There were ample warning signs to tip investors off to problems behind the scenes at FTX.
I predicted FTX’s collapse a month before it happened
Understanding the FTX Fallout From the Eyes of a Bitcoiner
The financialization, tokenization and the chase of short-term profits seen across Sam Bankman-Fried’s trading empire is peak Wall Street.
Decentralization index from Cardano builder, U of Edinburgh will help users understand assets
In an industry first, Input Output Global and the Scottish university will provide continuous tracking of digital assets by a methodology that has yet to be determined.
Is DOGE really worth the hype even after Musk’s Twitter buyout?
Though Dogecoin has seen a near 45% rally over the past month, its use cases remain limited, especially given that it can’t interact with smart contracts.
MATIC Backpedals Into Bearish Track Despite Its Social Dominance
The current state of MATIC and Polygon’s crypto ecosystem ranks among the worst. It took a toll on In the wake of FTX’s demise, the industry-wide contagion has impacted other projects, Polygon among them.
Despite this, Polygon is in the top three DeFi companies in terms of revenue. However, Polygon and its native coin is seen to continue to bear the brunt of the pains from the collapse of FTX.
Can MATIC truly rally now, as it falls to its support at $0.82 despite its social dominance?
For MATIC, It’s A Narrow Market
At the moment, MATIC is trading at $0.861, with a fairly narrow green candle. Indicator BB shows a point of maximum pressure at around the same price.
Coupled with the bearish formation of a descending triangle, this spells doom for MATIC over the following days.
Past results show that the token has also had trouble gaining traction. Available data on CoinGecko shows that MATIC is currently experiencing a losing run across all timeframes, with the monthly timeframe being the only exception, posting a gain of 2%.
Image: TradingView
According to CoinMarketCap’s on-chain research engine, the majority of MATIC holders are now in the red, with over 66% of the coins held in that spot. These are all bearish indications that the situation may deteriorate.
Given that Polygon is an L2 for Ethereum, it is not surprising that MATIC and ETH have strong connections. Currently, the correlation coefficient between the two is 0.75. This indicates that the price movements of the two strongly correlate with one another.
Investors and traders should monitor this signal, as any significant price change in ETH could aid Polygon’s comeback. Overall, though, investors and traders should anticipate MATIC to surpass $0.851
Bulls should seek support at $0.772.
Bearish Breakout Expected
Similar to what was stated previously, MATIC’s strong correlation with ETH can be a significant challenge for support but a significant boost for an uptrend.
Despite Polygon’s social dominance, the loss of market confidence will surely cause the price of MATIC to decline.
A short position at or below the current market price will mitigate the bearish market action. With the Bollinger band indicating a significant MATIC price decline, we can anticipate a bearish breakout in the next days.
As that day approaches, MATIC bulls can only pray for a miracle in order for a recovery to occur.
MATIC total market cap at $7.5 billion on the weekend chart | Featured image from Daily Hodl, Chart: TradingView.com
Proof-of-reserves: Can reserve audits avoid another FTX-like moment?
Crypto exchanges are actively releasing proof-of-reserves audits in order to build transparency but experts believe it would take more than that to regain investor trust.
What are soulbound tokens (SBTs) and how do they work?
Soulbound tokens (SBTs) refer to digital identity tokens that represent the characteristics or reputation of a person or entity.
Crypto Exchanges Record Massive Outflow Of Bitcoin, What Does This Indicate?
The growth of Bitcoin and crypto exchanges over the years reflects the industry’s evolution. Exchanges have been the most critical businesses supporting the blockchain and crypto protocols. In addition, the exchanges, led by the top figures in the industry, house most of the iconic brands in the crypto ecosystem.
Since the early days of Bitcoin till now, crypto exchanges have evolved and grown in many ways, gaining users’ trust. However, things have turned sour within the twinkle of an eye, and users have lost faith in crypto exchanges. The FTX collapse has spread its contagion across the crypto space, pulling most crypto exchanges down.
Bitcoin Records Highest Exchange Outflow Since 2018
This week recorded a massive outflow of Bitcoin from crypto exchanges after the collapse of FTX. Recent data from Glassnode reveals that Bitcoin flows out of exchanges quickly. According to the report, users and investors have withdrawn all Bitcoins that flowed into exchanges since 2018.
Since the FTX insolvency, primarily due to asset mismanagement, the demand for self-custody and spot-driven BTC markets has increased. This action has never been recorded in all previous bear markets that Bitcoin has survived.
Bitcoin wasn’t the only asset that recorded massive withdrawals. Stablecoins such as BUSD and USDC also recorded massive outflow from exchanges in the last seven days. On-chain data shows that a large number of the outgoing stablecoins have been moving into self-custody wallets. Santiment’s data confirmed this report.
According to Santiment, there was a constant inflow of stablecoins such as USDC, BUSD, and USDT into the crypto market in early 2022. In addition, the data suggested that new investors were buying assets as the prices declined.
The stablecoins market cap rose to $134.07 billion, with the inflow of coins at the same time BTC peaked. However, things have changed since the fed’s interest rate hike in June.
Furthermore, the stablecoins market has been recording massive holdings reshuffle after Binance revealed its plans to convert USDC to BUSD.
Self-Custody Is The Way To Go: Santiment Report
Santiment highlighted that the recent crisis teaches everyone to embrace self-custody. The market has learned, reflected in the increased outflow of USDC and BUSD from exchanges.
Several crypto firms and investors are facing the heat from the FTX downfall. For example, Crypto venture capital firm Multicoin Capital lost nearly $1 billion in assets held on FTX. The extent of damage in the crypto space and the massive outflow of assets and value declines has left questions on everyone’s minds. Many are wondering if crypto is still alive or dead.
There might still be hope since the crypto space has survived similar blows. The Mt.Gox collapse is one event that left a cascade effect on the crypto industry. The Terra collapse also had a similar impact on crypto.
Featured image from Pixabay, chart from TradingView.com
Bitcoin sees record Stock-to-Flow miss — BTC price model creator brushes off FTX ‘blip’
Bitcoin price action since FTX “feels like the world has ended,” says Stock-to-Flow creator PlanB.
Binance CEO CZ begins working on Vitalik Buterin’s ‘safe CEX’ ideas
While long-term solutions will need the involvement of multisig and social recovery wallets, Buterin pointed out two alternatives for the short-term — custodial and non-custodial exchanges.
This Crypto Venture Capital Loses Almost $1B On FTX, When Will This FTX Fiasco End?
The collapse of the FTX crypto exchange is one of the biggest shocks to hit the industry. The impact of the fall is spreading to different crypto assets and several investors on the exchange.
The crypto market has been experiencing massive downward performance as prices of assets kept declining. Hence, the overall value is far below expectations, creating more fears and doubts in crypto.
Following the unfolding events and crisis, the CEO of FTX, Sam Bankman-Fried (SBF), filed for bankruptcy for the distressed FTX exchange. He also resigned from his position as CEO.
On the part of FTX investors, the story is getting more intense. Several venture investors and individuals have started counting the losses following the bankruptcy filing. Also, the contagion from the collapse of the exchange is still spreading. One such recipient of the negative effect is Multicoin Capital.
Multicoin Capital Exposure To FTX Crypto Exchange
In the new development, a crypto venture company, Multicoin Capital, has disclosed its exposure to FTX. On Thursday, the firm reported how the fund plummeted by a whopping 55% over last month. It revealed to its investors that the drop in performance was due to the collapse of FTX.
The events surrounding FTX gave a huge blow to Multicoin. In July, the firm launched its $430 million fund. As the FTX saga was unwinding last week, the crypto venture firm recovered just one-quarter of its assets from the exchange. But, about 15% of its total assets are still trapped on FTX.
Currently, Multicoin Capital plans to write down its assets on the distressed FTX to zero. It noted that it’s the only sensible action to take as the exchange is already immersed in its bankruptcy proceedings. However, it still believed that it would recover some of its assets from the collapsed exchange in the future.
At the moment, the crypto venture giant didn’t state the amount it’s writing off regarding the FTX crisis. But some crypto market experts think the value would be more than $850 million.
The managing partners of Multicoin, Kyle Samani and Tushar Jain, reacted to the situation in the post. They wrote that they over-trusted their relationship with FTX, which made them lay many assets on the exchange.
Multicoin Capital Now Resorts To A Majorly Self-Custodian
Before now, Multicoin Capital distributed all its assets across the three leading crypto exchanges; Binance, Coinbase, and FTX. Following the collapse of FTX, the venture firm moved all its remaining assets to either self-custody or Coinbase.
Multicoin stated that it currently has no assets exposed to any counterparties. However, it plans to diversify its custodial exposure picking Coinbase as its primary custodian. It noted that it would resume trading with other exchanges once the situation in the market becomes calm.
Further, the crypto venture firm believes that the contagion from the FTX will continue to spread. It mentioned that several trading firms would shut down from the collapse of FTX and its sister trading platform, Alameda Research.
Featured image from Pixabay, chart from TradingView.com
Litecoin (LTC) Up 8% In Last 24 Hours, The Biggest Gainer Out Of Top 20 Cryptos
As the market declined last week (and continues to do so), Litecoin was one of the few currencies to increase in value.
CoinGecko reports that the price of a single Litecoin is at $63.69 at the moment. The token is up 8% in the last 24 hours, giving traders and investors some sense of relief. Litecoin (LTC) thus pulled off a surprise, edging out the other cryptos in the top 20 list.
The alternative cryptocurrency that has been around for a while appears to be gaining popularity among investors.
Only 35% of LTC holders are profitable, per CoinMarketCap. The percentage of holders who would benefit monetarily from a sale at the current time is thus reduced.
While this rebound is encouraging, the current state of the market following the contagion that was FTX means that LTC may not be able to avoid more market declines despite the uptick.
Outlook For Litecoin Looks Favorable
As things stand, the market environment is very unfriendly for bulls. Despite the market decline, a few cryptocurrencies have managed to rise into the top 20.
The relative strength index (RSI) for LTC is rapidly approaching the oversold zone, indicating a sharp reversal from a bullish to a negative trend.
At its present level of $63.69, the price is still above the 38.20 percent Fibonacci retracement zone.
Chart: TradingView
On a 4-hour timeframe, however, RSI values are increasing, indicating a growing bullish momentum.
The current level of support is $61.81, which is a quite significant level of support given the present market conditions.
Currently, the market structure resembles a bullish descending triangle, with a likely bullish breakout around the $64.15 price level.
In addition to supporting a likely positive breakout, the expanding Bollinger band indicates volatility in the coming weeks.
As the bulls retest the $64.15 price resistance in the coming weeks, they should observe the market environment.
Long-term LTC investors appear to be selling, while long positions on LTC exceed short positions, according to CoinGlass.
With massive short liquidations occurring in LTC over the previous few days, this change in momentum is in stark contrast to present market conditions.
What To Anticipate With LTC
LTC appears to be moving against the market, diminishing or losing its link with BTC and ETH. As the scenario for Litecoin improves, bulls must be cognizant of the current unfavorable market conditions.
Defending the $61.31 support is sufficient to maintain LTC’s bullish momentum if it cannot breach the $64.15 resistance.
Crypto total market cap at $787 billion on the weekend chart | Featured image from ITNext, Chart: TradingView.com
TRON Total Number Of Accounts Hit Nearly 120 Million, Weekly Report Shows
TRON, the native cryptocurrency of the blockchain network bearing the same name, continues to struggle as it fails to break free from its bearish momentum.
According to tracking from Coingecko, the 16th largest cryptocurrency in terms of market capitalization is trading at $0.050 at the time of this writing.
For the past seven days, the altcoin has dropped by almost 10% while over the last two weeks its value has declined by 20.2%.
On a month-to-date gauge, the digital asset has dumped 17.8% of its spot trading price, painting its entire chart in crimson.
However, while TRON remains unsuccessful in initiating a bullish run to reclaim higher trading session prices, its network is performing relatively well as the protocol was able to post impressive numbers last week.
TRON Network Activity Remains Upbeat Amid FTX Crisis
TRON DAO, the official Twitter account of the blockchain network shared some of the highlights of the protocol’s performance for the period of November 7 to November 13.
At the conclusion of the specific timeframe, the total number of accounts associated to the blockchain reached 119,949,499 while the overall tally for transactions facilitated over it hit the 4.19 billion mark.
TRON’s blockchain height surpassed the 45.83 million and its Total Value Locked (TVL) peaked at $12.3 billion.
It is important to note that this impressive growth in both network activity and value happened during the same week when the crypto space was ravaged by the negative effects of the collapse of the FTX crypto exchange platform.
Following Binance CEO Changpeng Zao’s decision to back out of initial plans to buy the exchange after the announcement of selling all of its FTT tokens, the crypto market was instantly painted in red as Bitcoin, Etheruem and the rest of the altcoins experienced severe price dumps.
TRON Founder Gives His Take On The Future Of NFTs
During a recent interview, Justin Sun, the founder of TRON, expressed his ideas about the current situation of the non-fungible token (NFT) industry.
According to Sun, sadly, the current generation of NFT tokens doesn’t offer much in terms of utility and that this is something that needs to be addressed if this particular digital asset class hopes to grow exponentially in the near future.
He emphasized his point by saying that during this important segment of Web3 development, these customizable tokens will be the focal point of many advancements and projects.
For its part, TRON seems to be doing well in this department as its NFT ecosystem also managed to record an uptick in terms of trade count and trade volume.
TRONUSD trading at $0.05157304 on the weekend chart | Featured image from Coin Edition, Chart: TradingView.com
SBF’s lawyers terminate FTX representation due to conflicts of interest
Attorney Martin Flumenbaum believed that Sam Bankman-Fried’s “incessant and disruptive tweeting” negatively impacted the reorganization efforts of the lawyers.
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NYDIG Analyzed The FTX Collapse And Its Implications. What Did We Learn?
It’s time for NYDIG to chip in. The FTX fiasco is the theme of the month in the crypto world, and the show’s just beginning. The NYDIG research team avoids the temptation to summarize the whole saga and goes straight to the implications of the fall of Sam Bankman-Fried’s empire. “Some signs of contagion have appeared but a full accounting of the damage and regaining of investor confidence will likely take time,” they say understating the harsh reality.
Taking a page from NYDIG’s book, let’s skip the intro and go straight to the conclusions.
Contagion Is Around The Corner
Speaking about “signs of contagion,” NYDIG mentions BlockFi and the Genesis/ Gemini combo. However, there might be much more to come.
“Several other service providers have piqued the curiosity of crypto sleuths as potential next dominoes, but we hesitate to speculate too much without hard evidence. Regardless, industry participants are on edge for even the slightest signs of stress and continue to pull balances off exchanges.”
In the contagion section of the paper, we find a rare mention of a conspiracy theory that’s making the rounds in crypto twitter. Rarely do big players bring this up. Of course, NYDIG ends up doubling down on the thesis about Terra/Luna that they put out in a previous paper titled “On Impossible Things Before Breakfast.”
“There have been accusations that Alameda caused the initial de-peg of UST, and while that may have been the case, uneconomic rates paid by the Anchor Protocol and insecure economic design of LUNA/UST ensured its ultimate destruction, destroying $60B worth of crypto wealth in a few short days.”
In the previous paper, NYDIG printed a great segway to the next section. “DeFi is not decentralized. The Terra ecosystem was not decentralized. Terra initially sourced funding from LUNA token issuance apportioned to Terraform Labs at inception.”
FTT price chart on Bitstamp | Source: FTT/USD on TradingView.com
NYDIG On DeFi Vs. CeFi
Even though they’re clearly not fans of DeFi, NYDIG gives them some credit. “Most DeFi protocols operated as advertised through the volatility this year, minus the ongoing hacks within the ecosystem.” True, but the ongoing hacks are not a minor factor. It’s a billion-dollar problem with no apparent solution available. However, according to NYDIG, this time the problem lies with centralized finance, and those companies “did the rest of the damage” by engaging in these behaviors:
“Poor risk controls, conflicts of interest, excessive leverage, unclear accounting, counterparty risks, and poor management were just some of the factors at play. Furthermore, the use of an equity-like token, FTX Token (FTT), as collateral exacerbated the issue.”
Is More Regulation The Answer?
According to NYDIG, the industry was expecting “improved regulatory clarity for US investors.” However, thanks to the FTX crash and Sam Bankman-Fried’s political lobbying, “the path in DC has grown more complicated. Regulators will now be on their toes and increasingly more likely to use their current authority to enforce existing regulations and possibly issue new ones.”
It is what it is, however one has to take into account that “FTX.com wasn’t even a US entity, which raises the question of how impactful improved US regulations would have been, at least with respect to preventing the specific recent events surrounding FTX.” That’s true, but FTX was in business with several US fully regulated entities. If effective, shouldn’t Silvergate’s AML procedures have detected Sam Bankman-Fried’s shenanigans?
A related question would be, shouldn’t the due diligence of the highly regarded entities that invested in FTX have detected that something was off?
Featured Image by Kaleidico on Unsplash | Charts by TradingView
Bitcoin scarcity rises as bad exchanges take 1.2M BTC out of circulation
Historical data around crypto crashes revealed that 14 crypto exchanges, together, were responsible for the loss of at least 1,195,000 BTC, representing 6.3% of the 19.2 Bitcoin currently in circulation.
South Korea seizes $104M from Terra co-founder suspecting unfair profits
The decision to freeze Shin’s asset worth over $104 million was approved by the Seoul Southern District Court, which was based on a request from the prosecutors.
FTX leadership pressed for information by US subcommittee chairman
A letter by the chair of the Subcommittee on Economic and Consumer Policy demanded the former and current FTX CEOs turn over details of the exchange’s past and current financials.
Grayscale cites security concerns for withholding on-chain proof of reserves
Grayscale shared a letter from Coinbase Custody attesting that each of Grayscale’s crypto products is fully backed, but stopped short of providing the wallet addresses.
