Bitcoin: China causes BTC to slip – 2-year low in sight

Bitcoin: China causes BTC to slip - 2-year low in sight
© Reuters

Investing.com – Like most “risk” assets, is starting this new week in the red, with a recent low of around $16,050, while the cryptocurrency spent most of yesterday around the $16,500 mark.

At the time of writing, is thus showing a drop of almost 2% since yesterday, to $16,200, and remains stable over a week.

As is the case with stock markets, this weakness in Bitcoin is linked to the risk-averse sentiment hovering over global markets on Monday, as rare protests in China worry investors around the world.

Unrest in China hurts Bitcoin

Chinese civilians clashed with police in several cities, including Beijing and Shanghai, over the weekend as public discontent with the zero COVID policy reached a fever pitch after a deadly fire in western China last week.

The clashes also come after riots broke out in Zhengzhou following the government’s reimposition of a lockdown in the city.

One risk is that the unrest in China could lead to further constraints in the global supply chain, resulting in a tougher fight against inflation and thus the risk of central banks raising rates more than currently expected, which would be detrimental to cryptocurrencies as well as all speculative assets.

Proportion of Bitcoin on exchange platforms at 4-year low

In more Bitcoin-specific news, and more positive for the cryptocurrency, we note that data from blockchain data analysis company Santiment shows that the amount of Bitcoin present on crypto platforms has fallen below the threshold of 6.95% of the total supply.

This is the first time since November 2018 that this figure has fallen below 7%. This is a positive factor in the long term, as investors’ retention of their bitcoins outside of platforms suggests a long-term holding intention. In contrast, an increase in the amount of bitcoin present on platforms is interpreted as an imminent intention to sell.

Santiment noted that the trend of taking Bitcoins off of exchange platforms and storing them on crypto wallets has been around since March 2020, but was significantly accelerated by the FTX bankruptcy case.

Technical thresholds to watch for on Bitcoin

Finally, from a charting perspective, last week’s low of $15,500 and the psychological threshold of $15,000 will be the first potential supports to consider if Bitcoin continues to fall below $16,000. Note that a drop below $15,500 would put the crypto back on a 2-year low.

On the upside, the short-term charts allow us to identify a first intraday resistance around $16,600, before the psychological threshold of $17,000.

What is the progress of CBDC (eAUD) in Australia?

What is the progress of CBDC (eAUD) in Australia?
What is the progress of CBDC (eAUD) in Australia?

Highlights

  • Australia and many other countries are contemplating the launch and use of CBDCs, with or without blockchain
  • Australia’s central bank released a white paper in this regard in September 2022, which shines a light on the technology that could be used
  • The pilot, according to the white paper, can begin from January next year, and by mid-2023, its findings could be published

Are central bank digital currencies (CBDCs) and cryptocurrencies like (BTC) and (ETH) the same thing? The answer to this is an emphatic ‘no’, simply because central banks like the Reserve Bank of Australia (RBA) have no role in regulating cryptocurrencies. Any cryptocurrency is launched by a specific project, usually based on blockchain technology. For example, BTC was launched by the Bitcoin blockchain project, and ETH by . Central banks do not control either the issuance or circulation of cryptocurrencies.

The term CBDC, however, has ‘central bank’ in its name. Here, it is expected that the fiat currency of any country, for example, the (AUD), would be infused with some new features and released as a digital-only currency for regular payments. However, there has not been much progress in this regard. China’s e-RMB is in its pilot phase, and a full launch is not expected soon. Where does Australia stand with respect to CBDC? Let us explore.

Australia’s CBDC

Now that the RBA has released the white paper of its CBDC project, things have become quite clear. According to this paper, released almost two months back, the announcement on ‘selected use cases’ for the pilot eAUD is due in December 2022. This can be a surprise because most other developed economies, including the US, have not shown such eagerness in their CBDC projects. The Digital Finance CRC (DFCRC) and the RBA have joined hands on the CBDC research project, and the white paper also suggests that regulators – the ASIC and AUSTRAC – would also be involved.

The most interesting aspect is the mention of Ethereum. Ethereum is a blockchain service provider which has supported the release of many ERC-20 tokens on its platform. The RBA’s CBDC could use Ethereum’s Quorum blockchain, which is an enterprise-level, permissioned chain. This can help in restricting the access to the network, unlike in permissionless blockchains like Bitcoin. The RBA has also said that the eAUD’s ledger would be ‘private’, with ‘no KYC data’.

Data provided by CoinMarketCap.com

Timeline

For now, details only on Australia’s CBDC pilot launch have been provided in the white paper. The pilot would be conducted for ‘selected use cases’ between January and April next year. By mid-2023, the findings of the project would be published in a report. Interestingly, it is also mentioned in the white paper that the eventual CBDC of the country would not necessarily be based on blockchain and/or Ethereum. One thing is certain unlike cryptos like Bitcoin, which have very volatile prices, CBDC prices would come with fiat currency-like certainty.

Bottom line

There is definite work being done with regard to a CBDC in Australia. The September white paper has even provided clear timelines for the launch and completion of the pilot phase. For now, Ethereum’s permissioned blockchain is the platform of choice. However, it can change when the eventual design of Australia’s eAUD is finalised.

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Bitcoin price struggles to rebound as Binance launches $1 billion recovery fund

Bitcoin price struggles to rebound as Binance launches $1 billion recovery fund
© Reuters.

By Senad Karaahmetovic 

(BTC) price is trading in the red Thursday despite Binance’s efforts to calm markets down after the spectacular collapse of the U.S.-based cryptocurrency exchange FTX.

Binance, the world’s largest cryptocurrency exchange, said yesterday that it established the Industry Recovery Initiative (IRI) to support the embattled crypto industry after the FTX collapse.

Binance committed $1 billion to IRI “with an intent to ramp up that amount to USD 2 billion in the near future if the need arises,” the exchange said in a blog post. The company added that it received around 150 applications from companies interested to support the IRI, including Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group.

“The mandate of this new effort is to support the most promising and highest quality companies and projects built by the best technologists and entrepreneurs that, through no fault of their own, are facing significant, short-term, financial difficulties. What makes this initiative unique is the collaborative approach to restoring confidence in Web3,” it is further stated in a blog post.

Still, Bitcoin price is trading near 2-year lows after failing to stage a relief rally on the back of the IRI launch. On Monday, the BTC price hit $15,460 – the lowest level seen since November 2020.

Given that $18,000 offered major support to Bitcoin, this zone is now likely to act as resistance and cap any attempt to stage a recovery. On the downside, the $13,900 offers some degree of support to embattled bulls.

Morgan Stanley sees higher odds of a crypto exit for SoFi after lawmaker letters

Morgan Stanley sees higher odds of a crypto exit for SoFi after lawmaker letters
© Reuters.

By Sam Boughedda

Reacting to news that lawmakers have called for a regulatory review of SoFi Technologies Inc. (NASDAQ:) crypto activities, Morgan Stanley analysts said the company is now a Bank Holding Company, and it cannot directly generally engage in crypto activities.

The analysts, who have an Equal Weight rating and $7 price target on SoFi, explained today that four Democratic lawmakers on the Senate Banking Committee issued letters to SoFi and banking regulators (the Fed, FDIC, and OCC), calling for a review of SOFI’s crypto trading activities.

SoFi shares declined more than 4% following the news.

However, the analysts added that while bank holding companies cannot directly generally engage in crypto activities, following the bank charter approval in early 2022, SoFi was allowed to continue offering crypto to retail customers for two years (with the possibility of 3 one-year extensions thereafter), as long as it did not expand its crypto activities.

“In today’s letters, lawmakers raised concerns about: 1) SOFI’s apparent expansion of crypto services despite the agreement not to do so (by allowing deposit customers to invest a portion of direct deposits into crypto), 2) capital requirements for SOFI’s crypto activities, and 3) investor protection concerns related to at least one “high-risk” token offered by SOFI,” the analysts wrote.

They added: “Later in the day, SOFI released an 8K. The company stated it takes its regulatory and compliance commitments seriously, including its non-bank operations within the digital assets space. SOFI also noted it believes it has been fully compliant with the mandates of the bank license and all applicable laws, and maintains consistent, constructive dialogue with federal and state regulators.”

They said that specific point may be “intended to effectively argue that regulators were in fact aware of SOFI’s plans.”

“Crypto a very small piece of SOFI’s revenues, but we see higher odds of 1) crypto exit and 2) potential regulatory scrutiny on the bank. Crypto is an immaterial part of SOFI’s revenue base today, embedded within the brokerage line which is less than 1% of SOFI’s total revenues (or as high as 3% back in 2Q21 when crypto valuations and trading volumes were much higher). Before today we believe investors were already discounting lack of growth in SOFI’s crypto revenues from here, but not a complete exit of the business. Today’s news would seem to increase odds of an eventual exit from crypto, such as when the conformance period ends in Jan 2024, or perhaps even sooner,” the analysts concluded.

Bitcoin gains as Genesis plays down bankruptcy risk report

Bitcoin gains as Genesis plays down bankruptcy risk report
© Reuters

By Geoffrey Smith 

Investing.com — prices climbed back above $16,000 by mid-morning in New York on Tuesday, after brokerage Genesis Capital played down a report suggesting that it was at risk of becoming the next domino to be knocked over by FTX’s collapse. 

Bloomberg had reported on Wednesday that the brokerage has been looking – so far without success – for up to $1 billion to fill a hole in the balance sheet of its lending unit left by the collapse of FTX. That’s a much larger sum than the $175 million that it admitted to having trapped in FTX’s system at the moment FTX collapsed. Data from Arkham Intelligence suggest that Genesis had received over $1B in – the native token of the FTX network – over the last three months, which are now effectively worthless.

Bloomberg cited a prospective term sheet for the emergency loan that mentioned the risk of bankruptcy if it failed to secure financing. Genesis Capital subsequently eased the pressure on its liquidity unilaterally by suspending client withdrawals, a measure that remains in place. 

“Our goal is to resolve the current situation consensually without the need for any bankruptcy filing,” Reuters quoted a Genesis spokesperson as saying late on Monday, adding that it continues to have conversations with creditors.

The risk of contagion from FTX has been largely responsible for the decline in most crypto assets in recent days, as investors have moved to park their funds in fiat currency to sit out the turmoil. The market cap of and other stablecoins, a rough proxy for overall changes in exposure to crypto, has been declining steadily over the last 10 days. 

How much can be rescued from the wreck of FTX is still far from clear, but there were crumbs of comfort for its creditors on Tuesday as the Financial Times reported that its bankruptcy administrators had located more cash on the accounts of its subsidiaries, bringing the assets discovered so far to over $1.24B. 

Edgar Mosley of Alvarez & Marsal, a consultancy firm advising FTX, said that the sum includes around $400M at accounts related to Alameda Research, the hedge fund owned by FTX founder Sam Bankman-Fried, and $172M at FTX’s Japan arm.

By 12:05 ET (17:05 GMT), Bitcoin was up 0.9% at $16,180, near its intraday high. 

Signs of opportunistic dip-buying were also visible in the stock market, where SEC disclosures showed that the ARK Innovation ETF (NYSE:) of Cathie Wood added to its holdings both of crypto exchange Coinbase (NASDAQ:) and of Grayscale Bitcoin Trust. The latter was trading at its biggest-ever discount to the net asset value of its holdings on Monday, a sign of serious investor doubt about its balance sheet. Grayscale, a unit of Barry Silbert’s Digital Currency Group, maintains its assets are fully backed. 

Litecoin Climbs 10.29% In Bullish Trade

Litecoin Climbs 10.29% In Bullish Trade
Litecoin Climbs 10.29% In Bullish Trade

Investing.com – was trading at $66.360 by 00:08 (13:08 GMT) on the Investing.com Index on Tuesday, up 10.29% on the day. It was the largest one-day percentage gain since Thursday, November 10, 2022.

The move upwards pushed Litecoin’s market cap up to $4.528B, or 0.58% of the total cryptocurrency market cap. At its highest, Litecoin’s market cap was $25.609B.

Litecoin had traded in a range of $61.220 to $66.360 in the previous twenty-four hours.

Over the past seven days, Litecoin has seen a rise in value, as it gained 7.97%. The volume of Litecoin traded in the twenty-four hours to time of writing was $807.772M or 1.29% of the total volume of all cryptocurrencies. It has traded in a range of $56.8200 to $66.3600 in the past 7 days.

At its current price, Litecoin is still down 84.20% from its all-time high of $420.00 set on Tuesday, December 12, 2017.

Elsewhere in cryptocurrency trading

was last at $15,883.8 on the Investing.com Index, down 1.39% on the day.

was trading at $1,104.76 on the Investing.com Index, a loss of 1.92%.

Bitcoin’s market cap was last at $303.787B or 38.66% of the total cryptocurrency market cap, while Ethereum’s market cap totaled $133.999B or 17.05% of the total cryptocurrency market value.

Bitcoin slumps below $16k as lender Genesis warns of bankruptcy

Bitcoin slumps below $16k as lender Genesis warns of bankruptcy
© Reuters

By Ambar Warrick 

Investing.com– Bitcoin and the broader cryptocurrency market were hit with renewed selling pressure on Tuesday after crypto-focused investment bank Genesis flagged a potential bankruptcy risk due to its exposure to recently insolvent exchange FTX.

The sank 3% to $15,787.4 by 18:47 ET (23:4 7 GMT), having slumped as low as $15,504- a fresh two year low- earlier in the day. World no. 2 crypto fell 3% to $1,108.81, bringing its total losses this month to nearly 30%. 

In the latest casualty of the crypto crash this year, reports said Genesis Global Trading, one of the largest institutional lenders in the space, warned that it could face a potential bankruptcy if it is unable to raise new funding. The bank is reportedly seeking new funds of up to $1 billion, but is yet to find a source.

But the firm said it has no plans to file bankruptcy “imminently.” It has reportedly approached major exchange Binance and private equity firm Apollo Global Management (NYSE:) for funds. 

The report comes just a week after Genesis’ lending arm suspended withdrawals, as concerns over its exposure to FTX triggered a bank run.

Reports earlier this year showed that Genesis had several outstanding loans to Alameda Research- the crypto trading desk that was linked closely to the FTX bankruptcy. It had also reportedly lost funds through its exposure to hedge fund Three Arrows Capital, which went insolvent earlier this year. 

Fellow crypto lender BlockFi filed for bankruptcy earlier this month, while several other smaller players suspended withdrawals or halted certain lending and staking services, as contagion from FTX’s collapse continued to spread. 

Amid severely souring sentiment towards the space, total crypto capitalization sank below $800 billion, with several altcoins seeing extended losses. fell 3.4%, while memecoin shed 2.1%.

Recent data showed that institutional investors are piling heavily into products shorting crypto in anticipation of more losses. The full impact of the FTX bankruptcy is also yet to be felt, given that the exchange was at one point the second-largest in the space. 

 

After a prescient call on FTX, investors pile into Marc Cohodes’ long Overstock.com

After a prescient call on FTX, investors pile into Marc Cohodes' long Overstock.com
© Reuters

By Investing.com Staff

Overstock.com (NASDAQ:) is notably higher for the second straight session after short-seller Marc Cohodes pounded the table long on the stock in an interview with HedgeyeTV on Friday.

While Cohodes’ bullishness on Overstock is well known, his recent prescient call on the collapse of FTX has investors taking a second look at the investment prowess of the legendary short seller. Cohodes was calling out FTX and its founder Sam Bankman-Fried weeks before the epic collapse of the crypto brokerage and trading firm.

In his bullish call on Overstock, the investor highlighted that part of his bullish thesis is based on the fact that two of the company’s competitors, Wayfair (NYSE:) and Helen of Troy Ltd (NASDAQ:), are over-levered. As the two debt-laden companies pull back due to economic weakness, Overstock, which has no debt, can pick up market share. Cohodes is short both Wayfair and Helen of Troy.

Cohodes also said, with a market cap of just $1 billion, it wouldn’t be a surprise for a company like Target (NYSE:) to one day just buy out Overstock for its discount retail business.

In addition to the discount retail business, which is admittedly seeing a slowdown right now, Cohodes is very bullish on Overstock’s tZERO business.

With other crypto trading firms losing investors’ faith in the wake of FTX, tZERO stands to take share. It can also tokenize things like the NFL in the future. Cohodes was very bullish on the fact that former Intercontinental Exchange (NYSE:) (IC) executive David Goone took over as CEO of tZERO earlier this year. The investor highlighted that Goone gave up his $5 million annual salary at ICE for compensation mostly made up of tZERO equity. ICE has also become a significant minority shareholder of tZERO.

Overall, Cohodes thinks tZERO could itself become worth $5-$15B.

In addition to the Cohodes call on Overstock, shares are benefiting today from a couple of insider buys from directors Joseph Tabacoo Jr. and Johathan Johnson III.

Further to his bullish call on Overstock.com, Cohodes was also bullish on Camping World Holdings Inc (NYSE:). He notes the dividend of CWH is yielding over 9%, so you get paid while waiting for the next upcycle. He said Camping World’s CEO, Marcus Lemonis, is the best CEO and is a cut-throat operator.

Crypto struggles as concerns about asset safety swirl post-FTX

Crypto struggles as concerns about asset safety swirl post-FTX
© Reuters

By Geoffrey Smith

Investing.com — Cryptocurrency prices weakened again on Monday as fears over deposit safety, following the collapse of exchange FTX, continued to prompt withdrawals and flight to the relative safety of fiat currency.

By 10:14 ET (15:14 GMT), was down 2.5% at $16,141, having earlier dipped below $16,000 again amid a general loss of confidence in the crypto space. , meanwhile, traded down 3.2% at $1,138. Altcoins, which have suffered from big drops in liquidity since the loss of market-making activity by FTX’s affiliated hedge fund Alameda Research, were generally down by more, with down 6.7% and down another 7.1%.

The market cap of the world’s biggest stablecoin – a rough proxy for net flows into and out of the crypto space – fell meanwhile to a three-month low of $65.8 billion.

Overnight, there had been fresh evidence of the wholesale loss of governance and risk controls at FTX, as part of the token haul drained from FTX’s accounts by a mystery exploiter was moved to other blockchains in an attempt to get them beyond the reach the people administering Sam Bankman-Fried’s defunct empire.

According to blockchain analysis by Arkham Intelligence, the hacker transferred 15,000 ether – worth some $17M – into , a token on the Ethereum blockchain that can be redeemed for Bitcoin. Observers noted that a number of developers behind the REN network had joined Alameda in 2021, and that the move strengthened suspicions that the exploiter was a former company insider.

The amount transferred late on Sunday was a mere fraction of the total sum – equivalent to over $600M – that went missing from FTX-affiliated wallets within two days of it filing for chapter 11 bankruptcy in the U.S. Arkham analysts noted that “the attacker is limited by the liquidity of renBTC, so cannot bridge lots at once.”

FTX had over 1M creditors – including depositors – at the time of its collapse, and initial filings from its bankruptcy procedure have indicated that its administrators face a gargantuan task in making them whole. New CEO John J. Ray said in his ‘day 1’ filing that he had secured less than $1B in assets, while estimates of its liabilities run to $10B or more.

While FTX and Alameda appear to have lost most of their money on altcoins, the fear of contagion has reached even the most established digital currencies, reflecting the inability, or unwillingness, of some of the sector’s biggest names to provide proof of their assets.

Grayscale Bitcoin Trust (OTC:), the world’s largest publicly-traded Bitcoin fund, refused to issue a cryptographic ‘proof-of-reserves’ statement last week citing “security concerns”. The market has responded by applying a bigger discount than ever – over 40% – to the assets Grayscale claims to hold not just in its Bitcoin fund, but also in its Ethereum fund.

Grayscale says it holds around 635,000 Bitcoin in its fund, worth over $10B. Any run on the fund comparable to previous runs seen this year on tokens such as the Terra/Luna stablecoin or FTX’s native token FTT would likely result in sharp declines for the world’s biggest digital asset.

XRP Falls 10.24% In Selloff

 

Investing.com – was trading at $0.35046 by 13:12 (02:12 GMT) on the Investing.com Index on Monday, up 10.24% on the day. It was the largest one-day percentage gain since Wednesday, November 9, 2022.

The move upwards pushed XRP’s market cap up to $17.88827B, or 2.23% of the total cryptocurrency market cap. At its highest, XRP’s market cap was $83.44071B.

XRP had traded in a range of $0.35039 to $0.36200 in the previous twenty-four hours.

Over the past seven days, XRP has seen a rise in value, as it gained 7.13%. The volume of XRP traded in the twenty-four hours to time of writing was $1.28123B or 2.42% of the total volume of all cryptocurrencies. It has traded in a range of $0.3504 to $0.3966 in the past 7 days.

At its current price, XRP is still down 89.35% from its all-time high of $3.29 set on Thursday, January 4, 2018.

Elsewhere in cryptocurrency trading

was last at $15,998.5 on the Investing.com Index, down 4.10% on the day.

was trading at $1,115.99 on the Investing.com Index, a loss of 8.41%.

Bitcoin’s market cap was last at $311.11618B or 38.84% of the total cryptocurrency market cap, while Ethereum’s market cap totaled $138.36584B or 17.27% of the total cryptocurrency market value.