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Crypto SWOT: Sam Bankman-Fried, CEO of FTX, bought a 7.6% stake in Robinhood

Commentaries & Views

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Goldario, rising 560.78%.

  • Despite slumping crypto prices, funding rounds for blockchain startups are still getting done. Moralis, a platform offering developer tools for web applications built on top of blockchains, has raised $40 million, writes Bloomberg. Moralis, which launched its platform last June, is now valued at $215 million. Investors in the startup's Series A funding round include Coinbase Ventures, the investment arm of crypto exchange Coinbase Global Inc., along with EQT Ventures, Fabric Ventures and Dispersion Capital.  

  • El Salvador's government bought 500 Bitcoins on Monday, in its largest purchase to date of the cryptocurrency. The government bought the coins at an average price of $30,744, President Nayib Bukele said on Twitter. The government has purchased 23,301 Bitcoins since making the digital asset legal tender in September of last year, according to data tracked by Bloomberg.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Terra, down 100%.

  • India's central bank applied "informal pressure" on Coinbase Global, preventing the exchange from facilitating purchases of crypto assets through the country's online retail payments system, CEO Brian Armstrong said on Tuesday. "So, a few days after launching, we ended up disabling UPI because of some informal pressure from the RBI," Armstrong said on an earnings call, according to Bloomberg.

  • Galaxy Digital Holdings, the cryptocurrency firm controlled by billionaire Michael Novogratz, posted a loss in the first quarter against a backdrop of large digital asset price declines. The net comprehensive loss was $111.7 million, compared to a gain of $858.2 million in the year-ago period, primarily due to unrealized losses on digital assets and investments in its trading and principal investment businesses, writes Bloomberg. 

Opportunities

  • KuCoin, one of the world's most popular crypto exchanges, raised $150 million from investors led by Jump Crypto, boosting its valuation to $10 billion. Circle Ventures, IDG Capital and Matrix Partners took part in the pre-series B financing, the Seychelles-based startup said in a statement. It will use the proceeds to expand in decentralized finance and NFTs via its own venture arm, writes Bloomberg.   

  • Bitcoin rebounded from a swoon below $30,000 as a selloff in stocks eased and a bout of calm washed across global markets. Bitcoin added as much as 5.4% on Tuesday before giving up some gains and trading at around $31,500 at 11:52 am in London. Ether at one point climbed 6.4% while coins like Solana and Avalanche were also in the green.  

  • Sam Bankman-Fried, the 30-year-old CEO of crypto trading platform FTX, revealed late Thursday that he bought a 7.6% stake in Robinhood, which lost 77% since its July IPO, reports Bloomberg. The news led to an immediate surge in the stock, which closed Thursday at $8.56.  

Threats

  • Bitcoin slumped to a level last seen in July 2021, as part of a wider retreat in cryptocurrencies triggered by a global flight from riskier investments. Tightening monetary policy to combat runaway inflation and ebbing liquidity are turning investors away from speculative assets, writes Bloomberg. Bitcoin's recent decline puts it at risk of firmly dropping out of the range where it's been trading in 2022, completely reversing the most recent bull run that drove it to a record of almost $69,000 in November.

  • Algorithmic stablecoins, like their more "traditional" counterparts, are supposed to provide calm in the chaos of crypto. Instead, as investors in one such token are rapidly finding out, they can serve as lightning rods for volatility. Rather than trading at $1 as designed, the TerraUSD coin slipped over the weekend to around 99 cents. By Monday evening in New York, it had plunged to 60 cents, obliterating its previous low of 92 cents in May 2021, writes Bloomberg.  

  • The backers of the TerraUSD algorithmic stablecoin are trying to raise about $1.5 billion to shore up the token after it crashed from its dollar peg. Investors in the proposed deal will be able to buy the Luna coin at a 50% discount to the spot price. The plunge in TerraUSD has reignited the debate over algorithmic stablecoins, a subject of controversy within the crypto industry, writes Bloomberg.
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