Bitcoin, crypto rise as FTX contagion fears ease

by James · November 23, 2022

Bitcoin rallied above $16,000 in Wednesday morning trade as it rose alongside Ether and the rest of the crypto top 10 by market capitalization, excluding stablecoins, as the market was shaken by lingering doubts from earlier this week about further contagion from now-bankrupt crypto exchange FTX.

See related article: Cathie Woods buys dip as Ark Invest scoops up Coinbase, GBTC shares: Bloomberg

Fast facts

Bitcoin rose 2.6% to US$16,198 in the 24 hours to 08:00 a.m. in Hong Kong, while Ether gained 2.5 percent to change hands at US$1,135, according to CoinMarketCap. Leading memecoin Dogecoin rose 5.1% to $0.07 and Polygon rose 6.8% to $0.85.
Litecoin posted the biggest gains on this chart, rising 13.7% to $70.09, representing a 20.76% increase over the past seven days as it climbed several positions on CoinMarketCap’s chart. Despite the broader market decline, the blockchain recently hit its all-time-high mining difficulty on November 18, and CryptoSlate recently wrote that “[Litecoin’s] resurgence is likely a symptom of crypto users looking for stability in a chaotic market.”
While it had gained 5% to $12.44 on Wednesday morning, Solana continued its slide in CoinMarketCap’s rankings, which began when Alameda Research began selling large amounts of its holdings in the token amid the collapse of sister firm FTX.
Markets were shaken on Tuesday when brokerage firm Genesis Global Capital halted withdrawals due to increased trading activity, causing concern for its parent company Digital Currency Group (DCG), which revealed it owed Genesis $575 million. Despite this, DCG revealed in a letter to shareholders that the loans do not mature until May 2023, and the company aims to emerge “stronger” after Crypto Winter, according to a Tuesday report from the Wall Street Journal.
“The FTX collapse is a story of a company that chose to operate outside of existing regulation while showing that they are regulated. In Australia, the FTX collapse has highlighted the issue that crypto exchanges do not and cannot provide full legal ownership of the asset to their customers , as they are unregulated, said Jeff Yew, managing director of Australia’s Monochrome Asset Management. Discard by e-mail.
“This is more so critical for businesses that have specific legal requirements such as a [self-managed superannuation (retirement) fund]. Storing cryptocurrency on crypto trading platforms may jeopardize the trustees’ obligation to ensure absolute title to the asset,” he added.
US stocks closed higher on Tuesday. The Dow Jones Industrial Average rose 1.2%, while the S&P 500 index and the Nasdaq Composite Index both rose 1.4%.
US investors are eagerly awaiting the release of the Federal Reserve’s November meeting minutes on Wednesday to gain insight into how the Fed views current economic conditions and plans for likely further rate hikes as it continues to battle near-40-year high inflation.
The Fed has been raising interest rates since March this year to try to curb inflation, raising them from near zero to a 15-year high of 3.75% to 4%. The Fed has signaled that it will continue to raise interest rates until inflation reaches a target of 2%.