Crypto SWOT: Bitcoin is up nearly 40% since the start of 2023.

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Strengths

Among the cryptocurrencies tracked by CoinMarketCap, the best performer of the week was Threshold, up 115.40%. Philip Hammond, the former UK chancellor, has been named chairman of crypto custodian Copper Technologies. Hammond, who had been a senior adviser to the London-based firm since 2021, is taking the role effective immediately, Bloomberg writes. Moody’s Corp. is working on a rating system for stablecoins, the most traded tokens in the crypto industry, as the asset class grows and comes under increased scrutiny from regulators and investors. The system will include analysis of up to 20 stablecoins based on the quality of the reserve attestations that support them, writes Bloomberg.

Weaknesses

Among the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Casper, down 4.41%. Genesis’ Chapter 11 filing last week showed it owed more than $3 billion to its top 50 creditors. The VanEck New Finance Income fund is among the 10 largest known with a claim of $53 million, writes Bloomberg. BlackRock and Apollo Global Management are among a group of creditors who lent bankrupt bitcoin miner Core Scientific around $500 million by buying convertible notes. The revelations reveal how traditional financial firms have helped fund companies in the crypto mining industry, Bloomberg reports, but a crash in the price of Bitcoin has squeezed profit margins for miners threatening companies with insolvency.

Opportunities

Donald Trump NFT sales increased 158% following news that Meta has restored its Facebook and Instagram accounts. According to OpenSea, sales of digital Trump trading cards reached 312 and volume reached 109 Ethereum, writes Bloomberg. a Bitcoin has had an amazing start to the year; the cryptocurrency was up, at one point, by 40%, for the month of January.

The price of the Floki Inu soared 14% following a DAP proposal to burn $55 million in tokens. The governance proposal would see 4.97 trillion floki tokens burned, worth around $55 million, Bloomberg writes.

Threats

Binance Holdings has admitted that it mistakenly kept collateral for some of the tokens it issues in the same wallet as exchange client funds. The reserves of almost half of the 94 coins issued by Binance are currently stored in a single wallet called “Binance 8” which also holds client assets, says Bloomberg. This wallet has far more tokens in reserve than would be required for the number of B tokens issued by Binance, indicating that the collateral is co-mingled with client coins rather than being stored separately. Shortly before FTX collapsed in November, its founder Sam Bankman-Fried sent $400 million to an obscure cryptocurrency trading firm called Modulo Capital. The start-up, which was founded in March and operated out of the same Bahamas resort where SBF lived, had no history of a public profile according to an article published by Bloomberg. The Dutch Central Bank has fined crypto exchange Coinbase for providing digital asset services in the country ahead of its local registration in September. The central bank said it imposed an admiring fine of $3.63 million for operating in the country without registration, writes Bloomberg.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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