📈 Crypto Carnage

Good morning. This is your Tuesday edition of Crypto Dispatch!

Was I the only person who played Will Smith’s 90’s summertime banger “Miami” on repeat because I couldn’t attend the Bitcoin Conference in person? (I’m not letting The Smack taint the tunes of my childhood, I don’t care how many think pieces are published).

Let’s start with a quick roundup of the week.

Billionaire Peter Thiel made his enemies list public, and his biggest nemesis: Warren Buffet or, as Thiel has dubbed him, “a psychotic grandpa from Omaha.” But was his rant (he went on to call out other senior investors as a “gerontocracy” who are trying to squash crypto’s viability) just a bit ageist?
Human Rights Foundation hosted a discussion on Bitcoin’s potential in empowering political and human rights activists. The conversation featured Yeonmi Park, a North Korean defector and activist, Farida Nabourema, a Togolese human rights activist, and Fadi Elsalameen, a Palestinian democracy advocate.
Mexico’s third-richest man, Ricardo Salinas, stood firm in his position as a bitcoin believer and reiterated that it is the best option to hedge against inflation. He wasn’t shy about disparaging the altcoin economy, though he did admit that they “provide privacy.”

The Wall Street Journal has a great photo spread if you want to see the BTC maxis mixing it up.

In today’s edition:

🤔 Hayes’ market hunch

🇮🇳 Coinbase deals with Delhi

Crypto Carnage

BitMEX co-founder Arthur Hayes predicts that the price of Bitcoin could fall as low as $30,000 by June due to its correlation with tech stocks and an impending (he believes) drop in the NASDAQ.

What happened: In a blog post published on Medium, Hayes outlined why he’s bearish on crypto for the short term, citing “rising nominal interest rates, worsening global fiat liquidity conditions, and falling economic growth” as primary factors that will drive prices down.

Using a series of graphs, Hayes demonstrated the relationship between the NASDAQ and apex cryptocurrencies bitcoin and ether, arguing that rising inflation will force central banks to “tighten monetary policy” and raise interest rates.
Hayes forecasts that US tech stocks will slump and drag crypto prices down with them, “an inconvenient truth” he claims most experts are willing to “ignore.” He predicts bitcoin could fall as low as $30,000 and ether to $2,500.
He also cites the Russian invasion of Ukraine as a factor downgrading market stability and growth, saying that “global growth will decline on higher commodity prices driven by the continuation and possible escalation of the Russia / Ukraine war.”

Even though he claims that we’re on the road to a “calamitous outcome,” he is still bullish on crypto in the long term, but taking a bearish position for the short term and buying “crash June 2022 puts on both Bitcoin and Ether.”

Why it matters: While Hayes is clear that all of these ideas are purely speculative and come from his “gut feeling,” he might be on to something.

On Monday, the crypto economy saw an almost 5% loss across the board, causing it to dip below its $2 trillion market cap. As of this writing, bitcoin sits at US$40,703 after a 4.8% loss over 24 hours, per Coin Market Cap.
“U.S. inflation likely accelerated to 8.4% in March, the fastest pace since early 1982, economists surveyed ahead of data due Tuesday predict. The Federal Reserve may need to hike interest rates above 4%, Goldman Sachs Group Inc. Chief Economist Jan Hatzius told Bloomberg.

But Hayes sees this downturn as part of a larger cycle, where crypto will reign supreme as they are “the only free markets left globally.”

Coinbase’s Indian Conundrum

US-based cryptocurrency exchange Coinbase has stopped processing any purchase orders for users in India after blurred regulatory lines led to the suspension of services through the Unified Payments Interface platform.

What happened: Three days after the launch event in Bengaluru on April 7, Coinbase customers found that their ability to buy crypto was disabled due to “ongoing issues” with the UPI system, which was the only payments method available for Coinbase users in India.

“We’re working hard to resolve the issue, and we advise that you check your account periodically to see if the issue is fixed,” Coinbase’s website states. “Note that we don’t have another payment method to buy crypto at this time. Thank you for your patience and understanding.”
UPI is overseen by the National Payments Corporation of India (NPCI), the country’s central bank and finance ministry. NPCI tweeted that they had no awareness of any crypto exchanges using UPI on launch day.
Coinbase is going all-in on the Indian crypto market, hiring 300 employees for the region with the expectation to triple that workforce within the year, according to co-founder Brian Armstrong.

Why it matters: The Indian government is still grappling with its views on crypto. In 2018, the Reserve Bank of India (RBI) banned banks from engaging in digital asset trading, which was overturned by the supreme court two years later.

Crypto is not illegal in India, but it isn’t legal tender, meaning “a regulatory body like the NPCI will not approve it unless it is officially legal.” The country’s financial regulators are pushing for more scrutiny and developing a rigorous regulatory framework before giving the green light for mass adoption.
Crypto YouTuber Aditya Singh tweeted that this is nothing new for crypto payment services, and Indian exchanges run into this issue regularly.

Big picture: The introduction of a steep 30% tax on crypto gains on April 1st has led to a massive downturn in trading volume in India, with one exchange’s volume dropping72%

“It is clear that the new tax has impacted the market negatively,” Crebaco CEO Sidharth Sogani told CoinDesk, adding that “the government should embrace the technology.”

Crypto Carnage

Coinbase’s Indian Conundrum

Bits & Blocks

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