The most important news of the week in the crypto world!
Nov 19, 2022
A pretty hectic week the last one we just lived. Here I share with you some of the news that, in my humble opinion, I consider the most important of the week.
1. CEO of Binance - liquidity fund
The CEO of Binance announced the creation of a liquidity fund, aimed at the recovery of the crypto sector and reducing the negative effects of the fall of FTX. According to CZ, the fund aims to reduce the cascading negative effects of FTX and recover the industry, helping all those projects that, despite being strong, are suffering from a liquidity crisis.
The Binance CEO also reached out to other players in the crypto industry who want to participate and invest in the future of the sector. CZ's words have had a positive impact, especially for BTC, which recovered almost $1 000 in price on November 14 in the next few hours.
2. Michael Saylor - fall of FTX will be positive for bitcoin
On the other hand, Michael Saylor explained in a recent interview for CNBC that the fall of FTX will be positive for bitcoin in the long term. Saylor believes that Bitcoin is trapped in a dysfunctional relationship with the rest of the cryptocurrency ecosystem. He further explained that the collapse of FTX was due to a lack of transparency, something that affects most players in the sector but not Bitcoin. The CEO of MicroStrategy believes that the fall of FTX will accelerate the implementation of regulation in the sector and that only a few assets will be able to comply with it, bitcoin among them. Saylor also predicts that the next stage of cryptocurrencies will be led by institutions and large players that will play a central role in driving development.
Do you think that the fall of FTX can be beneficial for the future of Bitcoin?
3. Elon Musk - Winter (for BTC) is coming
Elon Musk, the owner of Twitter and CEO of Tesla, responded on Twitter to investor Jason's doubts about the future of Bitcoin.
Musk responded to his tweet by assuring that bitcoin will get through this crisis, but that it could be a long winter. With this phrase, he means that although bitcoin will overcome this bump and the general price of the crypto market will emerge strengthened, it could take a long time to recover. Jason was reflecting on the price of Bitcoin a year ago, when it reached its all-time high of $69,000, and is now struggling to hold the $16,000 level. Musk remains bullish on Bitcoin, which is not surprising since Tesla has over 10,700 BTC on its balance sheet, priced at around $178.7 million right now, outrageous.
What do you think about this topic? Where do you think the price of BTC and therefore BCH will be in a year?
4. BlockFi - bankruptcy?
BlockFi has sent an official update to all of its clients explaining that they have significant exposure to FTX and its affiliated companies. Specifically, they refer to Alameda's obligations, assets held in FTX, and an alleged line of credit with FTX US of more than 400 million dollars. The statement also notes that work is being done around the clock to evaluate all possible options. According to information from The Wall Street Journal, BlockFi could be considering filing for bankruptcy even though it claims it has enough funds to cover its clients. BlockFi may be planning to lay off some workers as it prepares to sign Chapter 11 of the US Bankruptcy Code, following in the footsteps of FTX which signed it on Friday, November 11.
Other platforms like SALT have also been affected by the FTX crash and have announced that they are stopping withdrawals and deposits on the platform with immediate effect. In an email sent to their clients, those responsible for Salt explained that until they are able to determine the exact scope of FTX's impact, they will pause withdrawals and deposits on the platform. Salt explains that this is not a bankruptcy notice, but a pause to deal with the consequences of FTX and confirm that neither party has additional risks, thus avoiding bankruptcy.
5. Nayib Bukele - Keep buying the dip
The president of El Salvador, Nayib Bukele, is determined to take advantage of the fall in the price of BTC, caused by the implosion of FTX and has explained on Twitter that they will buy one BTC every day from November 18.
A little later Justin Sun, CEO of TRON, published another tweet in which he stated that they were going to copy Bukele's strategy and that they will also buy one BTC every day.
This year El Salvador celebrated the first anniversary of the Bitcoin Law, which legalized crypto as a legal tender in the country. At this time, the Central American country has already accumulated a total of 2 381 BTC.
The country was caught up in the FTX controversy last week when it was hinted that Bitcoin holdings could be on the exchange. However, Bukele was quick to deny these claims during a conversation with the CEO of Binance.
6. NANSEN report - FTX and Alameda exposed!
A report published by NANSEN, a blockchain analysis company, FTX and Alameda Research would have been in cahoots from the beginning, as both entities were created by Sam.
See the full report: https://www.nansen.ai/research/blockchain-analysis-the-collapse-of-alameda-and-ftx
NANSEN identifies several portfolio addresses that position Alameda as one of FTX's liquidity providers. Since May 2019, of the initial $350 million of $FTT, $27 million ended up in Alameda's portfolio. Furthermore, only two firms controlled 86% of the combined supply, which means that the free circulation of FTT was minimal, which made the token price very vulnerable to manipulation. When in 2021 the $FFT reached its all-time high of $84, neither FTX nor Alameda could sell their positions without causing misgivings in the market, so they chose to use their positions as collateral to request loans. The problems began when Alameda and FTX began to reinvest the loans into their own $FTT tokens, which led to higher leverage. In June 2022, when the current crisis in the crypto market began, Alameda faced a liquidity crisis that was impossible to solve, since everything depended on its $FTT token, which they could not sell either since if it lost value the exchange would not have liquidity. On-chain data shows that more than $4 billion worth of $FTT tokens were sent from Alameda to FTX, so it is possible that they were seeking loans of this value. It was at this moment that the CEO of Binance published his tweet, in which he announced that he was willing to liquidate his $FTT positions comparing FTX with LUNA and unleashed the crisis that has led the exchange to sign chapter 11 bankruptcy in the USA.
A crazy week right?
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Disclaimer: This article is presented as it is, it is my personal opinion. There is no plagiarism in it and the sources have been referenced.
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