FTX, BlockFi: Bitcoin Floats Despite Cryptocurrency Crash
Binance, the world’s #1 cryptocurrency exchange, is seizing the opportunity to expand its influence. It has just announced that it has acquired its first license in East Asia by acquiring the officially recognized Japanese platform Sakura Exchange Bitcoin for an undisclosed sum. Binance already tried to gain a foothold in Japan a few years ago, but had to give up at that time due to the demands of local regulators. For weeks, the Binance platform has been accused by some of being responsible for the high-profile collapse of rival FTX this month, which rocked the global crypto-asset sector. Binance’s Chinese-Canadian boss Changpeng Zhao announced his intention to dump FTT tokens issued by FTX on Twitter, then vowed to buy the company in the mix before changing his mind.
The domino effect
The bankruptcy of FTX caused a domino effect. Most players have cross-investments so that the bankruptcy of one can affect the finances of another. This spiral is further accelerated by the fear of investors trying to withdraw their funds from centralized digital asset platforms. Genesis, a broker specializing in cryptocurrency loans, could be the next victim. At Genesis Global Capital, the broker’s lending arm, withdrawal requests outstripped liquidity. The situation is critical and Genesis is next on the list of companies to close shop. Other companies in the crypto ecosystem may be affected in turn, including French Coinhouse, which has announced a freeze on its crypto wallets. However, these brochures are only for 10,000 people, while the platform has around 100,000 active customers.
3/4 of buyers lost money
To avoid general panic and to stop the bleeding of withdrawals, the actors multiply calming speeches. As a result, the price of bitcoin seems to have stabilized around $16,000 (vs. $69,000 a year ago), if it fell sharply after FTX’s bankruptcy was announced in early November. For investors, it’s a cold shower. According to a study published by the Bank for International Settlements (BIS) on November 14, 73% to 81% of bitcoin buyers lost money. Portfolio analysis shows that small bitcoin buyers (with portfolios of less than 1,000 bitcoins) buy on the rise, while “whales” with portfolios over 100,000 bitcoins sell during these phases. Obviously, the “big ones” were making money off the backs of the “small ones”.
Bursting the bubble
Philippe de Gauville, managing director and co-founder of fintech, which enables the placement of small amounts in financial markets, believes that the current situation is similar to the situation in the 2000s when the bubbles burst.Internet. “New investors entered the market and bought stocks of digital companies that had no business model. The bubble burst and caused a lot of losses for individuals. These people were out of the market for at least a decade. This pattern was repeated at the beginning of the market. Covid. Individuals rode the crest of the wave. They didn’t sell, so they didn’t lose, but they don’t have the same interest in crypto. And that’s not good news, because the talent will go to other sectors. We are going. experiencing crypto winter. But they will not disappear. The rules will soon be voted on in the European Parliament, which will reassure investors.” Alexandre Roubaud, founder of Bitstack, a savings program rounded up to bitcoins, is more optimistic. “Bitcoin’s decline has increased the number of users and the volume. Since last July, we’ve opened over 6,000 accounts.”
Will bitcoin be worth 1 million in 2030?
Cathie Wood, managing director of ARK Investment Management, brushes aside the criticism and continues to bet big on bitcoin, which she predicts will surpass one million dollars in 2030: “Sometimes you have to face crises, first to see who will survive, but also to test the system. We believe that bitcoin will do very well.” In short, bankruptcies will clean up the ecosystem and make it healthier.
Or $9,000 for a few months?
Vincent Boy, market analyst at IG, doesn’t share that optimism. He notes that “the current price of bitcoin around $16,000 is unreasonable. The bankruptcy of BlockFi is already in the works. On the other hand, the Genesis case is more worrying and is not a drop to $12,000-13,500. This floor could be in turn. bitcoin and sunk due to the correlation between traditional markets, they remain bearish and will remain so during a recession, and bitcoin may then fall to $9,000.Before a rebound?