Markets

The recovery in cryptocurrency prices should not overshadow FTX’s lessons

Published

8 months ago

20 May, 2024

Financial Block Staff

The recovery in cryptocurrency prices should not overshadow FTX's lessons

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

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As cryptocurrency markets continue to be in the midst of a bull market, combined with the most institutional adoption to date, there are multiple reasons for investors and advocates to be optimistic. One of the most surprising headlines, which is at least a partial result of the recovery in prices, new innovations and increased adoption, was the recently released news regarding the bankruptcy of FTX. Even as Bankman-Fried sits in prison, at the beginning of his long sentence, and the regulatory landscape (and regulators) struggle to overcome the failures and embarrassment caused by this collapse and associated crimes, a positive story has emerged. In May 2024 it was announced that the bankruptcy estate handling the reorganization and eventual liquidation of FTX was able to recover sufficient funds to repay investors in full, with some estimates going as high as 140% recovery..

Setting aside some comments that this absolves Bankman-Fried and his former colleagues of criminal activity – of which Bankman-Fried was found guilty in court and for which some former colleagues are still awaiting sentencing – there are several important lessons that all stakeholders in the crypto space should be aware moving forward. The fact remains that criminal charges have been brought against these individuals and that, while 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 markets for any asset has heard from Warren Buffet a version of the phrase that savvy investors only reveal themselves during bear markets; this is also the case with FTX. Positive headlines about the bankruptcy estate’s ability to repay investors tend to overshadow an important point; these ratios and redemption parameters are based on cryptocurrency prices as of November 2022. The 2024 bull market significantly increased the price of all cryptoassets, including those held on FTX’s balance sheet, leading to much higher levels of available assets. If you add up the cash recoveries possible through the repossession and sale of real estate, the picture of the repayment process becomes clearer.

The fact that FTX, on paper, has the ability to make investors whole 18 months after filing for bankruptcy should not obscure the fact that this is an incomplete presentation of the facts. Illiquidity is fine and portfolio managers face this risk/return tradeoff daily, but this is no excuse for fund commingling, wire fraud and other financial crimes committed at FTX.

Repayment plans expose the need for faster settlement

For an asset class that can and do move as quickly as cryptoassets, updates on FTX’s bankruptcy recovery are another example of the need for more timely legal processing. It is encouraging and worth noting that established failure practices have apparently worked as intended during this process, but this is no reason to stop looking for improvements. In contrast to the United States, customers of FTX Japan they managed to regain access to the funds long before the US bankruptcy case heralded this recent news. Questions that have been raised regarding FTX’s bankruptcy and eventual liquidation include, but are not limited to, issues related to cryptocurrency re-hypothecation, private key management, succession planning for key personnel of cryptocurrency exchanges and exactly how much disclosure and transparency should be required from the cryptocurrency broker. retailers.

Given the rapid acceleration of cryptoassets and blockchain-based applications, it is inevitable that legal and financial complications will arise. 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 guardrails are needed

In May 2024, in a rare display of bipartisan agreement, the United States Congress (both houses) voted to repeal the controversial SAT 121 the one issued by the SEC. In addition to these votes serving as another rebuke to President Gensler and his campaign to regulate all cryptoassets as stocks, this illustrates a fact that cryptocurrency advocates and investors have known for years; clear and concise regulatory frameworks are needed. Bitcoin ETFs have attracted tens of billions in inflows since their inception, and TradFi institutions continue to develop and deploy blockchain and crypto-native assets, but the regulatory environment in the United States remains murky.

Protecting investors, as well as maintaining liquid and transparent markets, should be a key priority of both US regulators and policymakers, but this should not stand in the way of much-needed innovation. Especially since stablecoins, and the implications of tokenized transactions, appear to be attracting the attention and investment of TradFi institutions, politicians would be wise to have productive conversations on these topics instead of scoring political points.

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

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Related Topics:Bankman-fried cryptocurrency FTX Gensler

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Financial Block Staff

We are the editorial team of Financial Block, 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 Financial Block, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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Markets

Bitcoin, Ethereum See Red as Markets Crash on Volatility

Published

6 months ago

1 August, 2024

Financial Block Staff

Bitcoin, Ethereum See Red as Markets Crash on Volatility

Bitcoin AND Etherealalong with the rest of the top 10 cryptocurrencies by market cap, appear to be in hibernation on Thursday morning.

At the time of writing, the Bitcoin Price is still below $65,000 and 2.2% lower than it was this time yesterday, according to CoinGecko data. Things are worse for the Ethereum Pricewhich is 3.7% lower than 24 hours ago at $3,185.22. The drop in ETH’s price is identical to that of Lido Staked Ethereum (stETH), a liquid staking token for Ethereum.

In recent days, falling prices have led to the liquidation of derivative contracts worth $225 million, according to Coin glassAnd about half of that, about $100 million, was liquidated in the last 12 hours.

When a trader is liquidated, it means that their position in the market has been forcibly closed by an exchange or brokerage due to a margin call or insufficient collateral. Margin is especially important when it comes to leveraged positions, which allow traders to control a multiple of their deposit, such as opening a $10,000 position with only $1,000 in their account.

Now that Bitcoin has been in the red for three days in a row, there is a chance that the world’s oldest and largest cryptocurrency could sink even further, BRN analyst Valentin Fournier said in a note shared with Decrypt.

“Bitcoin has closed in the red for three days in a row, with one-way trading showing limited resistance from bulls. Ethereum had a slightly positive Monday with strong resistance from bears who have won the last two days,” he wrote. “This momentum could take BTC to the $62,500 resistance or even the $58,000 territories.”

Looking ahead, Fournier said BRN’s strategy will be to “reduce exposure to Bitcoin and Ethereum and find a better entry point after the dip.”

This is despite Federal Reserve Chairman Jerome Powell’s comments yesterday on interest rates being widely regarded as accommodating and indicative of FOMC rate cuts in September.

Singapore-based cryptocurrency trading firm QCP Capital said the rally in stocks, which sent the S&P 500 up 1.6% from Wednesday’s close, was not felt in cryptocurrency markets.

“Cryptocurrencies have seen a broad sell-off overnight and into this morning,” the firm wrote in a trading note. “The market remains poised as traders pay close attention to daily ETH ETF outflows and further supply pressure from Mt Gox and the US government.”

Meanwhile, the other top-ranking coins are showing mixed performance.

Solana (SOL) is down 7.2% since yesterday to $169.13. Things are even worse for its most popular meme coins. In the past 24 hours, the most popular meme coins Dogwifhat (WIF) are down 12% and BONK (BONK) is down 9%, according to CoinGecko data.

Their dog-themed competitor, Ethereum OG Dogecoin (DOGE), the only meme coin in Coingecko’s top 10, is down nearly 4% since yesterday and is currently trading at $0.1205.

XRP (XRP) dropped to $0.608, which is 7% lower than it was at this time yesterday.

Binance’s BNB Coin (BNB) has kept pace with BTC and is currently trading at $571, down 2.4% from yesterday. Toncoin (TON), the native token of The Open Network, is down just 0.4% over the past day.

This leaves the stablecoins USDC (USDC) and Tether (USDT), both of which are stable as they maintain their 1:1 ratio with the US dollar.

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Markets

XRP Market Activity Drops During Ripple-SEC Talks: Price Steady

Published

6 months ago

1 August, 2024

Financial Block Staff

Ripple (XRP) Market Witnesses Calm During SEC-Ripple Meeting

The Securities and Exchange Commission (SEC) will hold another closed-door meeting with Ripple on Thursday, as the market hopes for a possible resolution to the legal battle between the two entities.

However, the cryptocurrency market remains relatively bearish, with the price and trading volume of XRP down in the last 24 hours.

Ripple holders take no risk

At press time, XRP is trading at $0.60. The altcoin’s price has dropped 6% over the past 24 hours. During that time, trading volume was $27 million, down 27%.

The SEC met before with the digital payment company on July 25. While the outcome of that meeting remains unknown, the Sunshine Act Notice for Thursday’s meeting includes one additional topic of discussion from the July 25 closed meeting: the instituting and resolving injunctive relief. That has market participants speculating whether a settlement is imminent.

In an exclusive interview with BeinCrypto, Ryan Lee, Lead Analyst at Bitget Research, noted that:

“This meeting will discuss possible resolution options for the Ripple Lawsuit. The founder of Ripple Labs said that a legal settlement could be announced soon. If an official settlement plan is released, it could positively impact XRP’s price movement.”

However, an assessment of XRP’s price movements on a 4-hour chart shows a spike in bearish bias as the market awaits the outcome of this crucial meeting. Its Moving Average Convergence/Divergence (MACD) indicator readings show that its MACD line (blue) has crossed below its signal line (orange).

XRP 4 Hours Analysis. Source: Trading View

Traders use this indicator to gauge price trends, momentum, and potential buying and selling opportunities in the market. When an asset’s MACD is set this way, it is a bearish signal that suggests selling activity is outweighing buying momentum.

Additionally, the altcoin relative strength index (RSI), at 46.08, is currently below its neutral 50 line and in a downtrend. This indicator measures overbought and oversold market conditions for an asset.

To know more: How to Buy XRP and Everything You Need to Know

xrp rsi XRP 4 Hours Analysis. Source: Trading View

At 43.83 at the time of writing, XRP’s RSI suggests a growing preference among the market participants for tok in distribution.

XRP Price Prediction: Derivatives Traders Exit Market

The XRP derivatives market has also seen a decline in trading activity over the past 24 hours. According to Coinglass, derivatives trading volume has plummeted 18% and open interest has dropped 10% during that period.

Open interest refers to the total number of outstanding derivative contracts, such as options or futurethat have not yet been resolved. When it drops, traders close their positions without opening new ones. This is a bearish signal that reflects a lack of confidence in any potential positive price movement.

According to Lee, the outcome of the meeting with the SEC “would have a significant impact on the price movement of the token.” If the outcome is favorable, the price of the token could rise towards $0.75 in August.

To know more: Ripple (XRP) Price Prediction 2024/2025/2030

XRP Price Prediction XRP 4 Hours Analysis. Source: Trading View

On the other hand, if no favorable resolutions are reached, the price could plummet to $0.50.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto strives to provide accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and conditions, Privacy PolicyAND Disclaimers They have been updated.

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Markets

Bitcoin’s Dominance Hits Three-Year High, But Analysts Say Altcoins Are Ready to Rebound

Published

6 months ago

1 August, 2024

Financial Block Staff

Bitcoin's Dominance Hits Three-Year High, But Analysts Say Altcoins Are Ready to Rebound

Bitcoin is now the dominant force in the cryptocurrency market, surpassing 53% of the total cryptocurrency market, a stronger share than it has been in the past three years.

Bitcoin’s market cap now stands at $1.27 trillion, second according to CoinGecko data. In contrast, the total cryptocurrency market cap is $2.43 trillion, with Ethereum occupying 15.9% of the market, worth $389 billion.

Bitcoin’s rise to dominance this year is unusual, as altcoins typically do better than Bitcoin in a bull market. While meme coins made a strong comeback during Bitcoin’s rally to all-time highs earlier this year, the so-called “wealth effect” It has not been appreciated as much by mid-range coins, such as Ethereum and Cardano.

“ETF flows fundamentally alter market dynamics,” he wrote Meltem Demirors, former chief strategy officer at CoinShares, tweeted Wednesday: “BTC gains no longer translate to alts and the longer tail of crypto.”

Bitcoin’s takeover has continued even as the market cap of Tether (USDT) continues to grow, the world’s largest stablecoin and the third-largest cryptocurrency after BTC and ETH. Stablecoins are backed by fiat currencies and are excluded from some measures of Bitcoin dominance due to fundamentally different value models.

The surge continued to pace even after the launch of Ethereum spot ETFs last week, which ironically culminated in a news sell-off event, and net outflows from new investment products since they were launched. This went against the predictions of K33 Search so far, which predicted that ETFs would catalyze ETH’s growth over the next five months.

Despite the poorer performance of the alts, there is reason to believe that they are ready to bounce back very soon.

CryptoQuant CEO Ki Young Ju said Tuesday that whales are “preparing for the next altcoin rally,” as limit buy orders for assets other than BTC and ETH are on the rise.

The executive shared a chart showing how the “cumulative difference between purchase volume and sales volume” has increased in recent months.

“The indicator measures the difference between buy and sell orders over a year,” CryptoQuant told Decrypt. A buy/sell order is a pre-set request to buy or sell a cryptocurrency if it hits a certain price level, which creates resistance and support levels.

“If the trend is up, it means that more people are placing buy orders, showing strong interest in buying,” CryptoQuant said.

By Ryan-Ozawa.

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Markets

XRP and SOL Retrace as BTC Price Drops to 2-Week Lows (Market Watch)

Published

6 months ago

1 August, 2024

Financial Block Staff

Bitcoin Returns Toward $60K, XRP Defy Negative Sentiment (Market Watch)

After Monday’s crash, in which BTC fell by several thousand dollars, the scenario has repeated itself once again in the last 12 hours, with the asset falling to a 2-week low of $63,300.

Alt coins followed suit, with most of the market in the red today. SOL and XRP lead the way from the higher cap alts.

BTC Drops To $63.3K

After a violent Thursday last week, when BTC crashed to $63,400, the asset went on the offensive over the weekend and surged above $69,000 on Saturday, as the community prepared for Donald Trump’s appearance at the 2024 Bitcoin Conference in Nashville.

His speech was followed by more volatility before the cryptocurrency settled around $67,500 on Sunday. Monday started off rather optimistically for the bulls as bitcoin hit a 7-week high of $70,000.

However, he failed to maintain his run and conquer that level decisively. On the contrary, he was rejected bad and dropped to $66,400 by the end of Monday. Tuesday and Wednesday were less eventful as BTC remained still around $66,500.

The last 12 hours or so have brought another crash. Bears have pushed the leading digital asset down hard, which has fallen to a 2-week low of $63,300 (on Bitstamp), leaving over $200 million in liquidations.

Despite the current rebound to $64,500, BTC’s market cap has fallen to $1.270 trillion, but its dominance over alts is recovering and has reached 52.6%.

Bitcoin/Price/Chart 01.08.2024. Source: TradingView

The Alts are back in red

Ripple’s native token has been at the forefront of the market challenge in recent days as pumped up to a multi-month high of over $0.66. However, its run was also interrupted and XPR fell by more than 6% in the last day to $0.6.

The other big loser among the larger-cap alternatives is SOL, which has lost 8% of its value and is now struggling to get below $170.

The rest of this altcoin cohort is also in the red, with ETH, DOGE, BNB, AVAX, ADA, SHIB, and LINK all seeing drops between 2 and 5%.

The total cryptocurrency market cap lost another $70 billion overnight, falling below $2.4 trillion today on CG.

Cryptocurrency Market Overview. Source: QuantifyCrypto SPECIAL OFFER (sponsored)
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