Sam Bankman-Fried, CEO and founder of FTX, made headlines because of a Coindesk remark immediately echoed vigorously by CZ, CEO of Binance, with respect to the FTT held.
Why did Binance decide to liquidate all FTX tokens (FTT)?
It so happens that Bankman-Fried is also closely tied not only to FTX but also to Alameda Research, and this collides with the fact that the latter has $3.66 billion in FTT (the FTX Token) on its balance sheet.
The problem is not in owning a token in which has been invested since its genesis but the fact that collateral for it is $2.16 billion when FTT’s market capitalization is around $3 billion and its diluted valuation is $7 billion.
The CEO of Binance which like Alameda is a cryptocurrency exchange platform including precisely FTT in the past had invested in FTX and owned 2.1 billion between BUSD and FTT at the time of the exit from the deal.
In this way, Zhao, as highlighted by CoinDesk, chose to liquidate all of its FTT by publicly announcing it, pointing out how the cryptocurrency world had already experienced dark times such as the liquidations of Celsius and Three Arrows Capital or the failure of the Terra/Luna ecosystem.
Caroline Ellison, Alameda’s CEO for only six months, found herself a hot potato to deal with and promptly responded that Alameda’s accounts were okay and ready to withstand the shockwave of those who would short the FTT token and that the company would gladly buy at $22 each the tokens held by Zhao.
The shorts have not missed the mark and in the last 24 hours as much as $500 million has come out of FTX’s coffers but unlike Celsius, just to name one, it has held up well to the market shock.
As we await further developments it is worth noting that the market, cryptocurrencies and market makers have achieved high standards of safety in transactions and balance sheets and that companies like Binance and Alameda are under the constant magnifying glass of the SEC and Mifid 2 that guarantee investors sound sleep in terms of regularity and hedging but again only time will shed light on the truth.
Crypto trends and breakeven between STETH and ETH
Almost all crypto have gone up thanks to the Fed’s moves and employment data that is growing both in absolute terms and in average wage growth (+4% this year).
Widening our gaze to the world of digital currencies, news headlines include JP Morgan’s historic first trade on the blockchain, Fidelity debuting its trading service, and Twitter deciding with Musk at the helm to shelve its crypto wallet project for the time being.
The umpteenth hacker theft is suffered by Deribit, the world’s leading crypto options exchange to the tune of $28 million.
Meta offers the ability to create and exchange NFTs on its socials (Facebook and Instagram) via the layer 2 Polygon and decentralized storage.
Centralized storage will be assisted by Arweave via Web3 and storage incentives.
AR, Arweave’s native token will be used for general exchanges and transactions in this context and that is precisely why it has seen its value increase in recent days by 60%.
The NFT market has been particularly affected by the bearish market for digital currencies but the sentiment is positive and ready to generate new value.
Meanwhile, in Buterin’s ecosystem, STETH and ETH reach parity two months after the Merge.
Coinbase: less trading leads to bad earnings
The third quarter proves to be bad not only for tech companies but also for Coinbase, which due to lower transaction revenues grosses a net loss of $545 million with shares touching -80% from the same period in 2021.
While the economic downturn leads to lower revenues due to lower transactions, Coinbase capitalizes on USDC (USD Coin) with related interest income being the hub’s largest revenue to date along with transaction income that stands at $102 million (+200% over Q2).
Transactions on Coinbase experience a spike during the hours when US trading overlaps with European trading but drop dramatically during the Asian market signaling that crypto is moving to the center of the globe, to the old continent.
An excellent signal for the digital currency market comes from the increase in liquidity in the currency pairs of the most capitalized currencies (BTC and ETH), which increased by 14% and 36%, respectively.
The volume of ETH perpetual futures is 54% and surpasses that of BTC
The volume of ETH perpetual futures is slightly higher than the volume of BTC, which stands at 46% in favor of 54% of the opponent’s futures.
When market volatility increases, so does that of futures, OKX has been steadily increasing its volumes on perpetual futures since 2021 and Bitmex is running for cover with a 50% drop on futures forcing it to mass layoffs and go all in on derivatives.
Despite hopeful signs for the future (milder increases) the Federal Reserve last week continued aggressive monetary policy with a +75 basis point change.
The news of the Fed’s rate hike and Chairman Jerome Powell‘s comment to investors hinting at a still long road of more hikes but anticipating more caution for the future led to the decorrelation between Bitcoin (touching $21,000 and equities (down 2%).
BTC and the US market no longer go hand in hand and move a further 0.4% apart, however, during the same period, the one with Gold (at the highest since 2020) continues to grow even if the latter is held back by the strong dollar and the FOMC and FED interest rate increases.