News Updates November 20, 2022
1. If Binance or Tether Collapse, it’s Game Over for Crypto, DOGE’s Founder Says
An eventual crash of Binance or Tether could cause a “big mega mondo market crash,” Shibetoshi Nakamoto assumed.
Dogecoin’s Shibetoshi Nakamoto believes a potential crash of the crypto exchange Binance or the stablecoin-issuer Tether could severely destabilize the entire industry.
He also advised people to do appropriate research and understand the digital asset’s sector specifics before entering it.
The Co-Creator of the memecoin Dogecoin – Billy Markus (better known as Shibetoshi Nakamoto) – thinks if either Binance or Tether goes down, this could be “pretty much game over.”
The American software engineer also outlined that an increasing number of people have realized that too much centralization is a “big weakness.”
The former CEO of Twitter – Jack Dorsey – was among the individuals to agree with Nakamoto’s assumption. He said such a potential meltdown will undoubtedly be “game over for the games.”
Still, DOGE’s creator believes the potential adverse event will not mean “crypto dies” but trigger a “big mega mondo market crash.”
Almost every disruption in the past, including the recent fiasco with FTX, has prompted severe market declines and panic among crypto participants. The uncertainty has also caused critics to proclaim bitcoin “dead.”
Despite “dying” over 460 times, the primary cryptocurrency is still around and keeps expanding its presence across the globe. It has become a legal tender in distressed economies like El Salvador and the Central African Republic, while numerous investors view the asset as a hedge against inflation because of its limited supply.
How Is Binance Doing?
Some market participants expected the FTX crisis to cause a domino effect and drag other exchanges into the mud.
The largest cryptocurrency platform – Binance – assured its balance sheet is stable and even topped up its Secure Asset Fund for Users (SAFU) to $1 billion to protect customers in case of emergency.
2. Crypto Markets Are Suffering – But Is It Really ‘Contagion’?
Sure, this crypto credit contagion is bad, but it’s unlikely to spread to other markets.
So we’re now roughly two weeks removed from the start of the FTX meltdown. The coverage on CoinDesk has been without peer.
Here are the biggest FTX-related stories from last week by my count:
FTX founder and former CEO Sam Bankman-Fried says “F*** regulators” in a Twitter Direct Message interview with Vox.
The new CEO of FTX, John J. Ray III, who led Enron through bankruptcy and is leading FTX through theirs, wrote about FTX that he has never “seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.”
Alameda Research, the crypto hedge fund which was joined at FTX’s hip, had a “Secret Exemption” from FTX liquidation protocols, basically a “god mode” button, as CoinDesk contributing editor Zack Seward put it, so as to not lose money when they should have.
But beyond topics directly related to FTX, let’s discuss this contagion – this crypto credit contagion – everyone seems to be talking about.
Crypto credit contagion is contained to crypto
Financial contagion is used to describe a crisis which spreads from one market or economy to another. An example: Home prices started falling in 2006, by September 2007 Lehman Brothers collapsed because of losses associated with subprime loans, and then a lot of people lost their jobs (like a lot).
This contagion was a credit contagion that spread everywhere. The reason these types of things happen is because of the complicated web woven among the countless financial institutions selling and buying countless financial instruments among each other. When one part of the web breaks down, other parts of the web start breaking down until all you’re left with is a shredded mess.
This is very clearly happening within crypto. Since the FTX fallout began we’ve had crypto lender BlockFi halt withdrawals from its platform citing exposure to FTX, then another crypto lender Genesis Global Capital also halted withdrawals, and then Winklevoss-owned crypto exchange Gemini shut down its Gemini Earn program which offered yield to customers through, you guessed it, crypto lending through Genesis.
(Genesis Global Trading is part of Genesis Global Trading and is owned by Digital Currency Group (DCG). DCG also owns CoinDesk.)
Oh, what tangled webs we weave.
3. Bitcoin Price Analysis: 18495 Target - 21 November 2022
Bitcoin (BTC/USD) sought additional technical guidance early in the Asian session as the pair continued to eye some upside technical targets and areas of potential selling pressure, including the 17791 and 18495 levels, related to selling pressure that commenced around the 21478.80 area. Traders have recently sought to sustain a break above the 17136.49 area, representing the 50% retracement of the recent appreciating range from 15512 to 18140.62. BTC/USD recently depreciated to the 15512 area, a two-year low that represented an exact bearish price objective based on selling pressure that strengthened around the 21478.80 and 18495.50 areas. Technical confirmation and validation occurred when Stops were elected below corresponding downside price objectives at the 17573.96 and 16651.45 areas. Associated downside price objectives below current price activity include the 13369, 8837, and 7538 levels.
The recent depreciation intensified after Stops were elected below the 16990, 16966, and 16503 levels, areas associated with historical appreciating ranges that commenced around the 3858 and 9819 levels. Technicians continue to eye the 14500.15 and 10432.73 areas as major downside targets. Additional downside price objectives include the 14613, 10727, and 9682 levels, areas that are related to selling pressure that intensified around the 20894.96 and 18495.50 areas. Following the recent move lower to two-year lows, areas of potential technical resistance include the 17791, 18495, 19199, 20070, and 20201 levels. Traders are observing that the 50-bar MA (4-hourly) is bearishly indicating below the 200-bar MA (4-hourly) and below the 100-bar MA (4-hourly). Also, the 50-bar MA (hourly) is bearishly indicating below the 100-bar MA (hourly) and below the 200-bar MA (hourly).
Price activity is nearest the 200-bar MA (4-hourly) at 16803.17 and the 50-bar MA (Hourly) at 16882.47.
Technical Support is expected around 15512/ 13369.11/ 10727.75 with Stops expected below.
Technical Resistance is expected around 18495.40/ 19199.48/ 20070.64 with Stops expected above.
On 4-Hourly chart, SlowK is Bearishly below SlowD while MACD is Bullishly above MACDAverage.
On 60-minute chart, SlowK is Bullishly above SlowD while MACD is Bullishly above MACDAverage.
4. Ethereum co-founder Tells Why He is Unhappy With Singapore’s Regulatory Approach
The Ethereum co-founder said that the decision to restrict retail crypto trading could derail Singapore's plans of becoming a crypto hub.
Amid the crypto winter of 2022, Singapore’s regulatory authorities have been keeping stricter vigilance over the functioning of the country’s crypto industry. However, Ethereum co-founder Vitalik Buterin has slammed the country’s regulator.
During his latest interview with Strait Times, Buterin said that Singapore’s ambition to become a crypto hub may not work due to its skeptical approach towards digital assets. He added:
The city-state’s “willingness to make a distinction between blockchain usage and cryptocurrency is like one of those weird things. The reality is if you don’t have cryptocurrency, blockchains that you’re going to have are just fake and nobody’s going to care about them.”
Amid the collapse of Singapore-based Terra Labs earlier this year, Singapore is putting a greater focus on crypto regulations in the country. To reduce risks from the crypto market’s volatility, Singapore has decided to restrict retail investors’ access to crypto trading.
This includes banning small investors from fund coin purchases as well as restricting them from borrowing and lending activities. Last month, central bank – the Monetary Authority of Singapore (MAS) – also proposed a fresh set of regulatory measures. The regulatory authorities in Singapore said that they are ok with having stablecoins.
5. FTX Exploiter Converts Millions in Ether to Alameda-Linked Ren Bitcoin Tokens
In addition, the exploiter transferred thousands of ether to a brand-new wallet.
Whoever was behind the $600 million exploit of crypto exchange FTX started exchanging millions of dollars worth of ether to Ren Bitcoin (renBTC), a token that represents bitcoin on other blockchains, early on Sunday.
Funds stolen from FTX were steadily converted to ether over the past week, making the exploiter one of the largest holders of the token, as CoinDesk previously reported.
The use of renBTC may surprise some in the crypto space: In 2021, Alameda Research – the Sam Bankman-Fried-owned trading arm at the center of a multibillion-dollar scandal – said Ren’s development team was “joining” Alameda and would work on expanding Ren’s usage to several blockchains.
At 7:27 UTC Sunday, the hacker moved over 5,000 ether to a new wallet, blockchain data shows. An additional 35,000 ether was then moved to that wallet over three separate transactions.
On-chain analysis of the new wallet shows the exploiter subsequently started to convert ether to renBTC using the decentralized exchange aggregator 1inch. The first of such transactions saw 4,000 ether being converted to wrapped bitcoin (wBTC), another bitcoin representative token, and then to renBTC.
