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Bitcoin (BTC-USD) is on track to end the week ~1% lower as investors remain cautious as contagion from the implosion of troubled cryptocurrency exchange FTX continues.
The top crypto previously fell to a two-year low of $15.6k week and could possibly slip further.
“There is likely more to come from the FTX collapse and contagion effects, not to mention other scandals that may be uncovered. This could continue to make crypto traders very nervous and extremely shake the fundamentals that support the price,” said OANDA analyst Craig Erlam.
Recent on-chain data from IntoTheBlock showed that 24.6 million BTC addresses (~51%) were in negative territory, the largest share of out-of-the-money addresses since the pandemic downturn began.
The global cryptocurrency market cap stands at $831.94 billion, down 0.26% via Thursday, according to CoinMarketCap.
The FTX fallout continues
FTX’s ex-CEO Sam Bankman-Fried operated the platform as his “personal fiefdom,” FTX attorney James Bromley reportedly said in the firm’s first bankruptcy hearing. He added that a large portion of FTX’s assets may have been stolen or gone missing.
It was also disclosed that FTX and affiliates held $1.24 billion in cash – more than the debtors disclosed. The company owed ~$3.1 billion to its top 50 creditors.
Turkey is the next country to scrutinize FTX, with authorities looking to seize Fried’s assets. Meanwhile, a Texas regulator launched an investigation into whether celebrity endorsements of FTX violate securities laws.
Venture capitalist Bradley Tusk told CNBC that venture capitalists will step up their due diligence going forward after the FTX meltdown.
Genesis Global Capital, the crypto lending unit of broker Genesis, has reportedly hired investment bank Moelis to explore how to shore up its liquidity. Given its exposure to FTX, Genesis has been scrambling to raise cash and may have to file for bankruptcy protection.
Regulatory News
Amid mounting calls for increased scrutiny of the crypto space, some U.S. lawmakers reiterated that Fidelity Investments should reconsider allowing retail clients to invest a portion of their savings in Bitcoin (BTC-USD).
A group of lawmakers also urged financial regulators to scrutinize SoFi’s (SOFI) crypto trading activities, to which the company responded by saying it was “fully compliant” with the laws. Morgan Stanley believes the development increases the chances of SoFi (SOFI) exiting crypto entirely.
New York Gov. Kathy Hochul signed a two-year moratorium on proof-of-work mining, becoming the first state to partially ban PoW mining.
bitcoin price
Bitcoin (BTC-USD) has fallen 0.32% to $16.53K at 2:40 p.m. ET, while Ether (ETH-USD) fell 0.53% to $1.20 000.
Bitcoin (BTC-USD) appears to be forming a support level at ~$15.6k, but OANDA’s Erlam said it is likely that the $10k level could be retested in the coming days.
SA contributor Pinxter Analytics said in a bearish analysis that there may not be a bottom for Bitcoin (BTC-USD) prices as the crypto has nothing tangible to back it up. Conversely, The Digital Trend is bullish but cautions that it is a speculative investment.
Cathie Wood, a longtime crypto bull, reiterated her prediction that the price of Bitcoin (BTC-USD) will hit $1 million by 2030.
Billionaire investor Bill Ackman has flipped his views on cryptos, saying they are “here to stay.”
Crypto-related stocks that ended in the red on Friday include: Marathon Digital (MARA) -4.6%Riot Blockchain (RIOT) -3.7%Coin base (COIN) -2.8%Bit farms (BITF) -1.1%BitNile (NIL) -1%.
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