This Week in Coins: Bitcoin, Ethereum Stable—Has the Worst of the FTX Damage Passed?
Crypto prices were a mixed bag this week. But as of Saturday morning, only a couple of the top 20 coins by market cap are not in the green over the past seven days. That begs the question: have the brutal effects of the recent FTX disaster subsided?
Bitcoin (BTC) remains virtually unchanged since seven days ago. It’s down 0.30% from a week ago, according to CoinGecko data, and currently trades at $16,592. Earlier in the week, it sank to $15,649–its lowest level in two years.
Ethereum (ETH) fared about the same. The world’s second-favorite digital asset moved up 0.60% in the past week, currently trading at $1,219 at the start of the weekend, and has inched up 2.5% in the past 24 hours. Last Monday, it slipped 7% as the attacker who drained FTX wallets dumped a significant portion of stolen ETH for BTC.
Both market leaders recovered a little on Wednesday, when the Federal Reserve released minutes from its November meeting. The good news is that the U.S. central bank reportedly plans on making smaller interest rate hikes going forward. This signals the end of a cycle of hikes—three so far this year, each of 75 basis points—that were the steepest since 1994.
Solana (SOL) holders avoided another week of losses. The No.14 coin (formerly a top-ten) is no longer in freefall, having grown this week by 3.3% to hit $14.08. On Tuesday, Litecoin (LTC) flipped SOL.
Solana was heaviest hit by FTX’s collapse among the leading cryptocurrencies. Disgraced FTX founder Sam Bankman-Fried was one of Solana’s earliest backers and also owned a large stash of SOL through his other crypto company, Alameda Research. SOL was the second-largest coin holding of the disgraced hedge fund.
Many leading cryptocurrencies posted small losses, but several enjoyed considerable rallies. Chainlink (LINK) added 9% and trades for $6.80, Litecoin (LTC) added a whopping 20% and is currently worth $75, and Binance Coin (BNB) grew 12% to $301.
Still, the good news for crypto fans may be short-lived. On Monday, crypto trading group CoinShares published a report that says institutional players are shorting crypto in record numbers. According to the report, short product inflows represented 75% of the total inflows—the largest on record.
Is Genesis the next bankruptcy?
Doomsayers’ eyes were on crypto prime broker Genesis this week as possibly the next high-profile insolvency after FTX.
Last week, the company suspended withdrawals on its lending side due to the fact that Genesis’s derivatives business had $175 million exposure to FTX. The company then reportedly sought a $1 billion bailout that it didn’t get.
By last Monday, reports emerged that Genesis may be facing bankruptcy.
A representative for the company told Decrypt at the time: “We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”
The news also affected the business of popular crypto exchange Gemini. Last week, Gemini warned of major delays for users looking to withdraw their cash from its Earn product, which was in part serviced by funds borrowed from Genesis.
On Tuesday, the exchange tweeted it’s continuing “to work with Genesis and its parent company Digital Currency Group (DCG) to find a solution.” The announcement said that affected customers are “highest priority,” Genesis and DCG “remain committed to exploring every possible option,” and all funds held on Gemini’s Exchange and Custody services are backed 1:1.
That same day, Digital Currency Group, which owns Genesis, had to reassure investors that the conglomerate faces no imminent threat despite owing Genesis $575 million.