Yesterday in Crypto - Issue #25

Read time: ~8 minutes

Good news for Ethereum fans! The U.S. Securities and Exchange Commission (SEC) is reportedly gearing up to approve Ethereum futures exchange-traded funds (ETFs).

🚀 What's Happening? The SEC is expected to green-light Ethereum futures ETFs in the coming months. These won't track Ethereum's direct price but will be based on futures contracts predicting Ethereum's future value, traded on platforms like the Chicago Mercantile Exchange. 💡 Quick Refresher:

• Futures are contracts predicting the future price of an asset.

• ETFs are investment funds traded like stocks on exchanges. They hold various assets and often track the performance of a specific index

📜 Who's in the Race?Around a dozen firms, including big names like ProShares, Volatility Shares, Bitwise, and Valkyrie, have thrown their hats in the ring. Some of these applications could see the light of day as early as October.

📉 Market WatchWhile the buzz around Ethereum futures ETFs is palpable, Ethereum's price has been on a roller coaster, recently touching its lowest since mid-June. But as seasoned crypto watchers know, volatility is part and parcel of the crypto realm.

🔍 Why Does This Matter?SEC's nod to Ethereum futures ETFs would be a monumental step towards mainstream acceptance. It offers a regulated avenue for both institutional and retail investors to dip their toes into the crypto world without the need to directly hold the assets.

Polygon, a leading Ethereum scaling solution, announces a strategic partnership with South Korea's largest telecom company, SK Telecom.

🌐 The Big PicturePolygon and SK Telecom are collaborating to co-develop blockchain-based services, aiming to enhance the user experience in the digital world. This partnership is set to bridge the gap between traditional telecom services and the burgeoning world of blockchain.💡 Quick Refresher:

• Polygon (MATIC) is a multi-chain scaling solution for Ethereum, enabling faster and cheaper transactions.

• Polygon takes transactions from the Ethereum blockchain, processes them on a separate, faster, Ethereum compatible blockchain, and then returns them to the Ethereum chain.

• This framework allows users and developers to interact with decentralized applications (DApps) without worrying about network congestion or high fees.

• The native cryptocurrency of the platform is MATIC, which is used for transaction fees and also serves as a governance token, allowing holders to vote on the platform's future developments.

📱 Who's SK Telecom?SK Telecom is not just any telecom company. It's South Korea's largest mobile carrier, boasting over 28 million subscribers. Their foray into blockchain signals a significant shift in the telecom industry's approach to emerging technologies.

🚀 Why Polygon? Polygon's high-performance, low-cost infrastructure makes it a go-to platform for many decentralized applications. Its partnership with a telecom giant like SK Telecom underscores its growing influence in the blockchain ecosystem.

🌍 Polygon PartnershipsThe partnership with SK Telecom is simply the most recent in a string of impressive announcements. Polygon has partnered with:

• Draftkings

• Reddit

• Stripe

• Disney

• Adidas

• Starbucks

• Adobe

• Meta

• The NFL

And plenty more!

🔍 Why It's a Game-Changer: By integrating blockchain into telecom services, users can expect enhanced security, transparency, and a plethora of new services that were previously unimaginable. It's a win-win for both sectors and, more importantly, for the end-users.

A sharp market downturn has lead to significant losses for traders. Here's a breakdown of what happened:

📉 The Big DropA sudden market decline saw Bitcoin and other major cryptocurrencies plummet in value. The drop was so swift that it triggered $1 billion in liquidations across various platforms.

💡 Quick Refresher:

• Borrowing to Boost: Liquidations are tied to the practice of leveraging, where traders borrow money to increase their trading position, aiming for higher returns.

• The Double-Edged Sword: While leveraging can amplify profits when the market moves in a trader's favor, it can also magnify losses when the market goes the other way.

• Forced Closure: If the market turns against a leveraged position and reaches a certain threshold, the platform may automatically close the position to prevent further losses. This is called a "liquidation."

• Margin Calls: Before a full-blown liquidation, traders might receive a "margin call," a request to add more funds to their account to maintain their position. If they can't meet the margin call, the position gets liquidated.

• Collateral at Stake: When taking a leveraged position, traders need to provide collateral. If a liquidation occurs, they can lose this collateral.

• Market Impact: Large-scale liquidations can cause significant price fluctuations in the market, as massive amounts of assets are sold off in a short period.

🌍 Global Factors at Play

• China's Evergrande Group, a major property developer, filed for Chapter 15 bankruptcy protection in New York, adding to the market's unease.

• Reports emerged that SpaceX, led by Elon Musk, marked down its Bitcoin holdings by $373 million and sold an unspecified amount.

• The SEC is expected to delay its decision on BTC spot ETFs today 8/18/23.

🔍 Why Does This Matter?Understanding market dynamics is crucial, especially in the volatile world of crypto. Events, both global and industry-specific, can have ripple effects, impacting prices and trader sentiment.

That’s all for today. Go outside and touch some grass this weekend. We’ll see you on Monday.

“Bitcoin is an arc of encrypted energy to escape the currency flood.”

– Michael Saylor - Founder, Microstrategy