Thursday brought some good news
for crypto die-hards. Point72, the hedge fund run by billionaire New York Mets owner Steve Cohen, was set to make a sizable move into the market. Bitcoin gained 2.5% following the news.
The rally didn’t last long.
Tether, the crypto stablecoin that says it’s backed one-for-one by fiat currencies, released a reserves breakdown for the first time that showed a large portion in unspecified commercial paper. The company has faced questions over both its reserves and whether it was used to manipulate cryptocurrency
prices. In February, Tether settled a legal dispute with the New York Attorney General’s Office and paid a fine of $18.5 million.
After that, reports surfaced that Colonial Pipeline Co. paid nearly $5 million in untraceable cryptocurrency to the hackers that infiltrated the company’s network and forced the shutdown of its infrastructure, setting off widespread gasoline shortages up the U.S. eastern seaboard.
At about the same time, Bloomberg reported that Binance Holdings Ltd., the world’s biggest cryptocurrency exchange, was under investigation by the Justice Department and Internal Revenue Service in relation to possible money-laundering and tax offenses.
News of the investigation sent Bitcoin and Ethereum, the two largest cryptocurrencies, down by more than 7% each as fears were stoked about the Biden administration taking a tougher approach toward an industry that has largely operated outside of the gaze of regulators.
Then at 4:00 p.m. New York time, Coinbase Global, Inc., the biggest U.S. crypto exchange, reported first-quarter earnings. Its revenues fell just short of consensus estimates and the company projected flat user growth. Coinbase also plans to offer Dogecoin trading on its platform. The exchange’s shares fell as much as 6.5% in after-hours trading before recovering.
Friday is already bringing further drama, beginning with more comments from Musk. The billionaire in a tweet said he “strongly” believes in crypto but that “it can’t drive a massive increase in fossil fuel use, especially coal.”
Not long after, he followed up with another post saying that he’s working with Dogecoin “devs to improve system transaction efficiency,” describing the effort as “potentially promising.” Dogecoin jumped more than 20% after the tweet.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.