The BTC is recovering and looking good: the leading cryptocurrency has returned to 16,582 USD upon falling below it. However, the whole situation is troublesome.
We may suppose that the current pullback is purely technical because fundamentally speaking, the market is stressed.
Genesis keeps fighting for its life. The company has hired counselors to work out all the ways of remaining afloat. Bankruptcy is also being discussed. Moreover, experts are looking for creditors that could help deposit the company’s balance for 500 million and up to 1 billion USD.
Market players are clearly seeing the risks that have impacted other players of the sector as well. Asset withdrawal from any platform may be rough and merciless. And no one seems insured from this.
On Wednesday, capitalisation of the crypto market is 823.61 billion USD: it has restored from the bottom hit yesterday. The BTC takes up 38.7%, the ETH – 17.3%.
Salvador: times of regulations
Salvador authorities have started working on regulating digital asset services and crypto emission. They plan to create a special commission that will be registering crypto companies and control their business. Moreover, the draft bill mentions creation of a department that will be managing, storing, and invest funds.
New York State authorities have banned PoW-based mining
Governor of the New York state Kathy Hochul has signed a law that puts a two-year ban on Proof-of-Work (PoW) crypto mining. Earlier a ban was imposed on opening new companies that use environmentally dirty mining.
CRV sky-rocketed
The quotes of the CRV (Curve DAO Token) have grown by 43% overnight. Now the coin is number 82 in the Top 100 rating of crypto. The LTC have also demonstrated sufficient dynamics, growing by 29% overnight.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
In the fast-paced world of cryptocurrency, vast sums of money can be made or lost in the blink of an eye. In early November 2022, the second-largest cryptocurrency exchange, FTX, was valued at more than US$30 billion. By Nov. 14, FTX was in bankruptcy proceedings along with more than 100 companies connected to it. D. Brian Blank and Brandy Hadley are professors who study finance, investing and fintech. They explain how and why this incredible collapse happened, what effect it might have on the traditional financial sector and whether you need to care if you don’t own any cryptocurrency.
1. What happened?
In 2019, Sam Bankman-Fried founded FTX, a company that ran one of the largest cryptocurrency exchanges.
FTX is where many crypto investors trade and hold their cryptocurrency, similar to the New York Stock Exchange for stocks. Bankman-Fried is also the founder of Alameda Research, a hedge fund that trades and invests in cryptocurrencies and crypto companies.
Within the traditional financial sector, these two companies would be separate firms entirely or at least have divisions and firewalls in place between them. But in early November 2022, news outlets reported that a significant proportion of Alameda’s assets were a type of cryptocurrency released by FTX itself.
A few days later, news broke that FTX had allegedly been loaning customer assets to Alameda for risky trades without the consent of the customers and also issuing its own FTX cryptocurrency for Alameda to use as collateral. As a result, criminal and regulatory investigators began scrutinizing FTX for potentially violating securities law.
These two pieces of news basically led to a bank run on FTX.
Large crypto investors, like FTX’s competitor Binance, as well as individuals, began to sell off cryptocurrency held on FTX’s exchange. FTX quickly lost its ability to meet customer withdrawals and halted trading. On Nov. 14, FTX was also hit by an apparent insiderhack and lost $600 million worth of cryptocurrency.
That same day, FTX, Alameda Research and 130 other affiliated companies founded by Bankman-Fried filed for bankruptcy. This action may leave more than a million suppliers, employees and investors who bought cryptocurrencies through the exchange or invested in these companies with no way to get their money back.
Among the groups and individuals who held currency on the FTX platform were many of the normal players in the crypto world, but a number of more traditional investment firms also held assets within FTX. Sequoia Capital, a venture capital firm, as well as the Ontario Teacher’s Pension, are estimated to have held millions of dollars of their investment portfolios in ownership stake of FTX. They have both already written off these investments with FTX as lost.
2. Did a lack of oversight play a role?
In traditional markets, corporations generally limit the risk they expose themselves to by maintaining liquidity and solvency. Liquidity is the ability of a firm to sell assets quickly without those assets losing much value. Solvency is the idea that a company’s assets are worth more than what that company owes to debtors and customers.
But the crypto world has generally operated with much less caution than the traditional financial sector, and FTX is no exception. About two-thirds of the money that FTX owed to the people who held cryptocurrency on its exchange – roughly $11.3 billion of $16 billion owed – was backed by illiquid coins created by FTX. FTX was taking its customers’ money, giving it to Alameda to make risky investments and then creating its own currency, known as FTT, as a replacement – cryptocurrency that it was unable to sell at a high enough price when it needed to.
In addition, nearly 40% of Alameda’s assets were in FTX’s own cryptocurrency – and remember, both companies were founded by the same person.
This all came to a head when investors decided to sell their coins on the exchange. FTX did not have enough liquid assets to meet those demands. This in turn drove the value of FTT from over $26 a coin at the beginning of November to under $2 by Nov. 13. By this point, FTX owed more money to its customers than it was worth.
In regulated exchanges, investing with customer funds is illegal. Additionally, auditors validate financial statements, and firms must publish the amount of money they hold in reserve that is available to fund customer withdrawals. And even if things go wrong, the Securities Investor Protection Corporation – or SIPC – protects depositors against the loss of investments from an exchange failure or financially troubled brokerage firm. None of these guardrails are in place within the crypto world.
3. Why is this a big deal in crypto?
As a result of this meltdown, the company Binance is now considering creating an industry recovery fund – akin to a private version of SIPC insurance – to avoid future failures of crypto exchanges.
But while the collapse of FTX and Alameda – valued at more than $30 billion and now essentially worth nothing – is dramatic, the bigger implication is simply the potential lost trust in crypto. Bank runs are rare in traditional financial institutions, but they are increasingly common in the crypto space. Given that Bankman-Fried and FTX were seen as some of the biggest, most trusted figures in crypto, these events may lead more investors to think twice about putting money in crypto.
While investors and regulators are still evaluating the consequences of this fall, the impact on any person who doesn’t personally own crypto will be minuscule. It is true that many larger investment funds, like BlackRock and the Ontario Teachers Pension, held investments in FTX, but the estimated $95 million the Ontario Teachers Pension lost through the collapse of FTX is just 0.05% of the entire fund’s investments.
The takeaway for most individuals is not to invest in unregulated markets without understanding the risks. In high-risk environments like crypto, it’s possible to lose everything – a lesson investors in FTX are learning the hard way.
In the fast-paced world of cryptocurrency, vast sums of money can be made or lost in the blink of an eye. In early November 2022, the second-largest cryptocurrency exchange, FTX, was valued at more than US$30 billion. By Nov. 14, FTX was in bankruptcy proceedings along with more than 100 companies connected to it. D. Brian Blank and Brandy Hadley are professors who study finance, investing and fintech. They explain how and why this incredible collapse happened, what effect it might have on the traditional financial sector and whether you need to care if you don’t own any cryptocurrency.
1. What happened?
In 2019, Sam Bankman-Fried founded FTX, a company that ran one of the largest cryptocurrency exchanges.
FTX is where many crypto investors trade and hold their cryptocurrency, similar to the New York Stock Exchange for stocks. Bankman-Fried is also the founder of Alameda Research, a hedge fund that trades and invests in cryptocurrencies and crypto companies.
Within the traditional financial sector, these two companies would be separate firms entirely or at least have divisions and firewalls in place between them. But in early November 2022, news outlets reported that a significant proportion of Alameda’s assets were a type of cryptocurrency released by FTX itself.
A few days later, news broke that FTX had allegedly been loaning customer assets to Alameda for risky trades without the consent of the customers and also issuing its own FTX cryptocurrency for Alameda to use as collateral. As a result, criminal and regulatory investigators began scrutinizing FTX for potentially violating securities law.
These two pieces of news basically led to a bank run on FTX.
Large crypto investors, like FTX’s competitor Binance, as well as individuals, began to sell off cryptocurrency held on FTX’s exchange. FTX quickly lost its ability to meet customer withdrawals and halted trading. On Nov. 14, FTX was also hit by an apparent insiderhack and lost $600 million worth of cryptocurrency.
That same day, FTX, Alameda Research and 130 other affiliated companies founded by Bankman-Fried filed for bankruptcy. This action may leave more than a million suppliers, employees and investors who bought cryptocurrencies through the exchange or invested in these companies with no way to get their money back.
Among the groups and individuals who held currency on the FTX platform were many of the normal players in the crypto world, but a number of more traditional investment firms also held assets within FTX. Sequoia Capital, a venture capital firm, as well as the Ontario Teacher’s Pension, are estimated to have held millions of dollars of their investment portfolios in ownership stake of FTX. They have both already written off these investments with FTX as lost.
2. Did a lack of oversight play a role?
In traditional markets, corporations generally limit the risk they expose themselves to by maintaining liquidity and solvency. Liquidity is the ability of a firm to sell assets quickly without those assets losing much value. Solvency is the idea that a company’s assets are worth more than what that company owes to debtors and customers.
But the crypto world has generally operated with much less caution than the traditional financial sector, and FTX is no exception. About two-thirds of the money that FTX owed to the people who held cryptocurrency on its exchange – roughly $11.3 billion of $16 billion owed – was backed by illiquid coins created by FTX. FTX was taking its customers’ money, giving it to Alameda to make risky investments and then creating its own currency, known as FTT, as a replacement – cryptocurrency that it was unable to sell at a high enough price when it needed to.
In addition, nearly 40% of Alameda’s assets were in FTX’s own cryptocurrency – and remember, both companies were founded by the same person.
This all came to a head when investors decided to sell their coins on the exchange. FTX did not have enough liquid assets to meet those demands. This in turn drove the value of FTT from over $26 a coin at the beginning of November to under $2 by Nov. 13. By this point, FTX owed more money to its customers than it was worth.
In regulated exchanges, investing with customer funds is illegal. Additionally, auditors validate financial statements, and firms must publish the amount of money they hold in reserve that is available to fund customer withdrawals. And even if things go wrong, the Securities Investor Protection Corporation – or SIPC – protects depositors against the loss of investments from an exchange failure or financially troubled brokerage firm. None of these guardrails are in place within the crypto world.
3. Why is this a big deal in crypto?
As a result of this meltdown, the company Binance is now considering creating an industry recovery fund – akin to a private version of SIPC insurance – to avoid future failures of crypto exchanges.
But while the collapse of FTX and Alameda – valued at more than $30 billion and now essentially worth nothing – is dramatic, the bigger implication is simply the potential lost trust in crypto. Bank runs are rare in traditional financial institutions, but they are increasingly common in the crypto space. Given that Bankman-Fried and FTX were seen as some of the biggest, most trusted figures in crypto, these events may lead more investors to think twice about putting money in crypto.
While investors and regulators are still evaluating the consequences of this fall, the impact on any person who doesn’t personally own crypto will be minuscule. It is true that many larger investment funds, like BlackRock and the Ontario Teachers Pension, held investments in FTX, but the estimated $95 million the Ontario Teachers Pension lost through the collapse of FTX is just 0.05% of the entire fund’s investments.
The takeaway for most individuals is not to invest in unregulated markets without understanding the risks. In high-risk environments like crypto, it’s possible to lose everything – a lesson investors in FTX are learning the hard way.
On Monday, the BTC is balancing near 16,746 USD. The morning session was much more complicated than expected, with a noticeable decline and sales.
Losses of the BTC over the week exceeded 20%. The crucial reason for the sales, as you remember, is the story with Binance and FXT.
At the market, they are actively discussing the version that the tweets and publications against FXT were not without a purpose. Binance washed off the rival virtually overnight. We will see what regulators will do. However, trust to crypto has dropped noticeably. The market swiftly recalled the story with Terra and Luna, which was a costly and painful experience.
The range of strong supports for the BTC has moved to 15,550-18,200 USD. Risks of falling to 12,000-12,500 USD are growing too fast.
Capitalisation of the crypto market is now estimated as 840.77 billion USD, the BTC taking up 38.3% and the ETH – 18.3%.
Withdrawal of the BTC was the largest – Glassnode
Glassnode watchers say that with all the volatility, withdrawal of the BTC from crypto exchanges turned out almost at the all-time peak of 106,000 BTC a month. The leading crypto has already faced a similar situations three times.
UAE schools will teach the basics of blockchain and the metaverse
Educational institutions at the UAE are introducing new lessons on blockchain, the metaverse, and cryptocurrencies. They say that the virtual reality is developing fast, so these new lessons will prepare schoolchildren for the labour market of the future.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The BTC has returned to 17,360 USD, but the week has been unbelievably volatile and tough. The turmoil might be not over yet: cryptocurrencies have proved fragile again, and this might be a turning point for the market trust to digital assets.
Over the week, the BTC lost 15.6%. Today the capitalisation of the crypto sector is estimated as 877.48 million USD, the BTC taking up 38.1% and the ETH – 17.9%.
The BTC and other cryptocurrencies got an unexpected foothold in the US inflation statistics for October, which provoked flourishing of the US stock market. This driver managed to reverse everything going on with the Binance exchange and the FXT. It will take long for the investor trust to exchanges and markets to recover, yet the catastrophe in the crypto segment has been stopped.
The US inflation report gave some optimism to market players regarding future actions of the Federal Reserve System. Also, they had a good influence on the demand for risky assets.
At the same time, it must be admitted that the FXT problem is still around, and the market will keep on suffering from it as before, as soon as support from stock exchanges comes to an end.
To get a chance for stabilising, the BTC needs to secure above 18,500 USD. More forecasts will be later.
Coinbase goes on with redundancies
The Coinbase crypto exchange has fired 60 more employees by its programme of optimising staff. Employees were fired chiefly from the recruiting department and the institutional segment.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
On the crypto market, optimists are shedding blood, and not for the first day in a row. The BTC has dropped to 18,135 USD. The leading cryptocurrency lost 8% overnight and more than 11% over a week.
Other crytocurrencies also dropped over the week: the XRP (-18%), ETH (-20%), DOGE (-38%), SOL (-42%).
Meanwhile, demand has grown for the OKB (+19.0%), MATIC (+6.8%), PAXG (+3.4%), USDP (+0.1%).
The main reason for the crash is the story around Binance and FXT. Let us agree that the FXT exchange fell prey to the eclipse corridor: the platform lost a lot of liquidity after the FTT token went on sale. Investors recalled the story with LUNA at once and fled from risks.
After all that happened, Binance decided to buy the FXT. This looks kind of ambiguous.
All this quite untimely distracted investors from the growth of the US stock indices. In such circumstances, the BTC could easily break through 22,000 USD, but dropped to the well-traded range between strong support levels of 18,000-19,000 USD.
What is next? until the US regulators react somehow, volatility in crypto will remain extreme. This means, the market will be under sales, though not in such crazy volumes.
On Wednesday, capitalisation of the crypto market is 891.8 billion USD. The BTC takes up 39.1% and the ETH – 17.4%.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The BTC is correcting after preceding growth, on Monday balancing near 20,723 USD.
Earlier the BTC rose to 21,258 USD. The rally – and for the crypto that had long been lingering to a narrow range this was a real rally – was based on rather good labour market statistics from the US.
On Friday, the US presented fresh reports on this sector; investors reacted positively, the market started rising and dragged the crypto behind.
What is next? The BTC is now likely to consolidate between 20,000-21,000 USD waiting for the Congress elections and the US inflation statistics (due on 10 November).
On Monday, the capitalisation of the crypto market is 1.028 trillion USD. The BTC takes up 38.9%, the ETH – 18.7%.
NFTs are in demand again
According to DappRadar, the popularity of the NFT market is increasing again, regardless of the BTC stagnation. Over a month, the number of unique investors in NFTs grew by 18%, reaching 1.11 million investors in October.
Circle launches EUR-bound stablecoin
Circle is launching the EUROC stablecoin, based on Solana and bound to the EUR. Several internetwork bridges are expected to be launched by 2023 in order to increase the popularity of the token.
KLAY quotes dropped by 18.3%
The Klayth (KLAY) coin became the most losing last week. It lost more than 18.3% of the price, and the capitalisation of the project dropped to 702.2 million USD. Sales brought the token to the 62th line of the rating of the most liquid cryptocurrencies. Most probably, this was a technical correction upon sky-rocketing earlier.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The BTC paused again. On Wednesday, it mainly fluctuates near 20,507 USD.
Investors are saving powers before the Federal Reserve System decides anything about the interest rate. The main forecast implies an increase by 75 base points to 4% annual. According to the CME, the probability of such a scenario is 86%.
However, the main attention will be focused on the press conference of the Fed’s head Jerome Powell where he will make forecasts and comments about future steps of the regulator.
We will see how capital markets will behave. Fundamentally, nothing changes for them positively: the price of crediting keeps growing, increasing the load on business. Hence, there are few reasons for optimism. However, this pessimism is predictable and habitual.
To be able to attack 21,500 USD efficiently, the BTC needs to step over 21,150-21,350 USD today. This will open a pathway to 22,500 USD.
Capitalisation of the crypto market today is 1,010 trillion USD; the BTC takes up 38.8% of the market, the ETH – 19%.
Americans want transparent regulations
According to The Harris Poll, at least 79% of questioned Americans think that the crypto industry needs more transparent regulations. This implies clear rules for investors in digital assets. The same poll showed that people still consider traditional money more reliable.
TON sky-rocketed
The TON crypto sprouted, growing by 11% overnight without any obvious reasons. Trade volumes amounted to 20.62 million USD.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The leading cryptocurrency is creeping down again. On Monday, main fluctuations are near 20,487 USD. To preserve the uptrend in force, the BTC needs to brace itself and secure above 21,500 USD. Until this happens, all movements will be inside a flat.
The most important event of this week and month is coming, and this is the meeting of the US Federal Reserve System. With a probability of 81.4%, the market expects the regulator to lift the interest rate by 75 base points. 18.7% of investors count on an increase by 50 base points.
However, the main movements will be provoked not by the Fed’s decision but by its comments. Everyone is too interested in what is next to come? There is one more meeting left till the end of the year, and previously, the regulator planned to lift the rate at each meeting.
Seasonal cycles suggest that the BTC might keep growing this week, at least.
Money Fellows attracted 31 million USD
An Egyptian startup Money Fellows that works in the crypto market managed to gather 31 million USD at another round of financing. The company will allocate the money for designing new products and services, as well as for hiring new employees.
DOGE: best result of week
The copper coin DOGE demonstrated the best result of the week. Over 7 days, its price almost doubled. This let the coin rise to the 8th line of the rating of most popular cryptocurrencies. DOGE capitalisation grew to 15.54 billion USD.
BTC: 14 years since “White Paper” publication
On 31 October, it is 14 years since the BTC published its “White Paper” – a tech document that described the work principle of the peer-to-peer payment system. It is still unknown who is hiding behind the Satoshi Nakamoto penname.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
Finally, the day has come when we have something to say about the BTC. Over the last 24 hours, the leading crypto has grown quite a bit. On Wednesday, it is mainly fluctuating near 20,326 USD.
The BTC even rose to 20,415 USD. This was due to an increase in the US stock indices: the impulse of growth persists on the platform, investors are working it out fully, though it becomes every time harder to buy.
On the one hand, stock market optimism can be explained by market players expecting the Fed to cool down its tightening policy. The Fed has never given such signals apart from certain remarks of the members. It should be reminded that the market has already got trapped by such wild guesses and seems to learn nothing.
On the other hand, nothing nothing has stopped the BTC from growing to 20,000 USD. Yet it failed to secure above 20,500 USD. This means growth to the important resistance level of 21,500 USD is in question.
The crypto market capitalisation is estimated as 979 billion USD. The BTC takes up 39.8%, ETH — 17.7%.
Ripple opened applications for third wave of Creator NFT
Ripple continues working with the Creator NFT and opens the third wave of applications for Creator Fund grants sized 250 million USD. This segment of the programme will be focused on creators and both physical tokens and NFTs.
Bitcoin ETF is losing
The Bitcoin ETF, ProShares (BITO) is suffering serious losses this year. A bit more than a year before placement, the ETF lost 70% of its high of November 2021, following the BTC.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
