🎯Will Tether be the next target for the hedge funds?

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Today’s estimated research time is 4 hours and 36 minutes condensed into a read time of 2 minutes and 57 seconds. Stay tuned to where we talk about:

• 🎯Tether is the next target for the hedge funds

• 🤔The most held crypto by hedge funds

• 🚨Voyager & 3AC Update!

• 🤑How to follow the money

🎯Tether is the next target for the hedge funds

Tether's CTO Paolo Ardoino has pointed out a coordinated attack on USDT by hedge funds shorting the stablecoin. The attacks involve a new wave of FUD, troll armies, etc.

Before we dive deeper, let's define some words.

What's short selling?

Traditionally it's betting that the price will go down. You borrow shares from the company at a higher price; if it goes down x amount, that's your profit.

What are hedge funds?

Hedge funds are a pool of money given by people to invest to make a profit for the investors. Some hedge funds play around with over +$1T!

USDT has dropped 19% since May, with an all-time high market capitalization of $83 billion. USDC has gained 5% and hit an all-time high of $53 Billion. We are already seeing an effect of Tethers' growth as it seems to plateau and is now on a decline. The FUD around USDT is making investors move their money into USDC, which could further drop Tether's market cap.

People are skeptical, especially after the depeg of UST back in May. Tether is also a coin pegged to the US dollar using treasury bills and other traditional financial assets for each unit of stablecoin.

Short sellers have been betting against Tether for the last 12 months, with their interest increasing after Tera Luna's collapse in May 2022. The same short sellers believe Tether is a commercial paper (Unsecured short-term debt) holdings backed by debt-ridden Chinese developers.

Rumours are Tether is not 100% backed and that it had exposure to Evergrande with 85% exposure to Chinese commercial paper while being 'issued from thin air. Lenders were also borrowing from Tether without over-collateralization.

Here we see the controversy over the $4.5B redemptions sent to the crypto exchange Bitfinex yesterday that weren't taken out of circulation. Meaning it wasn't burned. The network must mint new tokens and burn them frequently to maintain their dollar-pegged value.

However, the Tether CTO didn't mention the failure of redemptions.

The Tether CTO explains how Tether is all backed and has never failed a redemption. He also describes how the expiring CP has been rolled into US Treasury bills and will continue until CP exposure is 0. Is he just trying to save his own a** now?

The hedge funds are shorting USDT coins with millions of dollars in the pool, just like they did with Luna. Do you think it's time to short with the whales? Stay tuned where we will show you how to do so! NFA

Full Thread

🤔The most held crypto by hedge funds

Polkadot was the most commonly held altcoin in Q4 last year, as 24 out of 57 tracked Hedge Funds and VCs were invested in it. This may signal that large firms are invested in the asset, and it's being taken seriously.

Having a sense of direction on where the hedge funds are investing can be a good tool because, at the end of the day, if they want something gone, they will not stop until it's destroyed.

Additionally, Polkadot said it was bringing liquid staking to its network, allowing proof of stake for the holders. This could attract more hedge funds and retail buyers to invest their money in a safe asset. Do you think this is a good buy? NFA

🚨Voyager & 3AC Update!

Last week we talked about Voyager's current crisis:

The firm issued a notice of default on June 27 to 3AC with the loan consisting of $350M and a BTC balance of $665M as Bitcoin reaches $21,215.

Voyager has continued to limit customers' withdrawals to $10,000, down from $25,000 before the initial 3AC notice of default.

Dum du m dum duum dum (drum roll) Let's play a game!

Ding ding if you guessed d) you're correct!

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🤑How to follow the money

Regarding future plans in this space, 67% of existing funds plan to shift even more capital into the digital assets ecosystem by the end of 2022.

A 1% increase in allocation into crypto from the traditional hedge funds surveyed would represent $4 billion of new capital in the crypto space, which is equal to the total Assets Under Management (AuM) of native crypto hedge funds today.

Hedge funds have tons of capital that they can deploy into the markets, which would help innovation and growth in the industry.

Researching what coins hedge funds will invest in is following the money as they deploy millions into liquidity and adding bullish price action.

Here’s a thread that explains it in depth

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None of this is financial advice. This newsletter is strictly educational and is not investment advice or solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research!