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Babel Finance Reportedly Lost $280M Trading Bitcoin and Ethereum

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Crypto Lending Platform Babel Finance Halts Withdrawals Following Celsius
  • As of July 2022, the deck claims that the company lost 8k BTC and 56k ETH in June.
  • The wallet management staff allocated the funds to trading accounts.

Four large cryptocurrency firms, including Babel Finance, went bankrupt in the year 2022, the year of the crisis. Celsius, Voyager, and Three Arrows Capital round out the other three. “Unusual liquidity pressures” forced Babel Finance to restrict investor withdrawals on June 17. There have been substantial losses for the company in its investments in Bitcoins (BTC) as well as Ethereum (ETH).

No matter how bad things seem, Babel Finance is planning to get out of it. It has been revealed that Babel lost more than $280 million in Bitcoin and Ethereum in the reorganization process, according to The Block. As of July 2022, the deck claims that the company lost 8k BTC and 56k ETH in June.

Proprietary Trading Accounts

According to the deck, unhedged positions in proprietary trading accounts incurred considerable losses in June due to the volatility in the market. As a result, numerous trading accounts had to be closed out of necessity. Babel’s lending and trading units were unable to fulfill margin calls because of these losses.

The deck reads:

“Conclusion: Single point of failure – The Proprietary Trading team’s failed operation falls outside of the company’s normal business which has otherwise been running smoothly with proper management and control.”

Babel’s private trading team did not utilize term sheets to support its orders, hence they were not registered in the system. For the company’s proprietary trading crew, there were no limits on how much money they might utilize. The wallet management staff allocated the funds to trading accounts. As part of its recovery plan, Babel is presently seeking hundreds of millions of dollars in loan and equity finance.

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Ethereum Price Slides As Staked Token Reaches New ATH Ahead Of Hyped Merge

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Ethereum Price Slides As Staked Token Reaches New Ath Ahead Of Hyped Merge

Despite changes in the asset’s price, Ethereum is steadily adding to the ETH 2.0 staking contract.

According to the development team, this occurs about a month before the Merge is scheduled to occur.

Ethereum Staked Token Hit New ATH

According to Dune Analytics data, more over 13.2 million ETH have been deposited to the staking contract, however there are only about 80,000 unique depositors.

ETH Staked on ETH 2.0 Contract. Source: Delphi Digital

The graph above shows how ETH’s amount locked in the staking contract has gradually increased and reached a new all-time high in terms of ether.

A far cry from the peak reached last year, when ETH was close to $5,000, the USD value had soared to just shy of $24 billion.

The remarkable results come as the Ethereum development team continues to provide updates on the progress of the switch from PoW to PoS.

The most anticipated event in the bitcoin sector this year is referred to as the Merge.

Among other advantages, it should make Ethereum less energy-intensive and increase the network’s durability.

Numerous well-known crypto insiders predict that it will significantly affect the price of ETH. According to recent claims made by Arthur Hayes, it might increase the asset’s USD valuation in a manner comparable to BTC’s halving.

On the other hand, Mark Cuban cautioned that the Merge might initially be a “sell-the-news” event but thinks it’s a good move overall.

Price Have Began To Slide

According to the weekly shift in the Ether-Bitcoin cross rate, Christophe Barraud, chief economist, strategist, and top forecaster at Bloomberg, Ethereum is poised to lose ground against Bitcoin for the first time in seven weeks.

Ethereum

ETH/USD trades at $1,800. Source: TradingView

After the Consumer Price Index (CPI) or inflation data report came in better than expected, Ethereum has outperformed Bitcoin in recovery despite the decline relative to BTC as both remain highly correlated with the S&P 500 stocks, according to a report published on August 17 by the on-chain social metrics platform Santiment.

Featured image from Pixabay, Chart from TradingView.com, Delphi Digital

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Tether Announces Hiring of Fifth Largest Accounting Firm For Audits

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Tether Tokens Usdt Will Be Available On Tezos