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Bitcoin Stays Calm at $16.5K – Coin24h.com

Bitcoin Stays Calm at $16.5K – Coin24h.com

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Good morning. This is an abbreviated version of First Mover Asia as the team is out of the office today for a CoinDesk corporate holiday in the US. Here’s what happens:

Tariff: Bitcoin holds the $16,500 perch as the US Thanksgiving holiday weekend begins.

Observations: Jocelyn Yang writes about the domino effect caused by the collapse of FTX.

tariff

Bitcoin is trading sideways, holding above $16.5k

Author: James Rubin

The price of Bitcoin barely dropped on the US Thanksgiving holiday.

The largest cryptocurrency by market cap recently traded around $16,500, down just 0.11% in the last 24 hours. BTC has remained stable around $16,000 for the past three weeks, although it briefly fell below $15,500 on Monday amid fears over the future of crypto trading and lending firm Genesis Global Capital, which has been hit by the collapse of crypto platform FTX.

Crypto markets calmed down over the past three days, but at the same time, stock indexes rallied on signs that the US Federal Reserve would pull back from its current diet of 75 basis point interest rate hikes. While several crypto watchers say the recent failures could ultimately strengthen the crypto industry by forcing regulators to step up their efforts, most analysts remain bearish.

Ether recently changed hands at around $1,195, up 1.16% from the last day. Other cryptos were mixed, with Cardano (ADA) down almost a percentage point (-0.96%) and Quant (QNT) up 0.32%. The CoinDesk Market Index (CDI), an index that measures the performance of cryptos, fell 0.26%.

Views

FTX Contagion Revives Dreaded 2022 Crypto Knell – ‘Traction Stop’

Author: Jocelyn Yang

In the crypto industry in 2022, the phrase “stopping withdrawals” is like black smoke rising from a building. The damage is certain.

Technically, it means that a crypto exchange or lender has prevented customers from getting their money or digital tokens back – typically because there aren’t enough assets available to meet redemption requests. However, the likely outcome is that the company is unlikely to recover easily from the devastation. In many cases, filing for bankruptcy is the next step.

Now, the swift dismantling of former billionaire Sam Bankman-Fried’s crypto empire, including the FTX exchange and crypto trading firm Alameda Research, has unleashed a new wave of crypto exchanges and lenders that have halted customer withdrawals in recent weeks.

The collateral damage adds to the list of victims of the dramatic collapse of the Terra blockchain earlier this year, which precipitated or directly led to the failure of crypto companies such as Celsius Network, Babel Finance, Voyager Digital and Three Arrows Capital.

(CoinDesk has had 16 separate withdrawal stop notices this year; the list is below.)

The infection can spread quickly. When one company suddenly refuses redemption requests, another company suddenly faces a liquidity crisis. Investors get excited by the market, leading to new withdrawal requests, exacerbating the panic. Such is the model in the digital asset market, where there is no Federal Reserve or other central bank backing everything – as in the traditional financial system.

(CoinDesk has had 16 separate withdrawal stop notices this year; the list is below.)

“With every player, you suddenly have to control how much information you want to reveal,” said Benoit Bosc, global product director at crypto trading firm and liquidity provider GSR. “It may be more information than you want to reveal.”

BlockFi, Genesis

Cryptolender BlockFi suspended customer withdrawals from its platform on November 10, borrowing “lack of clarity” on FTX’s current situation; that was two days after the FTX exchange completely halted customer withdrawals on November 8. BlockFi later acknowledged its “significant exposure” to FTX.

Last week, Genesis, a major crypto finance company, announced that its lending unit had suspended redemptions and issuing new loans, citing the “extreme market disruption and loss of confidence in the industry caused by the FTX collapse.” Earlier this year, the company suffered hundreds of millions of dollars in losses after the failure of Three Arrows Capital. (Genesis is a sister company of CoinDesk.)

Bosc quoted Warren Buffett’s oft-repeated quote: “”When the tide goes out, you’ll see who’s swimming naked.””

Nicholas Colas, co-founder of market analysis firm DataTrek Research, wrote in a note that the current crisis will take time to resolve, and “until then, there is likely to be more selling pressure in this area.”

The following is a timeline of crypto firm withdrawal bans in recent weeks:

November 8: The FTX exchange stopped customer withdrawals, an FTX support worker said on the company’s official Telegram group.

November 11: FTX US stopped processing crypto withdrawals. On the same day, FTX Group companies – including FTX Trading and FTX US – filed for bankruptcy protection in the United States.

November 10: Cryptolender BlockFi suspended withdrawals from its platform, borrowing “lack of clarity” on FTX’s current situation at the time. (In a Nov. 14 update, the lender acknowledged its “significant exposure” to FTX.)

November 11: FTX US stopped processing crypto withdrawals. On the same day, FTX Group companies – including FTX Trading and FTX US – filed for bankruptcy protection in the United States.

November 13: Hong Kong crypto exchange AAX said it suspended withdrawals for up to 10 days due to an unknown third party failure. The company said there was no financial risk to FTX or its subsidiaries. AAX announced on November 23 that it will close derivative positions.

November 15: Japanese crypto exchange Liquid, owned by FTX, suspended both fiat and crypto exchanges on its Liquid Global platform “in accordance with the requirements of US voluntary Chapter 11 proceedings.” Exchange announced on November 20 that it had suspended all trading on its platform.

November 15: Crypto lending platform SALT said it has stopped all deposits and withdrawals on its platform due to exposure to FTX.

November 16: The lending unit of crypto-investment bank Genesis Global Trading temporarily suspended redemptions and issuing new loans, citing “extreme market disruption and loss of confidence in the industry caused by the FTX collapse.”

November 16: The Winklevoss brothers’ Gemini exchange said it was suspending withdrawals in its income-producing Earn program as the exchange suffered a $485 million outflow shock following the Genesis announcement earlier in the day. Genesis Global Trading operated in Gemini’s Earn program.

And here’s a timeline of cancellation freezes earlier this year:

June 12: Celsius Network says it will “suspend all withdrawals, exchanges and transfers between accounts”. (Celsius filed for bankruptcy on July 13.)

June 17: Babel says that “redemptions and withdrawals of Babel Finance products are temporarily suspended”.

June 23: CoinFLEX announces that it will “suspend all withdrawals”.

July 1: Voyager Digital says it is “temporarily suspending trading, deposits, withdrawals and loyalty rewards”. (Voyager filed for bankruptcy protection on July 5.)

July 4: Vauld says it made the difficult decision to suspend all withdrawals, trading and deposits.

July 20: Zipmex says it is “suspending withdrawals for the time being”.

August 2: ZB.com announces that “deposit and withdrawal services are now suspended” after losing nearly five million to a suspected hack.

August 8: Hodlnaut says it will “stop withdrawals, token exchanges and deposits immediately.”

Important events.

15:00 HKT/SGT(7:00 UTC) German GDP (QoQ)

CoinDesk TV

In case you missed it, here’s the latest episode of “The Hash” from CoinDesk TV:

Litecoin Surges; El Salvador Proposes Digital Securities Law, Paving the Way for Bitcoin Bonds

“The Hash” hosts discussed top stories, including El Salvador’s National Assembly considering a bill to regulate digital securities, which could pave the way for the issuance of bitcoin-backed bonds. Additionally, Hash took a closer look at Litecoin’s breakthrough before the mining fee halving.

Headlines

The future of crypto is self-maintenance and regulation, Kraken’s Dave Ripley: The incoming CEO reflects on why the future of crypto is based on proof of reserves and thoughtful regulation.

Ethereum research and development company Flashbots shares information about its next-generation block builder: After teasing Suave at this year’s Devcon, Flashbots outlines how the plug-and-play solution will change the way validators earn MEV.

Founder of EOS Developer Block.One Buys 9.3% of Crypto Bank Silvergate: The purchase makes Brendan Blumer the largest holder of Silvergate Capital.



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