Return of the robber baron

Between 1893 and 1907, J.P. Morgan twice saved the US economy from disaster. Of course, it didn’t hurt that he profited enormously in the process. Some within the industry argue Sam Bankman-Fried is doing the same. He says he’s simply being altruistic (insert eye roll here). 

Today's Topics:

• Are Robber Barons back in style?

• Circle gains as Tether struggles

• BlockFi gets line of credit from FTX

• Quick Links

Sam Bankman-Fried: Altruistic or opportunistic?

As the crypto market continues its downward trajectory, some within the industry are stepping in to mitigate losses. Or at least that’s what they say they’re doing. Take Sam Bankman-Fried for example. He’s bailing out crypto firms that have fallen on hard times, stating that he’s “effectively altruistic” while doing so.

Are Bankman-Fried and others like him simply filling a need in a flattening crypto market? Or are they living by the old saying, “never let a good crisis go to waste”? Some would say his actions are antithetical to what crypto stands for.

The free market should dictate who succeeds and who fails. Not opportunistic billionaires who seize any and every chance they get to buy up a failing company. Which then magically results in the expansion of their own business.

Funny how that works.

Circle is gaining on Tether as USDT sheds market cap

Since the start of May, USDT has lost almost 20% of its total market cap. By comparison, USDC has grown 5% in that same time frame. Based on that information and other related factors, analysts believe investors are bailing on Tether.

Circle, on the other hand, has set record highs 28 times since the beginning of May. As a result, the gap between the two stablecoins has shrunk. It’s not a paltry $12 billion, the closest Tether and Circle have been to one another in nearly two years.

Both stablecoins faltered briefly when things began to go south for Terra, but quickly recovered and regained their 1:1 ratio with USD. While not everyone is sold on the value of stablecoins, if these two take a turn for the worse, it could spell disaster for the crypto market as USDT and USDC combined represent nearly 80% of the stablecoin market.

For now, both coins are holding steady, but Tether can’t get complacent. Circle is closing in fast.

FTX lends BlockFi a helping hand and a $250 million line of credit

Is a partnership between BlockFi and FTX a possibility? We can’t say for sure that’s where things are headed, but it doesn’t hurt that the two just entered into a $250 million dollar agreement.

BlockFi gets a revolving line of credit which allows the platform to stabilize after paying out $1 million, the initial payment in a $100 million settlement. The help couldn’t have come at a better time as BlockFi is one of several crypto companies forced to reduce its labor force due to the downturn in the crypto market.

However, the loan is “subordinate to all client balances.” That means BlockFi can satisfy any obligations it has to clients before making a payment to FTX. Sam Bankman-Fried (yes, this guy again) stated that it’s his “responsibility to bail out struggling companies during this unrelenting bear market.”

It also paves the way for future collaborations between the two companies. BlockFi CEO Zac Prince says that the agreement unlocks “innovation between BlockFi and FTX as we work to accelerate prosperity worldwide through crypto financial services.”

Time will tell what comes of the relationship.

Quick Headlines

It’s a dog-eat-dog world. - Dogecoin and Shibu Inu are both on the rise as Elon Musk (enough already!) reiterates his support for DOGE.

Elon4President - Twitter is all in on Elon Musk and his $44 billion takeover bid. They voted unanimously that the deal is in the best interest of Twitter and its stockholders.

Central banks admit fault for inflation - As if admitting fault will somehow gain back our trust, now they claim they’re the main source of stability in the market, all while bashing crypto.

Don’t keep us in the dark. - Wyoming wants to draw more Bitcoin miners to its Black Hill region and create jobs by providing power to a crypto mining facility.

The genie is out of the bottle. - Uniswap makes a move to NFTs by purchasing Ethereum NFT aggregator Genie, as they attempt to bring everything they brought to ERC-20.

Stock-to-Flow model isn’t so hot right now. - Ethereum founder Vitalik Buterin isn’t a fan of Bitcoin, but that seems about right. Are his doubts justified?

It’s all about the nostalgia. - Those ancient relics we used to love that are so hard to find may not be as unobtainable as we thought. Graphic cards are back, and they’re not expensive.

Funding News:

Afropolitan gets $2.1M to lead Web3 for Africans - They are starting a digital nation. One of the craziest ideas we've seen in a long time.

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Disclosure: We are a newsletter for information only. We are not financial advisors nor do we claim to be. Consult your legal, investment or tax advisor. Crypto is risky. Do you own research.