Crypto News

Tether Cuts 17% Of Its Commercial Paper Holdings Over Q1 2022

As per the official report published on May 18, Tether, the issuer of the world’s most used stablecoin, USDT, has cut 17% of its commercial paper holdings and increased United States Treasury bills with this reserve amount to back its stablecoin, USDT. Tether made the reduction over Q1 2022 and continues for a further 20% decline since April 1. The firm will highlight this 20% reduction in the Q2 report. The crypto project took these steps following the USDT stablecoin losing its dollar peg. The stablecoin dropped to 95 cents on May 12. In addition, to assuage users’ fears over the catastrophic effects of the recent bloodbath, Tether noted that its reserves were “fully-backed” in a blog post on Thursday. Related Reading | TA: Bitcoin Reclaims $30K, Why Bulls Face Uphill Task According to the statement of the stablecoin issuer, it has decreased commercial paper holdings. As a result, the holdings decreased from $24 billion to $20 billion in the first quarter. As well as, the company increased its investments in the market money funds and U.S. treasury bills during that time. The firm has added 13% to its Treasury Department and lifted the investment amount from $35.5 billion to $39 billion. Chief technical officer at Tether, Paolo Ardoino, expressed; Tether has maintained its stability through multiple black swan events and highly volatile market conditions and, even in its darkest days. Tether has never once failed to honor a redemption request from any of its verified customers. Tether Affirms It Is “Fully Backed” He further added; This latest attestation further highlights that Tether is fully backed. And that the composition of its reserves is strong, conservative, and liquid.  In February 2021, New York Attorney General alleged the firm had misrepresented the figure of fiat collateral through which stablecoins USDT is backed. The company settled the legal dispute with A.G by paying an $18.5 million fine. And since then has been liable to disclose its reserve every quarter per the settlement. As a result, Tether reported its reserve allocation for Q4 2021 last February. According to that report, the company has reduced its commercial paper holdings from $30 billion to $24 billion, diminished by 20%. Continued redemptions from USDT would cause forced sales of commercial holdings, possibly leading to spillover in contagion in the traditional financial market, said Nikolaos Panigirtzoglou, an JP Morgan Chase & Co. analyst on Thursday. Citing the outflows of the Tether, Panigirtzoglou said; This is not all exiting crypto markets as around $5 billion appears to have shifted to USDC and Binance USD. Related Reading | Bitcoin Selling Pressure Continues As Long-Term Holder SOPR Spikes Up Tether has a market capitalization of over $74 billion at the time of writing. While Tether’s reported assets backing USDT have exceeded $82 billion. To assure users that Tether is stable as its name sounds, over the last two weeks of market volatility, Tether highlighted that it would “honor all redemptions from verified customers” for USDT. Featured image from Pixabay and chart from TradingView.com  

Crypto News

How Can the Rise in Fuel Price Be Turned Into a Good Investment?

The oil industry has had a chaotic two years. Crude oil prices were down early in the COVID-19 pandemic; nevertheless, the price has now topped $100 per barrel. Moreover, the worldwide benchmark, Brent crude oil, is currently trading above $111 per barrel. There has been a considerable rise in gas prices worldwide because of the rise in oil prices. If prices continue to rise, as many economists predict, it would stifle economic development, induce decreased consumption, and, in some situations, spark political instability. The increasing gasoline costs have already sparked fatal riots in nations such as Kazakhstan, Iran, and Zimbabwe. And, the significant factors for this have been the rebound in fuel consumption since the height of the coronavirus outbreak and supply difficulties in the aftermath of Russia’s invasion of Ukraine. Even analysts at JP Morgan Chase & Co and Bank of America have predicted that the Russian disruption will send oil prices up to $185 per barrel. Reasons for Rising Fuel Prices Oil has had a history of more significant fluctuations in price than any other asset. The Organization of Petroleum Exporting Countries, or OPEC, is the primary driver of oil price changes. Second is the supply and demand rules. Prices fall when supply exceeds demand, and vice versa when demand exceeds supply. The current instability is because of Russia’s conflict in Ukraine, which has caused crude oil prices to climb over $100 a barrel. Further, crude oil prices have risen rapidly over the recent weeks as the US and its western allies implemented severe sanctions on Russia. As a result of this, citizens’ lives are affected due to fuel prices’ direct impact on increasing inflation. Even the cost of other essential products has increased drastically, leaving people devastated. Making the Most of Rising Panic Rising fuel costs are putting economies under a lot of pressure. Many are worried about how it will affect the cost of other essentials rather than focusing on how to benefit from the situation. Some solutions can aid in these situations, and specific DeFi projects, such as Duet Protocol, offer them a unique approach called synthetic asset collateralization. Users have to provide liquidity to the protocol, which will be utilized to generate synthetic assets. For example, a user can provide liquidity and choose to mint dWTI, a synthetic asset whose price is pegged to WTI crude oil. And with this asset, users can earn rewards and other utilities within Duet’s ecosystem. Moreover, the platform allows users to mint synthetic assets like Oil futures, stocks, commodities, ETFs, Indexes, and Real-estate by providing capital to its reserve. These assets, represented as dAssets, can be traded in swaps (DEX), staked to earn rewards, or held in wallets to gain exposure. And, the benefits of holding them instead of their physical equivalents is that they provide greater liquidity, high-speed transactions, easy accessibility, transparency and low transaction fees. Minting Synthetic Assets on Duet Protocol Duet’s Synthetic assets are divided into two categories, stablecoin and dAssets(synthetic assets including but not limited to synthetic index, synthetic commodities, synthetic real estates, synthetic inverse asset, synthetic leverage asset, etc).  Currently, dUSD, dWTI and dXAU are the only dAssets supported with more of them coming soon. The process of minting these assets includes users providing collateral. Duet accepts more than a dozen high-quality assets such as wBTC, ETH, USDT, DAI, LTC, etc. as collateral. Interestingly, Duet Protocol accepts assets unique in the DeFi world as collateral. It includes LP tokens in large swap protocols and deposit certificate tokens in the credible lending protocols to enhance the efficiency of users’ funds and the composability of protocols. While minting Synthetic assets is just one part of the protocol, the platform will also facilitate the listing of creative synthetic assets, such as synthetic stablecoins that track the inflationary level and NFTs. Anyone will be able to list these assets permissionless with the help of oracle providers like Chainlink, Band or Uniswap. This makes Duet Protocol the infrastructure for collateral treasury, satisfying liquidation demands while also assisting with regulatory compliance. In addition, Duet will create a unique market-making mechanism using synthetic assets with high liquidity and trade volume. This eliminates the need to incentivize liquidity providers with tokens and allows for arbitrage between TradFi and DeFi to sustain the protocol’s liquidity. And, as a result, all “buying orders” on-chain will be dealt directly. Volatility Is All That Matters The best investments are made during volatile times. Economic conditions keep fluctuating for various reasons, and one should take advantage of these opportunities. The current state of rising fuel prices may be an ideal time to invest in some assets. And, synthetic assets from Duet Protocol, may be worth considering, given its rewarding mechanism. The current war scenario and interest rate hikes may last for a long time, but it is up to people to seek out and grab opportunities.  

Bitcoin Crypto News

Wall Street Giant Goldman Sachs Makes History, Offers First Bitcoin-Backed Loan

In the latest hint that Wall Street is pushing farther into crypto, Goldman Sachs has offered its first bitcoin-backed loan. Goldman Sachs Makes History In order to aid to the institutional adoption of cryptocurrencies, Goldman Sachs has granted its first ever Bitcoin-backed loan. According to Bloomberg, the unnamed borrower received cash from the US-based investment […]

Altcoins

Dogecoin (DOGE) Primed for Over 30% Rally After Strong Recovery, According to Top Crypto Analyst

A popular crypto strategist and trader is predicting a strong rally for Dogecoin (DOGE) as the memecoin is showing signs of life. Pseudonymous crypto analyst Rekt Capital tells his 298,800 Twitter followers that Dogecoin has managed to recapture a crucial level on the monthly timeframe after surging nearly 40% on April 25th. “DOGE/USD. DOGE has […]

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Altcoins

Dogecoin (DOGE) Surges As Elon Musk Attempts Twitter Takeover with Morgan Stanley

The CEO of SpaceX and Tesla is getting closer to his goal of acquiring social media giant Twitter, and in response his favorite cryptocurrency Dogecoin (DOGE) is rallying. According to a new Bloomberg report, the billionaire entrepreneur is in negotiations with Twitter executives and shareholders to purchase the platform with backing from banking giant Morgan […]

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Bitcoin

Bitcoin Lightning Network Better Than Debit Cards For Payments, Why Morgan Stanley Thinks So

U.S. bank Morgan Stanley published a report on Bitcoin and its second-layer payment solution Lightning Network. This BTC-based use case enables users to settle transactions in an instant, and records a 410% year-over-year growth, according to Arcane Research. Related Reading | Strike To Integrate Bitcoin Lightning With Shopify: Why It Matters This suggests that people are […]