This Week in Coins: Has the Worst of the FTX Damage Passed? Bitcoin and Ethereum Stable
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| This week in Coins - Mitchell Preffer created the illustration for Decrypt. |
This week's cryptocurrency prices were a mixed bag. Only a few of the top 20 currencies by market cap, as of Saturday morning, had a negative seven-day performance. That raises the question, have the terrible consequences of the recent FTX accident subsided?
Since seven days ago, Bitcoin (BTC) has remained essentially constant. According to data from CoinGecko, it is now trading at $16,592, down 0.30 percent from a week ago. It hit its lowest point in two years earlier this week when it fell to $15,649.
Ethereum (ETH) performed similarly. The second-most popular digital asset in the world gained 0.60% over the previous week and is now trading at $1,219 at the start of the weekend. It has also gained 2.5% over the previous day. On Monday, it fell 7% after the hacker who emptied the FTX accounts sold a sizable amount of the stolen ETH for Bitcoin.
On Wednesday, when the Federal Reserve issued the minutes from its meeting in November, both market leaders briefly recovered. The good news is that moving forward, the U.S. central bank reportedly intends to raise interest rates gradually. This marks the conclusion of a series of increases that was the sharpest since 1994 and included three hikes this year, each of 75 basis points.
Holders of Solana (SOL) escaped more losses this week. The No. 14 coin, which was formerly in the top 10, increased this week by 3.3% to reach $14.08, ending its freefall. Litecoin (LTC) flipped SOL on Tuesday.
The biggest victim of FTX's demise among the top cryptocurrencies was Solana. Sam Bankman-Fried, the disgraced creator of FTX, was one of Solana's first backers and also held a significant amount of SOL through his other cryptocurrency business, Alameda Research. The infamous hedge fund's second-largest coin holding was SOL.
Many popular cryptocurrencies had marginal losses, but some experienced significant rallies. Litecoin (LTC) gained a staggering 20% and is now worth $75, while Binance Coin (BNB) increased 12% to $301 and Chainlink (LINK) increased 9% to trade for $6.80.
Even said, the good news for crypto enthusiasts might not last long. Institutional players are shorting cryptocurrency in historic amounts, according to a study issued on Monday by the cryptocurrency trading firm CoinShares. The report states that short product inflows made up 75% of all inflows, which was the highest percentage ever.
Is Genesis going bankrupt next?
This week, doomsayers speculated that cryptocurrency prime broker Genesis would be the next prominent bankruptcy after FTX.
Due to Genesis's derivatives business's $175 million exposure to FTX last week, the company halted withdrawals on its lending side. The corporation allegedly requested a $1 billion bailout at that point but was denied.
By last Monday, there were rumors that Genesis might file for bankruptcy.
At the time, a corporate spokesman stated to Decrypt: "We don't have any immediate plans to declare bankruptcy. Our intention is to reach a mutually agreeable solution to the current predicament without declaring bankruptcy. Genesis is still having fruitful discussions with its creditors."
The popular cryptocurrency exchange Gemini's business was also impacted by the revelation. When consumers attempted to withdraw money from Gemini's Earn product, which was partially supported by money borrowed from Genesis, they were forewarned of lengthy delays last week.
The exchange tweeted on Tuesday that it was still "working to reach a solution with Genesis and its parent business Digital Currency Group (DCG)." Genesis and DCG "remain dedicated to exploring every viable alternative," the notification stated, adding any money kept on Gemini's Exchange and Custody services are backed 1:1. Affected customers are given "top attention" according to the announcement.
The same day, despite owing Genesis $575 million, Digital Currency Group, the company that controls Genesis, had to reassure investors that there is no immediate threat to the company.
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