Here’s what happened in crypto today

The co-founder of the BitMEX exchange told an audience on Token2039 in Singapore that he is banking on a short-term market crash if interest rates are cut. Two Republican lawmakers have asked SEC Chair Gary Gensler to answer questions on crypto airdrops. Meanwhile, Tether has crossed $1 billion in circulation on TON in five months.

Arthur Hayes predicts short-term market crash on rate cuts: Token2049.

As investors anticipate the first rate cut by the United States Federal Reserve in four years, BitMEX co-founder Arthur Hayes has shared his perspective on how these potential cuts could affect the cryptocurrency market.

Hayes delivered the keynote speech at Token2049 in Singapore on Sept. 18, “Thoughts on Macroeconomics Current Events.”

He addressed holding 5%-yielding Treasury Bills (T-bills) versus investing in cryptocurrencies in the context of potential market changes arising from the Fed’s rate cut decision that is expected to finally come out on Sept. 18.

BitMEX co-founder and Maelstrom chief investment officer Arthur Hayes at the Token2049 stage in Singapore. Source: Cointelegraph

Before discussing the crypto implications behind potential rate cuts, Hayes slammed the Fed for considering cutting rates amid growing US dollar issuance and increased government spending.

“I think that the Fed is making a colossal mistake cutting rates at a time when the US government is printing and spending as much money as they ever have in peacetime,” the entrepreneur opined, adding:

“While I think a lot of people are looking forward to a rate cut, meaning that they think the stock market and other things are going to pump up the jam, I think the markets are going to collapse a few days after the Fed’s rates.”

According to Hayes, the potential rate cut — which he expects to stand at 75 or 50 basis points — will likely drive a market drop because it will “narrow the interest rate differential between the US dollar and the Japanese yen.”

“We saw what happened a few weeks ago when the yen went from 162 to about 142, over about 14 days of trading that caused almost a mini financial collapse,” the former BitMEX exec said, adding: “We’re going to see a revisit of that financial stress.”

GOP Reps want crypto airdrop answers from Gensler

Republican Representatives Tom Emmer and Patrick McHenry have demanded Securities and Exchange Commission Chair Gary Gensler answer questions about the classification of crypto airdrops by the end of the month. 

In a Sept. 17 letter to Gensler, Emmer and McHenry said they’re concerned the SEC made “assertions about airdrops” in various lawsuits over the last two years and was “precluding American citizens from shaping the next iteration of the internet.” 

The lawmakers pointed to the SEC’s 2022 case against Hydrogen Technology Corporation and its March 2023 lawsuit against Justin Sun and other firms where the regulator hinted that airdrops broke securities laws.

“We are concerned that a misapplication of the securities laws will prevent this technology from achieving decentralization to its full potential,” they wrote. 

Source: Tom Emmer

Emmer and McHenry demanded Gensler answer questions by Sept. 30, around how crypto “given away for free” could be a security and how the SEC distinguishes airdrops from other rewards like credit card points.

They also asked if the regulator had assessed the market impact of classifying cryptocurrencies as securities and what the impact on onchain applications, economic growth and tax revenue would be.

USDT on TON chain surpasses $1 billion

USDT, Tether’s stablecoin, surpassed $1 billion in circulating supply on The Open Network (TON) on Sept. 17 according to data from on-chain researcher Token Terminal.

USDT on TON chain has surpassed $1 billion. Source: Token Terminal

The surge in USDT activity on the TON platform comes as Telegram Mini Apps proliferate, bringing USDT to increasingly active communities. According to the data provided by Token Terminal, the $1 billion circulation threshold was crossed after approximately five months of activity.