News Updates November 09, 2022
1. Bitcoin, Ethereum, Solana Swing Wildly as Market Reacts to Binance-FTX Bombshell
The market is experiencing a big sell-off as traders decide what to do with the big market-shifting news.
Bitcoin, Ethereum, Solana, and most other cryptocurrencies are experiencing a brutal sell-off following wild price gyrations today as traders make up their minds about what to do with the news that Binance is acquiring FTX.
Bitcoin, the largest cryptocurrency by market cap, was already suffering this morning, trading below $20,000 after traders liquidated their futures positions and sold-off their holdings last night. Then news dropped that Binance, the world’s biggest digital asset exchange, was buying its primary competitor FTX, following a public feud between the two CEOs of the companies.
Bitcoin has since swung up and down in price—at one point briefly closing in on $21,000.
But the asset’s price has since quickly plunged: it is now down 9.4% in 24 hours, priced in at $17,100, according to CoinGecko data.
Ethereum is not doing well, either. The second biggest digital asset has now dropped below its crucial $1,500 mark—priced in at $1,413—an 11% 24-hour drop.
The sell-off now means that both assets are down significantly in the past seven days: Bitcoin has lost 7.5% of its value while Ethereum is down 10.3%.
Hit even harder than the two biggest cryptocurrencies by market cap is Solana—now the eleventh largest digital asset—which is down nearly 30% in the past day, valued at $23.97.
FTX, which is one of the biggest spot and derivatives exchanges by volume, has deep connections to Solana, an Ethereum and Binance Smart Chain competitor. FTX last year launched a marketplace for Solana NFTs and has invested big money in several Solana-related crypto projects.
2. Targeted Takeover? CZ’s FTX Rescue Coincides With Midterms
The acquisition — pending due diligence — comes after Sam Bankman-Fried drafted his own proposal for US crypto legislation.
HOW ARE INSTITUTIONS TRADING IN THE BEAR MARKET? FIND OUT.
The unexpected election day truce between crypto exchanges Binance and FTX might be enough to overshadow voting-related volatility as shifting digital asset regulation comes into focus, analysts said Tuesday.
When Binance CEO Changpeng “CZ” Zhao announced tentative plans on Twitter to acquire rival exchange FTX, cryptocurrencies posted a swift turnaround — a bounce analysts were not anticipating ahead of midterm election results.
There is a definite agenda on the Republican side for crypto legislation, there’s shovel-ready bills ready to go,” said Nic Carter, general partner at Castle Island Ventures, on a Blockworks Twitter Spaces. “And I’m certain that this will focus on the spot [markets,] the centralized exchanges, primarily because that’s how the government knows how to regulate.”
Unexpected election day truce between crypto exchanges Binance and FTX might be enough to overshadow voting-related volatility as shifting digital asset regulation comes into focus, analysts said Tuesday.
When Binance CEO Changpeng “CZ” Zhao announced tentative plans on Twitter to acquire rival exchange FTX, cryptocurrencies posted a swift turnaround — a bounce analysts were not anticipating ahead of midterm election results.
“There is a definite agenda on the Republican side for crypto legislation, there’s shovel-ready bills ready to go,” said Nic Carter, general partner at Castle Island Ventures, on a Blockworks Twitter Spaces. “And I’m certain that this will focus on the spot [markets,] the centralized exchanges, primarily because that’s how the government knows how to regulate.”
The acquisition — which is pending due diligence and settling on terms — comes after FTX CEO Sam Bankman-Fried, known for his cozy political relationships with US politicians and corresponding campaign donations — drafted his own proposal for crypto legislation that was presented by US Sens. Debbie Stabenow and John Boozman in September.
With senators and representatives up for reelection, progress on advancing any legislation has been stalled in recent months, and the crypto industry in particular has been increasingly uncertain about where Tuesday’s results might leave the space.
The bill was not well received by the DeFi community due to its definition of “digital commodity” and other proposed rules. As of Tuesday, the industry was not optimistic about the future of the bill.
Kevin March, co-founder of digital assets trading platform Floating Point Group, told Blockworks that Binance “created a run on the bank [for] FTX,” dubbing CZ’s public move to sell the market maker’s FTT tokens a precursor to a “targeted hostile takeover.”
FTT is the native token for FTX, which powers transactions on the exchange and comes with associated diminished trading fees.
“This event could certainly accelerate US market regulation as institutions push for a better alternative now that there’s been so much consolidation,” March said.
As regulatory issues remain unsettled, the industry largely is still taking the pending merger as a net-positive, according to Leah Wald, CEO at digital asset fund manager Valkyrie Investments.
“Rumors of liquidity issues at FTX have been circulating for a bit now, but the speed at which this transaction has come together is surprising, even in the wake of FTX reportedly pausing withdrawals earlier today,” Wald said. “Binance stepping in to apparently shore up FTX’s balance sheet and ensure customers are made whole is a testament to the resiliency of the industry as a whole.”
3. Midterm Elections 2022: Crypto Live Blog.
The U.S. votes for the House and Senate on Tuesday, potentially setting the direction for the next two years of legislative and regulatory action.
The crypto industry has tried to play a major role in the election through donations, though results have been tempered at best. Despite that, a number of candidates with strong views on crypto are on the ballot, and whether or not they’re elected – as well as which party ends up controlling the House and the Senate – could well determine what sort of legislative priorities receive attention next year.
Despite their importance, the main story Tuesday was the surprise announcement by Sam Bankman-Fried, a major donor and the founder of trading firm FTX, and Changpeng “CZ” Zhao, the founder of Binance, that the latter had signed a non-binding letter of intent to acquire FTX.
The news came days after CoinDesk first reported that much of FTX sister firm Alameda Research’s balance sheet was composed of FTX’s own exchange token FTT, raising questions and concerns that the company may not have been as well-collateralized as it purported to be.
Prior to last week’s news, Bankman-Fried was a prominent face in Washington D.C, telling a banking conference last month that he spent much of his time talking to lawmakers and regulators. His influence may wane, given his company’s sudden decline, and legislative issues like the Digital Commodities Consumer Protection Act, which he supported, may suddenly lose industry backing.
4. Robinhood Is Down 20% After Binance Announces FTX Acquisition
FTX currently holds over 56 million shares of Robinhood stock.
The price of publicly traded exchange Robinhood stock is down 20%, to around $9.74, on news that Binance will acquire Sam Bankman-Fried's FTX, which took a 7.6% stake in the popular trading platform in May.
Robinhood opened the day trading at $11.72 before news of the FTX buyout became known.
According to an SEC filing, FTX bought just over 56 million shares of Robinhood, leading some to believe that Bankman-Fried intended to buy Robinhood outright, a claim he denied. Despite this, the price of HOOD jumped 14% on the news of the potential acquisition, to $9.12.
Robinhood went public in July 2021, selling initial public offering shares at $38 per share, raising close to $2 billion.
Robinhood Is Down 20% After Binance Announces FTX Acquisition
FTX currently holds over 56 million shares of Robinhood.
The price of publicly traded exchange Robinhood stock is down 20%, to around $9.74, on news that Binance will acquire Sam Bankman-Fried's FTX, which took a 7.6% stake in the popular trading platform in May.
Robinhood opened the day trading at $11.72 before news of the FTX buyout became known.
According to an SEC filing, FTX bought just over 56 million shares of Robinhood, leading some to believe that Bankman-Fried intended to buy Robinhood outright, a claim he denied. Despite this, the price of HOOD jumped 14% on the news of the potential acquisition, to $9.12.
Robinhood Adds Aave and Tezos
Trading app RobinHood has added cryptocurrencies Tezos (XTZ) and Aave (AAVE), allowing users to buy and sell the tokens on its platform. The company tweeted the announcement on Monday, linking...
During the pandemic, Robinhood became a popular trading platform for people stuck at home with government stimulus money in their bank accounts. In January 2021, an army of investors used Robinhood to fight off a short squeeze of the retail gaming company GameStop.
"Robinhood created this app that's very fun. It certainly does gamify Wall Street to a point where it makes it as easy as a video game, there's no fees, and with very little education, you can go on and buy and sell stocks," Ben Mezrich, author of The Antisocial Network told Decrypt at the time. "The double edge of that sword ... is that regular people also can lose a lot of money if they don't have their eyes open and see what can happen."
Robinhood went public in July 2021, selling initial public offering shares at $38 per share, raising close to $2 billion.
Robinhood to Lay Off 9% of Employees as Growth Slows
Brokerage app Robinhood is laying off 9% of its workforce, according to a statement from CEO Vlad Tenev today. Tenev called the decision "necessary," citing a change in Robinhood customers' be...
In the 1st quarter of 2022, Robinhood saw an 18% decline in revenue after laying off 9% of its staff. The firm blamed a global downturn in casual investment activity at the time. In April, Robinhood was downgraded from "neutral" to "sell" by Goldman Sachs before raising it back to neutral in June.
5. US Midterm Elections: Outcome Will Decide the Future of Crypto Legislation – Republicans to Gain Majority?
The US midterm elections are underway, and the outcome could have a larger impact on the future of crypto regulation than most people believe.
Polling so far in the election has indicated a clear lead to the Republican Party for the House of Representatives, while the Senate is a bit more uncertain. If the Republicans can secure a majority in the House and the Senate, the US could be facing more political gridlock over the coming years given that the White House remains under Democratic control for at least another two years.
For crypto, the election matters given important regulatory matters on the government’s agenda. According to a recent Bloomberg report, the crypto industry had widely expected 2022 to be the year when regulatory clarity could finally arrive, or that lawmakers – at the very least – would come up with a plan to regulate crypto.
With only two months left of the year, however, the chances that any crypto-related bills will be passed by Congress appear very slim, the report pointed out. Still, it’s not all bad for the crypto industry, where the general sentiment is that Republicans are expressing more favorable views than their Democratic colleagues.
The US midterm elections are underway, and the outcome could have a larger impact on the future of crypto regulation than most people believe.
Polling so far in the election has indicated a clear lead to the Republican Party for the House of Representatives, while the Senate is a bit more uncertain. If the Republicans can secure a majority in the House and the Senate, the US could be facing more political gridlock over the coming years given that the White House remains under Democratic control for at least another two years.
For crypto, the election matters given important regulatory matters on the government’s agenda. According to a recent Bloomberg report, the crypto industry had widely expected 2022 to be the year when regulatory clarity could finally arrive, or that lawmakers – at the very least – would come up with a plan to regulate crypto.
With only two months left of the year, however, the chances that any crypto-related bills will be passed by Congress appear very slim, the report pointed out. Still, it’s not all bad for the crypto industry, where the general sentiment is that Republicans are expressing more favorable views than their Democratic colleagues.
For instance, one of the most notable crypto critics in the House is Democratic Representative Brad Sherman, who first became known in the crypto community in 2019 when he proposed a ban on cryptoasset purchases in the US. The Congressman followed up with more sarcastic remarks on crypto during a hearing in December last year, when he suggested that “bitcoin could be displaced by ether” and various obscure altcoins he referred to as “hamster coin” and “mongoose coin.”
Moreover, it is believed that a Republican-controlled Congress would push more aggressively to pass bills that the crypto industry is asking for. Additionally, Bloomberg also noted that Republicans are likely to put pressure on regulators like the SEC to ease their aggressive stance towards the crypto industry.
