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Crypto SWOT: are crypto investors going into hibernation mode?

Commentaries & Views

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Swirge SWG, rising 3,775.59%.

  • Facebook parent company Meta is to proceed with its plans to bring digital collectibles to its users, reports CoinDesk, undeterred by the recent sharp downturn in the cryptocurrency market.  

  • Planetarium Labs, a Singapore-based web3 gaming technology firm, has raised $32 million in Series A funding led by Animoca Brands. Other investors in the round include Krust Universe, Korean technology giant Kakao's investment arm, reports Bloomberg.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Nody NODY, down 96.87%.

  • Crypto brokerage Voyager Digital has filed for chapter 11 bankruptcy protection, reports CNBC, becoming the latest casualty of chaos in digital asset markets. Voyager commenced bankruptcy proceedings in the U.S bankruptcy court for the southern districts of New York on Tuesday.

  • The recent buildup in open interest for Bitcoin futures is eerily similar to that seen just before the contract began a long descent from late 2021, writes Bloomberg. This suggests the recent consolidation around the $20,000 mark could be merely a pause before another leg south.

Opportunities

  • Bitcoin coasted over the $20,000 mark on Wednesday morning even as recession fears linger among investors and an institutional product to short the asset gained traction last week. Bitcoin rose 2% in the past 24 hours, reports Bloomberg, continuing a gradual recovery after last month's sudden drop to the $17,700 level.

  • Sorare is one of several companies attempting to take the idea of collectibles like baseball cards and bring them into the digital context. In May, Sorare announced a partnership with Major League Baseball in the U.S. as well as putting Serena Williams on the Board, writes Bloomberg.  

  • Crypto exchange Bitstamp cancelled a planned "inactivity fee," reversing course just five days after announcing the charges. The Luxembourg-based company scuttled a plan to start charging non-U.S. users 10 euros a month on accounts that haven't traded, deposited, withdrawn or staked assets for a year with a total balance of less than 200 euros, according to Bloomberg.

Threats

  • Account holders at now-bankrupt Voyager Digital shouldn't expect to get all their crypto back as the company reorganizes. The company's plan to exit bankruptcy plainly states that it expects account holders to be "impaired" by the Chapter 11 process, meaning they won't be getting back exactly what they're owed, writes Bloomberg.  

  • Luxury British jeweler Graff Diamonds paid $7.5 million ransom in Bitcoin to a Russian hacking gang after it leaked data on the jeweler's high-profile clients. Graff, that counts Middle East royalty among its client base, sued its insurer for losses over the extortion, saying that the payment should be covered under their policy, writes Bloomberg.  

  • Investors in the world's biggest cryptocurrency are going into hibernation mode with on-chain activity dropping by 13% in early July from November's highs, levels last seen in the bear phases of 2018 and 2019 (when Bitcoin was worth less than $10,000), according to Glassnode analysis. The risk-off market mood is spreading to the cryptocurrency exchanges as investors withdraw and stow their coins off-line in crypto wallets instead.
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