy’s Investment, Legal Victories, SEC’s Strategy, BRICS Payments, and Tether’s Milestone

March 7, 2024

Crypto World

Maciej Zerelik

Explore the latest insights from StealthEX and CryptoDaily! We’re eager to share with you an easy-to-follow, succinct recap of the pivotal events shaping the crypto space. Intrigued by the foremost news in the crypto universe this week? Let’s dive in right now!

Bitcoin’s Roller Coaster Day: From Peak to Crash and Back

In an unprecedented 24-hour period, Bitcoin experienced a wild ride, hitting an all-time high (ATH) before plunging $10,000 and then making a remarkable recovery of over $8,000. This dramatic sequence of events underscores the volatile nature of cryptocurrency trading, which remains an exhilarating yet risky endeavor.

The excitement began when Bitcoin briefly touched the $69,000 mark, setting a new ATH. However, the celebration was short-lived as a massive sell-off ensued, driving the price down to $59,000. Despite this steep decline, the cryptocurrency showed resilience, bouncing back significantly from its low point.

This volatility led to a frenzy of trading activity, with both long and short positions facing significant liquidations. According to Coinalyse, $163 million in long positions were wiped out during the downturn, and $87 million in shorts were liquidated as the price rebounded. The current long to short ratio stands at 59%/41%, indicating a cautious optimism among traders about Bitcoin’s direction.

Amidst this chaos, Bitcoin ETFs witnessed record trading volumes, with a staggering $10 billion traded in a single day. This surge in activity highlights the growing interest and investment in cryptocurrency, despite its inherent risks.

MicroStrategy’s Bold Move: $600M Investment to Boost Bitcoin Holdings

MicroStrategy, a leading corporate investor in Bitcoin, has announced a strategic plan to enhance its cryptocurrency portfolio. The company intends to raise $600 million through the sale of senior convertible notes due in 2030. This move is aimed at acquiring additional Bitcoin and supporting general corporate purposes, as Bitcoin approaches its all-time high of $69,000.

The decision to issue convertible notes is a testament to MicroStrategy’s innovative approach to investment. These notes, which can be converted into equity at a future date, offer the company financial flexibility while ensuring the prioritization of noteholders. This method also allows MicroStrategy to capitalize on the current bullish sentiment surrounding Bitcoin without diluting existing shareholders immediately.

Following the announcement, MicroStrategy’s stock experienced a significant surge, closing the day up 23% at $1,334 per share. Despite a slight dip in after-hours trading, the company’s stock has doubled in value this year, outperforming Bitcoin’s 60% increase over the same period.

MicroStrategy’s aggressive Bitcoin acquisition strategy has paid off, with its holdings now valued at nearly $13 billion. Under the leadership of executive chairperson Michael Saylor, the company has amassed 193,000 BTC at an average buy price of $31,550, resulting in a nearly $7 billion gain on its investment.

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Legal Victory in Montenegro: Terra Co-Founder’s Extradition Halted

In a significant legal development, the Appellate Court of Montenegro has overturned a previous ruling for the extradition of Terraform Labs co-founder Do Kwon to the United States, marking a pivotal moment in an ongoing international legal saga. This decision temporarily stalls Kwon’s extradition, introducing a new layer of complexity to the case that has captured global attention.

The court’s decision to send the case back for retrial due to procedural violations highlights the intricate legal challenges involved in extradition cases. Kwon, who faces fraud charges in the U.S. related to the Terra ecosystem collapse, has been in a legal limbo since his arrest in Montenegro for possessing falsified documents.

This ruling not only delays Kwon’s potential extradition but also ignites debates over the legal precedents and international relations involved in such high-profile cases. Kwon’s legal team celebrated the decision, emphasizing its significance in the broader context of legal rights and procedural fairness.

SEC’s Strategy on Ether ETFs: A Game of Patience

The Securities and Exchange Commission (SEC) has once again deferred its decision on the highly anticipated spot Ether ETF proposals, extending the suspense for industry giants like BlackRock and Fidelity. This move continues the SEC’s pattern of postponements, fueling speculation and anticipation among investors and market watchers.

The delay reflects the SEC’s cautious approach to cryptocurrency ETFs, despite having approved several spot Bitcoin ETFs earlier. The decision to push back the verdict on Ether ETFs, initially submitted by BlackRock in November of the previous year, underscores the regulatory challenges and considerations in the rapidly evolving crypto market.

Bloomberg ETF analyst James Seyffart has pinpointed May 23 as a critical deadline for the SEC, marking the end of a 240-day review period for proposals from other contenders. This date is now viewed as a potential turning point for the approval of spot Ether ETFs, with Seyffart estimating a 60% chance of approval by then.

Despite the SEC’s hesitancy, the market has reacted positively, with Ether’s price surging by 56.7% over the past month. This optimism reflects the broader market sentiment that approval of a spot Ether ETF could be imminent, although some industry observers remain cautious about the potential impact compared to the success of spot Bitcoin ETFs.

BRICS Nations Forge Ahead with Blockchain-Based Payments System

The BRICS consortium, comprising Brazil, Russia, India, China, and South Africa, has unveiled ambitious plans to develop a blockchain-based payments system. This groundbreaking initiative aims to bolster the economic ties among these emerging economies, reduce reliance on the US dollar in international transactions, and challenge the financial dominance of Western nations.

Yuri Ushakov, a Kremlin aide, emphasized the system’s objectives, highlighting its focus on leveraging cutting-edge digital technologies and blockchain to create a platform that is convenient, cost-effective, and politically neutral for governments, businesses, and citizens alike. This move is seen as a strategic step towards enhancing the BRICS bloc’s influence in the global monetary system.

The proposed payment system is expected to utilize digital assets and cryptocurrencies, facilitating cross-border transactions among member nations and other developing countries. This could significantly impact the global demand for the US dollar, potentially altering its dominance in international trade and finance.

Details regarding the technical specifics of the payment system, such as whether an existing blockchain platform will be used or a new one will be developed, remain undisclosed. Similarly, the timeline for the launch of this ambitious project has not been revealed.

This initiative is an extension of the BRICS Contingent Reserve Arrangement (CRA), established in 2014 with a $100 billion commitment to provide liquidity support among member nations. The CRA aims to diminish reliance on US dollar-denominated assets, strengthening the global financial safety net and promoting the use of member countries’ currencies.

Tether’s Milestone: USDT Market Cap Surpasses $100 Billion

Tether (USDT), the leading stablecoin, has achieved a significant milestone by surpassing a market capitalization of $100 billion. This development not only cements USDT’s position as a dominant player in the stablecoin market but also widens its lead over its closest competitor, USD Coin (USDC), by over $71 billion.

USDT’s market cap briefly reached the $100 billion mark on March 4th, according to CoinGecko, although other data sources like CoinMarketCap have yet to confirm this figure. The fluctuation in market cap is a reflection of the dynamic nature of the cryptocurrency market, influenced by current prices and circulating supply. This year, USDT has seen a 9% growth in market cap, indicating increased investor interest and confidence in the stablecoin.

The surge in USDT’s market cap is attributed to its role as a preferred medium for trading and hedging in the volatile cryptocurrency market. USDT maintains a peg to the US dollar, offering a stable asset for traders and investors looking to avoid the price swings of other cryptocurrencies. Recent trading activity has seen USDT’s price exceed its $1 peg, suggesting a high demand for the stablecoin amid a bullish crypto market.

Despite its success, Tether has faced scrutiny over the assets backing USDT. The company claims that each USDT token is backed 1:1 with independently audited reserves, primarily consisting of yield-bearing US Treasury Bills. Tether reported a record quarterly profit of $2.85 billion in Q4 2023, with a significant portion of its earnings derived from these Treasury Bills.

This article is not supposed to provide financial advice. Digital assets are risky. Be sure to do your own research and consult your financial advisor before investing.