Mastercard: ‘Deceleration’ In Crypto Purchases In The Last 3 Weeks But “Clearly, People Want To Invest”

Mastercard: ‘Deceleration’ In Crypto Purchases In The Last 3 Weeks But “Clearly, People Want To Invest”

Crypto is a relevant technology, and as a multi-rail player, Mastercard got to be in this space because people are looking for answers, said CEO Michael Miebach at the company’s Q2, 2201 earnings call.

Mastercard beat second quarter-earnings forecasts after logging in an increase in revenue and profit, pointing to the continued recovery in domestic and cross-border spending.

The company’s profit increased to $2.07 billion from $1.42 billion, while revenue jumped 36% to $4.53 billion. Gross dollar volume rose 33% to $1.9 trillion, while cross-border volume increased 58%.

“International travel is still in the early stages of recovery and represents additional upside potential,” said Mastercard Chief Executive Michael Miebach.

During Q2, 2021 earnings call, the credit-card company said while cross-border card-not-present, ex travel, continues to grow at a healthy rate above pre-pandemic levels, it has moderated recently relative to 2019 levels in part due to a reduced contribution from cryptocurrency purchases.

Talking about the “episodic” moment between April and June, Sachin Mehra, the chief financial officer of Mastercard, said volatility in crypto price saw more purchases in these months. But then, as the price came down, the inverse effect of that took place.

“So the reality is that, to us, kind of is one of those things which will remain volatile.”

“What I will tell you is we’ve seen a decent level of deceleration take place in how people are utilizing Mastercard products to purchase these digital currencies like crypto over the last three weeks as reflected in the numbers.”

However, the payments giant continues to advance the cryptocurrency industry and is excited about this “vibrant space.”

Chief executive officer Miebach talked at length about the value proposition it brings to the table for crypto companies, stablecoins, and central bank digital currency at the earnings call.

On the CBDC front, “things are definitely continuing to move forward,” he said, noting that a lot of central banks are engaged on this. Here, Mastercard brings a unique perspective to these players “as a multi-rail provider because all these countries have to make the trade-off.” Its virtual test platform is of a “particularly critical proposition” here.

Mastercard is also engaging with regulators for stablecoins regarding what good policy looks like around private sector stablecoins because that is “still unresolved.”

As for floating cryptos, with the point of currency stability not solved, they won’t enable that as settlement currency on its network.

“But clearly, people want to invest in that. They don’t want to sell their investments, and we’re going to make this as easy as possible,” Miebach. For this, they are working with Paxos to allow digital wallets to stay in crypto, which the broker-dealer settles in fiat.

So, Mastercard is “playing a role across the board” because, “This is a relevant technology (and) as a multi-rail player, we got to be in this space because people are looking for answers,” he added.

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Author: AnTy

Binance Bitcoin Futures Skyrockets to $48,000 in a Monster Wick

OI on Binance BTC futures is currently at 78.89k BTC, down from 101.37k BTC from last week, while being the only exchange to have a negative change in ETH futures’ OI in the past 24 hours but still sitting at the highest 627k ETH.

The textbook short squeeze that took place this weekend saw the price of bitcoin going as high as $48,000 on the leading cryptocurrency exchange.

On other crypto exchanges, this short squeeze sent the price of bitcoin to nearly $40,000 and Ether to almost $2,400, with Binance an anomaly.

On Binance itself, while Bitcoin wicked to about $39,800 on spot and on futures, it went as high as $48,168. In response, Binance has reportedly said that “API user place wrong orders, the liquidation price is the marked price, the extreme price will be automatically removed, and the user will not be affected.”

In the past 24 hours, more than 100,000 traders were liquidated for about $1.14 billion, with nearly $950 million being the short positions.

Bybit accounted for a majority of these liquidations at about $440 million, followed by OKEx and Huobi for just under $220 million, according to Bybt.

Binance, meanwhile, is accounting for a mere 11.4% of these liquidations at $129.5 million. However, the leading crypto exchange has stopped showing accurate liquidation for some time now, and these figures are expected to be much higher. Previously, Binance used to lead the market in liquidations.

This can be seen in the second-biggest drop of over 12% in OI on Binance’s Bitcoin futures in the past 24 hours.

Currently, at 78.89k BTC, it is down from 101.37k BTC on June 20, which was an increase of 78% in nearly a month as new short positions were opened. Still, it is the highest OI, accounting for 22.7% of the total BTC futures open interest.

“Binance straight up under-reports liq data, but OI down by ~12k BTC following that move and net buying on that 1m candle was ~12k BTC. Good ol cascade,” commented trader Hsaka. “Around ~$600m of forced buying in under 60 seconds.”

When it comes to Ether futures, only Binance has a negative change of 4.45% in the past 24 hours, now sitting at the highest 627k ETH while others had an increase in OI.

Amidst all this, Binance CEO Changpeng Zhao announced that they have started limiting new users to a maximum of 20x leverage a week ago on Monday.

“In the interest of Consumer Protection, we will apply this to existing users progressively over the next few weeks,” he added.

Meanwhile, several hedge funds have curbed their trading on Binance as the regulatory crackdown on it intensifies, the Financial Times reported.

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Author: AnTy

Over 30% of ALPHA’s Circulating Supply Is Now Being Staked & Earning 13% APY

Over 30% of ALPHA’s Circulating Supply Is Now Being Staked & Earning 13% APY

In the last two weeks, the price of ALPHA has soared more than 145%.

Up 262% YTD, ALPHA is a $227 million market cap coin, which is still down 73% from its all-time high of almost $3 five months back.

“Since hitting lows on June 24, DeFi tokens are enjoying a strong bounce. COMP, ALPHA, SNX, and AAVE lead the way… The next couple of weeks will be telling for DeFi, and the crypto market in general,” noted Delphi Digital.

This week, the Alpha Finance Lab also released the June monthly update where it shared that Alpha Homora V2 has generated over ~$943k in fees since its launch in mid-May 2021.

Since the beginning of Alpha Homora V1 in October, vBSC in March, and V2 in May, over ~$5.1m in protocol fees have been collected, which puts fees on an annualized basis at $15.28 million.

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Now, in addition to Alpha Homora V1 and vBSC, Alpha Homora V2 protocol fees are also distributed to ALPHA stakers. As such, Alpha holders can now stake and earn ~13% APY, all of which comes from the collected Alpha Homora protocol fees.

Currently, more than 30% of the circulating supply of Alpha, 86.9 million ALPHA (worth about $64.3mln), is being staked. Alpha stakers will soon be able to unlock higher leverage on V2 with the upcoming integration of Alpha Tiers into Alpha Homora V2.

When it comes to its total value locked (TVL), it is at $1.19 billion, which consists of $55.9m on V1, $1.1B on V2, and ~$81.7m on vBSC.

The team noted that Alpha Homora V2 has also consistently been able to maintain high lending rates compared to other lending protocols in the market.

Alpha Finance Labs further shared updates on other products, namely AlphaX, which is being redesigned to keep up with the changing perpetual swaps and derivatives market.

Currently, the smart contracts are being audited by ConsenSys now that product ideation, fine-tuning for product-market fit, smart contract development, and internal testing has been completed.

As for the DeFi incubator program Alpha Launchpad, which was launched last month, they have been receiving many applications from early stage to late stage DeFi projects. This will also benefit ALPHA stakers by providing them a share in incubated projects’ tokens and their protocol fees, said the team.

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Author: AnTy

US Congressman Buys Cardano (ADA), Dogecoin (DOGE), and Ethereum (ETH)

Alabama Representative Barry Moore bought Dogecoin (DOGE), Cardano (ADA), and Etherium (ETH) in the last two months, according to the trading disclosed filed with the clerk of the House of Representatives on July 2.

These filings are part of disclosure requirements mandated by the “Stop Trading on Congressional Knowledge Act,” or STOCK Act that requires reporting trades no later than 30 days and “in no case later than 45 days” receiving notification of any transaction required to be reported.

Etherium (ETH) was Moore’s first purchase on May 5, above $3,300, and near the $4,380 top on May 12. ETH -0.23% Ethereum / USD ETHUSD $ 2,317.95
-$5.33-0.23%
Volume 22.41 b Change -$5.33 Open $2,317.95 Circulating 116.6 m Market Cap 270.28 b
4 h Auction House Sotheby to Accept Bitcoin and Ether for the Sale of An Over 100-Carat Diamond 6 h Ethereum Fees And Daily Transactions Spike Thanks to Shiba Inu (SHIB), Tether & Uniswap 7 h NFT Mania Peaked in March But Play-to-Earn Games Leading the Market Now; Accelerating Mainstream Mass Adoption

Moore made three purchases of ADA on May 10, 11, and 13 when its price was just above $1.70, just days before the $2.45 peak on May 16. Since then, ADA’s price is down 41.3%, currently at $1.43. ADA -1.05% Cardano / USD ADAUSD $ 1.40
-$0.01-1.05%
Volume 1.35 b Change -$0.01 Open $1.40 Circulating 31.95 b Market Cap 44.82 b
8 h US Congressman Buys Cardano (ADA), Dogecoin (DOGE), and Ethereum (ETH) 10 h Cardano Beats Bitcoin and Ethereum as the Most HODL’d Crypto Asset on eToro in Q2 2021 2 d Inflows Recorded Across Digital Assets for the First Time in 9 Weeks: CoinShares Report

His most recent purchase was of DOGE on June 13 at around 3 cents. Unlike the other crypto purchases, this has been towards the decline. Still, the coin is trading around $0.2355, as of writing, down 62% from the $0.73 peak on May 8, according to Coingecko. DOGE -4.39% Dogecoin / USD DOGEUSD $ 0.22
-$0.01-4.39%
Volume 1.15 b Change -$0.01 Open $0.22 Circulating 130.35 b Market Cap 29.21 b
8 h US Congressman Buys Cardano (ADA), Dogecoin (DOGE), and Ethereum (ETH) 10 h Cardano Beats Bitcoin and Ethereum as the Most HODL’d Crypto Asset on eToro in Q2 2021 3 d Jack Dorsey says “No” to ETH, but Twitter Shows Interest With its Free NFTs Displayed on Rarible

Moore is not alone in buying the meme coin; in early April, US Rep. Mark Green (R-Tenn.) made two purchases of Dogecoin at around 6 cents.

The disclosure does not clear just how much of each coin was bought but rather mentioned a range of $1,000-$15,000 for each purchase. This puts his total crypto investment between $5,000 and $75,000.

However, there is no way to know if the congressman is still holding these crypto-assets or sold them over these last two months.

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Author: AnTy

Bitcoin Surges Above $41k — MacroStrategy, PTJ, FOMC Meeting, BCIE ‘Adopting BTC for Legal Use’

Today, the price of Bitcoin surged to hit $41,076 on Coinbase, last seen on May 21st.

While up more than 32% from last week’s low of $31,000, it’s hard to know if the cryptocurrency will be able to continue its way up towards the all-time high of $65,000 or people will use this bounce to exit after the recent sell-off.

For now, the market is enjoying greens today, which comes packed with a lot of good news.

For starters, MicroStrategy announced on Monday the completion of its $500 million offering of 6.125% senior secured notes due 2028. This will be used to buy even more Bitcoin and add to the company’s stash of 92,079 BTC that are being held in a newly formed subsidiary, MacroStrategy LLC.

MicroStrategy shares are also enjoying an uptrend, going past $600, last seen in early May. The company has yet to buy BTC with the latest proceeds.

As we reported today, billionaire investor Paul Tudor Jones is very bullish on Bitcoin as a portfolio diversifier and wants to have 5% of his portfolio in Bitcoin, the same percentage as gold, cash, and commodities.

“So, I like that idea of investing in something reliable, honest, secure, and 100 percent certain.” “Bitcoin has an appeal to me in being able to invest in certainty.”

PTJ’s net worth is $7 billion, which would put this 5% at $350 million, while his hedge fund Tudor Investment Corporation has about $44 billion assets under management (AUM) which would put this 5% at $220 million, not including his 2% Bitcoin allocation from last year.

The hedge fund manager is paying close attention to the Federal Reserve’s two-day policy June meeting this week, which is scheduled to conclude Wednesday.

According to Jones, if the Fed treats recent higher consumer prices with nonchalance, that is the “green light to bet heavily on every inflation trade” — “then I would just go all-in on the inflation trades. I’d probably buy commodities, buy crypto, buy gold,” he said.

But if they throw a “taper tantrum,” that would mean correction, but “that doesn’t necessarily mean it’s over,” he added.

According to Goldman Sachs, it’s too early for Fed Chairman Jerome Powell to begin the “taper clock,” they expect the first hint to be delivered in August or September.

“Powell likely agrees with Governor Brainard and President Williams that the labor market has not yet come far enough,” noted GS.

Additionally, Tesla CEO Elon Musk, who sent the prices crashing last month, helped bolster the positive sentiments after he said the electric car maker would accept Bitcoin payments once miners start using 50% clean energy.

As we reported, the world’s sixth-largest, $10 trillion economy India, a G20 member, is also planning to classify the cryptocurrency as an asset class.

Already, El Salvador has become the world’s first country to declare Bitcoin legal tender. While using BTC for payments, the country will also use volcanic geothermal energy to mine the cryptocurrency.

Now, the Central American Bank for Economic Integration, which is made up of 17 member states, is sharing their support for El Salvador’s Bitcoin move, calling it a “really big deal,” adding, “we’re really proud that they’ve made us part of this new policy.”

“The signal that I want to leave you today is that the BCIE is accompanying El Salvador in this new and innovative policy of adopting the cryptocurrency called Bitcoin for legal use,” said president Dante Mossi.

He further said that BCIE would work with the Salvadoran Government “because it is a modern way of doing business.” Though being the first country to adopt BTC as widely is a challenge, they would “take it head-on and find the best way to protect the user,” Mossi added.

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Author: AnTy

Is The Worst Over? This Is What The Bears And Bulls Have To Say

What started the week before last got worse towards the end of last week. While Bitcoin already had its bottom at $30,000 on Coinbase and on some exchanges almost $28k, the pain continued for Ether prices.

On Sunday, while BTC went down yet again to $31,100, Ether fell to about $1,725 on Coinbase, representing a 60.6% drawdown.

Altcoins simply got obliterated during the Sunday sell-off, losing more than 90% of their value.

The new week, for now, is starting on a green note with BTC near $38k and ETH at just under $2,400. Just like altcoins went down hard, they are now up 10%-50% in the past 24 hours.  BNB +33%, ADA +34%, DOGE +13%, XRP +24%, DOT +78%, LTC +23%, LINK +44%, MATIC +80%, and SOL +33%.

It could be expected that the worst is over as the funding rates are in deep negative territory. Also, this seems to be the end of the largest liquidations as after the Black Wednesday blow-up, liquidations have been under $1.5 billion, and the open internet halved.

While amidst the low liquidity, selling pressure, and China panic continues to be a big negative for the market, miner capitulation and selling from corporates who have Bitcoin on their balance sheet could bring the bears back.

However, the market also has positive drivers in the form of increasing stablecoin supply. In the past seven days, USDT’s market cap has increased from $58.14 billion to $60.26 billion, and USDC’s rose from $16.86 billion to $20.63 billion, as per CoinGecko.

While it could be used for buying crypto, it could also be used to park in yield farms or collateral for someone trying to get super short, said Sam Trabucco, a quant trader at Alameda.

Not to mention, the supply increases if the peg goes above $1. Both USDT and USDC have seen some fluctuations, more than usual, since the mid of May.

Also, funds are coming with their money to scoop up cheap coins. As Jason Choi of the crypto fund, The Spartan Group noted: “Almost every retail friend I know has sold or is selling, and almost every fund I speak to is bidding, albeit slowly.”

Another fund Amber Group is reporting flows from crypto funds, macro funds, opportunistic VCs” who it says are “beginning to buy this dip in BTC+ETH as well as blue-chip DeFi by staggering limit orders and running longer TWAPs. Buying is still relatively passive/measured at this moment.”

The market is reversing from small Alts to Bitcoin, and Ether with Korean trading funds are spot buying.

“Asian family offices and UHNWIs which were sidelined are starting to fade this moving using options (selling puts) given the favorable skew / high implied vol as a way to scale in,” added Amber Group.

Bitcoin had its worst monthly performance in May since March 2020 and before that Dec. 2018. Bitcoin’s realized cap or “cost basis” actually decreased for 8 straight days during this recent sell-off, indicative of newer coins selling.

But this isn’t the same as the past bear markets.

“The difference between the price of BTC vs. that blended cost basis at current levels is the tightest its been since 9/8/20 and back in the ~50% range all time,” while in 2015, 2018, and 2020, it hit 0% and flip negative at various points, noted John Street Capital.

All of this has the market expecting the ongoing sell-off to be the mid-way of the bull run instead of a bear market.

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Author: AnTy

Grayscale Bitcoin Trust (GBTC) Shares to Flood the Market Over the Next Couple of Months

Meanwhile, GBTC continues to trade at a steep discount. From the low of 21.23% last week, the discount has recovered a bit, and during this time, the BTC price crashed almost 20%.

It’s been months now that Grayscale Bitcoin Trust has been trading at a steep discount.

GBTC is not the only one as the discount on ETCG actually went as low as 54.9% and is currently at just under 40%. While ETHE is trading at a discount at 4.52%, LTCN is at a premium of a whopping 1,168% and BCHG at almost 182%, as per Bybt.

But, of course, GBTC is the most important one.

Late in February 2021 was the first time when it briefly went negative, but the next drop below zero on March 2nd was the last time it saw positive numbers. Since then, it has continuously been declining, hitting a fresh low of 21.23% on May 13.

As of writing, the GBTC is trading at a discount of 15.05% to NAV.

The time between when the discount on GBTC shares went record low this year and recovered some this week, the price of Bitcoin crashed almost 20%.

“GBTC prem is diverging from BTC price action recently,” noted Avi Sanyal, Head of Trading at BlockTower.

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While this discount may make GBTC look attractive on paper, James Seyffart, a Bloomberg ETF analyst, noted that GBTC is trading at a discount because of the shares coming into the market in recent months, and soon, in June and July, there will be a flood of them.

“Currently around 530 million shares that could be eligible for trading and rising to 692 million at the end of August,” he stated.

As we reported, Grayscale has been trying to limit the discount by announcing the buyback program, which was recently increased to $750 million; the discount has yet to take a good hit. While GBTC’s conversion into an ETF would eliminate any discount and premium, it is anyone’s guess when that would happen.

Grayscale Bitcoin Trust Unlock

Source: Bybt

While there are no new creations ever since Grayscale halted them at the end of February, the 6-month lockup on the shares already created is ending, increasing the supply by 31% over the next ~3.5 months, he stated.

As Scopus Asset Management disclosed in its SEC filing, it almost doubled its Bitcoin exposure through GBTC since Dec. 31st from 173k GBTC to 321k GBTC shares.

“I’m convinced a factor here is the money that was pouring into these Grayscale trusts. It was a lot of institutions piling in to take advantage of the massive premiums. Some didn’t care about crypto, and the ones that did are probably buying it directly now,” Seyffart said.

Trader Loomdart, an advisor to the firm eGirl Crypto, is of a similar opinion. He noted last month that these funds that aped into GBTC just 5-6 months ago without having “any real crypto love” are probably going to market sell their GBTC shares when they unlock, which will start happening next week and accelerate from there.

This is the very reason Loomdart sees “longing GBTC at like 30% discount and smashing long on BTC” as the next big trade.

“With GBTC starts changing drastically, big sign the big guys are starting to arb GBTC because it’s profitable enough to do so,” he added.

On Monday, Vailshire Partners, a smaller hedge fund that manages under $30 million in AUM, shared on Twitter that they took advantage of the discount by purchasing “an additional 6,753 shares of GBTC today.”

However, it is yet to be seen if the GBTC is done trading at a discount or another drop is to come before it starts to recover completely.

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Author: AnTy

SHIB Token Is Sending Ethereum Gas Prices Higher

The Dogecoin knockoff, up 30,120% in the last four days, is also the one behind Ethereum co-founder Vitalik Buterin’s $8 billion fortune.

Ethereum gas fees are back to skyrocketing.

The gas prices calmed down and fell to about 40 Gwie earlier this month after the Berlin hard fork went live in mid-April, layer 1 solutions like BSC and Solana (SOL) gained traction, and layer 2 solutions like Polygon (MATIC) started to see usage.

Average gas prices are currently 150 gwei, as per Blockchair.

This has the average transaction fees on the network going to $30 after falling under $8 on May 2nd, but we have yet to climb to the late February level of about $43.

The USD rate has been on the spike as the price of Ether made a new all-time high today at $4,175.

However, this has been in line with the second largest network’s growing usage as transaction count exceeds 1.7 million, up from a 2017 peak high of 1.4 million. On May 9th, it reached the height of 1,716,600, only to fall just under 700k today.

Since last month, transaction volume has also been strong, seeing a significant jump last week, from 7.1 million on May 6 to nearly 42 million on May 8. Today, it is back to 3 million ETH.

According to Lex Moskovski of Moskovski Capital, the surge in gas prices has been due to the SHIB token.

“Ethereum gas price is skyrocketing due to TikTok influencers shilling SHIB token in anticipation of a DOGE pump. Currently, the token’s contract is the 4th most used right after Uniswap’s and Tether’s,” he noted.

Interestingly, the Dogecoin knockoff is the token behind Ethereum co-founder Vitalik Buterin’s $8 billion fortune. Buterin actually received 50% of the SHIB token supply from the token’s developers over the past year.

Shiba Inu is a canine-themed meme token inspired by Dogecoin (DOGE), which is up 30,120% in the last four days and is currently trading at $0.00003054.

And Buterin is its highest holder with 505 billion SHIB, which is now worth more than his $1.3 billion in ETH.

Buterin, however, is in no way related to the cryptocurrency. Moving 50% of the coin’s supply to Buterin was actually the SHIB’s anonymous developers’ decision to remove them from circulation, as shared in the cryptocurrency’s white paper or “woofpaper.”

While the community is cautious and feels Buterin may rug them, “Will he do it? Certainly not. There’s no incentive for him to tarnish his reputation for 200 ETH,” tweeted WARONRUGS back in January.

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Author: AnTy

Evolve Files for a Ethereum ETF After Launching its Bitcoin ETF Last Month

Evolve Files for a Ethereum ETF After Launching its Bitcoin ETF Last Month

Evolve Funds Group has filed for an Ether exchange-traded fund (ETF) with the Canadian Securities regulators.

After launching the Bitcoin ETF (EBIT) on the Toronto Stock exchange, just a day after the first Bitcoin exchange-traded fund ever — Purpose Bitcoin ETF which gained the first-mover advantage and raised $421 million in just two days of its debut.

As a result, last week Evolve lowered the management fee on EBIT to attract investors. EBIT currently has $40 million in assets under management, as at March 1, 2021.

Now, Evolve with $1.7 billion in AUM is aiming to be the first mover in Ether ETF and has filed a preliminary prospectus to provide investors exposure to the world’s second-largest cryptocurrency.

The price of Ether is currently trading around $1,550, up over 113% YTD. Raj Lala, President, and CEO, at Evolve said,

“Ether is a digital asset that is not issued by any government, bank or central organization and was intended to complement rather than compete with bitcoin.”

ETHR aims to provide investors with exposure to the daily price movements of the U.S. dollar price of Ether which will be based on the ETHUSD_RR, a once-a-day benchmark index price for Ether administered CF Benchmarks which is currently the settlement index for futures contracts listed by CME Group as well.

ETHR will offer Canadian dollar-denominated unhedged units (“CAD Units”) and U.S. dollar-denominated unhedged units (“USD Units”). Elliot Johnson, CIO, and COO at Evolve says,

“Ether is the building block for a revolution in digital finance which is still in its infancy.”

“Ethereum is the most actively used blockchain with Ether being used to pay for transaction fees and computational services.”

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Author: AnTy

This Ethereum-based ‘Non-Volatile’ Stablecoin is on a Roller Coaster Ride

This Ethereum-based ‘Non-Volatile’ Stablecoin is on a Roller Coaster Ride

Just last week yet again Dynamic Set Dollar (DSD) 275% only to crash 91% to under $0.3.

The latest stablecoin which is all the rage right now is Dynamic Set Dollar (DSD) which is a sophisticated algorithmic stablecoin.

Launched less than a month back, the price journey of this stablecoin has been extremely volatile. Rising just above $80 on its first day of coming into existence, much like any other DeFi attraction, DSD dropped to $31 the same day.

On Dec. 2nd, a new high at $86.57 was set, as per CoinGecko. From here, it started tanking, going to about $0.66 on Dec. 12.

Last week, the stablecoin, yet again, rallied 275% only to crash 91% to under $0.3.

As of writing, DSD has been trading at $0.36.

The price action of this Ethereum-based stablecoin surely got many people REKT. But it isn’t all over as the circulating supply of DSD will be increasing by about 1/3 today which “could generate heavy selling.”

It was to fulfill DeFi’s needed functionality while “reliably maintaining its peg” that the team launched DSD.

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Based on the popular rebasing method, the token supply increases and decreases with every rebase by directly adjusting the number of tokens in every token holder’s wallet.

Whenever DSD trades below the $1 peg, token holders are incentivized to contract the token supply to bring the spot price back to the peg for which Coupons (debt) is issued. Users burn their DSD to purchase Coupons, which have an expiry of 360 epochs and the debt ratio capped at 35%, thereby reducing the supply. When DSD goes above $1, new DSD are minted to push the supply down.

DSD allows for 12 potential supply extension or contraction events per day.

In its official announcement, the team defined DSD as a “non-volatile digital asset pegged to the dollar, so the risk of liquidation through volatile price action is low.”

However, the stablecoin is anything but non-volatile as seen in the price movement and currently gaining a lot of interest.

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Author: AnTy