Raagulan Pathy’s Post

Bitcoin’s dropped from $64,000 to $58,200, representing a 10% crash in just 15 minutes Many people have asked me why the crash happened yesterday. Was it because Coinbase went down and showed $0 balances? Of course, not! It's because of liquidations, one of the crypto industry's biggest secrets. I will explain to you the secret of liquidations and how they cause massive volatility in the crypto markets. Traders often use leverage to increase the potential profit of trade, hence those transactions are done on margin. They open a margin account with an exchange or broker by signing a "margin agreement" under which the crypto in the account is pledged to the exchange or broker. In return for the pledge, the broker loans the portion of funds to the investor to establish those trades. When the prices move against the trader, in addition to putting an initial margin payment for establishing his trade, the investor is also required to deposit additional funds in the margin account to maintain his positions - thus the term "margin call". If the trader's account value falls below the required minimum maintenance level, a broker has the legal right to liquidate those positions to cover the margin call. Crypto traders today use sophisticated algorithms to make trading decisions and the ability to make consistent profits largely depends on speed. This paradigm shift has also changed the way brokers handle the liquidations of their client's positions. Brokers use real-time liquidation procedures, the so-called auto-liquidation algorithms, and automated trading strategies that immediately alleviate clients' margin deficiency. The broker tracks cash funds in real-time, and if at any point the cash balance falls below the margin balance, the algorithm automatically liquidates positions by sending off-setting transactions to close the open positions and decrease margin deficiency. In general, broker's clients have little to no control over the auto-liquidation algorithms, but they are held responsible for any losses resulting from this process. Auto-liquidation provides clear benefits to both client and broker, as it monitors losses in real-time and prevents unexpected margin deficits. On the other hand, complete automation has its own challenges because a trading algorithm can go awry and cause huge damage. Also, intra-day market volatility could cause clients' positions to be auto-liquidated on relatively short or no notice. Yesterday we had more than $600 million of liquidations, when the Bitcoin price rose to $64’000 and then crashed to $58’200. As the crypto bull market goes in its full force, I expect more volatility and further liquidations causing havoc to trading accounts. If you would like to talk about liquidations, market making, or liquidity, DM me and let me know what you think! #bitcoin #crash #liquidation #leverage #broker #crypto Follow 👉 Anton Golub & share ♻️ with your network

Tether.to made US$1bn profit this quarter and committed to spending US$150m on Bitcoin.  A short story on how the US and SEC missed a golden opportunity to regulate the biggest use case in crypto... Stablecoins As the environment started to become incredibly hostile in the US for crypto based businesses, it started with the SEC issuing a 'Wells notice' to Coinbase in March this year. USDC is owned by Circle a company based in Boston, MA. USDC is a stablecoin pegged 1:1 with USD, it is SEC registered, they have monthly audits (by Deloitte), attestation reports and a full transparency register of where all the assets are held. It's impressive, clear and instills trust. USDT (tether) for many years, didn't do any of the above, it was an opaque organisation that promised to have a 1:1 peg and going through countless audit firms didn't help. It paid a fine to the NY AG (US$18.5m which is basically a rounding error) for its ties to Bitfinex and helping plug the multi-hundred million dollar gap left from the hack in 2016 (allegedly). Safe to say, the US HATE TETHER. Yet, no one can actually prove they DON'T have the money. BDO seem to prove they do. Did they always?! No one cares now. USDC was growing at a faster than USDT until March and the beginning of the SEC tirade. Circle who owns the USDC contract has the ability to freeze assets and halt transactions. The fear is that if the SEC deem you're doing something they don't like they can force Circle to freeze your account. This saw a mass exodus which is still ongoing for USDC, with one key beneficiary... Tether... See the chart below, USDC total market cap decreasing, at the same pace, USDT increasing. The flows are moving from the most regulated stablecoin in one of the leading financial jurisdictions in the world, to a one that lives outside of the US, in an entity regulated by Hong Kong (maybe). Whats more, Tether is crazy profitable last quarter they made US$1bn, the quarter before US$1.5bn. They also committed to deploying 15% of their profit to Bitcoin! Tether also has US$3.3bn in excess reserves, meaning if they redeem every single dollar, they're still all billionaires. To the US, this is the biggest self own I have ever seen. In an attempt to regulate a market, you fuel your biggest rival with billions, then have to pay them interest on that cash, the interest is basically all profit, then they turn around and buy Bitcoin with it. You can't make this stuff up. Tether is owned by iFinex, the same owners of the Bitfinex exchange, JL Van der Velde and Giancarlo Devasini are the original founders and owners. Paolo Ardoino is the CTO. I can't wait for this movie.

📣 Crypto Consolidation as Coinbase Tightens Grip on USDC 📣   💵 U.S. #crypto exchange, Coinbase, has made an equity investment in Circle, the issuer of the U.S. dollar #stablecoin, #USDC.  💵 Coinbase’s percentage holding is undisclosed, but we assume it's a minority stake. (https://lnkd.in/dVxF2ujz)   🎛 With #Coinbase now having a greater say in Circle, the move also sees the Centre Consortium (co-founded by Coinbase and Circle, to run USDC) disbanded.   For Coinbase, So What❓   👉 The move makes sense for Coinbase as USDC contributes a significant amount to its income.  Coinbase also held $315m of USDC as part of its own financial resources at the end of Q2 2023.   👉 Coinbase Q2 2023 report shows that 75% ($151m) of Coinbase's interest income (of $201m) came from USDC.   👉 Also, Coinbase has seen an increased inflow of USDC this year. At the end of Q2, it held approximately $1.8b of USDC on its trading platform, up from $1.2b at the end of Q1 2023.   For Circle, So What❓   👉 The move makes sense for Circle as USDC has been under significant market pressure.  It can now benefit from Coinbase’s protection as a “group” company.   👉 USDC has lost more than half of its market capitalization in the past year, as the crypto winter deepened.  USDC’s market capitalization currently stands at $26b, down from $52b a year ago in August 2022 (and an all-time high of nearly $56b in June 2022).   👉 USDC’s problems stemmed partly from the contagion effects of the U.S. banking crisis earlier this year, due to its exposure to failed U.S. banks, Silicon Valley Bank and Silvergate Bank.   Further reading: DeFi Planet News Report https://lnkd.in/drVRy8Ju USDC Stablecoin Issuer, Circle, Exposed to Failed Banks Silicon Valley and Silvergate: https://lnkd.in/eRx-BTxf   Unpacking the Silicon Valley Bank Collapse: Causes and Consequences: https://lnkd.in/dX2wFm7i

Coinbase Global beat Q2 revenue expectations on Thursday; interest income boosting revenue Coinbase Global beat Q2 revenue expectations on Thursday as a surge in the crypto exchange's interest income cushioned a slump in trading volumes, according to Reuters. https://bit.ly/3QHgVZp The strong result comes on the heels of a dramatic quarter for the company and its rival Binance who were sued by the U.S. Securities and Exchange Commission in June. The lawsuit alleged that Coinbase traded at least 13 crypto assets that are securities without registering them with the regulator, marking a dramatic escalation of a crackdown on the crypto industry. "Despite our good faith efforts and transparency of our business to the SEC for years now, we were deeply disappointed that the SEC brought an unwarranted enforcement against us in June," Coinbase said in a letter to shareholders. Shares of the company were down 2% in volatile extended trading after surging 10% just after the results. Coinbase earns interest on reserves backing USD Coin (USDC), the second-biggest stablecoin by market capitalization. It also earns interest on bitcoin-backed loans it provides to customers. Interest income in the quarter surged to $201.4 million from $32.5 million a year ago, boosting revenue at the company's subscription and services segment. In a victory for the industry, a U.S. judge ruled in July that Ripple Labs did not violate federal securities law by selling its XRP token on public exchanges. Coinbase's revenue in the second quarter came in at $707.9 million, beating estimates of $662.5 million, according to Refinitiv data. The company's loss in the quarter narrowed to $97 million, compared with $1.09 billion a year ago. #coinbase #revenue #cryptocurrencynews #fintechnews

Coinbase Global beat Q2 revenue expectations on Thursday; interest income boosting revenue Coinbase Global beat Q2 revenue expectations on Thursday as a surge in the crypto exchange's interest income cushioned a slump in trading volumes, according to Reuters. https://bit.ly/3QHgVZp The strong result comes on the heels of a dramatic quarter for the company and its rival Binance who were sued by the U.S. Securities and Exchange Commission in June. The lawsuit alleged that Coinbase traded at least 13 crypto assets that are securities without registering them with the regulator, marking a dramatic escalation of a crackdown on the crypto industry. "Despite our good faith efforts and transparency of our business to the SEC for years now, we were deeply disappointed that the SEC brought an unwarranted enforcement against us in June," Coinbase said in a letter to shareholders. Shares of the company were down 2% in volatile extended trading after surging 10% just after the results. Coinbase earns interest on reserves backing USD Coin (USDC), the second-biggest stablecoin by market capitalization. It also earns interest on bitcoin-backed loans it provides to customers. Interest income in the quarter surged to $201.4 million from $32.5 million a year ago, boosting revenue at the company's subscription and services segment. In a victory for the industry, a U.S. judge ruled in July that Ripple Labs did not violate federal securities law by selling its XRP token on public exchanges. Coinbase's revenue in the second quarter came in at $707.9 million, beating estimates of $662.5 million, according to Refinitiv data. The company's loss in the quarter narrowed to $97 million, compared with $1.09 billion a year ago. #coinbase #revenue #cryptocurrencynews #fintechnews

Bitcoin off to Wall Street! (And my personal BTC story 😁) In 2010, I went into a cooffeshop. A sign told me that I could buy stuff in excahnge for Bitcoin. I went home, used my low speed internet at that time, and learned the basics of BTC Then, I decided to buy Bitcoins worth of $100. Exhange rate $0,2. Which would give me 5000BTC As I had 3 small kids at that time, my deal was interrupted, and I never went back to my computer. Today, that BTW would have been worth 230 million USD. Every time I think of this, I am not sad. I am genuine happy that I did not purchase those BTC’s😀 1) I would have been furuous that I had spent a million bucks on a cup of coffee 2) I would have had panic, trying to figure out where I had thrown away the harddisk where my BTC was stored (BTC has not been rocketing until the ladt years) 3) I would have been sleepless, trying to figure out who stole my BTC, since InfoSec and data integrity was «just» invented back then 4) I would have most likely spent all BTC’s before it peaked, or even sold them back with a 50% return, given the fact that 3 small kids litterally drain you for cashflow… 5) and the most important. I would be lazy and fed up. I would have more money that I could have spent, and no motivation for kicking in doors, take bulls by it horns, or wake up every morning eager to contribute and make a difference. My life would have been disruptive towards today, and I am not sure that I would like that. The moral: choose to be satisfied! Make sure that you embrace the small things in life which makes life worth living. Make sure that you prioritize your self and your family, and find your inner motitvation to rock the stage. Those things do not have any exchange rate other than happiness I am a happy camper. And I camp even harder when I see the BTC rate increases Make a great day!!! #Smallthingsinlife #BTC

It's Weekly Market Recap Time 💃 🕺 With the lead up to the Bitcoin halving and a CPI update from the US Federal Reserve we find ourselves in a fairly slow news cycle this week. Everyone is looking at this halving cycle and trying to unpick what happens next with Bitcoin. We’ve never had an all time high before a halving, we’ve also never had ETFs, or had a halving occur when interest rates were high. As per last week's news, we are seeing increased selling activity from both short and long term holders at this point in time. While all halvings are different they do rhyme, so we are all guessing ‘where to from here?’ Key dependencies like interest rates, liquidity and access are all playing their part this time around. 🔘 Big news events this week centred around the US gov potentially selling $2bn of BTC from the Silk Road case, plus the apparent sale of 30 million locked up SOL by the FTX estate. 🔘 The spot Bitcoin ETFs did $111bn in volume in March which is about 7-8% of the total market volume. Not bad for a 3 month old product. 🔘 Glassnode research out this week reinforces the position that Bitcoin’s long term holders are using the recent all time highs to realise profits. 🔘 Ripple has announced it is launching its own US dollar backed stablecoin. The coin isn’t named yet, but rumours are it will launch on both XRP ledger and Ethereum. Ripple’s CEO also mentions that they think the SEC claims are unreasonable and they will settle for “millions”. 🔘 There are concerns that Europe's MiCA legislation will force DeFi underground or into a position of locally enforcing KYC. 🔘 Coinbase won a case against the SEC confirming that secondary sales on its platform did not violate securities laws in the US. 🔘 Base, the Coinbase layer 2 network has recorded over $4bn in total value locked up making it number 3 on the layer 2 lists. 🔘 Paypal is running out a new service that will let US customers use their PYUSD to send and swap to USD without being charged fees on Paypal’s Xoom platform. Staying with Stablecoin news, Sony Bank in Japan is experimenting with a Yen backed stablecoin. 🔘 UltraSound money reports that ETH remains in strongly deflationary territory, just as planned from the merge. 🔘 $APT has a big token unlock this week, approximately $350m worth. 🔘 And finally as mentioned earlier.... the FTX estate sold 30 million of its locked up SOL tokens at a hefty discount with the average price paid being $64. In doing so they raised 1.9bn. They reportedly have around 11 million SOL left. Staying with Solana, the surge in volumes is causing a lot of failed transactions. Til next week folks ✌️

Our Daily Market Report is out! Today, we cover: #BTC Trading Volume (24hr): $52.6B / -39% #DigitalAssets: PayPal's Stablecoin Soars Past $500 Million Market Cap After Solana Expansion #TradFi: Federal Reserve Chair Jerome Powell will provide his semiannual update on monetary policy before Congress this week, starting with the Senate Banking Committee on Tuesday and followed by the House Financial Services Committee on Wednesday Every day, the SDM research team summarizes what is happening in crypto. Make sure to follow our page to get tomorrow's market breakdown! Institutional Insights: https://lnkd.in/ehTg3AtV

Hey there, crypto enthusiasts! Exciting news on staking this week! The IRS just dropped Revenue Ruling 2023-14, offering clarity on staking as gross income. In a nutshell, it is considered income once you gain control. However, here's the silver lining: if your staked asset is locked, it becomes income only upon unlocking. Keep in mind, staking rewards are valued at fair market value, which can lead to tax issues if you're not prepared. To play it smart, consider a staking tax strategy—sell around 30% of your rewards periodically to cover taxes. This way, you won't end up not being able to pay your tax bill if the asset price drops drastically. Revenue ruling link: https://hubs.li/Q01ZBWjv0 Stay informed and plan ahead for a smooth staking experience! 💰💻 #CryptoUpdates #StakingTaxes #TaxSmartCrypto

Coinbase's Surging Profits Show Growing Interest in Cryptocurrencies! #adoptionofcryptoassets #analystexpectations #BrianArmstrong #Coinbase #cryptocurrencyexchangeplatform #custodialservices #demandforcryptocurrencies #diversifyrevenue #earningsreport #fourthquarter2023 #growinginterestincryptocurrencies #institutionalinvestors #interestoncustomerdeposits #monthlytransactingusers #netincome #nontradingrevenue #relatedservices. #revenuestreams #tradingvolume #transactionfees #userbase