Cryptocurrency prices remained muted amid strong selling pressure. The FTX saga has resulted in liquidity pressures at major brokerages such as Genesis. Total market capitalization fell below $800 billion during the week, but later recovered modestly. On Friday, it was $826 billion. Bitcoin was trading at $16,451 and Ethereum at $1,180.
“This week, the broader crypto market faced intense selling pressure due to Genesis dealing with liquidity issues. Before the FTX fiasco, Bitcoin traded at $19,000, but fell to $15,000 before finding support above the $16,000 zone. Bitcoin is holding well above. A recent one $16,000 level in a few days,” said Alankar Saxena, CTO and co-founder of crypto investment platform Mudrex. Business Standard.
“The decline was mainly due to the stolen Ethereum being dumped by the FTX exchange hacker and transferred to many wallets. The same and impending bankruptcy concerns around Genesis trading and the subsequent impact on Grayscale or Digital currency Group (DCG) caused Bitcoin to fall sharply prices too,” said Anurag Dixit, founder of cryptocurrency management platform Kunji.
The unraveling of the FTX saga continued to reveal sharper details.
“Details emerging from the FTX bankruptcy filing revealed that the underlying mess is more complex and the industry continues to anticipate the potential spread of the contagion. Most notably, the top 50 creditors owed more than $3 billion, but their names have been withheld. This is fueling more speculation in the markets, ” said Parth Chaturvedi, Head of Crypto Ecosystem at CoinSwitch.
Earning the trust of investors
After the FTX fiasco, several cryptocurrency exchanges in the country tried to calm investors’ fears.
CoinDCX published its Proof of Reserves (PoR) document on November 24. It has made its record of on-chain and off-chain asset balances and wallet addresses available for public viewing and verification.
“With this, we want to instill complete trust in users. We feel that access to transparency is not a privilege, but a right of users,” said Sumit Gupta, Co-Founder and CEO of CoinDCX.
Another major exchange, CoinSwitch, released a third-party report confirming that their total balances are higher than their client holdings.
“We will continue to evaluate other ways to build trust and transparency as we help India meaningfully participate in the global cryptocurrency revolution,” said Ashish Singhal, Co-Founder and CEO of CoinSwitch.
CoinSwitch also launched CoinSwitch Pro, a KYC-compliant platform that allows users to trade Indian Rupee and Crypto assets across multiple exchanges with a single login.
Cryptocurrency Prices: What to Expect?
“The overall cryptocurrency ecosystem is in a vulnerable state and high volatility should be expected next month,” Dixit added.
“In this case [Bitcoin] if it breaks below the current level, the next support will be at the $16,200 zone,” added Saxena.