BlackRock Applies for BTC ETF, Curve Loan Poses Risk

Crypto markets have fallen sharply, with BTC down 3.8% while ETH is down 5.7% over the last day. Equities are rebounding today after the Fed sent mixed signals for the interest rate outlook, keeping rates unchanged for the first time since they began hiking while signaling the possibility of future hikes. The S&P continues to push 1.06% higher, and the Nasdaq is up 1.05%. Crypto initially followed equities lower yesterday, with the sell-off accelerating around 4 pm EST and no clear crypto-specific catalysts other than $100m in liquidations in the span of an hour. On top of uncertainty from SEC actions, negative sentiment is compounding with USDT slightly de-pegging and causing imbalances in various DeFi pools. The USDT (Tether) percentage within Curve’s 3Pool significantly increased from approximately 22% a few days ago to over 70% today. Furthermore, USDT now constitutes around 98% of the USDC/USDT pool on Uniswap. As a result, Tether will likely have to exchange a considerable amount of USDT as arbitrage traders become involved. To alleviate concerns, Tether’s Chief Technology Officer expressed that Tether was prepared to redeem any quantity of USDT.