Here’s what happened in blockchain and crypto this week.After reclaiming $1 trillion in global market cap, Bitcoin and cryptoassets pared gains earlier this week amid an announcement by the U.S. Departments of Justice and Treasury of a joint enforcement action against an international crypto entity on Wednesday. BTC fell more than $800 to below $20,800 but managed to recoup most of the losses today. Likewise, cryptoassets rebounded across the board despite the news that Genesis Global filed for bankruptcy on Thursday afternoon. BTC and ETH also weathered the weakness in equity markets this week. After a strong start in 2023, the Nasdaq has entered consolidation territory. In global macro releases, U.S. Producer Price Index (PPI) data came in lower than expected in December – a strong signal that inflation continues to decelerate as PPI is typically considered a leading indicator for CPI. On Wednesday, several FOMC members spoke in support of a 25 basis points rate hike in February. Elsewhere, crypto venture capital funding is building momentum amid a slew of deals this week. Digital Currency Group (DCG) subsidiary Genesis Global Holdco filed for Chapter 11 bankruptcy protection late Thursday in New York federal bankruptcy court. In the filing, the company published a list of its top 50 unsecured claims. Genesis owes more than $3.6 billion to its top creditors, according to the document. Some of the biggest claims — including one of almost $500 million — are attached to entities whose identities have been redacted. In a letter to clients, Genesis interim CEO Derar Islim said that “Our goal is to move through the Chapter 11 process as quickly and efficiently as possible while reaching the best outcome and emerging well-positioned for the future”. The ailing crypto lender’s travails have spilled over to other crypto firms, most notably crypto exchange Gemini, whose Earn program had been halted since November and has since been shuttered. Gemini is Genesis’ biggest creditor with a claim of $766 million. The exchange’s co-founder Cameron Winklevoss threatenedto take legal action against its parent DCG and CEO Barry Silbert. In a tweet thread, Winklevoss said on Thursday that unless DCG and Silbert make a “fair offer” to Gemini’s Earn customers, legal action will be taken against them “imminently.” Previously, Winklevoss was involved in a weeks-long public spat with Silbert over the loan repayment and called for Silbert’s ousting from DCG. Among other things, he argued that Silbert had mixed funds between the numerous subsidiaries within DCG while also engaging in “bad faith stall tactics”. Earlier this week, DCG subsidiary CoinDesk reported that DCG has suspended its quarterly dividends, according to a shareholder letter. The firm said that “In response to the current market environment, DCG has been focused on strengthening our balance sheet by reducing operating expenses and preserving liquidity. As such, we have made the decision to suspend DCG’s quarterly dividend distribution until further notice”. Meanwhile, DCG’s crypto media outlet CoinDesk may pursue a full or partial sale as it seeks to raise capital for its future growth, CEO Kevin Worth said. Earlier, the WSJ reported that the crypto media site approached Lazard, a firm specializing in mergers, restructuring and capital strategy, as the company explores a potential sale amid “numerous inbound indications of interest”. Market Overview The global cryptoasset market capitalization currently amounts to $1.03 trillion – up significantly from the $953 billion on Friday last week, with bitcoin accounting for 40%. Among the Top 30 cryptoassets by market cap, Solana (SOL) outperformed, gaining roughly 38% over the week. During the same period, the price of bitcoin (BTC) increased by 13.4% to $21,414 while the price of ether (ETH) rose 12.4% to $1,593. The total value locked (TVL) in DeFi is sitting at $45.7 billion – with Ethereum accounting for more than 60.4% of TVL. This Week’s Headlines
Notable Deals and Fundraising
Manuel Trojovsky, Head of Crypto Investments & Research Always be up to date on the market -> Subscribe here |
