Strengths
- Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was KLAY, rising 82.01%.
- Crypto hedge fund Strix Leviathan has hired ex-BlackRock Inc. executive Matthew McBrady as its new head of strategy, reports Bloomberg. The firm said that he will advise on its trading and investment strategies as well as oversee plans for growth. His entry into crypto illustrates the growing number of industry leaders who have traded traditional finance positions for ones in digital assets despite the market's volatility and steep downturn, the article continues.
- Bitcoin gained for a second day, spurring optimism among the almost bullish advocates of the bellwether cryptocurrency for an end to the months-long decline known as crypto winter, writes Bloomberg. Crypto traders celebrated the advances as a welcome change after months of limited price action. Bitcoin broke above $20,000 for the first time in more than two weeks on Tuesday, ending its longest run below that price level since the token first breached the threshold in late 2020.
Weaknesses
- Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was XCN, down 23.17%.
- Blockchain.com, stung by the crypto bear market that has rocked the industry, is in talks over a potential "down round" fundraising that may value the digital financial-services firm at a fraction of the $14 billion mark it achieved earlier this year. While terms of the current possible round are still being worked out and it is in the early stages, reports Bloomberg, the financing will result in a significant cut to the website's valuation, likely leaving it worth $3 billion to $4 billion.
- The latest exploit against crypto platform Team Finance, which lost some $14.5 million of various tokens, occurred despite a number of recent security audits, according to the company. The Ethereum-based project said Thursday that it had exploited via its audited Uniswap V2 to V3 migration's function. The project later said those audits had been conducted by a "reputable" firm.
Opportunities
- Bitcoin is poised to break above $20,000. If it succeeds, the token will end its longest run below that price level since it first breached that threshold in late 2020, reports Bloomberg. The token has traded below $20,000 for nearly three weeks, breaking from the coin's trademark volatility.
- Crypto's new class of Kingpins emerged after The Merge. The Merge created a new class of blockchain participants, called "builders". The software upgrade, which refers to the Ethereum blockchain switching to a system called "proof of stake" from "proof of work", is a significant shift in the current decentralized ecosystem, reports Bloomberg. Now there are a relatively small number of these builders who have significant amount of power on the blockchain.
- Hong Kong is pivoting toward a friendlier regulatory regime for cryptocurrencies with a plan to legalize retail trading, contrasting with the city's skeptical stance of recent year and the ban in place in mainland China. A planned mandatory licensing program for crypto platforms set to be enforced in March next year will allow retail trading, according to people familiar with the matter, writes Bloomberg.
Threats
- Core Scientific, one of the world's largest miners of Bitcoin, warned that it may run out of cash by the end of the year and could seek relief through bankruptcy protections. Operating performance and liquidity have been severely impacted by the prolonged drop in the price of Bitcoin, explains Bloomberg, along with a rise in electricity costs, increase competition and litigation with bankrupt Celsius Networks.
- Nearly a year into the "Bitcoin bear market" most investors who bought the cryptocurrency in 2021 are facing heavy losses and look to be waiting for rallies to close their positions, Morgan Stanley said in a research report. The bank says that trading volumes have been falling on most exchanges except Binance, which lowered BTC trading fees to zero in July, writes Bloomberg.
- Crypto enthusiasts have hailed decentralized finance as a way to cut out Wall Street middlemen. But DeFi is riddled with small-time scams, according to a report released Thursday. There have been more than 188,000 scams based on "smart contracts," the pieces of software that serve as the building blocks of DeFi, according to a report from software firm Solidus Labs, based on data going back to 2020, writes Bloomberg.
