Crypto Flipsider News – Tesla Sells BTC, Vauld Seeks Protection, Coinbase Jumps 14%, Polygon Scaling Solution, Dogecoin Update

07/21/2022

4 minutes read

2022.07.21 21:42

Read in the Digest:

Elon Musk Explains Why Tesla (NASDAQ:TSLA) Sold 75% of its Bitcoin Holdings in Q2

Vauld Files for Protection from Creditors, ZipMex Pauses Withdrawals

Coinbase (NASDAQ:COIN) Had No Financing Exposure to Celsius, 3AC, or Voyager. COIN Jumps 14%

Polygon Unveils New Ethereum-Compatible Scaling Solution zkEVM

Dogecoin Releases New Core Update to Improve Security and Efficiency

Elon Musk Explains Why Tesla Sold 75% of Its Bitcoin Holding in Q2

In its Q2 2022 report, electric car manufacturer Tesla announced a net profit of $2.26 billion, a 32% drop in profit from record levels in Q1. The shocking part of the report was that Tesla had sold off 75% of its Bitcoins holding for approximately $936 million.

In a Wednesday earnings call, the founder and CEO of Tesla, Elon Musk, explained that his company sold 75% of the $1.5 billion worth of Bitcoin it acquired in February 2021 because of concerns about its overall liquidity.

The centibillionaire cites the drop in production due to the temporary halt of operations in its Shanghai Gigafactory in China as part of the reason. Musk adds that “we were uncertain as to when the covid lockdowns in China would alleviate.”

According to Musk, the sale of Tesla’s Bitcoin holding should not be interpreted as the company taking a stance on the flagship cryptocurrency. He adds that the company remains open to increasing its Bitcoin holdings in the future.

Flipsider:

Reacting to the news, the price of Bitcoin fell by more than 5% from a five-week high of $24,196 to its current price of $22,710.

The 24-hour price chart of Bitcoin (BTC). Source: CoinMarketCap

Why You Should Care

Although the company agrees with the future potential of Bitcoin, the announcement continues a trend of an on-again, off-again relationship with Bitcoin.

Vauld Files for Protection from Creditors, ZipMex Pauses Withdrawals

Vauld has become the latest company hit by the liquidity crisis, as the crypto lender files for a moratorium order for protection against its creditors. Vauld says the protection will give the firm “the breathing space” for restructuring.

Vauld, which had cut its workforce by 30% and suspended withdrawals, reportedly owes more than $400 million to its creditors. According to reports, 90% of the fund was deposited by individual retail investors.

The heat has also gotten to Singapore-based crypto exchange Zipmex as it halts withdrawals due to “volatile market conditions, and the resulting financial difficulties of our key business partners.”

The liquidity of ZipMex could be a result of its exposure to Babel Finance ($48 million) and Celsius ($5 million). The exchange says it is exploring all available means (fundraising, legal action, and restructuring) to resume trading.

Flipsider:

Despite the harsh market conditions, StepN, a Solana-based move-to-earn reported $122.5 million profit in second-quarter profits.

Why You Should Care

The exact scale of the crypto liquidity crisis is yet to be determined as more crypto firms underwater surface.

Coinbase Had No Financing Exposure to Celsius, 3AC, or Voyager. COIN Jumps 14%

In a blog post dated Wednesday, July 20, leading crypto exchange Coinbase announced that it had no financing exposure to Celsius Network, Three Arrows Capital, or Voyager Digital, all of whom are seeking bankruptcy.

Coinbase, which has felt the brunt of the crypto winter like many other firms, said many crypto companies are struggling because of overleveraging and mismanagement of their balance sheets.

Following the clarification, the shares of the publicly traded cryptocurrency exchange Coinbase (COIN) jumped as much as 14%. A needed breather for the company’s stocks that have dropped by 74% since the start of the year.

Coinbase believes that going forward, the major shock crypto firms have suffered over the last few weeks will serve as an inflection point for the industry.

Flipsider:

Although the San Francisco-based exchange says it avoided risky investments that led to the collapse of those bankrupt firms, Coinbase admits investing in Terraform Labs behind the Terra collapse.

Why You Should Care

The update could be a strategy to reassure investors that the company won’t suffer the same fate as the bankrupt firms.

Polygon Unveils New Ethereum-Compatible Scaling Solution zkEVM

Popular Ethereum layer-2 scaling network, Polygon, has unveiled a new scaling solution, zkEVM (zero-knowledge Ethereum Virtual Machine).

According to Polygon, the zkEVM is the first Ethereum scaling solution to be built with the cryptographic method, zero-knowledge proofs. The zkEVM is designed to work with all existing smart contracts.

Developers can build on Polygon zkEVM the same way you would on Ethereum. The Polygon zkEVM will benefit from Ethereum’s security but improve on the throughput and drastically reduce fees.

Polygon announced that the permissionless, open-source zkEVM solution will be available for everyone to use. Although Polygon says the zkEVM testnet “will soon be live,” it gives no hints as to when the main launch will be.

Flipsider:

Polygon has also partnered with Kaleido to launch Polygon Edge, a gas-free and easy-access scaling service aimed at web 3 adoption among business users.

Why You Should Care

Polygon’s zkEVM looks to solve the underlying blockchain trilemma: decentralization, scalability, and security.

Dogecoin Releases New Core Update to Improve Security and Efficiency

On Thursday, July 21, the developers of the Dogecoin (DOGE) project announced the release of a new update for the core software to improve the performance of the network.

According to Dogecoin developer Patrick Lodder, the update, Dogecoin Core 1.14.6, significantly improves the security of the network, efficiency, and user interface. Thus, users are advised to upgrade their network.

In the Github document of the upgrade, developers write that the memory management of the network in cases of congestion has been improved. The network has also been upgraded to now reject buggy messages as a security measure.

In addition, the dust limit (minimum DOGE used for a transaction to be processed on the chain) has been lowered to 0.01 DOGE from 1 DOGE. Reacting to the excitement of the upgrade, the self-acclaimed DogeFather, Elon Musk, tweeted, “Upgrades!”.

Flipsider: