Daily Flash | A Fed Official Says FedNow Trumps Digital Dollar, CME Launches EUR Backed BTC And ETH Futures, Facebook Now Supports NFT Cross-Posting With Instagram

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Today's Headline - 0.3% Fall in Asset Value Could Render Tether ‘Technically Insolvent’: Wall Street Journal Report

According to a report published Saturday in Wall Street Journal, a 0.3% drop in the value of stablecoin issuer Tether’s reserve assets could “render Tether technically insolvent.”

The report, which is authored by Jean Eaglesham and Vicky Ge Huang, takes a dive into the state of Tether’s reserves and its long-awaited ‘audit’. The report stresses the importance of an audit by highlighting the murky nature of Tether’s reporting.

The report takes Tether’s reserve asset data on Aug. 25 (according to its website) to show that a thin cushion of equity could spark fears and lead to a bank run. The Aug 25 data shows that Tether’s $67.7 billion of reported assets outweighed its $67.5 billion of liabilities by just $191 million, which means that a 0.3% fall in assets could have rendered Tether technically insolvent.

Chief technology officer Paolo Ardoino — the public face of the company on nearly all matters — said Friday a review of what exactly backs the stablecoin issuer’s coin (USDT) is still “likely months” away.

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Chart of the Day - Bitcoin Long Term Holder SOPR (Spent Output Profit Ratio): Glassnode Onchain Report

As of this writing,
Bitcoin (BTC) is changing hands at around $20,170, up 2.07% in the past 24 hours,
while Ether (ETH) is trading at $1,532, or up 5.9% during the same period.

Most major altcoins are trading in the green,
with Cosmos (ATOM) leading the gain at +10.3%,
Cardano (ADA) +3.76%,
Solana (SOL) +4.89%,
Polkadot (DOT) +4.17%,
and Avalanche (AVAX) +5.42%.

Notable gainers include:
AIOZ Network (AIOZ) at $0.0714 (+28.14%),
UFO Gaming (UFO) at $0.00000304 (+21.39%),
Doge Killer (LEASH) at $542.75 (+17.48%).

Notable losers include:
Sperax (SPA) at $0.0173 (-41.12%),
SafeMoon (SAFEMOON) at $0.000361 (-10.81%),
Circuits of Value (COVAL) at $0.0169 (-8.42%).


Even though this is by no means an indication of a bullish reversal, the rebound had indeed established a baseline for the bulls to protect prices from further declining, which now appears to be the monthly support level of $19,858.

The bulls will likely attempt to push the price of BTC towards the 12-Day EMA ($20,948) which coincides with a daily resistance level of $20,842. A break and close above this resistance zone on a daily candle will likely attract more buying interest as this will indicate a break above the low of Aug. 20 ($20,768) which invalidates a continuation of the bearish pattern.

On the contrary, the bears will likely come in to bring the price towards the current support zone if the bulls fail to push the price towards the 12-Day EMA.


Given enough buying power, the bulls will likely attempt to push the price towards the 12-Day EMA ($1,593), which coincides with a weekly resistance level of $1,611 to form a resistance zone. A break and close above this zone on a daily candle will invalidate the bearish pattern as the price of Ether breaks above the low of the previous wave ($1,575) on Aug. 20.

On the contrary, as the 12-Day EMA has consistently proven to be an effective resistance/support level since Jul. 25, the bears will likely use it as a signal to bring the price down towards the current support zone.

As the Ethereum merge approaches, volatility will increase accordingly, and given the bearish economic outlook in the US and Europe, investors will be wary of placing too large a bet on either side, hence the likelihood of choppy trading between different zones is also plausible.

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Influencer of the Day - Federal Reserve's FedNow payments system will be live within a year, says Brainard: The Block Report

In a virtual speech on August 29, Fed Vice Chair Lael Brainard announced:

"We will be ready to launch the FedNow Service between May and July of 2023, bringing this innovative core instant payment infrastructure to financial institutions of every size across America."

As currently envisioned, the FedNow service will provide real-time, 24/7 access to payments for financial institutions of any size.

FedNow appears in many conversations alongside a potential Fed central bank digital currency or CBDC. A Fed governor recently came out in support of FedNow as opposed to a US-centric CBDC.

Per the executive order earlier this year, several agencies, including the Fed, the Treasury, and the Department of Justice are supposed to report to President Biden by Sep. 5 concerning the digital dollar.

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Buzzes of Yesterday - #CME Releases Euro-Denominated Bitcoin and Ether Futures, #Meta Adds Support of NFT Posting on Facebook, #Argentina Province Accepts Crypto as Tax Payment

DeFi

MakerDAO Co-Founder Recommends DAI-USD Depegging To Limit Attack Surface

Ava Labs CEO Denies CryptoLeaks' Claims As 'Conspiracy Theory Nonsense’

Dogecoin Co-Founder Rejects $14 Million Offer To Boost Image Of Dogechain

NFTs & Metaverse

NFT project Art Blocks launches engine for generative asset creation

Meta Adds Ethereum, Polygon, Flow NFT Cross-Posting Between Facebook and Instagram

MTV awards feature Snoop Dogg and Eminem as Bored Apes, first metaverse category

DeGods Have Ascended: Solana NFT Project Soars Ahead of Buzzy y00ts Launch

Business & Finance

Derivatives marketplace CME goes live with euro-denominated Bitcoin, ether futures

Mobile gaming firm Limit Break raises $200 million across two rounds

Governments & Policies

Brazil's central bank picks Itaú DeFi project among new innovation proposals

Iran allows use of crypto for imports amid sanctions

Argentina's wine-making haven now accepts crypto as tax payment

Author: Gate.io Researcher Peter L.
This article represents only the researcher's views and does not constitute any investment advice.
Gate.io reserves all rights to this article. Reposting the article will be permitted provided Gate.io is referenced.
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