Bitcoin is back on its winning ways

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Hello. Here is what happens:

Price: After falling early Thursday, bitcoin is back in the green; other major cryptos also rose.

Insights: Cobo, the asset management platform, adopts a key tenet of traditional finance: a separate custodian and settlement network for trading.

Prices

CoinDesk Market Index (CMI)

1,005.53

+18.1 1.8%

Bitcoin (BTC)

$21,084

+331.1 1.6%

Ethereum (ETH)

$1,553

+29.3 1.9%

S&P 500 daily close

3,898.85

30.0 0.8%

Gold

$1,931

+8.4 0.4%

10-year Treasury yield

3.4%

0.0

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

Bitcoin is back on its winning ways

By James Rubin

After falling early on Thursday, bitcoin is back comfortably above $21,000.

The largest cryptocurrency by market capitalization recently traded at around $21,190, up 1.6% in the past 24 hours, as investors shrugged off the latest fallout from disgraced crypto exchange FTX and conflicting economic data. BTC has continued on the more bullish path throughout 2023.

“Bitcoin is finding support ahead of the $20,000 level,” Edward Moya, senior market analyst for exchange market maker Oanda, wrote in an email. “The crypto space is cleaning up and until we see a major reputable exchange disappear, traders can mostly ignore the news of smaller crypto companies disappearing.”

Ether followed a similar trajectory, falling early before landing in the green. The second-largest crypto by market value recently changed hands above $1,550, a 1.9% gain from the same time on Wednesday. Other major cryptos also rose sharply with CRO, the Crypto.com exchange token, which jumped more than 4%, and ATOM, the crypto native to the decentralized network Cosmos, which rose by more than 3%. The CoinDesk Market Index (CDI), an index measuring the performance of cryptos, recently rose by 2%.

Cryptos pulled away from equity markets, which continued their losing streak this week, with the tech-heavy Nasdaq dropping 1% and the S&P 500 and Dow Jones Industrial Average (DJIA) each dropping one percentage point . Investors tried to reconcile the release of jobs data indicating that the boiling labor market had not cooled a weekly drop of 15,000 Americans filing for unemployment with a drop in housing starts and permits. build. The former suggested the economy is not cooling enough to satisfy central bankers and bodes ill for crypto, while the latter indicated the opposite.

The story continues

“Crypto markets still appear to be operating under good economic news that equates to bad news for the asset price landscape,” wrote CoinDesk analyst Glenn Williams.

Meanwhile, FTX’s new chief has addressed the previously unlikely prospect of the FTX exchange reviving, according to an interview he gave to The Wall Street Journal, his first since taking over at FTX in November.

John J. Ray III said despite accusations of criminal misconduct against former CEO Sam Bankman-Fried and other executives, customers praised FTX’s technology and said it could be helpful in reviving the ‘exchange. It’s all on the table, Ray told the Journal. If there’s a way forward on this, we won’t just explore that, well, do it.

The biggest winnersThe biggest losersInsights

Asset management firm Cobo looks to CeFi for inspiration

Cobo, a Singapore-based crypto asset management and custodian platform, is trying to change a key feature of the crypto industry by adopting the fundamentals of traditional markets, namely the use of custodian services. , separate clearing and settlement for trading.

Separation is a long-standing model in the traditional financial sector. These functions, usually managed by different independent entities, help increase transparency and reduce the risk of fraud and misconduct. This in turn helps build trust between market participants and contributes to the overall integrity and stability of the financial system.

In the world of crypto, however, these functions are combined under one roof by centralized exchanges (CEX). Unlike traditional exchanges, CEX crypto does more than just match buyers and sellers.

They hold and control client funds, act as a counterparty to transactions, and also provide lending/borrowing services, all with little regulatory oversight. Rather than being a neutral party in transactions, this multifaceted role of CEXs raises significant conflict of interest issues.

The dramatic demise of FTXs provided strong evidence that CEXs should not dominate all these functions and hold so much power over other market players.

Investors turn to custodians

With all the uncertainties of CEX, investors are turning to custodians. In November 2019, Cobo was the first depository to introduce the Loop Network, an off-chain settlement network that allows all parties on the Loop to transfer and settle instantly, free of charge.

Cobo has now upgraded the Loop network and this week launched Superloop, an off-exchange depositary and settlement network that allows traders to trade directly on supported exchanges, with credit secured by collateral held in custody. of Cobos, locked only before the transaction.

In this time of uncertainty, it is extremely important for custodians and exchanges to provide a sense of security and trust to traders, Dr. Jiang Changhao, CTO and co-founder of Cobo, told CoinDesk.

SuperLoop provides this confidence by ensuring that traders have full control over their assets when trading between exchanges, he added.

Investors and organizations can use Multi-Party Computation (MPC) custody solutions to co-manage their funds with an independent custody platform, and at the same time trade those funds on crypto exchanges that are integrated with clearing networks and settlement hosted by this custody platform.

Cobos SuperLoop minimizes counterparty risk by removing the need to pre-fund trades prior to trading and maximizes capital efficiency by allowing funds to be deployed without the delays and risks of on-chain transfers, giving users full control over their assets.

Important events.

World Economic Forum

12:30 HKT/SGT (4:30 UTC) Canadian Retail Sales (Monthly/November)

5:00 p.m. HKT/SGT (9:00 a.m. UTC) Fed Waller Speech

CoinDesk TV

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

Binance named as counterparty in FinCEN order against Bitzlato; Circle CEO on the Future of Money

“First Mover” was live in Davos, Switzerland at the World Economic Forum with the latest moving news from the crypto markets, including Binance being named as a counterparty in an order against little-known cryptocurrency exchange, Bitzlato , accused of laundering $700 million by US authorities on Wednesday. Additionally, Yulia Parkhomenko from Ukraine’s Ministry of Digital Transformation and KUNA exchange founder Michael Chobanian discussed the state of crypto donations to Ukraine to help its defense in the war against Russia. . And Circle CEO Jeremy Allaire shared his thoughts on the future of stablecoin regulation.

Securities

Bitcoin Gemini inflows from other exchanges have fallen to around six years, CryptoQuant data shows: Data suggests traders may find Gemini less desirable than other exchanges.

New FTX head says Crypto Exchange could be revived, Wall Street Journal: John J. Ray III made this comment in his first interview since taking over FTX in November.

China launches digital yuan smart contract feature via e-commerce app Meituan: Through the smart contract, users can earn part of a $1,312 daily prize for using the digital yuan.

Alameda Research-Connected Bank exits Crypto business: Farmington State Bank, a small Washington State community bank, is also changing its name.

Circle CEO: US Stablecoin Legislation Is the Lowest Fruit: Jeremy Allaire believes Congress will focus on regulating stablecoins due to its simple nature and significant growth potential.

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