Bitcoin drifts lower as crypto winter continues

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Hello. Here is what happens:

Price: Bitcoin fell in Tuesday’s trading, but not by much as crypto prices remained largely frozen near levels they held for a week.

Insights: In this final week of 2022, First Mover Asia revisits some of the best and most impactful CoinDesk (CD) stories of the past year. Less than a month after a CD story led to the implosion of crypto exchange giant FTX in November, senior columnist David Z. Morris focused on the seriousness of CEO Sam’s infractions. Bankman-Fried. The US Department of Justice later charged Bankman-Fried with wire fraud and other alleged crimes. After posting bail, he is confined to his parents’ California home except for exercise, and must wear a tracking device.

Watch the latest episodes of CoinDesk TV for insightful interviews with industry leaders in crypto and analytics. And sign up for First Mover, our daily newsletter providing context on the latest moves in the crypto markets.

Prices

CoinDesk Market Index (CMI)

792.84

7.9 1.0%

Bitcoin (BTC)

$16,700

217.1 1.3%

Ethereum (ETH)

$1,211

16.3 1.3%

S&P 500 daily close

3,829.25

15.6 0.4%

Gold

$1,821

+25.2 1.4%

10-year Treasury yield

3.86%

0.1

BTC/ETH Price by CoinDesk Indices; gold is the COMEX spot price. Prices from around 4 p.m. ET

Frozen markets, a drift of Bitcoin

By James Rubin

Bitcoin fell in Tuesday’s trading, but not by much, as investors continued their historic year-end hibernation. Crypto prices remain frozen near levels they have maintained for much of the past two weeks.

The largest cryptocurrency by market capitalization recently changed hands at $16,700, down 1.3% in the past 24 hours but close to its most recent support just under $17,000. The price of BTC has remained resilient over the past two months, despite growing fallout from the implosion of crypto exchange FTX.

In a CoinDesk TV First Mover interview, Martin Leinweber, digital asset product strategist at Market Vector Indexes, noted the strength of bitcoin compared to other cryptos. “If you look at coins that demonstrate relative strength, i.e. coins that have fallen the least from the all-time high, you will notice names that hardly anyone would have imagined, especially considering ranking,” Leinweber said. “So bitcoin was not the most defensive coin one would expect as a store of value.”

The story continues

Ether was recently trading just over $1,200, also down 1.3% from the same time on Monday. Most of the other major cryptos were slightly in the red with LINK, the software platform token Chainlink, and CRO, the native cryptocurrency of the Crypto.com exchange, each sinking more than 2%. The CoinDesk Market Index (CDI), an index measuring the performance of cryptos, fell 1.15%.

Major stock indexes closed mixed after a day of good and bad news in which China announced it would allow international travelers to re-enter the country, but Russia said it would ban sales of oil to countries that had placed a price cap of $60 a barrel the latest fallout from Russia’s unprovoked invasion of Ukraine. How the moves will affect prices around the world is uncertain. Brent crude, a widely watched gauge of global energy markets, was recently selling at $85 a barrel, an 11% gain over the past three weeks. The tech-heavy Nasdaq fell 1.4%, but the Dow Jones Industrial Average edged higher.

Meanwhile, the sad and disreputable FTX saga continued with documents filed in a Caribbean court showing former CEO Sam Bankman-Fried borrowed hundreds of millions of dollars from Alameda Research to buy his stake. in the Robinhood Markets (HOOD) trading application.

In an affidavit before his arrest, Bankman-Fried said he and FTX co-founder Gary Wang borrowed more than $546 million from Alameda through promissory notes in April and May. They used that money to capitalize Emergent Fidelity Technologies Ltd., the front company that bought a 7.6% stake in Robinhood in May.

The FTX crisis has renewed calls for tougher regulation around seven months after stablecoin TerraUSD (UST) lost its peg to the dollar. The ensuing collapse of the Terra ecosystem in the spring rattled lawmakers who had been reluctant to create tougher guidelines targeting digital assets to step up their efforts. So far, there have been few concrete results, although many crypto insiders expect changes over the coming year and beyond to protect investors.

Leinweber of Market Vector Indexes said he would adopt the stablecoin regulations. “I welcome these regulations,” he said. “That will lead to more dollars in this space. There are a few unregulated and less well-built ones. But they’re also good stablecoins.”

The biggest winnersThe biggest losersInsights

The FTX collapse was a crime, not an accident

By David Z. Morris, CoinDesk Chief Columnist

In the weeks since the Sam Bankman-Frieds cryptocurrency empire was revealed to be a house of lies, news outlets and mainstream commentators have often failed to give their readers a direct assessment of what’s going on. happened exactly. August institutions, including The New York Times and The Wall Street Journal, uncovered many key facts about the scandal, but they also repeatedly appeared to downplay the facts in a way that dampened intent. and Bankman-Frieds guilt.

It is now clear that what happened to crypto exchange FTX and hedge fund Alameda Research involved a variety of knowing and intentional frauds designed to steal money from users and investors. That’s why a recent New York Times interview was widely ridiculed for appearing to frame FTX’s collapse as the result of mismanagement rather than wrongdoing. A Wall Street Journal article lamented the loss of FTX’s charitable donations, arguably supporting Bankman-Frieds’ strategic philanthropic pose. Vox co-founder Matthew Yglesias, a legal columnist on the neoliberal status quo, appeared to whitewash his own entanglements in crediting Bankman-Frieds money with helping Democrats in the 2020 election by avoiding the likelihood that the money was actually embezzled.

Perhaps most perniciously, many outlets described what happened to FTX as a bank run or a deposit run, while Bankman-Fried repeatedly insisted the company was simply over-indebted and disorganized. Both of these attempts to frame the fallout obscure the central problem: the misuse of client funds.

Banks can be affected by bank runs because they are explicitly responsible for lending funds to their customers to generate returns. They may experience a short-term cash crunch if everyone pulls out at the same time, with no long-term problem.

But FTX and other crypto exchanges are not banks. They don’t (or shouldn’t) do bank-style lending, so even a very large increase in withdrawals shouldn’t put pressure on liquidity. FTX had specifically promised customers that it would never lend or otherwise use the crypto they had entrusted to the exchange.

CoinDesk chief columnist David Z. Morris unpacks his latest opinion piece which argues that Sam Bankman-Fried, former CEO of struggling crypto exchange FTX, is a fraud.

See also: Splits in Sam Bankman-Fried’s Crypto Empire Blur on Alameda Balance Sheet

In reality, the funds were sent to the closely related trading company Alameda Research, where they were, it seems, simply diverted. It is, in the simplest terms, theft on an almost unprecedented scale. Although the total losses have not yet been quantified, up to one million customers could be affected, according to a bankruptcy document.

Read the full story here

Important events.

11:00 p.m. HKT/SGT (3:00 p.m. UTC): U.S. Home Sales Pending (Nov. MoM/YoY)

8:00 p.m. HKT/SGT (12:00 UTC): US Mortgage Bankers Association mortgage applications (Dec. 23)

CoinDesk TV

In case you missed it, here’s the most recent episode of “First Mover” on CoinDesk TV:

Bitcoin miners power down as winter storm hits North America; Bitcoin holds nearly $17,000

Miners across the United States went dark over the weekend as a powerful storm swept through North America. MarketVector Indexes Digital Asset Product Strategist Martin Leinweber has shared his analysis of the crypto markets. Additionally, Akin Gump Partner Ian McGinley shared his thoughts on the latest legal developments for former FTX CEO Sam Bankman-Fried.

Securities

Crypto investment firm Midas closes its platform following losses: The collapse of Celsius and FTX led to the withdrawal of more than 60% of assets under management from Midas.

Mango Markets Exploiting Eisenberg Arrested in Puerto Rico: Federal agents weren’t a fan of Avraham Eisenberg’s highly profitable business strategy.

Pudgy Penguins NFTs Reach All-Time Highs With Holiday Rally: A Rapidly Rising Floor Price Caps the Year of the Banner for Once-Delisted Collections.

Ellison and Wang will be game changers in Bankman-Fried trial, attorney says: The testimony of the two FTX insiders could be damning for Bankman-Fried as he fights criminal charges, according to Ian McGinley, a partner of the Akin group.

Justice Department launches criminal investigation into $400 million FTX hack: Bloomberg: Experts have suggested fingerprints left by alleged hacker indicate inside work.

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