Bitcoin (BITCOMP) surged to its highest level in June on Sunday evening following a tweet from Elon Musk on the cryptoasset’s mining process: “When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.”
Musk’s words caused bitcoin to surge, from a trading range of sub $35,000, which it has tread for the past week, to now over $39,000.
Bitcoin slumped to a low of $31,304 on Tuesday but was already recovering, reaching $35,705 shortly before Musk’s latest comment.
Musk made the comment when defending Tesla’s bitcoin usage on Twitter, responding to accusations he was attempting a ‘pump and dump’ with the cryptoasset saying: “This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.”
Ethereum (ETH-X) witnessed a short surge on the back of the news, but this caps a weak seven days of trading. ETH started last week around $2,800 but trended downward to a low of $2,265 on 12 June. It has now recovered somewhat to trade around $2,500.
Global banking regulator calls for tougher rules on crypto
The Basel Committee on Banking Supervision, one of the most influential banking regulators in the world, has called for banks to have tough rules enforced around their cryptoasset holdings.
The regulator has recommended that the same stiff rules as traditional assets be applied to crypto holdings at major banking institutions. It says it is concerned about global financial stability if major banks begin to take on risk from cryptoassets without increasing their capital reserves.
The recommendations would force large banking institutions to hold capital reserves equivalent to the exposure they face from trading cryptoassets such as bitcoin and ethereum.
In essence, exposure to $100 worth of bitcoin by a bank would require $100 worth of collateral fiat holdings to mitigate the risk.
The regulator’s proposals split cryptoassets into two categories: those that can be treated under the existing Basel Framework, and other new kinds of assets that would require a “new conservative prudential treatment.”
Stablecoins – which are routinely pegged to fiat currencies – would fall under the former along with other tokenized traditional assets, while bitcoin, ethereum and others would come under new rules. Central Bank Digital Currencies (CBDCs) would, however, be exempt.
Tether becomes US commercial paper big hitter
Stablecoin tether can now count itself among the biggest global investors in US commercial paper, with $30 billion in holdings.
US commercial paper is a short-dated investment bond issued by corporations to meet short-term liabilities such as payroll and inventory. It is functionally similar to a cash holding and is not backed by collateral obligations.
Tether (USDT-X), a stablecoin, uses US commercial paper to maintain its holdings at one-to-one with the US Dollar. Those holdings have grown with the stablecoin’s rise and now number just under $30 billion-worth of paper.
This puts Tether in the same category as investment giants such as Vanguard and BlackRock, according to JPMorgan, making it one of the largest holders in the world.
Other than commercial paper, Tether holds fiduciary deposits, secured loans and some cash with banking partners. But, per JPMorgan, the large paper holdings suggest Tether is ‘struggling’ to hold cash reserves with banking partners.
Tether has become a major part of the cryptoasset ecosystem in recent times. It is now the third largest cryptoasset by market cap – with some $62 billion-worth of holdings.
Hard wallet maker secures bumper investment
Ledger, a Paris-based maker of hard wallets has secured a bumper round of investment with a $380 million Series C fundraise. With the fresh influx of capital Ledger is now valued around $1.5 billion, giving it ‘unicorn’ status in Europe.
Speaking to The Block, chief executive Paul Gauthier commented: “It’s a $1.5 billion valuation that we’ve reached through this round, but the reality is that our real target is a $100 billion valuation, and the reason why we think it’s going to be a $100 billion valuation is because the market’s going to be really huge.”
Ledger is a maker of hard wallets – physical devices which can store cryptoassets. Its technology helps cryptoasset owners store private keys in their hardware devices, securing them away from what it says are fallible computers or smartphones.
The company lays claim to be ‘the world’s most popular hardware wallet,’ suggesting it holds some 15% of all cryptoassets’ security keys on its devices.
The firm says it plans to use the proceeds of the Series C funding round for product innovation, enterprise capability expansion and operating system upgrades to its hardware.
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