The crypto market has been in a downward spiral for much of November. The collapse of FTX has exacerbated the market’s suffering and losses. The FTX crash appears to have impacted not only businesses and investors but also entire communities that had partnered with the beleaguered cryptocurrency exchange.
According to CoinMarketCap, the total crypto market capitalization stands at $829.42B. The market is down over 60% from its $3 trillion peak. At press time, BTC’s price stands at $16,607. Bitcoin is up 5.26% in the last 24 hours. Ethereum‘s price today is $1,173.14. Ethereum is up 7.84% in the last 24 hours.
Crypto market tanks for two weeks in a row
Since FTX’s demise, the crypto market has experienced significant change. Busan, the second-largest city in South Korea, is allegedly reconsidering its plans to launch a local crypto exchange. In light of the FTX contagion, Busan’s government and financial authorities have become increasingly concerned about the concept of a public-private digital exchange.
The city administration of Busan established a partnership with FTX in August 2022. As part of its efforts to become a digital financial hub in Asia, the municipal administration intended to construct the Busan Digital Asset Exchange. Nevertheless, given the present crypto market situation, the city may suspend these plans.
The city of Busan is not the only entity on the crypto market with a change of heart. The majority of this month’s industrial upheaval can be attributed to titanic exchange wars. The newest salvo from the CEO of Binance looks to be false.
On November 22, Coinbase was trending on Twitter after Binance CEO Changpeng Zhao, better known as CZ, appeared to challenge Coinbase’s Bitcoin holdings.
In a tweet that has since been deleted, CZ quoted a Yahoo Finance report claiming that Coinbase Custody holds 635,000 BTC for Grayscale. CZ commented that 4 months ago, Coinbase had less than 600K, with a link to an article from Bitcoinist published 4 months ago.
The CEO of Binance made it clear that he was merely citing “news reports” and not making his statements. His tweet, however, was not warmly welcomed by the crypto market community.
Shortly after that, Coinbase CEO Brian Armstrong reacted indirectly to CZ in a series of tweets, stating, “If you see FUD out there – remember, our financials are public (we’re a public company)” and providing a link to Coinbase’s Q3 shareholder letter. He clarified that his company possesses 2 million BTC worth $39.9 billion as of September 30.
That latest tweet CZ made about Coinbase’s Bitcoin holdings that he just deleted wasn’t a great look. I get the argument that he’s trying to protect the industry but CZ is more than smart enough to know that exchange and custody wallets are separate.
— Will Clemente (@WClementeIII) November 22, 2022
Shortly after that, CZ deleted his tweet and stated, “Brian Armstrong just told me the numbers in the articles are wrong. Deleted the previous tweet. Let’s work together to improve transparency in the industry.”
CZ “Let’s work together to improve transparency in the industry.”Also CZ – Let me tweet to millions some random FUD in the middle of a bear market major liquidity event before maybe just reaching out to confirm. https://t.co/UA00hieJsC
— Bob Loukas (@BobLoukas) November 22, 2022
Genesis brings in restructuring experts to avoid bankruptcy
In the near future, another crypto market bankruptcy case could be imminent. The lending business of Genesis Global Trading ceased new loans and redemptions following the FTX collapse. Consequently, the crypto market smelled difficulty in the platform’s liquidity position.
Genesis TimelineNovember 8: “No material net credit exposure”November 9: We lost $7MNovember 10: Okay, we have $175M locked in FTXNovember 16: Sorry, no withdrawals or new loansNovember 17: Okay, we need $1BNNovember 21: We’ll go bankrupt without the money#GENESIS
— CryptoBeast (@MissCryptoBeast) November 22, 2022
According to sources quoted by Bloomberg, the digital asset brokerage is having difficulty securing additional money for its lending operations. According to the article, the platform has been in private conversations with numerous companies, including Binance, and has sought at least $1 billion in further funding.
Recent reports, however, indicate that Genesis is now seeking half as much emergency assistance. However, according to reports, Genesis has recruited a restructuring consultant to explore all options, including but not limited to a potential bankruptcy.
It is believed that the company has recruited the investment bank Moelis & Company to evaluate its alternatives. Voyager Digital also retained Moelis & Company after it banned withdrawals and deposits on July 1.
Since FTX’s demise on November 11, all eyes have been on Genesis, Grayscale Investments, and its parent company, Digital Currency Group, for fear that they may be the next victims of the crypto market contagion. In this regard, SBF has addressed a letter to the FTX personnel.
See here (SBF’s words not mine, a bankruptcy trustee will sort it out, etc): Collateral – mostly crypto – went from being “worth” $60bn to $9bn *fast*Even a “conservative” balance sheet goes upside-down very fast when the assets are garbage and the debts are real. See: Lehman pic.twitter.com/6VOf2L02YC
— Liz Hoffman (@lizrhoffman) November 22, 2022
According to the letter, SBF froze under pressure when the company went bankrupt. Since then, the crypto market has suffered due to his actions. In the letter, he described the catastrophic condition of the group’s collateral and liabilities.
I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again. You were my family. I’ve lost that, and our old home is an empty warehouse of monitors. When I turn around, there’s no one left to talk to.
The crypto market has been in a freefall for the better part of November. Current recessions have had a negative impact on the crypto market. High inflation and stricter monetary policy had a negative impact on crypto investors, leading to the market’s collapse.
The year 2022 will be remembered as a turning point in the crypto sector and will act as a wake-up call for crypto enthusiasts who must realize that much work remains to be done. The crypto market has yet to recover, and it could be years before it does.
This article has been originally published at: https://www.cryptopolitan.com/why-crypto-market-down-november-2022-update/