Weekly Newsletter #6

Newsletter #6

GM/GN, bear 🐻 market is back 😭Hopefully everyone's been doing well and holding up. Grab your Joes ☕️ and milk 🥛, and let’s get to this week's news! 👇

TOPICS OF THE WEEK

My eyes hurt...what about you?

• Market Analysis

• News of the Week

• Other Headlines

• 🤑 Funding 🤑

• Meme of the Week

🩸 on the streets...

DATA YOU SHOULD CARE ABOUT

Daily Transactions on Arbitrum and Optimism surpasses Ethereum. The L2 thesis in place, and users are finally realizing the power of L2s as it offers MUCH cheaper fees.

Now onto the macros...The US Housing market needs to look better. However, we have made progress since September of last year. Affordability is at a decade low.

The world's 2nd economic powerhouse, China 🇨🇳, is back open! The Global 🌍 supply chain is finally not as tight as before. However, it does seem the US is attempting to weaken China's current position in the supply chain.

NEWS OF THE WEEK

Did Binance Misplace $1.8 BILLION USDC?

According to Forbes, on August 17th, 2022, $1.78 BILLION worth of collateral was moved out of Binance customer wallets. The funds were said to be used to back stablecoins, bUSDC in particular, a wrapped version of Circle's USDC.

The report questioned Binance's management and custodial service for customer assets. The misuse of customer funds is an unacceptable practice, especially after what happened with FTX. This has led to significant outflows for Binance, roughly $6 billion.

💀💀💀

So what's CZ saying? "Your Funds are SAFU" - sounds awfully similar to SBF?

However, the users disagree, and past experiences with FTX have taught us, better safe than sorry.

Here are some of the theories/FUD going around:

• Binance was involved in rehypothecation (a process where banks and brokers use their rights to the collateral to make their transactions in hopes of financial gain)

• Binance swapped USDC for bUSD issued by Paxos

• CZ got shot by the FBI? 👈 This is fake news spread on Chinese WeChat 😂

It's hard to say whether or not any of this is true or false - but one thing is for sure - you're better off holding your coins yourself. Not your keys 🔑 not your coins.

Goodbye 👋 Silvergate?

The "crypto" bank, Silvergate, might just be the next domino to fall. The crypto-friendly bank's stock plummeted over 70% last month.

The bank had to delay its annual 10-K filings with the SEC, and the bank told the agency that it needed more time to clean up the mess that it's been put through after the fallout of FTX.

While crypto isn't the ONLY business Silverbank conducts, it sums up a large portion. If you've ever used exchanges like Coinbase, Binance, or FTX, you've indirectly used Silverbank. It’s known as the “bridge” to crypto as it oversees ~$11 billion in crypto assets and ~1,600 crypto clients. The blow also damaged reputable financial giants like BlackRock, with a 7.2% stake.

What exactly happened? 💭

• After FTX, one of Silvergate's biggest clients, investors shortly withdrew $8.1 BILLION 

• Silvergate sold off its debt at a loss of $718 MILLION to cover withdrawn funds

• It recorded a $1 billion loss for Q4 and a total of $949 million loss for 2022. In 2021, it had a profit of $76 million - oh how things can change in a year

• Silvergate needs to repay the $4.3 billion of advance from Federal Home Loan Bank

• DOJ is also probing Silvergate on its interaction with FTX/Alameda

Wall Street wants Silvergate in the ground- it's now the most shorted stock on the street

What's Next? ⬇️

Well...institutions (Coinbase, Gemini, Circle, Crypto.com, Paxos, and Galaxy Digital) are dipping, so soon we'll probably see more customers doing the same thing. The damages don't seem to stop here, many are also pinning yesterday's drop in crypto prices on Silvergate. Will Silvergate be the next FTX?

Just when we thought we were fine...

OTHER HEADLINES

• Australia to Test Central Bank Digital Currency Use Cases

• Visa Still Keeping Crypto Strategy, Despite Rumors

• Billionaire buys Winning “Dookey Dash” NFT for $1.63 Million in Ethereum

• Fujitsu Teams Up to Create “Japan Metaverse Economic Zone”

• India Will Base Global Crypto Framework on IMF and FSB Synthesis Paper

• No Royalties Will ‘Kill’ Web3: Animoca Brands Chairman, Yat Siu

• ETH Shanghai Upgrade is Delayed until April (CoinTelegraph)

$FUNDING$

• Redeem Raises $2.5M to Let Users Receive NFTs via Phone Numbers (CD)

• China Blockchain Conflux Gains $10M Investment From DWF (CD)

• Entertainment NFT Firm Orange Comet Raises $7M in Equity Round (CD)

• Fixed Income DeFi Platform Term Finance Readies for Business (CD)

MEME OF THE WEEK

Dippity dip dip 🌧️

Aand that wraps it up for our newsletter! Hope you enjoyed the news, memes and analysis. See you next week!

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.