This week in coins: Bitcoin avoids heavy losses as FTX contagion spreads

This week with coins. Illustration by Mitchell Preffer for Decryption.

This being week two According to the FTX disaster story, crypto investors can expect things to get worse before they get better. However, the two market leaders, Bitcoin and Ethereum, no longer appear to be in freefall.

Bitcoin (BTC), the largest cryptocurrency by market capitalization, has traded at $16,655, down just 1% over the past week. The No. 2 cryptocurrency, Ethereum (ETH), has shaved nearly 4% off its value and traded at $1,210 at the start of the weekend.

Both appeared rebound on Tuesday After fresh data from the US Department of Labor’s latest PPI (Producer Price Index) report, prices of goods excluding food and energy fell. Many took this as a sign that inflation in the US may finally calm down, which would give the Federal Reserve some incentive to ease its tight fiscal policies. Stocks also rose again on the news.

Several leading cryptocurrencies lost between 5% and 10% this week, including Cardano (ADA), Polygon (MATIC), and popular dog meme coins Dogecoin (DOGE) and Shiba Inu (SHIB).

Among the top twenty cryptocurrencies by market cap, Solana (SOL) was the biggest loser, down 17% to $13.31. FTX was an early supporter of Solana, and the entire Solana ecosystem is affected by the explosion; blast radius includes abbreviations in Solana NFT protocol Metaplex.

The full extent of the Solana network’s ties to Sam Bankman-Fried’s collapsed multi-billion dollar crypto empire came to light this week, along with announcements that several other leading companies in the industry were exposed to FTX.

FTX infection is spreading

As prices stabilized this week, a number of announcements came from within the industry as companies moved to announce their exposure to the insolvent FTX.

On Monday, cryptocurrency lender BlockFi denied claims that most of its assets were locked up in FTX, but told customers that there would be withdrawals. stay on break, citing “significant risk” to the collapsed exchange. There was BlockFi customer withdrawals stopped last week. The company is also considering applying Chapter 11 bankruptcy, Open the password report confirmed, and likely face imminent layoffs.

Crypto hedge fund Ikigai, “the vast majority” of total assets closed in FTX a tweet by founder Travis Kling. Kling also apologized for investing client funds in FTX and “actively supporting” it.

Published by the Solana Foundation blog post He revealed that he had $1 million in cash or equivalent assets stuck in FTX. In addition, the fund holds 3.24 million shares of FTX Trading LTD, 3.43 million FTT tokens and 134.54 million SRM tokens. decentralized exchange Serum. Bankman-Fried co-founded Solana-based DEX in 2020.

The fund’s announcement also clarified the extent to which Bankman-Fried has invested in the network’s token. FTX and Alameda together bought 50.5 million SOL, which is now worth less than $666 million.

Crypto-centric investment firm Sino Global announced in a statement on Tuesday official statement that there was”average seven digits” is exposed to FTX but continues to function normally.

Cryptocurrency Liquid Global on Tuesday it froze all withdrawals, including fiat, “pursuant to the requirements of voluntary Chapter 11 proceedings in the United States.” Liquid Group and all its subsidiaries, including Japan-based Quoine Corporation and Quoine Pte. in Singapore, received by FTX Trading Ltd in an undisclosed deal earlier this year.

Circle, the issuer of the stablecoin USDC, admitted in a regulatory filing that “small capital” a position hinted at by CEO Jeremy Allaire at FTX right after the FTX collapse 10.6 million dollars investment. Circle expects financials to be “materially lower” than last February’s forecasts, the filing said.

On Wednesday morning, major cryptocurrency broker Genesis announced told clients it would stop withdrawing money from its lending arm, citing “unprecedented market turbulence” from the FTX bankruptcy. Just a There was a firm a week ago he tweeted: “Our working capital and net positions in FTX are not material to our business. Circumstances related to FTX have not prevented the full operation of our trading franchise.”

Blockchain analytics firm Chainalysis was even identified in filings with a Delaware bankruptcy court. FTX creditor and owe money in bankruptcy proceedings.

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