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Hedge fund that shorted GameStop closes as $1.13B GME stock offer completes

One of the hedge funds badly burned in the infamous GME social media driven short squeeze is closing down, while GameStop itself has just completed its $1.13 billion equity offering.

According the Financial Times, London-based White Square Capital operated by Florian Kronawitter has closed its main fund and will return capital to investors.

White Square Capital reportedly had $440 million in assets under management (AUM) at its peak. The hedge fund was one of many that suffered double digit percentage losses from short positions in January, when the Wall Street Bets subreddit helped pump GME’s price from $21 on Jan. 12 to around $345 on Jan. 27.

However the FT reported a source as saying the fund’s closure was unrelated to its GameStop misadventure. In a letter to investors, co-founder Kronawitter cited the traditional equity long-short model was being “challenged” in the current financial climate, as there are “way too many fish in the pond” that operate with the same long-short strategy.

“The traditional edge is being arbed away [eroded by other investors], there’s an oversupply of capital,” Kronawitter said.

The co-founder also highlighted that the hedge fund’s opportunities for arbitrage have “diminished” due to the “onslaught of capital caused by central bank monetary interventions.”

These factors are also accompanied by the relative ease of access to information and cheaper investment alternatives, with Kronawitter asserting that it brings it to question how the management fees from hedge funds can be justified in the current market.

In a Reddit thread discussing the news on the r/wallstreetbets subreddit, members of the group shared their delight, with user “turtleduck77” likening hedge funds that shorted GME to dominoes falling, noting that its “Time to invest in dominoes! The game not the pizza.”

Related: New decentralized crypto exchange is inspired by r/Wallstreetbets

GameStop completes ATM offering

Yesterday GameStop announced the completion of an at-the-market (ATM) equity offering, with the company selling five million shares of common stock generating almost $1.3 billion before commissions and offering expenses.

“GameStop will use net proceeds from the ATM Offering for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet,” the announcement read.

One of the growth initiatives likely to be funded is GameStop’s NFT marketplace set to be launched on Ethereum.

While details are sparse at this stage, the firm’s blockchain division is reportedly headed by the former business operations leader of Ethereum and Loopring DEX, Matt Finestone.

The smart contract platform is based on the ERC-721 NFT standard and was created by foobar, a developer who has worked on wrapper solutions for the classic version of Crypto Punks, HD Mooncats, and MooncatHelper NFT projects in the past.

While top crypto assets and memecoins have been in a major down trend since May 12, GME’s meme stock has increased 36.6% within that time frame, increasing from $161 on May 12, to $220 as of today, according to TradingView.

In comparison, data from CoinGecko shows that crypto’s nearest equivalent in meme coin Dogecoin has cooled down, has dropped 64% — declining from a price range of $0.50 on May 12, to $0.18 today.

Hedge fund that shorted GameStop closes as $1.13B GME stock offer completes

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Elon Musk announced, Tesla is reconsidering Bitcoin as Payment after Miners Turn 50 % Green.

The globally known business tycoon, Elon Musk, CEO of famous automobile company Tesla, announced on Sunday, 13 June 2021, that Tesla will resume taking payments through bitcoin once the miner’s industry will confirm the usage of adequate clean energy from now onwards.

Musk tweeted on Sunday that if miners provide a formal assurance of using at least 50% of clean energy in order to maintain a positive impact on our environment, Tesla will indeed start bitcoin transactions. 

The electric-car producer company stopped putting up with installments from customers who intended to pay their car expenses with bitcoin. Tesla took this sudden step in mid-may 2021 as the company had some serious concerns regarding how cryptocurrency mining is affecting climate change. This concern was raised as cryptocurrency mining makes use of vast pools of powerful computers.

In may Musk said, his company is deeply concerned about this rapid increase in the use of fossil fuels in order to carry out Bitcoin transactions and mining, particularly coal, which is well known to produce the worst emissions among whole categories of fuel.

Musk reacts to the tweet of the CEO of South African asset manager

The CEO of South African asset manager sygnia, Magda Wierzycka, tweeted that Elon Musk is trying to manipulate the market by tweeting about bitcoin prices. He added that Musk’s behaviour should trigger a thorough investigation on the matter by the United States Securities and Exchange Commission.

On Sunday, Tesla CEO denied allegations imposed on him by Magda Wierzycka regarding market manipulation. He explained that his company has hardly sold 10 per cent of its bitcoin ownership to substantiate that bitcoin could be liquidated effortlessly without any need to move the market, he said in his tweet. 

Furthermore, by disclosing its earnings statements, Tesla announced it has sold some 272 million dollars worth of crypto assets during the initial quarter, and this move helped the company to reduce regulating losses by 101 million dollars, as mentioned in the company’s earnings statement.

In February 2021, Musk’s company, in an SEC filing, revealed that it purchased 1.5 billion dollars worth of bitcoin and also confirmed that Tesla would soon begin to accept bitcoin as an installment method for its products.

Conclusion 

Often, the Tesla owner Elon Musk’s statements on social media regarding cryptocurrency makes significant rise and fall in crypto prices, but on Sunday, it appeared to show an instant effect as bitcoin prices overall elevated nearly 8 per cent just around the daytime on Sunday.

Elon Musk announced, Tesla is reconsidering Bitcoin as Payment after Miners Turn 50 % Green.

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Mexico lawmakers aim to follow the example of neighboring countries with proposed Bitcoin legislation

Eduardo Murat Hinojosa, a senator of the federal government of Mexico, has said he will be submitting a proposal to lawmakers seemingly aimed at crypto adoption in the country.

In a tweet today, Hinojosa changed his profile picture to feature the senator speaking into a microphone with the iconic “laser eyes,” indicating support for crypto. The lawmaker said he would be “promoting and proposing a legal framework for crypto coins in Mexico’s lower house,” specifically mentioning Bitcoin (BTC).

Hinojosa was not the only Mexico lawmaker indicating their support for crypto. Indira Kempis Martinez, a senator representing the state of Nuevo León, has also switched her profile to show laser eyes, with Hinojosa referring to her as a friend to the cause.

“We are going to lead the shift to crypto and fintech in Mexico,” said Hinojosa.

The social media activity comes as countries in Latin America have seemingly been taking steps towards greater adoption of crypto. In a video announcement to attendees of the Bitcoin 2021 conference last week, El Salvador President Nayib Bukele said he would send a bill to the country’s legislature demanding that Bitcoin be made legal tender.

On Sunday, Paraguayan congressperson Carlitos Rejala hinted that crypto would be connected to “an important project to innovate Paraguay in front of the world” starting this week. Yesterday he added that he was working with local crypto figures “in order for Paraguay to become a hub for the crypto investors of the world.”

Though Mexico has many individual investors who back Bitcoin, authorities in the country reported last year that cartels had been increasing their use of crypto to launder funds. At the time, the head of the Mexican attorney general’s Cyber Investigations Unit said the country’s law enforcement lacked the resources needed to tackle money laundering when crypto was involved.

Mexico lawmakers aim to follow the example of neighboring countries with proposed Bitcoin legislation

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Cointelegraph Consulting: DeFi projects launch on Polygon, usage skyrockets

In the midst of the hectic crypto market, the gas fees in the decentralized finance (DeFi) sector have skyrocketed, once again highlighting the value of layer-two scaling solutions. Cointelegraph Consulting teamed up with Covalent to discover the numbers behind Polygon, the network that is onboarding an increasing number of decentralized applications, from SushiSwap to bZx.

Aave, DeFi’s lending giant, launched on Polygon this April and has already lured away about 66,000 unique users to the layer-two version. Nearly $12 billion has been deposited since the launch, and over $7 billion has been borrowed. Though what is important is that only $158 has been spent on gas across the entire Aave’s Polygon version.

Notably, the major fraction of borrows involves stablecoins, with USD Coin (USDC), Dai and Tether (USDT) making up roughly 60% of borrowings on Aave’s Polygon version. In fact, the breakdown of the borrowings reveals that Aave managed to execute its strategy that prevents users from risky borrowing against volatile assets, which in turn usually leads to liquidations.

Hot off the heels of 1inch Network’s launch on Polygon on May 12, we take a look at its usage as well. 1inch on Polygon has reached almost $18 million in daily swaps by dollar value, with the most swaps denominated in USDT, Wrapped Ether (WETH), USDC or DAI. 

There have been nearly 10,000 swaps facilitated thus far. The platform has already facilitated $43 million in swaps, but only $25 of gas was used to swap this amount.

Amid Ethereum network congestion and rising costs, Polygon is gaining momentum due to its astonishingly low transaction fees. With more DeFi projects pursuing multichain strategies, Polygon could onboard more projects in the near future.

For more charts, market signals and carefully curated news analysis, download the full edition of this issue.

Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. With market intelligence from one of the industry’s leading analytics providers, Covalent, the newsletter dives into the latest data on social media sentiment, on-chain metrics and derivatives.

We also review the industry’s most important news, including mergers and acquisitions, changes in the regulatory landscape, and enterprise blockchain integrations. Sign up now to be the first to receive these insights. All past editions of Market Insights are also available on Cointelegraph.com.

Cointelegraph Consulting: DeFi projects launch on Polygon, usage skyrockets

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Facebook’s Diem Unveils Its Latest Stablecoin Plans and Strategic Move to the United States

Facebook’s Diem Unveils Its Latest Stablecoin Plans and Strategic Move to the United States

Diem Association, previously known as Facebook’s Libra initiative, announced on Wednesday that it plans to launch a US dollar stablecoin as it scales down its global goals to concentrate on the US.

The group, which includes 26 financial institutions and non-profits, announced that it was relocating its core activities from Switzerland to the United States and withdrawing its application for a payment system license from the Swiss financial regulator.

Diem Networks US, a subsidiary of the Deim Association, would operate a blockchain-based payment mechanism that allows for real-time Diem stablecoin transfers and will file as a money services company with the US Treasury’s Financial Crimes Enforcement Network, according to the organization.

Digital currencies that are pegged to a fiat currency are known as stablecoins. Silvergate Bank, headquartered in California, will establish the Diem USD stablecoin and maintain the Diem USD deposit. Diem mentioned that a stablecoin pilot would be launched, but did not specify when.

The association said, “We are committed to a payment mechanism that is secure for customers and companies, allows payments quicker, and is less expensive.”

Diem’s decision to remove its application for a payment license was reported by the Swiss Financial Market Supervisory Authority in a statement.

“Diem plans to introduce the payment system from the United States in the first step since the project’s initial target market would be the United States,” it added.

Libra was first announced by Facebook in June 2019, as part of a larger initiative to move beyond social networking and into e-commerce and global payments. Libra, along with partners such as payment providers and credit card companies, will create a digital currency backed by a diverse range of currencies and short-term government debt, according to the statement. Libra is expected to fuel transfers between customers and companies all over the world, giving more users access to financial services, according to the social media giant. However, lawmakers around the world were quick to oppose the project, fearing that it would erode their influence over the financial system, allow crime, and compromise users’ privacy.

Libra and its partners scrapped attempts to keep a portfolio of currencies and sovereign debt in April 2020, opting instead for stablecoins backed by global currencies, and sought approval from the Swiss regulator. Libra rebranded as Diem in December in a revived attempt to win regulatory clearance, with its spectrum narrowed even further to a single dollar-backed digital coin.

Diem now has 26 founders and a minority investor, including Facebook’s wireless wallet Novi.

Facebook’s Diem Unveils Its Latest Stablecoin Plans and Strategic Move to the United States

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