Markets

Resurgent Crypto Prices Must Not Overshadow FTX Lessons

Published

8 months ago

19 May, 2024

FinCrypt Staff

Resurgent Crypto Prices Must Not Overshadow FTX Lessons

Optimistic sentiment should not overshadow the lessons to be learned from FTX

getty

As crypto markets continue to be in the midst of a bull market, combined with the largest institutional adoption to date, there are several reasons for investors and advocates to be optimistic. One of the most surprising headlines, which is at least partially a result of the resurgence in prices, new innovations and increased adoption, was the recently released news related to the bankruptcy of FTX. Even as Bankman-Fried is in prison, beginning his long sentence, and the regulatory landscape (and regulators) are struggling to overcome the failures and embarrassment that this collapse and associated crimes have caused, a positive story has emerged. In May 2024, it was announced that the bankruptcy estate managing the recovery and eventual liquidation of FTX had managed to recover sufficient funds to fully reimburse investors, with some estimates going as high as 140% recovery.

Leaving aside some comments claiming that this absolves Bankman-Fried and his former colleagues of criminal activities – of which Bankman-Fried was found guilty in court and some former colleagues are still awaiting sentencing – there are several important lessons that all interested parties in the the crypto space must be aware moving forward. The facts remain that criminal charges were brought against these individuals and that, although the sentences can always be reduced in the future, these charges and crimes exist.

Rising Prices Lift All Boats

Any investor who has studied the history of the markets for any asset has heard some version of Warren Buffet’s quote that savvy investors only come into their own during bear markets; this is also the case with FTX. Positive headlines regarding the bankruptcy estate’s ability to repay investors tend to obscure an important point; These reimbursement ratios and metrics are based on crypto prices as of November 2021. The 2024 bull market has greatly increased the price of all crypto assets, including those held on FTX’s balance sheet, leading to much higher levels of available assets . When combined with the cash recoveries that were possible through property repossessions and sales, the picture of the repayment process becomes clearer.

The fact that FTX, on paper, has the ability to recover investors 18 months after filing for bankruptcy should not obscure the fact that this is an incomplete presentation of the facts. Illiquidity is good and portfolio managers deal with this trade-off between risk and reward every day, but that is no excuse for the mixing of funds, wire fraud and other financial crimes committed at FTX.

Repayment plans expose the need for faster settlement

For an asset class that can and does move as quickly as crypto assets can, FTX’s bankruptcy recovery updates are another example of the need for more timely legal processing. It is encouraging and noteworthy that established bankruptcy practices have apparently worked as intended during this process, but that is no reason to stop looking for improvements. In contrast to the United States, customers of FTX Japan managed to regain access to funds long before the US bankruptcy case announced this recent news. Issues that have been raised regarding FTX’s bankruptcy and eventual liquidation include, but are not limited to, issues related to crypto remortgaging, private key management, succession planning for key personnel at crypto exchanges, and exactly how much disclosure and transparency should be demanded from the crypto broker. resellers.

Given the rapid acceleration of cryptoassets and blockchain-based applications, legal and financial complications are inevitable. While it remains true that all cryptoassets, including bitcoin, are financial instruments, it should be evident that the rapid development of institutional products, coupled with interest from individual investors, indicates that at least some cryptocurrency-specific frameworks and rules are needed. .

Regulatory protections needed

In May 2024, in a rare show of bipartisan agreement, the US Congress (both chambers) voted to repeal the controversial SAB 121 which had been issued by the SEC. In addition to these votes serving as yet another rebuke to Chairman Gensler and his campaign to regulate all cryptoassets like equity securities, it illustrated a fact that crypto advocates and investors have known for years; clear and concise regulatory frameworks are needed. Bitcoin ETFs have attracted tens of billions of inflows since inception, and TradFi institutions continue to develop and deploy blockchain and native crypto assets, but the regulatory environment in the US remains unclear.

Protecting investors, as well as maintaining liquid and transparent markets, should be a key priority for both US regulators and policymakers, but this should not impede much-needed innovation. Especially as stablecoins and the implications of tokenized transactions appear to be attracting attention and investment from TradFi institutions, it would be advisable for policymakers to conduct productive conversations on these topics rather than scoring political points.

FTX continues to cast a long shadow over the crypto space, but it also offers crypto advocates, investors, and policymakers an opportunity to learn – and implement – important lessons.

Source

Related Topics:Cryptography Fried Banker FTX Gensler

Up Next

Market Disruptor: How This Unknown Crypto Could Eclipse Polkadot’s Performance

Don't Miss

Crypto Altcoin Gainers | No bank

FinCrypt Staff

We are the editorial team of FinCrypt, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on FinCrypt, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

Click to comment

Markets

Crypto Markets Rebound as Spot Bitcoin ETFs Attract Massive Inflows

Published

6 months ago

17 July, 2024

FinCrypt Staff

Crypto Markets Rebound Ahead of Early Ethereum ETF Approval

This week saw $722 million worth of Bitcoin spot ETF inflows, including the largest daily inflow in a month.

Cryptocurrency markets rallied on Wednesday, driven by inflows into spot Bitcoin exchange-traded funds (ETFs).

The price of Bitcoin (BTC) is up 3% over the past 24 hours to last change hands at $65,200, according to CoinGecko. Ethereum (ETH) is up 2% and is trading at $3,471. Solana (SUN) and Polkadot (POINT) increased by 4%.

Bitcoin spot ETFs saw $422 million in daily inflows on Tuesday, the highest in the past 30 days, according to Far side data, . The all-time record for a single day was $1.05 billion on March 12.

Among Tuesday’s top contributors, BlackRock’s IBIT led with $260 million in inflows, followed by Fidelity’s FBTC with $61 million. This week has already seen more than $722 million in inflows.

Among the top 100 cryptocurrencies by market cap, Worldcoin (WLD) led with a 28% increase, followed by Helium (HNT) with 20% and Lido DAO (LDO) with 15%.

Worldcoin, a decentralized identity project led by OpenAI CEO Sam Altman, announced is extending the lockups for early investors and team members. This means that tokens will be gradually released through 2029, instead of the original 2027 plan. Token unlocks are generally seen as a negative because they increase supply and early investors can sell their tokens for profit.

Meanwhile, XRP, the token of the XRP Ledger network, jumped 8% after the CME and CF benchmarks introduced new indices and reference rates for XRP.

U.S. stocks faced a downturn on Wednesday. The S&P 500 fell 1%, while the Nasdaq Composite and Dow Jones Industrial Average both fell 2%.

Source

Markets

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Published

6 months ago

17 July, 2024

FinCrypt Staff

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Crypto markets appear to have been taken over by the bulls as major tokens have surged above their crucial resistance zone. Bitcoin surged above $65,000 while Ethereum was above $3,500, and XRP, which had remained passive for quite some time, surged over 40% in the past few days to hit $0.6. The uptrend has been captured in most altcoins, with Worldcoin (WLD), Arweave (AR), and Injective (INJ) leading the rally. Here’s what to expect for these tokens in the coming days.

Worldcoin (WLD) Price Analysis

O Worldcoin Price has been trading inside a descending wedge since it marked a new ATH near $12 in the final days of Q1 2024. The recent price action helped the price break out of the upper resistance of the wedge, breaking above the crucial resistance zone between $2.21 and $2.39. Market sentiments have changed, but technicals suggest that the bulls may remain passive for a while, which could offer some room for a bearish pullback.

The price broke out of the wedge with a significant increase in volume, but the current volume suggests that the bulls have taken a step back. Meanwhile, the RSI is about to reach the upper boundary, which could attract bearish forces. Additionally, the DMI has undergone a bullish crossover, but the decline in the ADX suggests that the rally may remain consolidated above the gains. Therefore, the WLD price is expected to maintain a horizontal consolidation between $3 and $3.3 and trigger a fresh rally to $4.4 during the next bullish rally.

Arweave (AR) Price Analysis

Arweave formed a strong base around $25, which helped the rally trigger a recovery during the bearish attack. Mt. Gox and German terror forced the price to fall below $20. However, the recent price action has brought the altcoin within the bullish range and raised expectations of maintaining a decent uptrend for a few more days.

AR price has hit one of the major resistances around $30 to $31.5, which could act as a strong base once overcome. The buying volume is slowly increasing, which could keep the bullish hopes for the rally high. Moreover, the supertrend has just flashed a buy signal, indicating a clean reversal of the trend. Therefore, AR price seems primed to maintain a healthy uptrend and rally above $40. However, if the bulls maintain a similar trend, making new highs above $50 may not be a tedious task for the bulls.

Price Analysis of Injective (INJ)

Injective price has been showing sharp strength since the beginning of the year and hence, the recent turnaround is expected to revive a good uptrend going forward. The bears engulfed the rally to a large extent, but the recent price action suggests that the bulls have regained their dominance. Therefore, INJ price is expected to maintain a strong uptrend with a bearish interference on the way down.

INJ price has surged above the lower support zone and has registered consecutive bullish candles. Although the volume is below the required levels, the OBV is maintaining a sharp uptrend. Furthermore, the Ichimoku cloud lead span B is heading towards the lead span A and a healthy crossover indicates the start of a new uptrend. However, INJ price may be out of the bears’ reach once it secures the resistance zone between $30.77 and $32.12, which seems to be on the horizon.

Source

Markets

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Published

6 months ago

17 July, 2024

FinCrypt Staff

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Ethereum (ETH) supply on exchanges has hit a 34-month high as the asset’s price surpassed the $3,500 mark.

ETH has risen 2.3% over the past 24 hours and is trading at $3,490 at the time of writing. The second-largest cryptocurrency — with a market cap of $419 billion — briefly touched an intraday high of $3,517 earlier today.

ETH Price, Whale Activity, RSI, and Exchange Supply – July 17 | Source: Santiment

Ethereum’s daily trading volume also increased by 7.6% to reach $19.8 billion.

According to data provided by Santiment, the supply of Ethereum on exchanges has reached $19.52 million ETH. This level was last seen in September 2021, when the asset was trading around the same price.

On the other hand, data from the market intelligence platform shows that the number of whale transactions has fallen by 12% in the last day — falling from 8,730 to 7,629 unique transactions per day.

The move shows that the supply of Ethereum on exchanges has been increasing with small deposits rather than large transactions from whales.

Additionally, the ETH Relative Strength Index (RSI) is currently hovering at the 60-mark, per Santiment. The indicator shows that Ethereum is slightly overbought at this price point, but it may not be in a critical position due to its large market cap.

One of the main drivers of Ethereum price increase is ETH spot expectations ETFs in the US Investment products are scheduled to start trading on July 23rd.

Source

Markets

Bits + Beeps: How to Play the ‘Trump Trade’ in Cryptocurrencies After the Assassination Attempt

Published

6 months ago

17 July, 2024

FinCrypt Staff

Bits + Bips: How to Play the ‘Trump Trade’ in Crypto After the Assassination Attempt

Also, how much will the Fed cut rates (and when)? What will be the inflows into ETH ETFs? And what is the near future for Bitcoin?

Posted on July 17, 2024 at 12:00 PM EST.

Listen to the episode at Apple Podcasts, Spotify, Capsules, Source, Podcast Addict, Pocket molds, Amazon Musicor on your favorite podcast platform.

In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger and Joe McCann, joined by guest Jack Platts, dive into the market reaction to the recent assassination attempt on former President Donald Trump, analyzing how this event will influence the 2024 US presidential election and the cryptocurrency markets.

They also cover potential rate cuts: Could there be a cut in July? How big could the September rate cut be? Could the decision be influenced by the upcoming election?

They also give their predictions on what percentage of BTC ETF inflows the ETH ETFs will reach, and James talks about what he expects for Grayscale’s ETHE (hint: his outlook would be positive for ETH).

Finally, they delve into what’s next for Bitcoin as the German government runs out of BTC and Mt. Gox distributions begin. Just now?

Program Highlights:

Whether Trump’s shooting decided the election and whether the event caused a “flight to safety”
How election markets are becoming a place to watch election probabilities and whether cryptocurrencies “lean right”
Whether rate cuts will occur in July or September and by how much they will cut: 25 bps or 50 bps
How Joe sees the relationship between global liquidity cycles, rate cuts, and the potential rise of Bitcoin
What are the new updates about Ethereum ETFs and their expected launch?
Why Solana Hasn’t Performed Significantly Better Since Trump News
What Market Breadth Indicates About the Current Market Rally and the Impact of Rates on Small Caps
Everyone’s predictions on ETH ETF inflows and how much outflow we’ll see on Grayscale’s ETHE
What’s Next for BTC After German Government Exits Bitcoin and Mt. Gox Giveaways Starting This Week