The crypto market resembles the Nasdaq in the early 2000s. Here’s why:

Hello! Welcome to Distributed Ledger, our weekly crypto newsletter that arrives in your inbox every Thursday. I’m Frances Yue, a crypto reporter at MarketWatch, and I’m going to walk you through the latest in this bear market.

Find me on Twitter at @FrancesYue_ to send feedback, or tell us what you think we should deal with. You can also reach me via email to share your personal stories with crypto.

As the Federal Reserve raised its benchmark rate for the fourth time this year on Wednesday to calm inflation, I sat down with Ben McMillan, founder and chief investment officer at IDX Digital Assets, to discuss the recent state of the crypto market.

To advertise

Crypto at a glance

Bitcoin BTC USD,
+4.43%
gained 0.8% in the past seven days, trading around $23,908 on Thursday, according to data from CoinDesk. Ether ETHUSD,
+7.74%
rose 6.4% over the seven-day period to about $1,732. Dogecoin DOGEUSD Meme Token,
+5.21%
fell 3.5% while another dog-themed token, Shiba Inu SHIBUSD,
5.22,
decreased by 5% from seven days ago.

cryptographic statistics
The biggest winners Price %return in 7 days

Bitcoin Gold

$26.86

45.2%

Ethereum Classic

$33.75

44.1%

Celsius network

$1.14

42.4%

Qtum

$4.30

40.5%

Lido CAD

$2.22

38.7%

Source: CoinGecko as of July 28
The biggest declines Price %return in 7 days

amplifier

$0.009

-7.3%

Houbi

$4.42

-6.2%

Dogecoin

$0.07

-5.7%

Share Frax

$6.26

-5.6%

algorithm

$0.33

-5.5%

Source: CoinGecko as of July 28
Nasdaq early 2000s?

Today’s crypto market “looks a lot like the Nasdaq in the early 2000s after the washout,” IDX’s McMillan said in a telephone interview. For the past two months, the crypto market has struggled with contagion as hedge fund Three Arrows, broker Voyager and lender Celsius went bankrupt.

“You had some big, high-profile closing events,” McMillan said. “Like long-term capital management in the late 90s or Pets.com, there were a lot of flawed business models that simply messed with the hype of vanished digital assets.”

“Eventually, we saw a similar paradigm play out in the early 2000s with technology stocks, and it ended up being a buying opportunity for generations,” McMillan said.

But in a risky environment, IDX’s Risk-Managed Bitcoin Strategy Fund BTIDX mutual fund,
+4.29%
has kept its investments largely in cash since late last year, with bitcoin rising more than 67% from its November high, McMillan said.

According to McMillan, the fund has recently “started to put some risk back on the table.”

“What we’re looking for is what we call a kind of faith-buying behavior. We want to see it, especially with a volatile market like bitcoin or other digital assets. For an asset class that is no stranger to withdrawals above 50%, risk management becomes really important, especially for institutional clients, who are primarily the ones we serve,” said McMillan.

Listen to Mike Novogratz at the Best New Ideas in Money Festival September 21-22 in New York City. Galaxy Digital CEO has ideas for navigating the crypto winter.

FTX’s rescue plan for Voyager?

Bankrupt crypto broker Voyager Digital has rejected a proposal from Sam Bankman-Fried crypto exchange FTX and Alameda Ventures, saying it is a “low offer disguised as a white knight rescue”.

On July 22, FTX and Alameda jointly offered to buy all of Voyager’s digital assets and crypto loans, except its claims on hedge fund Three Arrows, in “cash” at fair market value. This value would be “calculated in good faith by Alameda based on market practices and available pricing information,” according to the proposal, with Voyager confirming.

As part of the proposal, FTX and Alameda also offered to provide Voyager customers with early liquidity, where they could choose to create a new account with FTX and receive a cash balance equal to a portion of their receivables. with travel.

In response to FTX and Alameda’s proposal, Voyager’s attorneys said it would harm the company’s customers, increase efforts to maximize value in the bidding process, limit users’ crypto requests to their dollar value and give consumers the tax consequences of transactions, among other things. other concerns.

“The AlamedaFTX proposal is nothing more than a liquidation of the cryptocurrency on a basis that benefits AlamedaFTX,” Voyager attorneys wrote in a lawsuit on July 24.

Still, “the deal isn’t dead per se,” Bankman-Fried said in an interview with Yahoo Finance on Tuesday. “Ultimately, the shareholders decide what they want to promote. And I don’t think we’ve seen a final trip on that side.

In a series of tweets, Bankman-Fried argued that their proposal would benefit consumers by providing faster repayments. “The longer the bankruptcy process drags on, the more options lose customers,” the crypto billionaire tweeted. He also tweeted that some other third parties could bid on plans that will give customers more haircuts.

Crypto Companies, Funds

Shares of Coinbase Global Inc.. MONEY,
+5.56%
gained 3.4% to $60.84 on Thursday, after falling 17.5% in the past five trading sessions. by Michael Saylor Microstrategy Inc.
MSTR,
+4.10%
climbed 2.3% on Thursday to $268.32, while shares fell 7.4% over the past five days.

my company Blockchain Riot Inc. REVOLT,
+1.33%
shares rose 1.5% to $7.25 on Thursday, after losing 4.8% in the past five days. Shares of Marathon Digital Holdings Inc.
MARA,
+3.73%
was up 5.5% to $12.99, up 3.7% over the past five days. Another miner Ebang International Holdings Inc.. EBON,
-0.19%
stocks rose 1.8% to $0.48 on Thursday, losing 15% over the past five days.

Overstock.com Inc.
OSTK,
+7.73%that is
shares rose 7.7% to $30.45. Shares gained 3.8% over the five-session period.

Shares of Block Inc.
sq,
+0.67%,
formerly known as Square, fell 0.3% to $72.56, while shares fell 2.7% over the week. Tesla Inc.. TSLA,
+1.96%
shares were up 1.5% to $836.90, contributing to a 3% gain in the past five sessions.

PayPal Holdings Inc.
PYPL,
-1.68%
fell 2% to $84.68, although shares rose 2.9% over the five-session period. Nvidia Corp.
NVDA,
+0.70%
shares fell 0.3% to $177.45, down 1.3% in the past five trading days.

Advanced Micro Devices Inc.
AMD,
+0.79%
stocks rose 1.4% to $90.21 Thursday, down 0.6% from five trading days ago.

Among crypto funds, ProShares Bitcoin Strategy ETF
BITO,
+4.50%
rose 5% to $14.80 on Thursday, as the Bitcoin Short Strategy ETF
COCK,
-4.40%
fell 4.9% to $32.58. Valkyrie Bitcoin Strategy ETF
BTF,
+4.67%
rose 4.9% to $9.21, while VanEck Bitcoin Strategy ETF
xbtf,
+5.86%
rose 4.9% to $23.28.

Bitcoin Trust in Grayscale
GBTC,
+3.87%
rose 3.2% to $14.69.

Required Measurements

Leave a Comment