The cryptocurrency bear market, which has wiped more than $2 trillion off the value of coins, could soon come to an end.
That is the view of JPMorgan strategist Nikolaos Panigirtzoglou, who said an increasing willingness of larger crypto firms to bail out others – allied with $5 billion of venture capital funding in May and June – were signs that “deleveraging is well-advanced”.
Deleveraging is when a company attempts to decrease its total financial leverage – reduce debt – for example by selling off assets. It also applies to companies that have been liquidated.
The collapse of the Terra ecosystem sparked the market freefall, with crypto lenders BlockFi and Celsius running into liquidity issues and investment firm Three Arrows Capital collapsing under debt.
Panigirtzoglou did not make light of these earthquakes – they “suggest that the tremors from this year’s crypto market fall continue to reverberate” – but added: “The fact that crypto entities with the stronger balance sheets are currently stepping in to help contain contagion.”
The $5bn of VC funding in May/June is $3.4bn higher than the same period in 2021, but down $2.2bn on March/April.
The value of the cryptocurrency market stands at $870bn at the time of writing, down from a high of $3tr.
FTX snubs Celsius over ‘$2bn hole’, eyes BlockFi for just $25m
Crypto exchange FTX reportedly passed on the opportunity to buy struggling lender Celsius due to the state of its finances.
Crypto publication The Block cited two sources who claimed FTX had discovered a ‘$2bn hole’ in its balance sheet. They also claimed that FTX “found the company difficult to deal with”.
Meanwhile FTX is reported by CNBC to be eyeing a deal to purchase BlockFi for just $25m.
In response to that report, BlockFi CEO Zac Prince tweeted: “I can 100% confirm that we aren’t being sold for $25m.” The company was valued at $3bn in March 2021.
FTX recently handed BlockFi a $250m credit facility to help with liquidity issues.
Cryptocurrency shorts
An algae biomass project built on the Tezos blockchain has been unveiled. Sustainable Impact Token (SIT) will support the development, construction and operation of algae biomass farms, which produce high-quality, non-animal protein, absorbing large amounts of carbon out of the atmosphere.
The US Commodity Futures Trading Commission has charged Cornelius Johannes Steynberg and his South African company Mirror Trading International with fraud and registration violations. It alleges that the defendants solicited 29,421 Bitcoin – worth $1.7 billion – that were subsequently misappropriated while claiming falsely that its trading was done via a proprietary software program.
A financial stability report from India’s Reserve Bank says risks created by cryptocurrencies may undermine established institutions, labelling them a “clear danger”. Its governor Shaktikanta Das wrote: “Anything that derives value based on make believe, without any underlying [value], is just speculation under a sophisticated name.”
MoHash, a decentralised finance (DeFi) protocol harnessing stablecoins to provide access to global capital and liquidity for private debt in fast-growing economies, has raised $6m in seed funding.
55% of crypto companies plan to increase their identity verification budget, according to a report from identity verification software provider Sumsub. Surveying 200 crypto companies and analysing millions of checks performed in 2021-2022, it also found that an estimated 80% of crypto businesses use automated KYC solutions.
Pluto Digital, a crypto tech and operations company, says it is protecting users of the YOP platform from the volatility in the crypto market by guaranteeing Ethereum withdrawals from its ETH Vault. It did this by depositing 60 ETH of the group’s own reserves. The news comes as staked Ethereum (stETH), which is pegged to ETH on a 1:1 basis, decoupled on secondary markets.
Cryptocurrency exchange Binance has signed up Italian-Senegalese TikTok creator Khaby Lame as a global brand ambassador to increase Web3 awareness and adoption. Lame, who has 144m followers on TikTok – No.1 globally – and 78m on Instagram, rose to fame with ‘life hack’ videos where he navigated overly complicated scenarios without saying a word while performing a dance move.
Hong Kong-based cryptocurrency exchange OSL is reportedly laying off 40 to 60 employees, or about 15% of its workforce.
Crypto prices
The overall market cap of the more than 20,000 coins is at $872.9 billion at the time of writing (7am UK), a 1.9% decrease in the last 24 hours.
Market leader Bitcoin – the original cryptocurrency created by the mysterious Satoshi Nakamoto – lost 3% to fall below $19,500. BTC is 7% down in a week.
Ethereum, the second most valuable crypto coin – created as a decentralised network for smart contracts on the blockchain – shed 3% to $1,050. ETH is 8% down over the course of a week.
Binance Coin is a cryptocurrency created by popular crypto exchange Binance to assist its aim in becoming the infrastructure services provider for the entire blockchain ecosystem. Its BNB token gained 1% to $219, leaving it 5% down over seven days.
Cardano is an open source network facilitating dApps which considers itself to be an updated version of Ethereum. Its ADA token, designed to allow owners to participate in the operation of the network, fell 2% to 45 cents and is 8% down in a week.
The XRP token of Ripple, a payment settlement asset exchange and remittance system, acts as a bridge for transfers between other currencies. XRP shed 3% to 31.5c, with its price 14% down on seven days ago.
Solana is a blockchain built to make decentralised finance accessible on a larger scale – and capable of processing 50,000 transactions per second. Its SOL token gained 0.5% to $32.66 and is 15% down compared with its price a week ago.
Meme coin DOGE was created as a satire on the hype surrounding cryptocurrencies but is now a major player in the space. DOGE lost 3% to 6.5c, leaving it slightly up in a week.
Polkadot was founded by the Swiss-based Web3 Foundation as an open-source project to develop a decentralised web. Its DOT token, which aims to securely connect blockchains, lost 4% to $6.62 and is 16% down on its price a week ago.
Avalanche is a lightning-quick verifiable platform for institutions, enterprises and governments. Its AVAX token lost 6% to $16.16 and is 18% down on where it was a week ago.
To see how the valuations of the main coins have changed in recent times – and for round-ups of recent cryptocurrency news developments – click here.
For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.