BlockFi files for Chapter 11 bankruptcy protection after halting withdrawals |
Nov. 28, 2022
What happened today in crypto markets
By Jocelyn Yang, CoinDesk Markets Reporter
Was this newsletter forwarded to you? Sign up here.
Hey there, loyal Market Wrap subscribers!
You may have noticed your afternoon crypto newsletter has a new name: Market Wrap is now Crypto Markets Today.
While “Market Wrap” aligns nicely with the timing of the newsletter – the end of the trading day for the major U.S. exchanges – it was never a great fit for a newsletter primarily about crypto markets, which of course are open 24/7/365.
Since we’re changing the name, we figured it was a good time to revamp a few things within the newsletter. We tightened some bolts and swapped out some gears to make the whole thing run better. We hope you like it – let us know what you think by replying to this email.
One last thing: To ensure Crypto Markets Today makes it into your inbox every day, please add the email cryptomarketstoday@coindesk.com to your address book, trusted sender list or company white list.
BTC/ETH prices per CoinDesk Indices; gold is COMEX spot price. Prices as of about 4 p.m. ET
Top Story
Crypto lender BlockFi filed for bankruptcy protection Monday, indicating it had significant expose to FTX. It also indicated it hoped to restructure, continuing operations in the meantime.
BlockFi has about $257 million in cash on hand and a Bermuda-based affiliate is also filing for liquidation in a similar process, according to a press release.
According to the company’s petition, BlockFi’s executives estimate the company has more than 100,000 creditors, and checked off the ranges. Executives estimate the company has between $1 billion and $10 billion in both assets and liabilities.
The company’s largest creditors include West Realm Shires Inc., the legal name for FTX US, which has a $275 million unsecured claim, and the Securities and Exchange Commission (SEC), which has a $30 million unsecured claim. The majority of the other top 50 creditors’ names were not shared.
A rocky year: BlockFi, which suspended withdrawals a few weeks ago due to the ongoing confusion about FTX’s assets, has faced a lot of setbacks. The company liquidated a large client earlier this year, and it needed a line of credit from FTX to survive.
The lender was set to raise funding at a $1 billion down round valuation in June, after raising $350 million at a $3 billion valuation in March 2021. As recently as last July, the company was looking to go public within the next 18 months, with a potential $500 million fundraise coming soon.
Year after year, Consensus has had a dedicated purpose of bringing the industry together to process the year past and strategize for the year ahead. This year, that purpose is more critical than ever. We are extending this limited-time Buy One, Get Two Free offer as a way to bring more people into the most important conversation in crypto and Web3. Register now.
Other News
Bitcoin (BTC) slid 2%, amid news that crypto lender BlockFi had filed for bankruptcy protection earlier in the day. The largest cryptocurrency by market capitalization was trading around $16,200, down 1.9% in the past 24 hours.
The MakerDAO community rejected a proposal to use up to $500 million of the stablecoin USDC to invest in bonds with crypto investment firm CoinShares. As CoinDesk’s Krisztian Sandor reported, CoinShares had proposed managing between 100 million and 500 million USDC and actively investing the money in a portfolio of corporate debt securities and government-backed bonds with the aim of returning a yield matching the Secured Overnight Financing Rate. On Monday, some 72% of votes were cast against the proposal.
Equity markets fell amid widespread protests against Covid lockdowns in China. The S&P 500 index dropped by 1.5% at closing. The Nasdaq Composite and Dow Jones Industrial Average closed down 1.5% and 1.4%, respectively.
Market Analysis: Big Crypto Fund Outflows
Crypto funds had the biggest week of outflows in three months as negative sentiment continued to pervade digital-asset markets following the collapse of Sam Bankman-Fried’s FTX exchange, and amid contagion to other firms.
Outflows for crypto investment products totaled $23 million, the highest amount in 12 weeks and a reversal from a two-week streak of inflows, according to a report by CoinShares on Monday.
Investors had scooped up shares in digital-asset funds as crypto prices tanked in the weeks after FTX’s meltdown, but as prices stabilized last week, the trend appears to have reversed. The headline figure for outflows is even more bearish than it looks because the week included some $9.2 million of inflows into “short bitcoin” funds, or those designed to profit from further price declines in the largest cryptocurrency by market value.
Generation C hosts Avery Akkineni of Vayner 3 and Sam Ewen from CoinDesk share how brands and marketers are using Web3 to experiment and potentially transform their businesses. Tune in to explore how Fortune 500 companies and new start-ups alike are coming to the blockchain to generate attention, gain customers and create value for their bottom line and their communities. Listen now.
Altcoin Roundup
Ether’s price dropped following a “whale” address moved 73,224 ETH, worth $85.7 million, to Binance during the Asian trading hours, according to an analysis by on-chain researcher Lookonchain. Investors typically transfer coins to centralized exchanges when they intend to sell or use the coins as a margin in derivatives trading. Therefore, an uptick in exchange inflows often paves the way for heightened price volatility. Ether was around $1,170, down roughly 3% in the past 24 hours.
Trending Posts
Listen 🎧: Today’s “CoinDesk Markets Daily” podcast discusses the latest market movements and a look at next steps following the FTX collapse.
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
