As the legal battle between the United States Securities and Exchange Commission (SEC) and Ripple continues, the cryptocurrency community is betting that the blockchain company’s victory could open an alt season, which has led to an increase in open interest in XRP perpetual futures.
Indeed, the volume of XRP perpetual futures open interest has surpassed $600 million on five different crypto exchanges, increasing nearly $400 million over the previous seven days, according to the data and chart shared on Twitter by the crypto analytics platform Kaiko on March 31.
As Kaiko stated:“XRP perpetual futures open interest more than doubled this week on bets that a possible victory in Ripple’s lawsuit against the US SEC will trigger an alt season.”
In a recent newsletter, Fortune Crypto Editor Jeff John Roberts asserted that Ripple has finally found a long-term value proposition for the company and XRP, the native token of the XRP Ledger.
In the newsletter titled “Ripple and XRP may finally be for real,” Roberts reveals that he has always been skeptical of the value proposition of the cryptocurrency until he met with Ripple President Monica Long this week. Notably, the “Kings of Crypto: Coinbase and the Next Generation Finance” author now believes Ripple and XRP have found their niche with Ripple’s On-Demand Liquidity (ODL) product.
As highlighted by Roberts and previously reported by The Crypto Basic, the ODL product has grown rapidly in the last two years from just three countries in 2020 to 40 payout markets today, representing nearly 90% of the foreign exchange market. Roberts disclosed that Long explained that Ripple achieved this growth by focusing on partnerships with small and medium-sized banks that appreciated the lower transaction costs.
For context, Ripple’s ODL utilizes XRP as a bridge currency to allow for near-instant cross-border payments at low cost. Consequently, the author expressed the belief that with this model, the company may be positioned to succeed regardless of the outcome of its legal battle with the United States Securities and Exchange Commission (SEC).
“All of this is to say that Ripple, more than ever before, has figured out a long-term value proposition for both the company and XRP—and that it may be poised to succeed regardless of how its big court case turns out,” Roberts surmised.
Recall that the blockchain payments company remains locked in a legal battle with the SEC that has spanned over two years. The SEC claims that Ripple’s sales of XRP to fund its business violate securities law, arguing that XRP is an unregistered security.
As reported by The Crypto Basic yesterday, Long recently expressed that she is confident of a positive outcome in the case. Pundits have predicted that a ruling could come between now and the middle of April.
Okoya David Kio is a crypto enthusiast passionate about understanding what makes the nascent market tick. When he’s not pondering about cryptocurrencies, you might find him in a BP debate room trying to proffer solutions to age-old societal problems.
Now, reports have emerged Wall Street giant Goldman Sachs is looking to raise $2 billion to snap up the assets of embattled crypto lender Celsius which has been hard hit by the latest bitcoin and crypto crash. Goldman Sachs is soliciting crypto funds and traditional financial institutions as part of the deal that could see it buy Celsius’ crypto assets at a discount, it was first reported by Coindesk, with Blockworks adding the deal could happen even if the lender does not declare bankruptcy, citing anonymous sources.
“Goldman didn’t want to buy into the top of the market,” one source told Blockworks. “This is more their style.” Celsius, which had $12 billion in assets under management as of May of this year, has been teetering on the brink of bankruptcy after suspending user withdrawals from the platform earlier this month, citing “extreme market conditions” and exacerbating a crypto price crash that sent bitcoin spiraling under $20,000.
Celsius has hired restructuring advisors Alvarez & Marsal, it was earlier reported by the Wall Street Journal, adding to previous reports Citigroup C+3.3% has been tapped to advise on possible solutions. Goldman Sachs’ reported bid for Celsius’ crypto assets is likely to return some degree of confidence to the market after traders were left rattled by the pace of the bitcoin, ethereum and cryptocurrency sell-off.
“Even so, it may not be the best time to buy, as it may take considerable time before the crypto market digests the recent turmoil and enters a new phase of sustained demand from broad segments of investors, not just stressed asset hunters,” Alex Kuptsikevich, FxPro senior market analyst, said via email. The Celsius meltdown, coming hot on the heels of the collapse of the terraUSD stablecoin its support coin luna, has sparked fresh calls for better crypto market and crypto company regulation.
“I suspect after the recent events with Celsius that the U.S. will provide more clarity soon, on regulation towards custodial providers and lenders, to bring more stability to the crypto space,” Marcus Sotiriou, an analyst at the U.K.-based digital asset broker GlobalBlock, wrote in an emailed note.
Nearly three weeks after Celsius Network suspended fund withdrawals and other operations from its platform, questions about its future are mounting. The maneuvers behind the scenes are also increasing. The crypto firm has hired Alavarez & Marsal, a restructuring advisory firm. Celsius has tapped restructuring attorneys from law firm Akin Gump Strauss Hauer & Feld.
According to Fortune, which cites anonymous sources familiar with the matter, Goldman Sachs has solicited crypto firms and web 3 firms, the new iteration of the internet, as well as traditional financial institutions and companies specializing in restructuring. Goldman Sachs did not immediately respond to a request for comment.
On June 12, Celsius announced that it would suspend indefinitely various transactions, including withdrawals of funds “due to extreme market conditions.” Today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts,” the company said at the time. “We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”
Celsius is a cryptocurrency lending platform. The company allows anyone to borrow cryptocurrency and earn interest for lenders. “Earn high. Borrow low. Change the world,” the firm says on its website. One of its catch phrases is “Borrow like a Billionaire.” Celsius, through its CEL token, promises “financial rewards” as much as 30% extra returns weekly. But some options are not available to U.S. based users.
When it raised $400 million last October from investors led by WestCap and Canadian Caisse de dépôt du Québec (CDPQ), Celsius Network saw its valuation soar to $3 billion. The company wants to be an intermediary between traditional finance and the sphere of cryptocurrencies.
Bitcoin and cryptocurrency prices have struggled this year, with the Federal Reserve’s plan to raise rates and potentially trim its balance sheet spooking investors.
The bitcoin price has lost around 40% of its value since hitting an all-time high of nearly $70,000 per bitcoin in November. Smaller cryptocurrencies, including ethereum, BNB BNB-0.9%, XRP XRP-2.7%, solana, cardano, luna and avalanche, have also fallen back—though some are on track to break records in 2022.
Now, a panel of cryptocurrency experts has predicted the bitcoin price will peak at almost $82,000 in 2022 before dropping to just above $65,000 by the end of the year—but warned a more advanced blockchain such as ethereum, BNB, XRP, solana, cardano, luna or avalanche could eventually eclipse bitcoin.
“There’s still plenty of uncertainty about the short-term bitcoin outlook,” Asher Tan, the chief executive of Australia-based crypto exchange CoinJar and panel member said in a statement. Tan has a more conservative outlook on the bitcoin price than the panel average.
“Given the macroeconomic headwinds, it would not surprise me to see bitcoin spend the whole year bouncing around between $30,000 to $60,000—the sort of conditions that are terrible for traders, but rewarding for accumulators with a multi-year timeframe.”
The panel, made up of 35 people from the world of crypto and put together by financial comparison website Finder, has returned a lower average bitcoin price prediction for the end of 2022 than it did in January—at the time predicting the bitcoin price would end December at just over $76,000.
The longer-term panel average has also dipped with bitcoin now forecast to be worth just over $420,000 by the end of 2030, down around 25% from an October forecast of $567,000.
However, some panel members have become more bullish since then. Martin Fröhler, the chief executive of ethereum-based trading platform Morpher gave one of the most bullish end-of-2022 predictions, pointing to “political uncertainty, inflation, and an ever increasing desire to own non-government controlled assets” as likely to push the bitcoin price to a new all-time high.
The continued success of ethereum and recent rallies for other top ten cryptocurrencies such as BNB, XRP, solana, cardano, luna and avalanche may have weighed on the panel’s outlook, with 50% predicting bitcoin will eventually be displaced as the most valuable cryptocurrency.
“Bitcoin is a one trick pony,” said Thomson Reuters technologist and futurist Joseph Raczynski who thinks ethereum has “far grander” potential than bitcoin as “a massive platform of the internet of value.”
“For now, bitcoin really only serves as another currency, akin to a dollar, euro, or pound. Other blockchains that serve a multitude of purposes will likely have a chance to take the throne.”
Others are even more downbeat about bitcoin’s prospects. John Hawkins, a senior lecturer at the University of Canberra, returned one of the bleakest bitcoin price predictions, forecasting bitcoin will be worth just $5,000 by the end of 2025 and dropping to a mere $100 per bitcoin by 2030 as it loses out to ethereum and state-backed alternatives.
“As well as private crypto being replaced by central bank digital currencies, and a general collapse of the speculative bubble, I think bitcoin will lose out to ethereum which has a stronger use case, especially if ethereum ever converts to proof-of-stake and so becomes more environmentally responsible.”
Ethereum’s long-awaited transition to the less energy-demanding proof-of-stake consensus mechanism, abandoning the proof-of-work system pioneered by bitcoin, was expected to happen over the next couple of months but has recently been delayed until the end of this year.
I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk
The bitcoin price came within touching distance of $50,000 per bitcoin but has today dropped back, losing more than $2,000 per bitcoin in a matter of hours. Ethereum has also erased its latest gains, despite traders eagerly eyeing a long-awaited upgrade.
Now, after El Salvador last week postponed its controversial $1 billion bitcoin-backed bond, outspoken bitcoin billionaire Michael Saylor has warned the market perhaps isn’t “quite ready” for bitcoin bonds.
“I’d love to see a day where people eventually sell bitcoin-backed bonds like mortgage-backed securities,” Saylor, the chief executive of business intelligence software company MicroStrategy, which has pivoted to become a bitcoin acquisition vehicle over the last two years, told Bloomberg in an interview. “The market is not quite ready for that right now. The next best idea was a term loan from a major bank.”
Last week, El Salvador, which became the world’s first country to adopt bitcoin as legal tender last year, revealed it had postponed its planned $1 billion bitcoin bond offering with the country’s finance minister Alejandro Zelaya blaming unfavorable market conditions—but El Salvador’s president Nayib Bukele blaming the delay on necessary pension reforms.
“I think this is not the time,” Zelaya said in comments reported by Reuters, with Russia’s invasion of Ukraine unsettling markets in recent weeks. “In May and June sometimes you can, but the market variables get different. After September, it is difficult to raise, unless you are previously funded, as in the case of bitcoin bond.”
The hotly-anticipated bitcoin bond, designed to fund the creation of an ultra-low tax bitcoin city in El Salvador, will have a “substantial oversubscription” that could reach $1.5 billion, according to Zelaya. Half of the funds raised will be used by the country to buy more bitcoin and the rest earmarked to develop bitcoin mining infrastructure powered by a volcano.
Earlier this week, MicroStrategy announced it’s bitcoin-focused subsidiary MacroStrategy had taken on a $205 million loan to buy more bitcoin, adding to its 125,000 bitcoin hoard. MicroStrategy stock price, up some three-fold since it first began buying bitcoin, has slide 6% this week.
The loan will give MicroStrategy “an opportunity to further our position” as the largest publicly-traded bitcoin investor, Saylor said in a statement.
I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk
MicroStrategy CEO and Bitcoin permabull, Michael Saylor believes that traditional financial markets aren’t quite ready for Bitcoin-backed bonds. Saylor told Bloomberg on Tuesday, that he’d love to see the day come where Bitcoin-backed bonds are sold like mortgage-backed securities, but warned that, “the market is not quite ready for that right now. The next best idea was a term loan from a major bank.”
The remarks come two days after MicroStrategy’s (MSTR) Bitcoin-specific subsidiary MacroStrategy, announced that it had taken out a $205 million Bitcoin-collateralized loan to purchase even more Bitcoin. This loan was unique, as it marked MicroStrategy’s first time borrowing against its own Bitcoin reserves — which are currently valued at approximately $6 billion — to buy more of the cryptocurrency.
Saylor’s comments also follow El Salvador’s recent decision to postpone the issuance of its $1 billion dollar Bitcoin-backed “Volcano Bond” on March 23rd. According to El Salvador’s Finance Minister Alejandro Zelaya, the decision to delay the bond was due to general financial uncertainty in the global market driven by conflict in Ukraine.
In a potential warning to El Salvador, Saylor said that the country’s Volcano Bond was somewhat more risky than his company’s Bitcoin-collateralized loan,Saylor added that he remains extremely bullish on the long-term potential for Bitcoin-based bonds, going as far to say that it would be a good idea for cities like New York to use Bitcoin as a debt instrument.
Related: MicroStrategy CEO won’t sell $5B BTC stash despite crypto winterSince its initial $250-million Bitcoin investment in August 2020, MicroStrategy has now amassed a substantial 125,051 BTC — which at the current price of $44,547 equates to $5.5 billion. MicroStrategy has made a series of separate BTC purchases using the company’s cash on hand as well as the proceeds of sales of convertible senior notes in private offerings to institutional buyers.
Saylor’s actions have gradually transformed MicroStrategy into a partly leveraged Bitcoin holdings company, with MSTR shares closely correlated with the price of Bitcoin.
As the legal battle between the United States Securities and Exchange Commission (SEC) and Ripple continues, the cryptocurrency community is betting that the blockchain company’s victory could open an alt season, which has led to an increase in open interest in XRP perpetual futures.
