Strengthens
- Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was KLAY, which rose 82.01%.
- Crypto hedge fund Strix Leviathan has hired former BlackRock Inc. CEO Matthew McBrady as its new chief strategy officer, Bloomberg reports. The firm said he will advise on trading and investment strategies as well as oversee plans for growth. His foray into crypto illustrates the growing number of industry leaders who have swapped traditional financial positions for digital assets despite the market’s volatility and steep decline, the article continues.
- Bitcoin gained for a second day, spurring optimism among the bellwether cryptocurrency’s near-bullish advocates for an end to the months-long slump known as crypto winter, writes Bloomberg. Crypto traders celebrated the advance as a welcome change after months of limited price action. Bitcoin broke above $20,000 for the first time in more than two weeks on Tuesday, ending its longest run below that price level since the token first breached the threshold in late 2020.
Weaknesses
- Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was XCN, down 23.17%.
- Blockchain.com, stung by the crypto bear market that has rocked the industry, is in talks about a potential “step-down” fundraising that could value the digital financial services firm at a fraction of the $14 billion it fetched earlier this year. While the terms of the current possible round are still being worked out and it’s in the early stages, Bloomberg reports, the funding will result in a significant cut to the site’s valuation, likely worth $3 billion to $4 billion.
- The latest exploit against crypto platform Team Finance, which lost around $14.5 million worth of various tokens, occurred despite a series of recent security audits, according to the company. The Ethereum-based project said Thursday that it had leveraged its revised Uniswap V2 to V3 migration feature. The project later said that these audits had been carried out by a “reputable” firm.
Possibilities
- Bitcoin is poised to break above $20,000. If successful, the token will end its longest run below that price level since it first breached that threshold in late 2020, Bloomberg reports. The token has traded below $20,000 for nearly three weeks, breaking from the coin’s trademark volatility.
- Crypto’s new class of Kingpins emerged after The Merge. The merger created a new class of blockchain participants, called “builders”. The software upgrade, which refers to the Ethereum blockchain switching to a system called “proof of stake” from “proof of work,” is a significant shift in the current decentralized ecosystem, Bloomberg reports. Now, there is a relatively small number of these builders who have a significant amount of power on the blockchain.
- Hong Kong is swinging towards a friendlier regulatory regime for cryptocurrencies with a plan to legalize retail trading, in contrast to the city’s skeptical attitude over the past year and the ban in place in mainland China. A planned mandatory licensing program for crypto platforms to be enforced in March next year will allow retail trading, according to people familiar with the matter, Bloomberg writes.
Threats
- Core Scientific, one of the world’s largest miners of Bitcoin, warned that it could run out of cash by the end of the year and may seek relief through bankruptcy protection. Operating results and liquidity have been severely impacted by the prolonged drop in the price of Bitcoin, Bloomberg explains, along with an increase in electricity costs, increased competition and litigation with bankrupt Celsius Networks.
- Nearly a year into the “Bitcoin bear market,” most investors who bought the cryptocurrency in 2021 are facing big losses and appear to be waiting for the rally to close their positions, Morgan Stanley said in a research report. The bank says trading volumes have fallen on most exchanges except Binance, which lowered BTC trading fees to zero in July, writes Bloomberg.
- Crypto enthusiasts have hailed decentralized finance as a way to cut out the middlemen on Wall Street. But DeFi is full of petty scams, according to a report released Thursday. There have been more than 188,000 frauds based on “smart contracts,” the software that serves as the building blocks of DeFi, according to a report by software firm Solidus Labs, based on data dating back to 2020, writes Bloomberg.
