Crypto Update: Sell-offs and subpoenas
Cryptocurrency analyst, Saxo Bank
This week the entire crypto market cap fell 18% to $280 billion. The market cap is well within reach of its 2018 low of $250bn. Similarly, Ethereum fell by 20% against the USD. Meanwhile, Bitcoin traded 14% lower, with its market cap sitting at $110bn. Bitcoin's percentage of the total market cap and its performance is indicative of a downturn, as Bitcoin tends to outperform the market due to investors selling alternative coins to buy bitcoin in the downturns.
Chainanalysis offers insights to the great sell-off of 2018
Cryptocurrency forensics firm Chainanalysis published a blog post detailing a great distribution of wealth at the beginning of this year. The firm purports that from December 2017 to April 2018, the number of bitcoins used for speculation increased by over 50% as long-term investors exited their holdings. They suggest that this change of bitcoin from the hands of investors to the hands of speculators increased the liquid supply of bitcoin while the change in demand was immaterial, therefore aiding the price decline.
Crypto exchanges subpoenaed
Over the weekend, the US Commodity Futures Trading Commission requested trading data from the exchanges that comprise the Bitcoin futures index as part of its price manipulation investigation in the bitcoin markets. Some exchanges refused at first before being subpoenaed as they claimed the request was invasive because of the amount of data and the fact that they would have to share it to a third-party that also runs a crypto-trading platform. Some cited this increased oversight from the CFTC as the reason for the recent market downturn.
Bitmain eyeing IPO
The largest cryptocurrency miner and chip manufacturer Bitmain raised $400m with a valuation of $12bn in a pre-IPO round of financing led by Sequoia Capital China. Bitmain is looking to go public by September at a valuation of $30-40bn. The bitcoin miner uses and sells complex hardware designed to mine cryptocurrency and made $3-4bn in revenues last year. Bitmain’s IPO highlights the maturation of the space and could encourage other large crypto-focused firms to go public.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.