- The Warmup by Kaizen
- Posts
- Circle’s Worst Day Ever
Circle’s Worst Day Ever
PLUS: Tether Finally Announces a Big Four Audit
Welcome back to The Warmup.
This is me when someone asks me what crypto twitter was like in 2021.
Here’s what we’re watching:
Market Snapshot
Circle’s Worst Day Ever as Clarity Act Threatens Yield
SOL Wedge Tightening
Tether Finally Announces a Big Four Audit
Market: Solana leads crypto gains, Bitcoin and Ethereum also up. Gold surges, stocks modestly higher, VIX down.
Circle’s Worst Day Ever as Clarity Act Threatens Yield
What’s going on:
Circle stock (CRCL) plunged 20% on Tuesday, its worst single-day drop since going public.
A new draft of the Clarity Act could ban stablecoin yield directly or indirectly, including anything economically equivalent to interest.
Coinbase (COIN) also fell 10%.
The draft bans passive yield but allows activity-based rewards. It hit the same day Tether announced a full USDT audit by a Big Four firm.
What it means:
Circle faces regulatory pressure on its main revenue source plus rising competition from Tether.
It closed at $101, still up 28% year-to-date, but billions in value were wiped out.
Final rules on rewards will be critical for stablecoin issuers.
SOL Wedge Tightening
What’s going on:
SOL is in a tightening rising wedge on the daily chart. The pattern is now very narrow with only $10 between support and resistance.
Falling volume shows consolidation and a breakout or breakdown is near.
Key levels we’re watching:
Support: $86
Resistance: $97
Breakout target: $120
Breakdown target: $65
Directional Bias: Neutral waiting for confirmation
What we’re waiting for:
Confirmed close above $97 + rising volume for long
Confirmed close below $86 + rising volume for short
Tight risk management as false breaks can happen
Tether Finally Announces a Big Four Audit
Source: Tether
What’s going on:
After over a decade of promises, Tether announced it has signed with a Big Four accounting firm for its first full independent audit of USDT reserves.
The firm’s name was not disclosed.
Tether claims $192 billion in assets back its $192B USDT, mostly in U.S. Treasuries. It has only used quarterly attestations from BDO until now.
The move comes as the GENIUS Act requires rigorous audits for foreign stablecoin issuers.
What it means:
A clean full audit would sharply boost Tether’s credibility and help it comply with the GENIUS Act.
It removes one of crypto’s longest-standing risks and makes the stablecoin market safer for institutions.
 | SOL: |
 | TAO: |
 | VIRTUALS: |
Should Tether’s new Big Four audit restore trust in USDT? |
Circle got absolutely smoked because the new Clarity Act draft looks ready to kill passive yield on USDC.
That’s their main money maker getting threatened right when Tether drops a bomb of its own: finally hiring a Big Four firm for a real, full audit of USDT.
Timing is everything. Just as USDC’s yield advantage might get regulated away, Tether is stepping up with the transparency play everyone’s been waiting 12 years for.
If that audit comes back clean (and it better), Tether might actually pull ahead. Suddenly the “risky” stablecoin starts looking like the safer, bigger, and now more legit option.
— The Warmup Team
Always do your own research. This newsletter is supplemental material to help educate readers as they make their own decisions. Projects mentioned here are provided to give a potential early-mover advantage.