In the past, bad news in crypto often meant bad news for crypto’s price. An exchange or protocol would get hacked, and Bitcoin would slide down in response.
People used to explain away this correlation between Bitcoin and bad news by saying that the market was still too thin, or still too young, for Bitcoin to uncouple from the news cycle.
According to Satoshi Nakamoto’s original vision, Bitcoin was created as an alternative to the traditional financial system, a decentralized currency backing a decentralized economy that could not be influenced by a few bad apples. However, as crypto traders have seen, Bitcoin is still inextricably linked to what goes on in the traditional financial system. Non-crypto events like COVID protests in China appear to have a negative effect on Bitcoin’s price, while crypto-related events like today’s BlockFi bankruptcy filing also seem to be sending BTC’s price down several points.
All of this is to say — is it realistic to ever expect Bitcoin to finally stop caring what is going on in the world? Or should we perhaps instead stop attaching so much importance to Bitcoin’s price, and turn the narrative to look at what cryptocurrency has done for the decentralized, privacy financial movement as a whole?
After all, Satoshi’s white paper didn’t say — I’ve invented a cryptocurrency that will make everyone rich when it goes to $1 million a pop. It said — I’ve “proposed a system for electronic transactions without relying on trust.”
SKALE announced the availability of Metaport — a way to use the chain-to-chain bridging capabilities of the SKALE Network, in today’s CMC Community Spotlight.
BlockFi has announced that it is filing for bankruptcy — becoming the latest crypto firm to fall victim to a punishing bear market. In a statement, the embattled crypto lender expressed hope that the Chapter 11 proceedings would “stabilize its business” and deliver maximum value for all clients. BlockFi’s demise is unmistakably linked to the implosion of FTX, with the company confirming that work will continue to recover funds that remain tied up in the doomed exchange. The statement went on to add that the company has $256.9 million in cash on hand. BlockFi and FTX’s fates were entwined when Sam Bankman-Fried — who until very recently was positioning himself as a white knight of the crypto sector — swooped in to help the stricken company.
The Bahamas’ attorney general has confirmed that there is an “active and ongoing investigation” into FTX’s collapse that involves criminal authorities. Ryan Pinder also defended how the country’s regulators handled the exchange’s implosion. He praised the Securities Commission for acting swiftly, and said no other country could have moved as quickly. Pinder added that FTX consisted of over 100 companies in dozens of jurisdictions worldwide, and said: “Any attempt to lay the entirety of this debacle at the feet of The Bahamas, because FTX is headquartered here, would be a gross oversimplification of reality.” He vowed any individuals who break Bahamian law will be held accountable for their actions.
Pinder went on to urge governments around the world to exercise restraint in their public commentary surrounding the proceedings against FTX — and claimed that new CEO John Ray had made “inaccurate allegations” in Chapter 11 filings last week. Describing this as “extremely regrettable,” the attorney general added: “It is possible that the prospect of multimillion-dollar legal and consultant fees is driving both their legal strategy and the intemperate statements. In any case, we urge prudence and accuracy in all future filings.”
Bitcoin slid by 2% to start the week as the markets reacted to anti-lockdown protests in China. The world’s biggest cryptocurrency was trading at $16,231.45 at the time of writing on Monday. Major altcoins suffered larger losses, with Ether down 3.52% and BNB down 5.87% over a 24-hour timeframe. All of this comes as demonstrations over tight COVID restrictions intensify around China, with officers using pepper spray against protesters in Shanghai. In unprecedented scenes, some were also heard calling for President Xi Jinping to resign. There has been widespread anger at his zero COVID policies, which mean quarantine periods and lockdowns are still in place — almost three years after the pandemic began.
Thanks for reading! Have a great day — more news tomorrow!
