It’s been a week of consolidation in the cryptocurrency market, with the price of one bitcoin essentially the same as it was seven days ago, at least at the time of writing. However, this calm may be short-lived. While 2022 was a year in which all assets were primarily affected by major macro trends, all investors are waiting to see the impact of the US Federal Reserve’s decision to raise interest rates.
last year Federal Reserve In the US began an aggressive strategy to increase interest rates, with four consecutive increases of 75 basis points. However, the pace slowed after that, with only 50 basis points up. Market expectations point to a more moderate increase for the period, with most analysts expecting an increase of only 25 basis points. As is traditionally the case with the Federal Reserve, it is not the magnitude of the rally that is likely to influence the markets, but Jerome Powell’s comments about what to expect for the coming months of the year.
On January 31, a court-appointed forensic examiner, Ms. Sobha Pillai, presented her final report on certain operations of the Celsius cryptocurrency lending platform. This comprehensive document, consisting of 470 main pages and 31 appendices, was released on September 29. The picture isn’t anything rosy. In her report, Ms. Pillay outlined several key aspects of Celsius’ operations, including the storage of cryptocurrency for customers, the loyalty of the company’s public representation, the use of new deposits to pay off existing customers, the state of the company’s mining business, and tax compliance. “Selesie presented herself as an altruistic organisation,” Ms. Pillay wrote. However, “behind the scenes, Celsius conducted its business in a fundamentally different way than it presented itself to its clients, in all essential respects.” He points out that upon initial coin offering, Celsius did not inform the community that it was unable to raise the required $50 million, and instead generated $32 million. Additionally, Ms. Pillay documented how the company and its founder, Mr. Mashinsky, exercised control over the price of the original CELIUS token (CEL). However, these efforts have been compromised in part by accounting deficiencies. As a result, Celsius failed to generate sufficient returns on its crypto-asset investment to fully fund CEL’s acquisition. Thus, the company had to use bitcoins and ethers deposited by customers to fund CEL purchases.
You don’t have to research yet to understand accounting deficiencies. We learn through this same report that Celsius used Quickbooks to manage its accounts. FTX did the same. If the program is definitely suitable for small and medium-sized companies, it is definitely not suitable for those who claimed to be multinational companies only last year. When Pillay began compiling Celsius’ finances, the examiner found significant discrepancies between the account balances in the Quickbooks files downloaded from the Celsius account and those used to create the consolidated statements provided by the lender.
Along the same lines, note that the court document notes that “on or around February 15, 2023,” a group of users will be notified of their eligibility and begin the process of withdrawing their funds from the now-bankrupt platform. Most importantly, these users will only be able to withdraw 94% of their trapped cryptocurrency. Not that bad in the end. Who will be part of this group? Targets users who have deposited money into a “custodial program” or “percentage holding accounts” if such funds were “never in” the custodian program before or were transferred to the custodian program from interest-bearing or borrowing accounts within 90 days of the request, and if Its value is less than $7,575.
On the FTX side, federal prosecutors are trying to block FTX co-founder Sam Bankman-Fried from using encrypted messaging software, citing efforts that could “constitute witness tampering.” The government says Bankman-Fried wrote to Ryne Miller via Signal, an encrypted messaging app, on Jan. 15, days after those responsible for the cryptocurrency exchange’s bankruptcy claimed more than $5 billion in FTX assets. Miller is a current advisor to FTX US and a former partner at Kirkland & Ellis. Separately, the company’s lawyers said in a statement that at least some members of Sam Bankman Fried’s immediate family are not cooperating with the investigation into the stock market crash and should be questioned in court. Legal deposit filed on wednesday. The FTX founder’s brother, mother and father were his advisors and are set to be subpoenaed along with the company’s former executives as the company’s new management seeks to know what happened to the money allegedly embezzled, depending on the file. “The debtors and their advisors have worked tirelessly over the past 70 days…to establish controls, restore and protect the assets of the estate,” said the legal filing, which was jointly filed by FTX with representative creditors. “However, major questions remain regarding many aspects of debtor financing and its transactions,” the document continues.
In all this succession of bankruptcies for 2H Half of 2022 notes that defunct cryptocurrency lender BlockFi finally gets court approval to sell off its remaining assets. These include a $250 million line of credit due in June 2022, aimed at strengthening its balance sheet. An auction of the assets will be held on February 28. Creditors’ representatives have until March 16 to oppose the sale of these assets. According to a report from Bloomberg last week, the company was planning to dispose of 8,000 Bitcoin miners, in exchange for loans of up to $160 million.
Speaking of mining, note that this week again, the Bitcoin network is doing better than ever in its past history. Bitcoin mining difficulty is at an all-time high, increasing by about 4.68% from 37.59 trillion on Sunday to 39.35 trillion at the time of writing. Meanwhile, the bitcoin hash rate, which measures the amount of computing power devoted to mining the cryptocurrency, currently stands at 305.81 ExaHashes per second (EH/s). This figure is still lower than the absolute record set on January 6, which was 348.7 PE/S.
Another day, another rejection of Securities and Exchange Commission To allow the launch of a bitcoin cash ETF in the US. The latest rejected proposal from ARK Invest came from Cathie Wood and global cryptocurrency ETF provider 21Shares, who have joined forces for a second time in an effort to launch the ARK 21Shares Bitcoin ETF. The SEC made this decision for the same reasons as previously: Ark failed to demonstrate that the exchange’s regulations were sufficient to protect public investors from fraudulent and manipulative businesses and practices.
Tesla suffered a $140 million loss on its investment in bitcoin last year, as described in a filing it filed with the US Securities and Exchange Commission on Monday. The electric car maker posted a depreciation of $204 million with a gain of $64 million by converting bitcoins in 2022. An impairment charge describes a decrease or loss in the value of an asset. Remember, Tesla invested $1.5 billion in bitcoins in February 2021. At all times based on business needs and our view of market and environmental conditions,” the company said in a filing on Monday.
Who is interested in acquiring bitcoins? In contrast to the mainstream media that often associates cryptocurrencies with young, novice investors, a report from DeVere Group shows that it is the richest in society who are most interested in it. Despite a difficult year for cryptocurrencies, 82% of millionaire clients have considered investing in digital assets such as Bitcoin. Nigel Green, CEO and founder of The DeVere Group, said that while the interviewee group is generally more conservative, he believes the interest stems from Bitcoin’s core values of being “digital, global, borderless, decentralized, and non-manipulative.” Company studies from previous years showed a growing trend of interest among wealthy investors in cryptocurrency investments.
For many, BTC price action has always been associated with halving cycles (half) Bitcoin rewards, which last for four years. The resulting price pattern provides one among the “four best years” with the next being 2025. It must be said that these cycles have been strictly adhered to so far.
Analysts also try to use historical data from these cycles to predict what the next bull market might look like. This is an exercise made by speculator “TardiGrade” using a random bitcoin oscillator, which coincides with the highs and lows of the BTC/USD cycle. Currently, the indicator is printing its latest low, and if history is any guide, price behavior will do the same. The stochastic oscillator is a volatility tool, which compares closing prices to historical averages. “Bitcoin’s well-formed structure with random behavior suggests that the next high will be at 200k and the next bottom will be at 70k,” the analyst summarizes alongside an explanatory chart.
If so, the current Bitcoin price levels could, at a later date at least, present a tempting opportunity to enter the market.
This article is brought to you by Fonds Rivemont. The Rivemont Crypto Fund is Canada’s first actively managed cryptocurrency fund. RRSP and TFSA qualification. Accredited investors can learn more here.
Disclaimer: This column does not necessarily reflect the opinion of CryptonewsFR and does not constitute investment advice or trading instructions..
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