The Crash of the FTT Token Causes Sam Bankman-Fried to Lose His Fortune

Alexander Salazar
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<strong>The Crash of the FTT Token Causes Sam Bankman-Fried to Lose His Fortune</strong>

Despite losing much money, Sam Bankman-Fried stated there was no hostility between FTX and Binance. Changpeng Zhao recently said a crypto company should never use a self-created crypto token as collateral or borrow funds from others to operate.

Sam Bankman-Fried lost most of his fortune due to the sharp drop in the value of FTT, the native token of the FTX exchange. Since he keeps most of his wealth in FTT, the loss directly results from the fall in its price.

The value of FTT dropped by around 83% from USD 20.47 to USD 2.67 in a few hours.

Alameda Research, a quantitative trading firm involved in the problem that caused the cryptocurrency market to panic, also uses the FTT token. That situation led FTX to take some emergency measures, like withdrawal suspensions.

Sam Bankman-Fried Explains What Happened between FTX and Binance

Amid rumors about a dispute between Binance and FTX, Sam Bankman-Fried described the situation to his Twitter followers.

The executive announced that FTX and Binance have agreed to conduct a strategic transaction. He explained his team at FTX worked to eliminate the withdrawal backlog before they completed the deal. Besides, he told his users that the exchange would cover their assets 1:1.

Sam Bankman-Fried stated there was no hostility between FTX and Binance, but many investors, including himself, have lost much money.

The case of Sam Bankman-Fried is an example of the risks associated with investing in the crypto market. That is also a reason why many investors diversify their portfolios.

Changpeng Zhao Discusses Two Lessons from the FTX Crash

Changpeng Zhao, the CEO of Binance, gained high popularity from 2021 to 2022 as one of the ten wealthiest people worldwide. He has said he wants to drive the adoption of crypto assets through offline and online educational programs and meetups.

Zhao recently shared two lessons he learned from the crash of the FTX exchange and the FTT token.

The developer said a crypto company should never use a self-created crypto token as collateral. In addition, he highlighted that a project should not borrow funds from others to run its business.

He also confirmed that the Binance exchange never used its native token, BNB, as collateral, saying they have no debts.

The prices of almost all crypto assets have dropped by 10% on average, except Cardano (ADA) coin and BNB. The rumors about the fight controversy between Binance and FTX are the main reason for that decline.

BNB is trading at around USD 300.11 and has accumulated a 9.8% loss over the last 24 hours. While its daily trading volume is slightly above USD 6.13 billion, its market capitalization is about USD 49.48 billion, according to CoinGecko.

Investors should research BNB or any other cryptocurrency before buying it to know its all-time high, behavior, and possible future price. That will help them make better trading decisions and reduce the risk of losing money. It is a matter of time before seeing where the market will take the native token of Binance.

By Alexander Salazar

Unlike in 2014 and 2018, the Price of Bitcoin Might Not Drop after the 2022 US Midterm Elections

Alexander Salazar
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<strong>Unlike in 2014 and 2018, the Price of Bitcoin Might Not Drop after the 2022 US Midterm Elections</strong>

Following the two previous US midterm elections, the price of Bitcoin dropped sharply, but that might be different this time. Despite breaking through the bearish divergence trend, the market capitalization is far from its resistance line.

The value of Bitcoin (BTC) collapsed shortly after the 2014 and 2018 US midterm elections. However, that may not occur this time despite the similarities with the current price action.

The 2014 and 2018 US midterm elections took place on November 4th and 6th, respectively. Following those voting processes, the crypto market suffered a sharp drop.

As for 2022, the US midterm elections will occur while Joe Biden holds the presidency.

There will be similarities and differences between Bitcoin and the overall capitalization of the crypto market in the previous and current elections.

Similarities in the Price of Bitcoin after Each US Midterm Election

The time between the all-time high of Bitcoin and the election is the most prominent similarity in the price action. The milestone occurred 350 days after the 2014 elections and 336 days after the 2018 ones.

The value of Bitcoin collapsed in 2014 and 2018 following the US midterm elections. It continued falling for about a month by up to 58% and 51%, respectively. The current price action might cause it to decline by around 50% to USD 10,400.

Despite Similarities in the Price Action, the RSI Is Different

Although the price action between those periods is similar, the movement of the RSI is different. After the indicator only dropped below 40 after the 2014 and 2018 elections, its respective bottoms were 35 and 37.

The RSI has moved well below 40 in the current cycle, reaching 34 in June, its lowest level on record. In addition, the indicator has generated a bullish divergence, a sign associated with trend reversals.

Unlike the price action, technical indicators show that the movements of Bitcoin after the US midterm elections will differ from those in 2014 and 2018.

The Capitalization of the Crypto Market Suggests a Bullish Outlook

The overall capitalization of the crypto market cryptocurrencies shows a relatively optimistic outlook for Bitcoin. Its price shows a double dip pattern, considered bullish, as both holes have long lower strands.

Then, the weekly RSI generated a bullish divergence while seeking to break above its bearish divergence trend.

Although it has not broken through the bearish divergence trend, the market capitalization is still far from its resistance line. Therefore, an increase would amount to a bullish movement close to 24%.

After the US midterm elections, there might be a rise rather than a drop in the price of Bitcoin.

Meanwhile, Bitcoin is trading at around USD 19,758 and has accumulated a 5.1% loss over the last 24 hours. While its daily trading volume is above USD 432.19 billion, its market capitalization is about USD 379.39 billion, according to CoinGecko.

Investors should research Bitcoin before buying it to know its all-time high, behavior, and possible future price. That will help them make better trading decisions and reduce the risk of losing money. The current US midterm elections may affect BTC either positively or negatively.

By Alexander Salazar

Latin America and the Caribbean Would Be the Regions Most Exposed to a Recession in the US, According to Fitch Ratings

Audy Castañeda
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<strong>Latin America and the Caribbean Would Be the Regions Most Exposed to a Recession in the US, According to Fitch Ratings</strong>

Any shock that the US receives, internal or external, will negatively affect the macroeconomic stability of most of the region.

The regions of Latin America and the Caribbean would be the most vulnerable to a recession in the US economy, according to the risk rating agency, Fitch Ratings. The entity also foresees a slight recession in the United States from the second quarter of 2023.

In the report “The vulnerabilities of Latin America and the Caribbean in the face of a recession in the United States”, it is pointed out that these regions are the most likely to suffer from the slowdown in the US economy, not only because of their geographical proximity but also because of their high degree of interaction and dependence on international trade.

Fitch Ratings’ Report Highlights

Fitch cut its US growth forecast for 2023 to 0.5%. The entity also foresees a slight recession in the United States, starting in the second quarter of 2023. Fitch also considers that economic cycles and policy decisions in the United States are highly correlated with those of Latin America and the Caribbean.

Specifically, the report indicates that the main transmission channels to Latin America and the Caribbean are trade, remittances, tourism, and the prices of raw materials.

The report acknowledges that the effect will not be the same in all countries. At the regional level, the different economic characteristics of the countries will allow the impact to “vary considerably”. The most direct case will be that of Mexico, a country in which the lower external demand of the United States will negatively affect its exports, creating the risk of a trade deficit.

In the case of Central America, a large part of its exports are demanded by the United States; however, these countries have greater diversity, and could even, ultimately, resort to internal trade between its own members.

The greatest weakening for the countries of Central and South America and the Caribbean would come from a fierce reduction in remittances and tourist income. Speaking of South America specifically, the region has an additional “invisible problem”, and that is that many of them, such as Chile, Uruguay, and Argentina, are carrying out monetary policy measures that could even accentuate the effects of a recession in the United States economy.

General Macroeconomic Outlook

Fitch Ratings cut growth forecasts sharply and broadly since June’s Global Economic Outlook (GEO). World GDP is expected to grow by 2.4% in 2022, revised down by 0.5pp, and just 1.7% in 2023, down by 1.0pp.

In the case of the Eurozone and the United Kingdom, it is predicted that they will enter a recession at the end of this year. Seconding the United States, a country that would suffer a mild recession in mid-2023.

By Audy Castaneda

G20 Will Seek to Create a Global Crypto Framework and Penalize Countries that Do Not Comply

Audy Castañeda
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G20 Will Seek to Create a Global Crypto Framework and Penalize Countries that Do Not Comply

The last summit under the Indonesian presidency will take place in Bali on November 15.

Upcoming G20 summits are expected to focus on crypto regulation. This is due to money laundering and terrorist financing with cryptocurrencies.

The last G20 summit under the Indonesian presidency will take place on November 15. Subsequently, India will assume the chairmanship of future G20 summits for one year from December 2022.

Ahead of the G20 summit, India’s Finance Minister Nirmala Sitharaman shared her thoughts on crypto regulation. Last Tuesday, addressing the Indian Council for International Economic Relations Research (ICRIER), she noted that, “We have not submitted any plan to regulate digital assets. The cryptocurrency regulation agenda will be presented at the G20 meeting.”

Illicit Activities Financed with Cryptocurrencies

Svetlana Martynova, a senior UN official, believes that the prevalence of crypto financing terrorist activities may have quadrupled in recent years. She estimates that 20% of terrorist attacks have been crypto-funded.

Furthermore, according to a report by Chainalysis, illicit entities received close to $10 billion this year. While, in 2021, it was a record, with illicit entities receiving more than 15 billion dollars.

India to Prioritize Crypto Regulation at G20 Summit

“You don’t know where the road takes you. Is it drug financing? Is it terrorist financing or is it just a game? Successful regulation will not be possible if only one country does it. We haven’t come up with any plans yet. So we need to get all G20 members on board to see what is the best way to do it,” according to Nirmala Sitharaman.

India has maintained a strict attitude against cryptocurrencies. Therefore, as the host, they are more likely to bring up the crypto regulation discussion at the summit. Earlier, Indian Home Minister Amit Shah stated that cryptocurrencies are responsible for the increase in drug trafficking in India.

FATF Takes Charge of Crypto Regulation

The Financial Action Task Force (FATF) is ready to strengthen its battle against money laundering and terrorist financing.

They are preparing to conduct annual checks to ensure countries enforce anti-money laundering and anti-terrorist financing regulations on cryptocurrency providers operating in their jurisdiction, two sources with knowledge of the matter told Al Jazeera.

Countries that do not follow AML (anti-money laundering) guidelines could be added to the “grey list”. Syria, Uganda, and Barbados are part of the list. The FATF increases its monitoring of the countries that are part of the gray list.

In addition, the FATF blacklists countries that continue to fail to cooperate in dealing with AML. Iran is part of the blacklist. They are subject to economic sanctions and other financial restrictions by the FATF.

By Audy Castaneda

Lebanese Citizens Turn to Bitcoin as a Hedge against the Collapse of their Economy

Alexander Salazar
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Lebanese Citizens Turn to Bitcoin as a Hedge against the Collapse of their Economy

Since banks cannot seize or block Bitcoin holdings, Lebanese citizens like Georgio Abou Gebrael view it as their bank. Since BTC is a better option due to the depreciation of the Lebanese pound, mining has expanded in the country.

Many Lebanese citizens have turned to cryptocurrencies due to hyperinflation, bank collapse, and monetary devaluation. Since the hydroelectric power from rivers is cheap, some residents have focused on Bitcoin mining to generate money.

Factors Leading the Lebanese Economy to Collapse

Lebanon was among the most developed countries in the Middle East before the 1970s but now faces many economic problems. Since 2018, the GDP has decreased by 40%, inflation has been around 160%, and the local fiat currency has dropped by over 90%.

A massive civil war that killed thousands of people and divided society caused the Lebanese economy to decline in the late 20th century. In addition to internal conflicts, the Middle Eastern country has fought the Israeli army several times.

Political figures blamed Syria for the death of Rafic Hariri, former Prime Minister of Lebanon, in a car bomb explosion in 2005. That caused another war, violence in the region, and an enormous wave of migration. Statistics reveal that around 14 million Lebanese citizens, twice the population, live abroad.

Given those factors, it is logical to know why the war-weary country faces such critical monetary issues.

The Advantages of Adopting Cryptocurrencies in Lebanon

The Lebanese citizens that decided to stay in their country sought alternatives to preserve their wealth amid the financial crisis.

Georgio Abou Gebrael, 27 years old, said he considered Bitcoin (BTC) a fraud when he first heard about it in 2016. However, the economic collapse in Lebanon led him to start viewing the pioneering cryptocurrency as a hedge.

Gebrael, an architect, lost his job in 2020 and could not withdraw money from his bank account. All Lebanese financial institutions prohibited their clients from conducting those transactions.

However, he was lucky to contact employers who would pay him in Bitcoin. For his first job, he made a car tire commercial for which he received USD 5 worth of BTC.

Although the above amount was insignificant, Gebrael wanted some assets that banks could not seize or block. He now accepts payments in Bitcoin for practically any work, saying the crypto asset has become his bank.

Ray Hindi, the CEO of L1 Digital AG, left his native country when he was 19 years old. He pointed out that banks have limited withdrawals, converting those deposits into bills.

Hindi explained that citizens could have taken out their money with a reduction of 15%, then 35%, and now 85%. However, they look at their bank statements and believe they will eventually be intact.

The Government Targets Unauthorized Cryptocurrency Mining Entities

Young Lebanese entrepreneurs also view the mining of cryptocurrencies as another attractive niche. Ahmad Abu Daher mines Bitcoin with hydroelectric power in a small mountain town 30 miles south of Beirut.

Abu Daher said he could harness power from the Litani River to get electricity for 20 hours daily at pre-inflation prices. He said he was paying a low rate while he got more US dollars through the mining activity.

Since the Lebanese pound (LBP) has lost value, holding Bitcoin seems a better option. Therefore, Abu Daher has thousands of machines in the Middle Eastern country.

The Lebanese government recently raided unauthorized entities and raised energy prices to stop cryptocurrency mining. That has led farm operators to comply with the law, using legal electricity and not damaging infrastructures.

By Alexander Salazar

The Weekly Activity of the Bitcoin Whales Indicates the Predominance of Transfers between Peers

Alexander Salazar
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<strong>The Weekly Activity of the Bitcoin Whales Indicates the Predominance of Transfers between Peers</strong>

The whales transferred 348,183 BTC between peers and 36,028 BTC from exchanges to unknown wallets. Those long-term holders introduced 23,252 BTC into the market and moved 1,002 BTC between crypto marketplaces.

Less than two months before the end of 2022, the behavior of the Bitcoin (BTC) whales indicates clear trends. The following weekly summary shows the most prominent information on their activity and some conclusions.

It is necessary to contextualize that activity to better dig into the status of the whales and the overall market. However, this is just a micro approach to one of the many factors that can influence the performance of BTC.

Weekly Analysis of the Activity of the Bitcoin Whales

Over the last week, the predominant trend in the activity of the whales has been the transfer between unknown wallets. They moved 348,183 BTC, which represents 85.24% of the weekly total.

Although it is quite a lot, it might be a cryptocurrency exchange like KuCoin or Binance rebalancing its wallets. In early November, there were four transactions of 50,532 BTC and another three of 23,542 BTC each.

The second-highest trend has been accumulation, as 36,028 BTC went from cryptocurrency exchanges to unknown wallets. That amount is equivalent to 8.82% of the weekly total.

The introduction of liquidity into the market has been the third-highest trend, as the whales moved 23,252 BTC. That represents 5.69% of the weekly total.

Finally, the weakest tendency has been the transfer between cryptocurrency exchanges, as they moved 1,002 BTC. That amount is equivalent to 0.25% of the weekly total.

Therefore, the whales moved a total of 408,465 BTC through 43 transactions. The accumulation trend in the previous week indicated that around 120,000 whales hoarded around 19,000 BTC.

The Current Situation of Bitcoin in the Crypto Market

Meanwhile, Bitcoin is trading at around USD 20,753 and has accumulated a 2.6% loss over the last 24 hours. While its daily trading volume is above USD 356.18billion, its market capitalization is about USD 398.47 billion, according to CoinGecko.

The price of Bitcoin reached a seven-week high following a better-than-expected jobs report showing the robustness of the labor market. That happened despite the efforts of the US Federal Reserve (Fed) to cool the economy. That information gave rise to a wave of volatility that became positive for risk assets like BTC.

Over the last two weeks, the Fed has shown interest in raising rates to lower inflation and overall macroeconomic uncertainty. That situation has caused the S&P 500 and Nasdaq-100 indexes to drop further while Bitcoin rose.

Although many believe that what happens in traditional markets does not affect BTC, that is not the case 100%. The whale market seems neutral despite a wink of uncertainty to the upside.

The whales seem to remain a majority, as 64% of Bitcoin holders have kept their holdings for over a year. It is only a matter of time before seeing what surprises the pioneering cryptocurrency will bring before 2022 ends.

By Alexander Salazar

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