Cassandra Pierce

Despite the implosion of FTX, there is still hope for crypto. Fundstrat’s Tom Lee says Bitcoin continues making sense for some investors.

CNBC interviewed Lee in a Friday interview. He compared this year’s bear market in virtual currencies to 2017-2018, which saw them rebound in the years that followed. Two reasons he remained bullish on a wobbly cryptocurrency sector are that the FTX blowout can be beneficial in that it flushes out bad actors and history has shown bitcoin to have delivered good returns.

“It’s a crucial moment for the industry. It is removing a lot and purging a lot bad players, I believe. But does that mean crypto is dead? Lee stated that crypto is not dead.

He said that the strong crypto companies that emerge after FTX’s fall will be like the ones that survived 2008’s financial crisis, such as JP Morgan. Lee stated that the mistake was to believe that crypto could not be touched.

FTX filed recently for Chapter 11 bankruptcy, claiming that its CEO Sam BankmanFried had resigned. It was triggered by a severe liquidity crisis and rocked crypto markets.

Lee says that there are still many cryptocurrency companies with strong balance sheets, particularly those who have built their businesses around bitcoin.

He acknowledged that the crypto industry is under pressure and said it has been a “terrible year”. The Federal Reserve is aggressively raising interest rates to combat inflation, causing such damage to the digital-asset sector. This led to a crypto crash in early 2018, as investors lost interest in high-risk assets.

“It’s been an awful year for crypto. Lee stated that no one has made any money in crypto by 2022. He said that this is no reason to lose faith in bitcoin and that he still recommends clients to purchase the token.

“We read about bitcoin for the first time in 2017. We recommended that people invest 1% of their money into bitcoin at that time. Bitcoin was less than $1,000. Lee stated that this holding would represent 40% of their portfolio today, without rebalancing.

Bitcoin dropped 2.11% Monday at the last check, to trade at around $16,200, according to CoinMarketCap.

“So, bitcoin still makes sense for someone who wants some kind of ballast?” He agreed.

The important Fed FOMC meeting in November 2022, which decides the interest rate, is fast approaching. Bitcoin derivatives offer some valuable insights. The meeting is expected to result in a 0.75% increase in interest rates, followed by a 0.50% increase in December. It remains to be seen what Bitcoin’s (BTC) prices will do in this setting. BTC traded in sideways on Wednesday as a sign of potential bullish momentum.

Bitcoin FOMC Decision – The Derivatives

Bitcoin whales are involved in the inflow of assets to exchanges as the market prepares for Fed announcement. According to on Chain Data from Crypto Quant the open interest in the derivatives market has declined in recent years. This pattern coincided with Bitcoin hitting a monthly high of approximately $21,000. Both Bitcoin and Ethereum are under high selling pressure ahead of the FOMC meeting.

“As bitcoin prices rise, open interest in the derivatives market has fallen, signaling that traders are closing their long bets.”

In the meantime, large volumes of stablecoins flow into exchanges. This could indicate that BTC’s long-term prospects are good. According to price tracking platform CoinMarketCap, BTC’s price is currently at $20,481, an increase of 0.31% over the past 24 hours. The Ethereum price is at $1,567. This is a drop of 0.29% over the past 24 hours.

U.S.-based traders continue to accumulate BTC

In recent years, it has been found that U.S. crypto traders have continued to buy Bitcoin. Despite many headwinds, traders in the U.S. have accumulated Bitcoin more than any other country since July 2018. The main interest in Bitcoin has been from U.S. traders since July 28, 2022.

This means that BTC prices could move in any direction after the Fed rate announcement. There have been instances in the past when BTC prices dropped a little before an announcement was made. This was followed by sharp increases in all cryptocurrencies.

DBS, the biggest bank in Southeast Asia, announced that self-directed cryptocurrency trading has been launched via DBS digibank. Details:

Clients who are eligible can trade cryptocurrencies via DBS Digital Exchange (Ddex), DBS digibank, or at their own convenience.

DBS’s digital asset exchange supports trading in four cryptocurrencies: bitcoin, bitcoin cash and ether. The exchange previously allowed only institutional and corporate investors to trade crypto, as well as family offices and clients of the bank’s private wealth management.

DBS explained Friday’s launch:

This means that approximately 100,000 Singapore investors meet the criteria and can access DBS’ digital assets ecosystem.

Sim S. Lim is an executive from the bank’s Consumer Banking and Wealth Management. He stated: “Broadening Access to Ddex represents yet another step in our efforts in providing sophisticated investors who want to dip their toes into cryptocurrencies with a seamless and safe way to do so.

DBS reported that trading volumes on its digital asset platform had soared in August. According to the bank, “Investors who are confident in the long-term prospects for digital assets gravitate towards trusted and regulated platforms to gain access to the digital asset market.” The bank also recently joined the metaverse through a partnership with The Sandbox.

Piyush Gupta , CEO of DBS Bank Group, stated in March he doesn’t believe cryptocurrency will become money but said that it could be an alternative to gold or its value.

Bitcoin extended its drop below US$20,000 (RM89,758) on Monday (Aug 29), as part of a wider cryptocurrency-market retreat, amid concern about the US Federal Reserve’s rate-hike path.

On Monday, the largest token dropped as much as 2.3% to US$19.527. This is the fifth consecutive day of declines. It comes after US stocks plunged last Friday in response to Jerome Powell’s speech at Jackson Hole. On Monday, the wider crypto market fell with the MVIS CryptoCompare Digital Assets 100 Index falling as high as 2.5%.

“Money is flowing from risky assets. Cici Lu, chief executive officer at Venn Link Partners, stated that Crypto followed Powell’s sharp adjustment to the US stock markets’. “Markets didn’t like his comments and bitcoin is resuming its role as a high beta asset.

Bitcoin was supported by the US$20,000 level when it reached its lowest point in recent months. However, bitcoin had been climbing higher in recent weeks. It had not been below US$20,000 from July 14th, and even surpassed US$25,000 in August before Saturday.

Uncertainty about Fed rate hikes’ path and impact on riskier assets has led to gyrations.

Many strategists have identified US$20,000 as the key point for Bitcoin, but levels of support could be lower.

Katie Stockton, Fairlead Strategies, sees long-term support around the US$18.300 to US$19.500 range. Mark Newton, Fundstrat strategist, has identified key areas within the US$19,000 area. He said that a “real area of significance” is around US$17,000. This would allow for a 100% alternative wave projection of the latest decline since mid-August.

Antoni Trenchev, cofounder and managing partner at Nexo, wrote a Sunday note that stated, “If bitcoin doesn’t hold US$20,000 then US$18900 comes into play prior to a date with June intraday low US$17,600,”. It doesn’t look very pretty if it’s close to that.

According to Coinglass data, the last two Fridays in crypto have been difficult. US$288 Million worth of longs were liquidated on the latest one. August 19 saw the largest liquidation of longs since June 13 at US$562 millions.

The second-largest crypto Ether fell as much as 4.1% to US$1,422.67 on Monday, continuing its decline of around US$2,000 a few weeks ago. It has been fluctuating ahead its highly-anticipated Merge upgrade which is due in mid September.

Analysts at Bitfinex stated that Ethereum’s drop in anticipation of the impending Merge was also noteworthy. Bearish sentiment seems to be spreading across all risk assets. “The volatility that has become so common in the digital token space shows no sign of abating.”

Craig Wright claims that he is the mythical creator of bitcoin for years. The Australian computer scientist, Craig Wright, attempted to defend the assertion that he was Satoshi Nakamoto. However, the legal battle resulted in a pyrrhic victory for him and a tarnished image on Monday.

After Wright sued a blogger, claiming that his claim to have been the mysterious Nakamoto was fraudulent, a London high court judge ruled Wright had presented ‘deliberately falsified evidence’ in a case of libel.

Justice Chamberlain wrote that Wright would only be able to recover nominal damages because he had presented a false case and provided deliberately false evidence up until the trial.

Wright sued Peter McCormack, a blogger, over a series tweets in 2019. There was also a YouTube video discussion in which McCormack claimed Wright was a fraud and that Satoshi is not Satoshi. McCormack had previously abandoned his defense of truth in his case and the judge did not address the issue of Nakamoto’s identity.

McCormack’s claims had’seriously damaged’ Wright’s reputation in the cryptocurrency industry. McCormack’s tweets led to Wright claiming that he was invited to speak at many conferences following the submission of academic papers for blind peer reviewing. However, ten invites were withdrawn. He was rumored to be available for appearances at events in France and Vietnam as well as the US, Canada, Portugal, and other countries.

McCormack presented evidence from academics disputing Wright’s claims. These were dropped from Wright’s case in May. Chamberlain stated in his judgment that Wright later admitted that some of his evidence was incorrect but that it was accidental.

The judge stated that Wright did not have any documentary evidence that he had accepted a paper at any of the conferences mentioned in his earlier libel claim. He also said that Wright never received an invitation to speak at any of these conferences, and that any such invitation was withdrawn.

Wright explained that he had abandoned this section of his case due to the damage to his reputation from the “disinvitations” was not in England or Wales. The judge then added, “The judge cannot withstand scrutiny.”

He concluded that Dr Wright’s original case regarding serious harm and the evidence supporting it were both maintained up until the trial.

McCormack’s lawyers argued that McCormack’s tweets were ‘flippantly lighthearted’ and were in response Calvin Ayre’s posts, a Canadian businessman who ‘goading other people into accusing Dr Wright fraud’. Chamberlain also stated that Wright had been accused of being a fraud by ‘numerous others’.

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Chamberlain stated that the tweets were ‘flippant’ in tone, but they came from a’respected expert in cryptocurrency podcasting’.

“They were unambiguous in their meaning.” Many people would have read them to have realized that there was a heated debate over whether Dr Wright was Satoshi. However, some may have been influenced reading Mr McCormack’s trenchantly stated contribution to the debate.

“The fact that he was willing and able to express his views so boldly in response to threats to libel proceedings is probably to have made those who had read them more likely to believe them, than less.”

However, the judge ruled that Wright’s pretrial case regarding the serious damage to his reputation was unconscionable and that he should not be awarded ‘any more than minimal damages’.

The judge requested that both the legal teams of each side submit arguments on the awarding of costs.

Chamberlain concluded that McCormack’s comments during the video discussion, including calling Wright a “liar” and a “moron”, were defamatory. However, the video and most of the tweets did’serious damage’ to Wright’s image.

Wright stated in a statement that he intended to appeal the adverse judgments. His evidence was clearly misunderstood. I will continue to pursue legal challenges until these baseless, harmful attacks intended to diminish my reputation cease.

The latest study by the cryptocurrency exchange Kucoin revealed that around three million Saudi Arabians are crypto investors, or have traded crypto in the past six months. According to the study, 17% of Saudi Arabia’s adults are ‘crypto-curious’ and will likely invest in cryptocurrency over the next six months.

According to the Into the Cryptoverse report of the crypto exchange, the study also examined how Saudi residents have reacted to crypto trading since the beginning of the ongoing crypto winter.

“In the first quarter 2022, 49% crypto investors hoped to increase their investment in cryptocurrency over the next six months.” According to the report, the bearish market that began in the second quarter 2022 was accompanied by a shift in investor sentiment towards more conservative strategies for holding cryptocurrencies.

According to the report, 31% of crypto-owners in the country indicated that they want to keep their crypto balance the same as before Q2. Investors with lower incomes, however, have had a tendency to liquidate a portion of their portfolios over the same time period.

The Future of Finance: Crypto

Kucoin reported that 76% of investors have less experience than one year. Around 49% of these investors only began crypto trading in the last six months. The report shows that Saudi Arabia has a high number of crypto novices.

According to 51% of Saudi crypto investors, they invest because they believe it is the future. Around 44% stated that cryptocurrencies offer higher long-term returns than other forms of investment.

Young investors below 30 are believed to make up at least a third. Men were the dominant gender group, with 63% of them being the most dominant (63%). The study found that 44% of male crypto investors would not miss the trend. However, it was more common for women to be focused on the real benefits of crypto.

According to the report, 84% of crypto investors use social media (especially YouTube and Twitter) as sources of information. Online communities are reportedly used by just over a third (35%), when searching for information about crypto-related topics.

Nearly half of crypto investors buy digital currencies with fiat money every month and then engage in spot trading. The report states that this involves trading, buying and selling on the current value of crypto currency. This is the only type of crypto trading that some scholars in the Arab World consider halal.

El Salvador bought yet another bitcoin dip, thereby accumulating in the cryptoasset after a market crash that led to sharp drops in its value.

President Nayib Bukele stated that 80 bitcoin were purchased by the country for $19,000 and are worth approximately $1.5 million. He wrote, tweet: “Thank you for selling low,” and included screenshots of transactions.

It purchased 500 bitcoin for an average of $30,744 each. This brought its total bitcoin holdings to 2,301 Bitcoins. That’s roughly $71.4 Million. According to Twitter updates by Bukele, El Salvador now has 2,381 bitcoin, worth $46.4 million.

El Salvador’s president has once again tried to “buy the dip”, this time because bearish sentiment from hawkish central bankers and a series major cryptocurrency firm collapses have caused prices to trade near their 2017 highs.

Bukele stated that he trades the country’s Bitcoin via his mobile phone. According to the Nayib Bukele Portfolio tracker website his first bitcoin purchases were made in September 2021 when bitcoin was trading for $52,000. He hasn’t displayed a penchant for market timing. On October 27, 2021 when bitcoin was trading at $60.345, 420 BTC was his second largest bitcoin purchase.

Market turmoil has caused El Salvador to delay the highly anticipated’volcanic bonds’, which were due to be issued by March 20, but have been delayed. The country’s $1 billion planned bond offering will be used to finance its ‘bitcoin-city’, a community located at the base the Conchagua volcanic.

Some industry commentators think the bottom is near. JPMorgan analysts stated in a note Wednesday that the deleveraging that caused the crypto crash may not continue and pointed to the strong venture capital funding of the industry as a positive sign.

Blockworks was informed by Chris Terry, a board member and vice-president at SmartFi lending platform, that he believes there is a ‘weak’ bottom to bitcoin. He said that he believes we may be seeing a bottom in the $20K area.

“If bitcoin had fallen to the low teens at $12-14K, it would make me feel more positive about it. That would have been a bottom I could trust. ‘

Wave Financial co-founder Les Borsai echoed this sentiment. He stated that most of the potential sellers had already sold and so you will be left with long-term owners and many interested buyers.

El Salvador’s president has indicated that he wants his country to keep its bitcoin purchases. Alejandro Zelaya , Finance Minister, dismissed concerns that bitcoin’s fall in value could have an impact on the country’s fiscal well-being. He said the risk was ‘extremely low’.

The nation’s total BTC portfolio has fallen to $60 million, or 57%.

Interview with Bloomberg: Galaxy Digital CEO Mike Novogratz stated that Bitcoin and Ethereum would need to regain their bullish narratives over time.

Novogratz predicts that global macro-hedge funds will buy Bitcoin once the U.S. Federal Reserve stops raising interest rates.

“The Fed will not stop flinching… I think you’ll see many traditional macro funds who’ve had an amazing year, buying Bitcoin. He said that we would add to our position at this point.

Novogratz believes the recent cryptocurrency crash was caused by leveraged players like Three Arrows Capital, a major crypto hedge fund. Three Arrows Capital has apparently failed to meet margin demands.

According to the crypto mogul, the current crisis is similar to the collapse of Long-Term Capital Management, a now-defunct hedge-fund. After experiencing significant success, LTCM lost $4.6 billion within a matter of months because of the 1997 Asian financial crisis. It was one of the largest hedge fund failures in history, and it was eventually liquidated in 2000.

Novogratz predicts bankruptcy proceedings in many businesses.

Galaxy Digital boss is quick to compare the price performance for cryptocurrencies with Zoom Meeting, a videotelephony program. He is certain that neither Zoom nor crypto will disappear despite massive losses.

Novogratz stated, “You will rebuild an base in price, but you will rebuild your story.”

Novogratz claims that the U.S. is headed into recession and that a soft landing is not possible.

He believes that the relationship between stocks and cryptocurrencies could end on a move-forward basis.