Celsius is sick

Good morning! Welcome to The Daily Moon. Are you worried about BTC dropping to $20,000? MicroStrategy is ready for $3,500. The software firm has already lost $1 billion worth of BTC and is okay losing some more. And that ‘margin call’ issue? CEO Michael Saylor calls it all a rumour.

Celsius’ Terra-ble Times?

Things are getting worse for crypto lender Celsius. Nobody knows when it’ll be up and running. Meanwhile, investors are getting impatient. CEO Alex Mashinsky broke his silence after three days but offered no straightforward answers.

No thawing yet On June 13, Celsius paused withdrawals citing “extreme market conditions”. As a result, capital worth $12 billion in 1.7 million accounts is frozen. And investors don’t know when they can start cashing out.

Mashinsky’s delayed statement left a lot of lingering doubts. What is the exact resolution? When can investors get access to their money? What happens if the company goes belly up?

Currently, the company is lawyering up to find solutions to manage the capital crisis. Meanwhile, its native token is down ~16% amidst all the bad news.

Closing in The liquidity crunch happened because Lido’s Staked Ethereum, which mirrors Ethereum prices, lost its 1:1 peg. Now:

• Investors using stETH to borrow ETH are stuck.

• Celsius has to sell stETH if mass redemptions happen.

• That lowers stETH’s price further.

The platform pays 17% interest for depositing crypto. But in return, users give Celsius the right to pledge, transfer, or even sell these assets.

Bitboy founder Ben Armstrong is planning to move court against Celsius. He has alleged that the platform is not letting him pay loans with existing funds on the platform.

Stable Getting Scarce

The Terra-Luna effect is far from over. Stablecoins, which were considered safe cryptos, are now seeing a supply deficit. All because investors are selling off quickly.

Blaming Terra and CelsiusClose to $1.6 billion worth of Tether’s USDT was withdrawn over the last 48 hours. The token pegged to the US dollar got de-pegged on June 14 after Celsius froze withdrawals. It is trading at ~$0.99 levels. Tether has also loaned $1 billion to Celsius.

Earlier, the market also raised doubts about Tether’s reserves. But the stablecoin entity assured investors ‌it has enough reserves to tide over the crisis.

There are others tooTron’s USDD is also facing a similar fate of de-peg. It is trading at $0.97 levels. Founder Justin Sun’s $2 billion reserves promise hasn’t enthused investors so far.

Algo stablecoins have it worse. Take MakerDAO’s DAI, for instance. It saw the biggest liquidation in its history, with 40% of its supply wiped clean.

Markets Feeling Low

A 0.75% Fed rate hike jolted the Indian markets. Sensex and Nifty fell to a 52-week low on the fears of the United States slipping into recession. Meanwhile, the Bank of England also hiked its rates by 0.25%.

Preparing for the worstWhile the Fed hike was ‌on expected lines, the worry is an incoming slowdown. To simplify:

• Rate hikes lead to EMIs getting expensive.

• Non-essential purchases are postponed.

• Low sales mean a decline in economic activity.

• This decline causes a recession.

A recession in the US will have ripple effects on the world, including India. ICYMI, the 0.75% hike, is the biggest increase since 1994.

Selloff troublesFor BSE and NSE, another concern area is the FII selloff. Foreign institutions have sold more than Rs 1.6 trillion-worth Indian stocks since October 2021. When FIIs sell, prices crash. Market experts believe ‌the exits will continue till Fed pauses hikes.

DOGE Is Serious

Enough with the memes. Dogecoin wants to be taken seriously now. The crypto has launched its test network Dogechain to build DeFi and decentralised apps.

Not jokingThis will be Dogecoin’s first step in developing a full-fledged blockchain. The testnet will serve as a ground to experiment with new applications. Once the testing is complete, it’ll move to the main network.

Users will get rewards to test the decentralised apps. That means you’ll get to mint and swap NFTs, use GameFi, and even try out DAOs.

PoS ChainDogecoin’s testnet will be on the proof-of-stake chain. PoS involves ‘staking’ or putting some crypto to validate a transaction. The testing network will be built on Polygon Edge on the IBFT algorithm. All of this gave the token a slight bump, and it rose ~6% in 24 hours.

And that’s it for today. If this email was forwarded to you, please consider subscribing. It’s free. We’ll never show you an ad or charge you for this. We swear.

Who are we? There is a lot happening in our world. Everything has layers, and each layer has to be carefully peeled so you, the reader, know how the world of money is changing every day. That’s our promise. Help you unpeel the onions, which are the public markets in the US, India, and crypto, so that you know just a little more.