Dear Teroxx Community,
This week we saw a digital asset market that was exposed to a major setback in price levels due to the turmoil surrounding FTX.
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Digital Asset News
The crash and liquidity problems of the third largest crypto exchange FTX shook the crypto world. The failed takeover of FTX by its main competitor Binance and the reports that FTX is alleged to have embezzled customer funds then poured even more oil on the blazing fire. The company said it had decided on Wednesday evening not to pursue the takeover after carefully reviewing the matter. “It is beyond our means,” Binance announced on Nov. 9.Binance’s due diligence revealed that $8 billion would be needed to save the company.
Meanwhile, the managing director of consulting firm Innomagic Robert Schwertner, a.k.a. Crypto Robby, even calls Nov. 9 a “black Wednesday in crypto history.” Uncertainty remains in the market, the blockchain expert says, because now the question is right on the surface whether crypto exchange Binance is really that stable.
“One thing is for sure: in the coming weeks, we can expect high volatility in the crypto market. If Binance and other krpytobörsen skid, Bitcoin and Co. come under heavy pressure. Then prices below 10,000 euros are conceivable.”
In the EU, crypto regulation is already underway. On Oct. 10, the European Parliament’s Economic Affairs Committee adopted the MiCA (Markets in Crypto Assets) Regulation, a result of trilogue negotiations between the EU Council, the European Commission and the European Parliament. The bill aims to create a single regulatory framework for cryptocurrencies across the 27 member states of the European Union. Finally, EU lawmakers still need to conduct legal and linguistic reviews, approve a final version of the draft law and publish MiCA in the Official Journal of the EU, but nothing stands in the way of the new legislation in principle, so it can come into force as early as 2024.
Bitcoin Ethereum and shares of crypto market-related companies such as MicroStrategy have taken a sharp dive following the announcement that influential crypto exchange FTX has now filed for bankruptcy after all and that Sam Bankman-Fried has resigned as chief executive officer (CEO).
Software provider MicroStrategy, which is under the aegis of bitcoin advocate Michael Saylor, has lost a whopping 32.57% in the last five days. The company owns nearly 130,000 BTC in Bitcoin assets, which is why its stock price is closely tied to the market-leading cryptocurrency. In contrast, the Nasdaq stock index gained 0.79% over the same period.
Mining company share prices also suffered losses yesterday, November 11, with the Crypto Mining Stock Index down 0.14%. The big boys were hit the hardest, with Marathon (4.95%), Riot Blockchain (5.74%) and Hive (16.08%) all losing noticeably.
After the bank run on the influential crypto trading platform FTX on November 7, the bitcoin price really collapsed and fell by 21% within a few days. The market-leading bitcoin investment fund GBTC is now also falling victim to this sudden crash.
Yesterday, November 9, Grayscale Bitcoin Trust (GBTC) reported a record discount of 41% after the investment fund’s share price slid to just $8.76. However, the share price has been on a slow slide for pretty much exactly a year since posting an interim record high of $51.47 on November 12, 2021.
The background for the persistent weakness of GBTC is structural problems, because the Bitcoin securitized with the share units cannot simply be derecognized by investors. This results in considerable inefficiencies in price formation in relation to the actual bitcoin price.
This clearly shows how important Teroxx’s chosen path is not to invest in individual projects for the long term, but to trade local opportunities, which at the same time include a quick exit from the positions if the markets are not in a well assessable situation.
Technical term of the week
Proof-of-reserves: Describes a process / statement issued by a trading platform to provide transparent information about capital.
Digital Asset Markt
Bullish outlook: If no further negative news “shakes” the market, we could see a quick recovery to ~$19,000 – $20,000 on positive global markets.
Bearish outlook: Markets could form new and deeper support zones on negative world markets.