This week's Crypto Biz newsletter: The Wall Street Journal questions Tether's business model; venture capitalists are scooping up crypto at rock bottom prices.
In the world of crypto, FUD stands for fear, uncertainty and doubt. It’s often evoked intentionally to draw negative attention to a particular project or business. One of crypto’s most enduring legacies has been the constant FUD surrounding Tether, whose USDT stablecoin commands a market capitalization of nearly $68 billion. Whether intentional or not, The Wall Street Journal ran a story this week claiming that Tether was on the edge of technical insolvency and that it wouldn’t take much to push the stablecoin issuer into financial peril. Of course, Tether didn’t take it lying down and immediately issued a response to what it considered to be a “disinformation” campaign by the Journal.
Regardless of which side of the debate you’re on, it’s becoming clear that there is a strong media bias against Tether. In fact, the Journal ran a story a few months ago claiming that more hedge funds were betting against the stablecoin around the same time that the crypto market as a whole was plunging.
This week’s Crypto Biz newsletter dissects the Tether controversy and gives you the latest information on the state of venture capital and nonfungible tokens (NFTs).
Tether responds to Wall Street Journal ‘disinformation’
In an article published on Saturday, The Wall Street Journal claimed that even a 0.3% decline in Tether’s assets could deem the stablecoin issuer “technically insolvent.” The Journal was referring to Tether’s most recent disclosure on its website, which showed that assets only narrowly exceeded its liabilities. Tether clapped back and accused the Journal of engaging in unnecessary FUD. “The article seeks to discredit the work that Tether has put into transparent and honest communication to the public,” Tether said. “Perhaps the WSJ has confused Tether with some of its competitors.” If you’re concerned about Tether FUD, don’t sweat it. The stablecoin issuer has been constantly attacked by mainstream media since at least 2017.
Lots of milking pic.twitter.com/ZBJnmvai9f
— Paolo Ardoino (@paoloardoino) August 29, 2022
‘Everything’s on sale:’ Reddit founder, Galaxy and Genesis execs raise big money
For all the talk about crypto winter, venture capital continues to flood the blockchain industry. This week, Reddit co-founder Alexis Ohanian announced that his venture firm Seven Seven Six is looking is raising $177.6 million to invest in various crypto and blockchain startups. “This is the best time to buy if you’re really long on the industry. It’s on sale. Everything is on sale,” said Katelin Holloway, Seven Seven Six’s founding partner. If recent history is any indication, Seven Seven Six will likely be successful in meeting its investment target. Expect more big funding stories from the world of blockchain.
Meta announces Facebook and Instagram users can post NFTs from digital wallets
Mark Zuckerberg’s Meta couldn’t launch its own stablecoin, but the social media giant is still embracing blockchain technology in other ways. Effective immediately, Facebook’s roughly 2.9 billion users will be able to share NFTs by connecting their digital wallets directly to the social media app. The announcement came less than a month after Meta enabled Instagram NFT integration in over 100 countries. It’s not entirely clear how Meta will make money off its NFT integration. Investors probably hope NFTs don’t burn a hole in Zuckerberg’s pocket like his company’s Metaverse division (yikes).
We’re introducing the ability to post digital collectibles across @facebook and @instagram. You can now connect your digital wallet to either app to share your #NFTs on both.
— Meta Newsroom (@MetaNewsroom) August 29, 2022
What NFT are you excited to share? https://t.co/wa2wkWfI7p pic.twitter.com/SlpwAuY02c
‘Most of crypto is still junk’ and lacks use case — JPMorgan blockchain head
After bashing Bitcoin (BTC) for years, JPMorgan has spun out a dedicated division for digital assets — a clear sign that the major banks acknowledge the sector’s long-term value proposition. Umar Farooq, who heads JPMorgan’s digital asset division, recently told a panel that most crypto projects are “junk” and not worth pursuing as investments. “I mean, with the exception of, I would say, a few dozen tokens, everything else that has been mentioned is either noise or, frankly, is just gonna go away,” he told the Monetary Authority of Singapore’s Green Shots Seminar. I think most investors would agree that most crypto projects don’t have a future. The problem is agreeing on which projects outside of Bitcoin and Ether (ETH) are not junk.
Don’t miss it! Crypto market dump — Is it over or the start of the next mega crash?
Crypto winter is starting to look like a crypto deep freeze as Bitcoin, Ether and altcoins all plunged this week. Have we seen a definitive bottom in crypto prices, or is there more pain on the way this fall? In this week’s Market Report, I sat down with fellow analysts Marcel Pechman and Benton Yaun to discuss where crypto prices could be headed next. You can watch the full replay below.
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