Miners shed their BTC balances in response to FTX collapse/
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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Welcome to a new week. Here's what you need to know in crypto today. |
- FTX faces a criminal investigation in the Bahamas.
- Binance CEO encourages crypto users to control their own digital assets.
- Crypto.com chief tries to assure its customers that it doesn't share FTX's fate.
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Bankrupt crypto exchange FTX faces a criminal investigation in the Bahamas following its dramatic collapse last week. Authorities in the Caribbean country where FTX has its headquarters are investigating whether any criminal misconduct occurred in the exchange's decline and bankruptcy. Sam Bankman-Fried's crypto exchange went from being one of the world's largest to filing for bankruptcy in barely a week, after a CoinDesk article raised questions about the financial stability of its sister company Alameda Research. |
The native token of Binance-owned Trust Wallet soared 80% on Sunday after CEO Changpeng Zhao encouraged crypto users to take personal control of their digital assets. Zhao made the warning following the collapse of Binance's rival FTX, which Binance briefly agreed to rescue before aborting its plan after it took a closer look at FTX's balance sheet. Trust Wallet is a decentralized hot wallet facilitating the storage of cryptocurrencies. Its native token TWT allows holders to participate in decision making related to the app's features. At the time of writing, TWT was up about 50% in the last 24 hours at $2.44, according to data by CoinMarketCap. Crypto.com CEO Kris Marszalek has attempted to assuage fears that the exchange could be the next to face a liquidity crisis. Crypto.com's native token CRO has dropped around 45% in the last week, while its daily volume was down to about $284 million in October compared with last year's highs of around $4 billion. In a YouTube interview, Marszalek reiterated that Crypto.com's balance sheet is strong and its exposure to FTT was limited. He added that CRO, unlike FTX's native token FTT, has never been used as loan collateral. |
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Market Insight: Miners Shed Bitcoin |
Bitcoin miners appear to be shedding their balances in response to FTX collapse-induced panic in the cryptocurrency market. The balance held in miners' wallets has decreased by 9,402 BTC to 1.826 million BTC ($30.6 billion), the lowest level in 10 months, according to data by Glassnode. The 30-day change in bitcoin held by miner addresses fell to -10.792 BTC last Thursday, the lowest it has been since January. The fallout from FTX's collapse helped bring about a 22% drop in bitcoin's price in the seven days to Sunday, exacerbating the woes of mining firms that have been squeezed between the falling price of bitcoin and rising energy costs in recent months. Should BTC's slide continue, miners' electric bills may exceed the income earned from the BTC mined. Many miners also have power purchase agreements and hosting contracts requiring them to consume energy or pay additional fees. Therefore, they may either continue to operate at a loss, waiting for the price to pick up, or just cease their operations altogether. |
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- The chart by Delphi Digital shows similarities between the current bitcoin bear market and the 2018 market swoon.
- The latest decline is reminiscent of the November 2018 capitulation event that saw bitcoin drop nearly 50% to $3,200 precisely one year after the bull run peaked.
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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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