Crypto is hiring

In today’s edition, FTX re-discovers US stocks, Tether’s pain is Circle’s gain, Coinbase is thinking hard

May 19, 2022

Good morning! Welcome to The Daily Moon. You’ll soon bump into Jamiroquai while hanging out with Snoop Dogg in LANDS. The jazz band will host fan meets and perform Virtual Insanity on the metaverse. Some merch is on the table too. They already own land on The Sandbox, so it’s a done deal. 

FTX Discovers US Stocks

How long can you keep away from the OG of investments? FTX couldn’t. The crypto exchange has launched stock trading on its app. Users can trade Bitcoin, Dogecoin, and US stocks. 

Just to recap, a Bitcoin selloff wiped off $200 billion in just a single day on May 12. The crypto crash has nothing to do with the decision, claimed FTX US President Brett Harrison. He says this has been in the works since January. 

Then, why?The US equity market is the largest in the world. It accounts for 41.6% of the $117 trillion global equity market cap, or $49 trillion. Too big a number for FTX to ignore. 

FTX began stock trading for select users yesterday. The timeline for a wider rollout isn’t public yet. But the stock addition is part of a plan to expand in the US. The company is flush with funds after raising $400 million in January. With a $32 billion valuation, FTX is more valuable than Nasdaq and Twitter. 

Breaking BTC Ties?The stock-trading entry comes just three days after FTX founder Sam Bankman-Fried dissed Bitcoin. He said that Bitcoin has “no future” as a payments network because of its high environmental costs and inefficiencies.  

Bankman-Fried also bought a 7.6% stake in stock-trading app Robinhood just over the weekend. 

Fun factThe FTX Brothers, Sam, and Gabe are also quietly donating millions to Democrats in the ongoing US primaries. The funds are apparently “pandemic-focussed”.

Stable Circles 

Tether’s loss is Circle’s win. As Tether lost its US dollar peg, Circle’s USD Coin saw its circulation rise by almost $3.4 billion. 

Loss, Loss, GainRemember the TerraUSD De-peg? Well, it caused a lot of commotion? We’ll break it down: 

  • TerraUSD and LUNA crashed because of Terra’s weird algorithm. 

  • Fears of a ripple effect caused massive withdrawals from stablecoin Tether.

  • Circle’s USDC gained since it was the next viable option.

Unlike Terra’s UST Coin, actual dollar reserves back Circle’s USD Coin. However, not everyone is convinced about Tether’s assets. It fell to 95 cents on May 12. 

Peg Promise Circle has consistently claimed that their USD Coin will only be backed by real cash. In a May 13 blog, the company said that they have:

  • $11.6 billion in cash. 

  • Short-term government-backed bonds worth $39 billion. 

There were 50.6 billion USD Coins in circulation as of May 13. Circle’s promise of USD Coin being always redeemable 1:1 for US dollars seems to be working. 

Crypto’s Just Getting Started

If you’re following the news closely, there has been a culling of late. Tech startups across the world are laying off people. Be it public or private. There is some fear when taking jobs in technology companies. But not when it comes to crypto.

How do we know?Search for crypto-related jobs in the US jumped 395% between 2020-21, according to data released by LinkedIn. Other “mainstream” tech jobs saw only a 98% rise in search volume. 

Why is crypto immune?This is a deep question. Crypto is riding on two different sentiments that have helped fight this trend. 

  1. The fundamentals according to experts are strong, despite the dumping of tokens on the market. 

  2. Most of these crypto companies have raised a lot of capital. Just last quarter, crypto companies, collectively, raised $9.2 billion, outperforming the $8.8 billion raised in Q42021. US-based VC, a16z, also announced that it would make investments worth $600 million across gaming and metaverse. Share

Fact Vs Fiction 

Coinbase is getting a think tank started. It’s a sensitive time to be a crypto company. There is a massive sell-off, and a few sceptics are ‌loudly saying, “I told you so.” This is when you need to make sure that the government doesn’t take steps to make things harder. But there’s more. US President Joe Biden wants crypto exchanges to keep their funds separate from customer investments. These are regulatory challenges that Coinbase wants to fight against.  

Roll out the mythbusters Coinbase’s think tank has published a report showing how crypto risks are not any higher than Nasdaq 100 stocks or commodities. The exchange also attempted to dispel notions about climate risks from crypto by claiming that the data sources are inconsistent.   

MeanwhileOn the other side of the world, a Russian government official has said that crypto payment will become legal “sooner or later”. 

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.