Tuesday, Jun 21st 2022

Crypto Three Things (6/21)

Commentary

“Intelligence is the ability to adapt to change."-Stephen Hawking

1) Solend protocol users walk back vote on a ‘whale wallet’: Token holders of Solend, a DeFi lending platform built on Solana, voted to gain control of the largest user’s account who borrowed against as much as 5.8 million SOL in deposits. Holders worried that if SOL dropped to $22.30, the wallet could be liquidated, and Solend would end up with bad debt. However, after widespread community backlash, the controversial vote was reversed.

Titan’s Takeaway: The drastic measure to avoid a cascade of liquidations broadly sparked questions regarding decentralized platforms. Centralized moves like this begin to resemble actions that a traditional lender would take and asks if some crypto operators have forgotten a core principle of decentralized finance.

2) Celsius warns return to liquidity will take time:  A week after the Celsius network halted user withdrawals, the lender provided a sparse update which left more questions than answers. While remarking that stabilizing liquidity and operations “will take time,” there was no news on when withdrawals will be processed again.

Titan’s Takeaway: While it appears that Celsius is actively seeking to find a solution for its breakdown, an update on reopening withdrawals is needed to assuage investor fears and adhere to the crypto ideal for transparency.

3) ProShares to launch the first US-listed short BTC ETF: The first exchange-traded fund to short Bitcoin futures will allow investors to bet against the growth of Bitcoin. Going by the ticker BITI, the ETF is packaged by ProShares, the same company that launched the first U.S. Bitcoin futures ETF in October last year. ProShare expects to launch the product this week.

Titan’s Takeaway: The arrival of the first short Bitcoin exchange-traded fund comes at a time when investors' nerves are tested amid whipsaw trading and broad-based market retreat. In our eyes, the new short BTC ETF is a stamp of approval for the nascent industry as it becomes increasingly embedded in institutional capital markets.

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