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It looks like the worst is over for now – although the CoinShares report also suggests that institutional players are catching up with short cryptocurrencies.
This week has been one of highs and lows for cryptocurrencies, however, as of Saturday morning, only a few of the top 20 coins by market cap were NOT locked up for the past seven days. This begs the question: has the brutal impact of the recent FTX disaster diminished?
Bitcoin & Ethereum show strength
Bitcoin (BTC) is virtually unchanged from seven days ago. It’s down 0.30% from a week ago, according to CoinGecko data, and is currently trading at $16,592. Earlier in the week, it fell to $15,649, the lowest level in two years.
Ethereum (ETH) did about the same. The world’s second most popular digital asset is up 0.60% over the past week to trade at $1,219 at the start of the weekend. In the last 24 hours it is up 2.5%. It slipped 7% last Monday when the hacker who emptied the FTX wallet traded a significant portion of the stolen ETH for BTC.
Both leaders gained some ground on Wednesday when the Federal Reserve released minutes from its November meeting. The good news is that the US Federal Reserve plans to raise interest rates less sharply in the future. That signals the end of a cycle of rate hikes – three so far this year, each of 75 basis points. The strongest since 1994.
Holders of Solana (SOL) avoided another week of losses. Coin #14 (previously top 10 coin) is no longer free-falling. SOL is up 3.3% for the week at $14.08.
Solana – the biggest loser
Among the leading cryptocurrencies, Solana was the hardest hit by the FTX disaster. Sam Bankman-Fried, the disgraced founder of FTX, was one of Solana’s early backers and also owned a large stash of SOL through his other crypto company, Alameda Research. SOL was the disgraced hedge fund’s second largest coin holding.
While many leading cryptocurrencies have seen losses, some have also seen significant gains. Chainlink (LINK) is up 9% and is trading for $6.80, Litecoin (LTC) is up a whopping 20% and is currently trading at $75. On the other hand, Binance Coin (BNB) is up 12% to $301.
But the good news for crypto fans may be short-lived. On Monday, crypto trading group CoinShares published a report that institutional players are shorting cryptocurrencies in record numbers. According to the report, inflows from short products account for 75% of total inflows – a record high.
Will Genesis be the next bankruptcy?
The eyes of the fear-mongers turned to leading crypto broker Genesis this week – possibly the next high-profile bankruptcy after FTX.
Last week, the company suspended withdrawals on the credit side because Genesis’ derivatives business had a $175 million exposure to FTX. The company reportedly asked for a $1 billion bailout afterward—to no avail.
Reports surfaced last Monday that Genesis may be facing bankruptcy.
Company representative at the time:
“We have no plans to file for bankruptcy anytime soon. Our goal is to resolve the current situation amicably without having to file for bankruptcy. Genesis remains in constructive discussions with creditors.”
The news also affected the business of popular crypto exchange Gemini. Last week, Gemini warned of significant delays for users trying to withdraw their funds from their Earn product, which was serviced in part with funds borrowed from Genesis.
On Tuesday, the exchange tweeted that it continues to “work with Genesis and its parent company Digital Currency Group (DCG) to find a solution.” The announcement said that affected customers are a “high priority,” that Genesis and DCG “continue to evaluate all possible options,” and that all funds held on exchange services are secured and kept Gemini 1:1.
On the same day, the Digital Currency Group, which owns Genesis, had to reassure investors that despite Genesis’ $575 million in debt, the conglomerate is not under immediate threat.
Text proof: Decrypt
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