Bear market calls for another crash

by · October 21, 2022

Three Arrows Capital. Celsius. Voyager Digital. The list of crypto bankruptcies, shutdowns, and trading halts has been endless in 2022. And the year isn’t over yet. This week, German crypto bank Nuri urged its users to withdraw money ahead of the company’s planned shutdown in December – at least Nuri’s users were properly notified.

The crypto bear has mercilessly cleansed the market of profit, leverage, poor risk management and outright fraud. If industry forecasts are to be taken seriously, the market may see one last capitulation before conditions begin to improve.

This week’s Crypto Biz chronicles Nuri’s shutdown, the latest drama surrounding Voyager Digital and Silvergate Capital’s difficult quarter.

German crypto bank Nuri asks 500,000 users to withdraw money before closure

After disclosing liquidity problems in August, Nuri informed its 500,000 users this week that it would cease operations on December 18. That gives users two months to withdraw their money before the company goes out of business due to the bear market. Nuri CEO Kristina Mayer assured users that “All assets in your Nuri account are safe and unaffected by Nuri’s insolvency.” When Nuri goes bankrupt is not good for the industry, but they handled it much better than Celsius, who locked user outlets before filing for bankruptcy.

Voyager Digital will not sue its managers for incompetence, will require insurance on them

The Voyager Digital saga took another surprising turn this week after the company chose not to sue its executives for incompetence for their role in facilitating the Three Arrows Capital debacle (and the Voyagers in the process). For those not up to date on the drama: Voyager issued a $675 million loan to Three Arrows Capital without proper due diligence. That loan was never repaid and became a key element in Voyager’s bankruptcy. So why aren’t the managers being sued? According to reports, they were granted immunity from the lawsuit when Voyager’s assets were acquired by FTX US via auction in late September.

Silvergate Capital’s crypto-to-fiat transfers decrease by $50 billion compared to Q3 2021

Few statistics show how brutal the crypto winter has been than Silvergate Capital’s crypto-to-fiat transfers. The company revealed this week that transfers on its network plunged $50 billion year-over-year in the third quarter, an alarming sign for those banking on crypto mass adoption among financial institutions. But, there was a silver lining: Silvergate’s profits rose 84% year over year to $43.328 million. Investors responded to the news by dumping Silvergate shares, which plunged 20% on October 18.

Binance Launches $500 Million Loan Project To Support Crypto Miners

Crypto exchange Binance is launching a new $500 million lending project to fund cash-strapped Bitcoin (BTC) miners during the bear market. The new Binance Pool will give miners access to loans over an 18-to-24-month term, where they will pay 5% to 10% in interest and pledge physical or digital assets as collateral. Only “blue-chip” miners can qualify for the loan. “One of the requirements is that the applicant must be classified as a Binance VIP user and connect at least 500 PH/s to the Binance Pool for a minimum of 24 months after the loan is issued,” a Binance spokesperson told Cointelegraph.

Before You Go: When Will The Crypto Bear Market End?

Tired of the crypto bear market? How long until the market turns? While no one has a crystal ball, I remain steadfast in my belief that Bitcoin will likely see a cyclical bottom in the next few months, followed by an extended accumulation phase. In this week’s market report, I sat down with fellow analysts Marcel Pechman and Benton Yaun to discuss crypto’s near-term outlook. You can watch the full replay below.

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