Bitcoin

Bitcoin Tops $19K, Blockchain.com Cuts Jobs, Sam Bankman-Fried Blogs

Sam Bankman-Fried, the disgraced former chief of FTX, denied stashing away billions of dollars and gave his take on what happened to his bankrupt crypto exchange in a lengthy new post on Substack published Thursday.

This article originally appeared in Crypto Markets Today, CoinDesk’s daily newsletter diving into what happened in today’s crypto markets. Subscribe to get it in your inbox every day.

  • He denied stealing funds and claimed FTX and sister company Alameda Research collapsed because of the crypto market meltdown and inadequate hedging on Alameda’s part.

  • “I didn’t steal funds, and I certainly didn’t stash billions away,” Bankman-Fried wrote. Later in the post he concluded that “Alameda lost money due to a market crash it was not adequately hedged for.”

  • While alleging the trading firm “failed to sufficiently hedge its market exposure,” he also said he “hasn’t run Alameda for the last few years.”

  • Bankman-Fried faces numerous federal charges including conspiracy to commit fraud, and is now free on bail at his parents’ home in California. He has pleaded not guilty to the charges, but his lieutenant and Alameda chief Caroline Ellison pleaded guilty to fraud charges and is now cooperating with an investigation with the U.S. Attorney for the Southern District of New York.

  • While casting the blame of FTX’s downfall on Alameda’s poor hedging, Bankman-Fried notably didn’t address the $65 billion line of credit he opened from the exchange to the trading arm, as revealed in a court hearing on Wednesday. At the hearing, a lawyer representing FTX in its Chapter 11 bankruptcy proceedings said the credit line has led to a “shortfall in value” in repaying customers and creditors.

(CoinDesk and highcharts.com)

(CoinDesk and highcharts.com)

Bitcoin (BTC): The largest cryptocurrency by market value briefly topped $19,000 Thursday – rising 8% for the day and reaching its highest level since the FTX-crash-induced market sharp downturn in early November. Crypto-related stocks even made larger gains as the rally in the sector continued. BTC slid earlier in the day after the latest U.S. Consumer Price Index (CPI) report showed that inflation slowed down last month before experiencing a quick surge in the afternoon trading hours (ET). It had settled back to $18,800 as of publication time.

Equities closed higher Thursday following the positive inflation data: Both the tech-heavy Nasdaq Composite and Dow Jones Industrial Average (DJIA) were up 0.6%, while the S&P 500 was up 0.3%.

Ether (ETH): The second-largest cryptocurrency recently followed BTC’s direction, rising 6% for the day to trade around $1,427 as of press time. As Ethereum’s upcoming Shanghai upgrade approaches in spring, data from Etherscan shows that more than 16 million ETH have been deposited into Ethereum’s Beacon Chain staking contract as of Thursday, representing over $22 billion at current prices.

CoinDesk Market Index (CMI)

911.03

+54.7 6.4%

Bitcoin (BTC)

$18,832

+1304.2 7.4%

Ethereum (ETH)

$1,424

+82.2 6.1%

S&P 500 daily close

3,983.17

+13.6 0.3%

Gold

$1,900

+25.6 1.4%

Treasury Yield 10 Years

3.45%

0.1

BTC/ETH prices per CoinDesk Indices; gold is COMEX spot price. Prices as of about 4 p.m. ET

Crypto Market Analysis: Inflation Cools, but Hopes for Fed Pivot Might Be Too Hot

By Glenn Williams Jr.

Bitcoin and ether responded positively to the release of December inflation data, with prices fluctuating as the day progressed.

BTC’s hourly chart shows a sharp uptick in trading volume during the hour of the announcement. Most telling in that hour of trading is the momentary decline in prices, implying that some traders viewed the inflation data as an opportunity to take profits. ETH’s hourly chart shows almost identical price behavior, with a slight increase upon release of the report, followed by a price decline in the following hour.

Probabilities that the Federal Reserve will raise interest rates by 25 basis points in February rose to 96% from 77% a day prior. Verbally this could be categorized as a shift from highly likely … to really, highly likely. Traders are reducing their bets on a more aggressive hike of 50 basis points.

But the federal funds futures curve implies that interest rates will increase to near 5% before pivoting lower in the second or third quarter of 2023. This remains largely unchanged – a sign that while the Fed might slow the pace of hikes, it will stay in hiking mode for quite a while.

Bitcoin 1/12/23 (TradingView)

Bitcoin 1/12/23 (TradingView)

Read the full technical take here.

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