Bitcoin News
What to tell your family about what happened in crypto this year
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After a lackluster rise of crypto in 2021, which saw many new crypto millionaires and several crypto startups attain unicorn status, came the dramatic fall in 2022. The industry was plagued by macroeconomic pressures, scandals and meltdowns that wiped out fortunes virtually overnight.
As 2022 comes to a close, many crypto proponents are perplexed about the state of the industry, especially in light of the recent FTX collapse and the contagion it has caused, taking down several firms associated with it.
Many who couldn’t stop talking about crypto and recommending their family to invest in it last year at Christmas dinner could see the tables turn this year, with them having a lot of explaining to do about the state of crypto today. While as awkward as that conversation is going to be, Cointelegraph prepared a small recap to help ‘crypto bros and sisters’ explain what really happened to crypto in 2022 when market pundits were expecting the rise to continue throughout the year.
The downfall was universal, but crypto turned it into a contagion
The start of the crypto downfall was triggered by external factors, including growing inflation, rate hikes from the United States Federal Reserve and the international conflict between Ukraine and Russia that shook investor confidence in the market, leading to a sell-off in traditional and crypto markets.
The external market conditions, aided by the unchecked centralized decision-making process, claimed its first big player of this bull cycle in Terra. The $40-billion ecosystem was reduced to ruins within days. More importantly, it created a crypto contagion that claimed at least half a dozen other crypto players, mainly crypto lenders that had exposure to the Terra ecosystem.
The collapse of the Terra ecosystem had the greatest impact on lenders, bankrupting Three Arrows Capital and many others. Celsius paused withdrawals due to extreme market conditions, causing crypto prices to fall, and then declared bankruptcy. BlockFi had to be bailed out by FTX with a $400 million cash injection.
At the time, FTX seemed too eager to bail out several troubled crypto lenders. But, just a quarter later, it turned out FTX was not as liquid and cash-rich as it claimed to be. In fact, the crypto exchange was using its native tokens and in-house, non-existent projects as leverage against multi-billion-dollar valuations and loans. Its sister company, Alameda Research, was found to be involved in building a house of cards that eventually came crashing down in November.
The FTX crypto exchange and its founder, Sam Bankman-Fried, have built a philanthropic outlook for the world, turned out to be outright fraud and stole customers’ funds. The former CEO was found to be misappropriating customers’ funds and was eventually arrested in the Bahamas on Dec. 11.
Related: FTX collapse: The crypto industry’s Lehman Brothers moment
Bankman-Fried was extradited to the United States on charges of securities fraud and misappropriation of funds. However, the former CEO managed to secure a bail plea against a $250 million bond paid by his parents who put up their house to cover his astronomical bail bond.
While the arrest of Bankman-Fried and his trial in the U.S. have given some hope to FTX users, the chances of many customers getting back their funds are very slim as lawyers have predicted that it might take years and even decades to get the funds back.
Two back-to-back crypto contagions caused by a series of bad decision-making and the greed of a few, might not be an easy thing to explain to the family. So, own up — everyone makes mistakes in the bull market, thinking they are doing the right thing by getting their family involved. However, one can always talk about the bright sides and the lessons learned from the mistakes, and the 2022 crypto contagion is no different.
Centralized exchanges and coins may come and go, but Bitcoin will stay
Terra ecosystem’s collapse was a significant setback for the crypto industry —both in terms of value and how the outside world perceives it. Crypto managed to bear the brunt of the collapse and was on its way to redemption, only to face another knock in the form of FTX. The FTX saga is far from over but it highlighted what corruption and hefty donations can do to your public image even when you have robbed people billions of their money.
The mainstream media frenzy saw the likes of the New York Times and Forbes write puff pieces for the criminal former CEO before the charges were framed against him. Bankman Fried was portrayed as someone who was a victim of bad decisions when FTX and Alameda were involved in illicit trading from day one, as mentioned by SEC in their charges.
Related: Regulators face public ire after FTX collapse, experts call for coordination
The FTX downfall and the crypto contagion are being portrayed by many as the end of trust in the crypto ecosystem. U.S. regulators are warning that it is only the start of the crypto crackdown, with SEC chief Gary Gensler comparing crypto platforms and intermediaries to casinos.
However, any crypto veteran will tell you that the industry has seen much worse and has always bounced back to its feet. While the collapse of the third largest crypto exchange (FTX) is definitely significant, it doesn’t come close to the Mt. Gox hack from the early days of crypto exchanges.
Mt. Gox was once the biggest external factor that cast doubt on the cryptocurrency industry, especially Bitcoin (BTC). When the exchange was hacked in 2014, it account for more than 70% of BTC transactions at the time. The hack did have a wild impact on the price of BTC at the time, but the market shot back up again in the next cycle.
Years later, the FTX collapse once again reminded users of the risks involved with centralized entities, triggering a significant movement of funds from centralized exchanges to self-custody wallets.” Self-custody wallets allow users to serve as their own bank, but the trade-off is that wallet security also becomes their sole responsibility.
Crypto users are withdrawing their funds from crypto exchanges at a rate not seen since April 2021, with nearly $3 billion in Bitcoin withdrawn from exchanges in November, moving them to self-custody wallets.
New data from on-chain analytics firm Glassnode shows that the number of wallets receiving BTC from exchange addresses hit almost 90,000 on Nov. 9. The movement of funds away from exchanges are usually a bullish sign that BTC is being “hodled” for the long term.
Every other token might look lucrative in a bull run, as evident from the last one where the likes of LUNA, Shiba Inu (SHIB) and Dogecoin (DOGE) broke into the top 10. But today, these projects be it Terra-LUNA or meme coins are either obsolete or far from their bull run hype.
Bitcoin, the original cryptocurrency, has seen downfalls of several major exchanges over the past decade and yet has come up on top of each of those collapses in the next cycle. This is the reason most early crypto investors and Bitcoin proponents often advocate for self-custody and hodling BTC over investing in new altcoins that might seem lucrative in a bull run, but there is no guarantee that they would make it to the next bull run
The collapse of these centralized entities in 2022 could also prompt policymakers to eventually come up with some form of official universal regulations to ensure investor security.
The bottom line
The core technology of decentralization and Bitcoin, the OG cryptocurrency, is here to stay regardless of the crypto entities involved in facilitating different use cases and services on top of them. 2023 could see a new wave of crypto reforms, with more aware users who believe in self-custody rather than letting their funds sit on exchanges. Also, it’s better not to give out financial advice to anyone, especially in a bull market.
Source: https://cointelegraph.com/news/xmas-dinner-table-what-to-tell-your-family-about-what-happened-in-crypto-this-year
Bitcoin News
Nomura Group Unveils Bitcoin Fund Catering to Institutional Investors
Nomura Digital Assets, a subsidiary of Japan’s leading financial institution, Nomura Group, has ventured into the world of digital assets with the launch of a Bitcoin fund. This strategic move is designed to streamline access to digital assets for major investors, responding to the escalating demand for cryptocurrency investments. It marks Nomura’s maiden foray into providing investment solutions tailored to the digital asset arena.
In a press release dated September 19, Laser Digital Asset Management, the digital asset management arm of Nomura, proudly introduced the Bitcoin Adoption Fund, a specialized offering aimed squarely at institutional investors. This fund underscores the growing breadth of cryptocurrency adoption in Japan.
Facilitating Bitcoin Uptake
The Laser Digital Bitcoin Adoption Fund offers institutional investors an attractive proposition, blending cost-efficiency with robust security measures. In a bid to safeguard the fund’s holdings, Laser has enlisted the services of Komainu, a custody solution established in 2018, which is subject to regulatory oversight and jointly formed by Nomura, Ledger, and Coinshares.
Fiona King, the head of Laser Digital Asset Management, emphasized the fund’s meticulous management and compliance standards. Notably, the fund operates as a segregated portfolio within the mutual fund entity, Laser Digital Funds SPC.
Nomura Holdings foresees that its crypto-focused division, Laser Digital, will begin turning a profit within the next two years. This projection is a response to the surging demand for Bitcoin and other cryptocurrencies, pitting Nomura against established traditional heavyweights such as JPMorgan and Goldman Sachs.
While Laser Digital already offers Bitcoin derivatives to its institutional clientele, the prolonged bear market has impacted the company’s growth trajectory. Due to the recent downturn in cryptocurrency values, Nomura has cautioned that it might take longer than initially anticipated for Laser Digital to achieve profitability.
Bitcoin News
Bitcoin Surges to $32,500 in China: Here’s Why
The cryptocurrency market has witnessed a remarkable surge in the price of Bitcoin, and according to a renowned cryptocurrency analyst, this increase has a fundamental reason: Chinese buying. In a recent YouTube video, the CryptoBanter analyst dissected the factors behind this Bitcoin surge, which comes after a series of significant declines in August. In this report, we will delve into how Chinese buying has propelled the price of Bitcoin and how other factors, such as the depreciation of the Chinese yuan and its correlation with the U.S. Dollar Index (DXY), have influenced this exciting development in the cryptocurrency market.
The Flight from the Chinese Yuan: Bitcoin and Gold as Havens
One of the key factors behind Bitcoin’s recent surge is the increasing flight of Chinese consumers from their national currency. The Chinese currency has experienced depreciation in its value, leading many Chinese individuals to seek refuge in Bitcoin and gold. Economic uncertainty in China, exacerbated by crises in the stock market and the real estate market, has further eroded confidence in the Chinese yuan. As a result, Bitcoin and gold have become safe-haven assets for Chinese investors.
Bitcoin Reaches $32,500 in China
The CryptoBanter analyst reports that the demand for “digital gold” in China has driven Bitcoin’s price to astonishing levels. According to their observations, a single Bitcoin has reached a price of $32,500 in China and was then exchanged for USDT at $33,000. This represents a significant premium compared to the current price of Bitcoin in other markets, which stands at $27,135. This price disparity has created a substantial arbitrage opportunity for investors.
September Breaks the Traditional Bearish Pattern
September is typically a historically bearish month for Bitcoin, but this year has been a notable exception. Despite pessimistic predictions from many analysts, BTC has recorded a 4% increase in its price during this month. The CryptoBanter analyst suggests that this positive performance may foreshadow even greater gains in the future.
Correlation with the U.S. Dollar Index (DXY)
One interesting observation from the analyst is the correlation between the price of Bitcoin and the U.S. Dollar Index (DXY). According to their data, whenever the DXY reaches the level of 105, the price of Bitcoin tends to rise. This could indicate an inverse relationship between the strength of the U.S. dollar and the attractiveness of Bitcoin as an investment asset.
Long-Term Investors Continue to Accumulate
Despite the volatile market conditions, the analyst points out that long-term Bitcoin investors have increased to over 75%. This suggests sustained confidence in the long-term potential of the world’s largest cryptocurrency, even amid price fluctuations.
Bitcoin in the Last 24 Hours
According to CoinMarketCap data, in the last 24 hours, Bitcoin has experienced a 0.79% increase. On the weekly price chart, the leading cryptocurrency has risen by 4.56%. At the time of writing this report, Bitcoin has a market capitalization of $528 billion, solidifying its position as the largest and most robust cryptocurrency network in the world.
In Conclusion…
Chinese buying has proven to be a crucial factor in the recent surge of Bitcoin, challenging the traditionally bearish expectations for September. As the cryptocurrency continues to evolve and attract the attention of investors worldwide, the relationship between Bitcoin and global economic events will remain a topic of interest and discussion within the crypto community.
Bitcoin News
This Analyst Predicts a Bright Bullish Future for Chainlink (LINK)
In an exciting revelation, prominent cryptocurrency analyst Michaël van de Poppe has shared his insightful analysis of Chainlink (LINK), one of the standout cryptocurrencies in today’s market. Van de Poppe, widely recognized in the crypto community, has caused a stir with his bullish predictions for this decentralized oracle network. Let’s delve into the details of his analysis and understand why he foresees a bright future for Chainlink.
Van de Poppe’s Chainlink Analysis
According to Van de Poppe’s analysis, Chainlink has reached its minimum level and is poised for a reevaluation phase that could offer extremely lucrative buying opportunities. His expert view focuses on a specific price range: $6.15 to $6.40. For investors, this range presents itself as a strategic entry point that could result in substantial gains in the near future. Van de Poppe has even set an ambitious price target of $8, suggesting an impressive bullish potential.
Technical Analysis: Bullish Outlook
Chainlink’s technical analysis supports Van de Poppe’s claims. The 4-hour chart for LINK/USD reveals that the altcoin remains above all moving averages, a positive indicator of the current bullish trend. Furthermore, the chart shows that Chainlink is struggling to break above the upper band of its symmetrical triangle pattern, which could mark the beginning of a significant rally.
The MACD indicator also lends support to the idea of a bullish breakthrough, with two consecutive higher highs indicating an upward momentum. Although the RSI remains neutral, it is above the 50 level, suggesting room for further growth in Chainlink’s price.
Key Levels and Resistance
In recent days, bears attempted to push Chainlink’s price below $6.55, but strong buying pressure at this level prevented a significant decline. This demonstrates the strength of buyers in the area. After this attempt at a downward correction, the price returned and reached the supply zone at $6.68. At this point, several double-bottom patterns were observed, a bullish indicator according to technical analysis.
Chainlink’s Potential
The pivotal moment came in the previous 4-hour timeframe when bulls gained momentum by surpassing the resistance at $6.70. This bullish breakthrough led the price to steadily rise, reaching an intraday high of $6.88, which is close to the 200-exponential Moving Average (EMA), a significant technical indicator.
However, as in any financial market, there is always the possibility that bulls may lose their momentum. In that case, we could see a retracement to the main support level at $6.45. If this level fails to hold, a more significant correction to $6.0 is possible, potentially opening the door to a bearish trend.
Conclusion
In summary, Michaël van de Poppe, with his impressive track record of predictions, has put Chainlink on the radar of many investors. His technical analysis supports his bullish outlook and highlights key levels to watch. As this cryptocurrency continues to attract attention in the crypto community, investors will be eager to see if Chainlink lives up to expectations and reaches new highs on its exciting journey towards $8 and beyond. Stay tuned for market updates, as exciting opportunities can arise in the world of cryptocurrencies.
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