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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Well, what a week. Here’s what you need to know in crypto today. |
- Crypto lender BlockFi pauses withdrawals, saying it can't conduct business normally.
- FTX Australia calls in administrators.
- Other FTX subsidiaries have slowly begun to resume withdrawals.
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Crypto lender BlockFi has paused withdrawals, saying it cannot conduct business normally in the wake of FTX’s collapse. The move comes even though two days ago Chief Operating Officer Flori Marquez said that BlockFi was “fully operational” and that it was an independent entity. In July, FTX US agreed to provide BlockFi a $400 million credit facility, which also gave the crypto exchange the right to acquire BlockFi. That deal, of course, is now in doubt. |
Beleaguered crypto exchange FTX’s Australian arm has called in administrators to examine whether it has enough assets to pay back its customers. FTX Australia’s directors handed the reins to administrators from KordaMentha, an advisory and investment firm, after FTX CEO Sam Bankman-Fried didn’t attend a board meeting, according to a report by Australian Financial Review. All eyes will turn to FTX’s other regional subsidiaries in the days ahead, as the crypto empire’s collapse continues. Bankman-Fried has warned that although FTX US is “100% liquid”, it might halt trading in the coming days and so users should close their positions. FTX’s subsidiaries have slowly begun to reopen withdrawals. FTX Japan said it had resumed yen withdrawals, while FTX Turkey announced it was working on sending lira balances to its customers. Japan’s regulator had ordered FTX to stop accepting new customers and allow only current customers to close their existing positions and not open new ones. FTX’s regional subsidiaries are able to access local payment rails, and so traders aren’t reliant on the SWIFT network for deposits or withdrawals. Withdrawals on FTX International remained paused. |
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Market Insight: Ether Turns Deflationary |
Ether has turned deflationary for the first time since the Merge. The world’s second-largest crypto is now burning more ether than what is being minted, according to data from ultrasound.money. A negative inflation rate means ether’s net supply has declined by 5,598 since the software upgrade in September which saw the Ethereum blockchain move to a proof-of-stake mechanism. That put ether on the path to becoming a deflationary asset, causing a sharp drop in the newly minted ETH. That more than 13,000 ETH have burned in the last three days alone is an indication that the burn rate depends heavily on the Ethereum network’s usage, which has surged this week, possibly because of market volatility caused by FTX’s collapse. Turning deflationary for the first time is a sign of ether’s bullish prospects, once the FTX-induced panic calms down. At the time of writing, ETH was priced at $1,267, up around 8% in the last 24 hours, according to CoinDesk data. Read the full story by Omkar Godbole. |
- The Dollar Index (DXY) has dropped to a three-month low. Markets have been offloading dollar bullish positions since Thursday's softer-than-expected U.S. inflation release.
- The weakness in the greenback may provide a tailwind to risky assets, including cryptocurrencies.
- Some observers, including ING, remain bullish on the dollar.
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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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