Newsletter Volume 17
Article 1 — The Market This Week
The cryptocurrency market has been experiencing a significant sell-off this week, which has caused turbulence for investors. One notable victim of this market downturn is Silvergate, whose stock has taken a substantial hit due to a delayed SEC filing. However, the delay means that a short squeeze, which many investors were hoping for, is now unlikely to occur.
Silvergate is a bank that services several significant players in the cryptocurrency industry, including Circle and Kraken. However, the bank has run into difficulties due to the volatility of the crypto market, which has affected its business in recent months. In addition, the company’s fourth-quarter earnings report revealed a staggering $1 billion loss, which has caused many investors to lose confidence in the bank.
In addition to its financial troubles, Silvergate is also facing scrutiny from various government agencies due to its involvement in the digital assets side of its business. This has led to some concerns about the bank’s future as it struggles to maintain its capital position in the face of a wave of withdrawals.
Despite these challenges, some investors remain optimistic about Silvergate’s future. BlackRock, the world’s largest asset manager, recently boosted its stake in the company to 7.2%, indicating that it still sees potential in the bank. However, the recent collapse of Silvergate’s stock has made it clear that there are no guarantees in the volatile world of cryptocurrency.
Overall, the story of Silvergate serves as a cautionary tale for investors in the cryptocurrency industry. While there is undoubtedly potential for significant profits in this market, significant risks are also involved. As the market continues to evolve, it will be interesting to see which players emerge as winners and which ones are left behind.
Total Crypto Market Cap: $1.07 T
Ethereum Market Cap: $189.12 B
ETH/BTC Ratio: 0.07
Ethereum Gas Price: 22 gwei
DeFi TVL: $76.18 B
Fear and Greed Index: 50 (Neutral)
Federal Reserve Balance Sheet: $8.33 T
Article 2 — Weekly Review of IC15
Cryptocurrencies are always evolving, and this week has been no exception. The IC15 benchmark Index saw a positive rise, with Uniswap, Litecoin, Polygon, and Chainlink all making notable gains. However, Cardano was down by 0.25%, putting a damper on an otherwise positive showing. Despite fluctuations, the market capitalization of cryptocurrencies remains robust at $1.081 trillion.
The National Assembly has voted in favour of stricter cryptocurrency regulations in France. This move is designed to protect investors and bring transparency to the industry. Meanwhile, the government of Ras Al Khaimah (Abu Dhabi) has announced plans for a free zone that offers zero taxes and 100% foreign ownership to digital and virtual asset firms. The goal is to create a hub for the development of Metaverse, blockchain, virtual asset wallets, NFTs, and other Web3-related services.
In other news, South Korea and Binance are reportedly collaborating on a new virtual asset exchange for the government and financial authorities in South Korea. Meanwhile, the Tel Aviv Stock Exchange is considering approving crypto trading services for non-banking members in Israel.
The Reserve Bank of Australia has announced a series of projects aimed at building use cases for its CBDC, the eAUD. These projects will test the use of the eAUD for offline payments, bond settlements, securities trading, and more. Additionally, Binance’s custody arm, Ceffu, has applied for a Capital Markets Service license in Singapore for its custodial services.
Finally, Chiliz and Jump Crypto have launched an incubator and accelerator program called Chiliz Labs with a massive $50 million investment. The program aims to support early-stage blockchain projects. In addition, the provenance Blockchain Foundation has also launched a $50 million program to support blockchain developers in regulating financial services on the blockchain. As the world of cryptocurrencies continues to evolve, there’s clearly no shortage of exciting developments to watch.
Article 3 — Battle of Bull and Bear
In the volatile world of cryptocurrency, XRP has been the subject of intense speculation and debate among traders and investors. However, despite breaking below a critical uptrend at the start of the year, the bulls have managed to keep the cryptocurrency above the $0.37 level, with support from broader crypto markets and a weaker US dollar.
As short-term speculators anticipated a drop in XRP’s price, the cryptocurrency has retraced back to the north of its 100-Day Moving Average at $0.381, with bulls now eyeing a retest of the 200DMA just ahead of the $0.40 mark. However, a downtrend linking highs going back to September 2022 poses a key resistance area.
XRP traders continue to await updates on Ripple’s ongoing lawsuit with the US Securities and Exchange Commission, which alleges that Ripple issued XRP as an unlicensed security to US investors. The bulls hope for a favourable outcome in the lawsuit or a settlement that could significantly boost the XRP price.
While XRP’s short-term outlook is mixed, a bullish breakout above the cloud of moving averages and the downtrend from last year could pave the way for a quick retest of earlier yearly highs in the $0.43 area, even a run towards the $0.50s. However, failing any near-term bullish break, a gradual grind towards $0.30 remains a strong possibility.
For traders seeking quick gains, alternative high-potential tokens sold in pre-sale by promising up-and-coming crypto projects may be worth considering. The Cryptonews Industry Talk team has reviewed some of the best candidates in a list of the top 15 cryptocurrencies for 2023.
Article 4 — Weekly Spotlight
This week’s attention has been brought to Marathon Digital. This Nevada-based crypto miner has postponed its Q4 earnings release after the US Securities and Exchange Commission (SEC) flagged accounting errors in its financial statements. The errors include calculating impairment of digital assets and determining revenue from contracts with customers. In addition, Marathon Digital recently determined that it acted as a principal instead of an agent in operating a third-party mining pool, leading to unreliable portions of its financial statements in 2021 and unaudited quarterly reports for 2022. As a result of the restatement, several figures, including revenue, cost of revenue, energy, and hosting, are expected to change.
However, the restatement is not expected to impact the total margin, operating income, or net income in 2021 or 2022. Marathon Digital’s stock has declined over the past year but rose 17% in the last three months, ending Tuesday’s trading at $7.10 per share on the Nasdaq. Due to the SEC’s letter, the company is unable to file and make corrections to its 2022 annual report on Form 10-K by its March 1 deadline, but it expects to file within 15 days of this deadline.
On the other hand, Visa, a global payment technology company, has been closely monitoring the rapidly evolving crypto industry and actively involved in the space for some time. The company has already established its foothold in the crypto world by offering cards that allow users to spend their crypto assets at merchants that accept Visa payments. Moreover, Visa has been expanding its presence in crypto with plans to roll out these cards to 40 new countries.
Despite recent setbacks, such as terminating global credit card agreements with the now-defunct crypto exchange FTX, Visa has remained committed to its vision of a crypto-friendly payments ecosystem. The company’s head of crypto, Cuy Sheffield, recently emphasized that reports of Visa slowing down its crypto push were inaccurate. The company still believes that fiat-backed digital currencies running on public blockchains have the potential to play a significant role in the payments industry.
In October, Visa filed new trademark applications that have stirred up rumours of potential plans for a crypto wallet and a metaverse product. While details remain scant, it is clear that Visa is keeping a close eye on the emerging trends in the crypto industry and is poised to take advantage of new opportunities as they arise. With its vast experience in the payments industry, Visa could play a significant role in shaping the future of crypto adoption and integration into mainstream financial systems.