The latest moves in crypto markets, in context By Jamie Crawley, CoinDesk Reporter Was this newsletter forwarded to you? Sign up here. |
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Anything but just another Tuesday. Here’s what’s going on. |
- FTX’s native token FTT slides 20% as liquidity questions continue.
- More FTT fallout: BitDAO asks for proof of funds from Alameda.
- Riot Blockchain misses earnings estimates, subduing RIOT’s price.
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The price of FTX native token FTT dropped more than 20% as fears over the financial position of Sam Bankman-Fried’s exchange and his trading firm Alameda Research escalated. Investors appear to be concerned about FTX’s liquidity, with the exchange seeing over $450 million in stablecoins departing its platform in the last week. FTX has also hiked interest rates on its lending platform, now paying 10% for USDT compared to 5% prior to the news, reported by CoinDesk, that FTT makes up a significant part of Alameda’s finances. At the time of writing FTT is priced at $17.86, down 20.75% on the day. |
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BitDAO, one of the largest decentralized autonomous organizations (DAOs) has aired its concerns about Alameda, asking for proof of funds from the trading firm. Alameda bought 100 million BIT tokens a year ago with 3.36 million FTT, with the requirement that Alameda holds the BIT for at least three years. The BitDAO community appears concerned that Alameda has liquidated other token holdings to defend FTT. Bitcoin miner Riot Blockchain’s Q3 earnings fell short of analysts’ estimates. On average, analysts were predicting $56.3 million in revenue, but the firm reported just $46.3 million. The figure compared to $72.9 million for Q2 and $64.8 million in Q3 2021 – in case you needed further confirmation that crypto winter has set in. A silver lining: Riot still has $255 million in cash and 6,766 BTC on hand, so the company appears well stocked to weather the cold. RIOT shares are down 4.7% in pre-market trading. |
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Market Insight: FTT Drags Down BTC, ETH |
With FTX native token FTT sinking 20% to below $17, bitcoin and ether were also in the red to the tune of around 5% and 6% respectively. Options data suggests fears that the FTX-Alameda axis’ position could turn into another Terra LUNA collapse earlier this year, which rocked the crypto industry. The skew between bullish call options and bearish put options has dropped to –12%, the lowest since late September, according to digital assets data provider Amberdata. Ether’s is lower still at –20%. Call options give the buyer the right to purchase an asset for a predetermined price by a certain date, while put options work the same but with selling. A negative call-put correlation therefore demonstrates bearish sentiment among traders. Read the full story by Omkar Godbole. |
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Chart of the Day: FTT’s Liquidity Drying Up |
- The chart by Kaiko shows FTT's liquidity on major exchanges, measured by market depth within 1% of the mid price (the average of the current bid and ask prices being quoted) since Nov. 5.
- Liquidity declined ahead of FTT's early Asian session slide to a 21-month low of $15, with Bitfinex's 1% bid depth crashing from nearly $2 million to under $250. Huobi's tanked from $1.5 million to under $3,000.
- Market depth refers to the degree of an asset's resilience to large buy and sell orders. The greater the bid depth, the more liquid the market is and vice versa.
- The 1% bid depth refers to cumulative quantity of bids and asks within 1% from the mid price.
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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