Chart of the Day
US stocks sank as Federal Reserve officials warned of underestimating the chances of higher rates in light of the Fed’s resolve to curb inflation. Asian stocks rebounded in the early hours of Tuesday as a nationwide protest against China’s “Covid zero” strategy eased. The dollar fell as sentiments improved and risk appetite returned.
In the broader crypto market, major cryptocurrencies rallied despite the fall of yet another major lender amid the spread of the FTX contagion. As of the time of writing, BTC is trading near the $16.5k region after posting a 2% gain in the last 24 hours. The largest cryptocurrency by market cap demonstrated some resilience in its price action despite a wider slowdown in asset activity and further implosions related to the FTX collapse. ETH is up 3.3% in the same period, and is now attempting to establish a stronger footing above the $1,200 handle. Most major altcoins have flipped green, with LINK and a handful of memecoins leading the recovery on double-digit percentage gains in a similar time frame.
Just as the industry continues to absorb the aftershock of recent blows, the amount of synthetic BTC assets on Ethereum continues to fall from its all-time high near 338k in April. The team behind renBTC, who lost their funding after Alameda Research filed for bankruptcy, has halted issuance. The team has decided to gradually phase out the Alameda-tied Ren 1.0, and launch a 2.0 version once they have more funding. WBTC, the largest supplier of BTC on Ethereum, was embroiled in the fear of an impending de-peg over the weekend, but has since restored some confidence after its official custodian assured that WBTC is safe and fully backed.
Talk of the Town
Crypto lender BlockFi filed for chapter 11 bankruptcy on Monday, spotlighting the latest contagion effects that have been unleashed by the FTX collapse. According to the firm’s bankruptcy petition, BlockFi claimed more than 100,000 creditors, with $1 billion in assets and $10 billion in liabilities. Bankruptcy gives BlockFi an opportunity to formulate a repayment plan for creditors, and get back what they can from FTX, although potential recoveries are a long way off. The firm’s advisor Mark Renzi acknowledged in a court filing that the “full extent of the fallout from FTX’s collapse remains to be determined”.
