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News Summary 10/11: Tether, El Salvador, Infinity, Bitcoin ETF, Mining

Analysts fear that the stablecoin company Tether has exposure in the soon-to-be-bankrupt Evergrande. Ethereum founder Vitalik Buter criticizes El Salvador. Infinity is carrying out a vampire attack on OpenSea. The approval of the Bitcoin ETF is getting closer. Texas and New York have benefited from China’s crypto ban.

Stablecoin Tether made headlines

Tether is the biggest stablecoin with a massive market value of $68 billion. Since the beginning, there have been speculations surrounding the company. Tether should have (in theory) one U.S. dollar in reserves for each USDT token issued. Over the years, this has been questioned again and again.

Last weekend Bloomberg published a lengthy article titled “Anyone Seen Tether’s Billions? ” This article questions Tether’s backing among other things.

This time Tether ended up in the eye of the hurricane due to the Evergrande crisis. The bankruptcy worth hundreds of millions frightened investors around the world. Now it’s been claimed that the USDT token would be partly backed by Evergrande loans.

Tether has denied these allegations. The problem is that Tether has not revealed any details of its holdings. According to the latest information, about half of USDT token backings are “Commercial paper”. Only a couple of percent of the collateral is U.S. dollars. What are these commercial papers exactly? Nobody knows.

Check the Twitter thread below for a quick analysis of the situation:

Earlier this year Tether made an agreement with the U.S. Attorney’s Office in New York following a three-year investigation. However, the barking around Tether is not showing any signs of calming down. Critics continue to ask the same question: what is exactly backing the USDT token?

It should be noted, though, that none of the stablecoin companies have issued a full audit. We have only seen attestations so far from each operator (USDT, USDC, BUSD, etc.)

Ethereum founder criticizes El Salvador

El Salvador has been a common topic in our news reports recently. The country is currently building new infrastructure to mine Bitcoins using the thermal energy of volcanoes. The first “volcano Bitcoin” was mined about a week ago.

President Nayib Bukele tweeted a video of the new animal hospital being built in El Salvador. This is possible due to Bitcoin’s positive price development.

However, El Salvador doesn’t intend to sell its Bitcoins. The money comes from a special fund the country created earlier to purchase bitcoins from its citizens. The fund makes sure there is always a buyer and no Salvadorean needs to hold bitcoins who doesn’t want to do so.

El Salvador’s Bitcoin fund must have the same value in dollars and bitcoins. Now that the dollar value of Bitcoin has risen by tens of percent, dollars can be removed from the fund to build the pet hospital.

Not everyone likes what they see in El Salvador. Ethereum’s founder Vitalik Buterin surprisingly attacked El Salvador in a recent Reddit post. Buterin criticized El Salvador’s decision to force companies to accept Bitcoin. Buterin also criticizes Bitcoin maximalists who support President Bukele.

One should remember that El Salvador offers all its citizens a free Bitcoin wallet that allows bitcoin to be converted into dollars at no cost. Citizens are therefore not obliged to hold bitcoin if they do not want to carry a risk of volatility.

The Chivo wallet has already been downloaded by more than three million residents.

Infinity’s vampire attack on OpenSea

The NFT boom has been one of the biggest crypto trends in 2021. When compared to spring months, trading volumes are ten times higher now.

Most NFT trading takes place at OpenSea. The marketplace has almost a monopoly status, but now there is a new player in town. The new Infinity marketplace aims to attract users from OpenSea by using a so-called vampire attack.

The situation is very similar to what took place a year ago when Sushiswap tried to absorb liquidity from Uniswap. As a result, Uniswap was forced to launch its own UNI governance token.

Infinity tries to pull the same trick.  It has launched its own governance token, which is airdropped to OpenSea users. In addition, Infinity has copied OpenSea’s smart contracts. This allows users to transfer their listing to Infinity without gas fees.

For more information about a vampire attack, see the video below.

The situation may very well lead to OpenSea launching its own governance token, just like Uniswap did a year ago.

Bitcoin ETF could be accepted soon

The Bitcoin ETF (Exchange Traded Fund) has been a common topic in the crypto world for several years. The first Bitcoin ETF application was submitted already in 2013. In 2018, many believed that the Bitcoin ETF would lift the market up again, but it turned out differently.

The SEC has so far rejected or postponed all applications. However, many analysts believe that the ETF will be approved in 2021.

There are currently more applications for Bitcoin ETF pending approval than ever before. If the Bitcoin ETF is approved, it is likely to be a futures-based product.

A few days ago, SEC approved an ETF called Volt Crypto Industry Revolution and Tech. However, this product does not directly invest in Bitcoin. Instead, it invests in companies that have bitcoins in their balance sheets. These include entities like Marathon Digital and Microstrategy.

An ETF would provide an easy way for institutions to invest in Bitcoin. Many analysts expect the ETF to be one of the factors that will push the price of Bitcoin above $100,000 during the next months.

If the ETF will be a spot Bitcoin ETF this prediction would most certainly come true. A futures-based ETF is unlikely to have the same effect.

A Bitcoin ETF on the US market would bring a lot of legitimacy to this asset class.

Texas & New York benefit from China’s cryptocurrency ban

Two weeks ago, China announced once again a ban on cryptocurrency activities. This news did not cause much reaction at first, as China has made similar announcements for years. This time, however, it’s different. The ban has had an impact on the industry.

The latest news is about Bitmain, which is the largest manufacturer of Bitcoin ASIC miners. The company announced that it would stop delivering its equipment to mainland China.


This would have been a big hit for Bitmain earlier, as a large part of the mining farms were located in China. Now, however, the situation is not bad. Many Chinese miners have moved to other Asian countries and the United States.

Texas and New York, in particular, have attracted a lot of miners.

China’s mining ban seems like a short-sighted move from the game theory point of view. China might have to pay a heavy price in the coming years. However, despite the ban, Bitcoin mining still continues in China.

According to The Block, Jiangsu Province alone had more than 4,500 IP addresses with mining-related traffic. Interestingly, up to a fifth of these IP addresses belongs to government-run agencies and companies.