Bearish Sentiments Breed Amid Fed Rate Hikes and Silvergate Collapse
Weekly Summary
- Fed Chair Opens Door to Faster Rate Moves and a Higher Peak
- Silvergate Slides on Plan to Wind Down Bank Operations and “Voluntarily” Liquidate
- Voyager Gains Court Approval to Sell Assets to Binance U.S. in US$1.3b Deal
- Ethereum Validators Win “Short Term” as Blur, OpenSea Rivalry Drives up Gas Fees
- Mt. Gox Creditors Have Until Friday to File Repayment Claims
Industry Stories
Fed’s Powell Opens Door to Higher & Faster Rate Hikes: The U.S. Federal Reserve Chairman, Jerome Powell, signaled that the central bank may increase interest rates sooner than previously expected, as the economy rebounds faster than anticipated from the pandemic-induced slowdown. The announcement caused a sell-off in risk assets including stocks and crypto, as investors worried about the impact of higher borrowing costs on economic recovery and corporate profits.
Meanwhile, another signal from Powell is that stablecoins could have role in financial sector if properly regulated, as Fed “doesn’t want regulation to stifle innovation”.
Silvergate Slides on Plan to Wind Down Bank Operations and “Voluntarily” Liquidate; Silvergate Bank has announced plans to wind down its deposit operations by the end of 2023. The bank cited regulatory uncertainty and a shift in its focus to digital assets and blockchain infrastructure as reasons for the decision. It also stated that it will continue to serve its clients through the wind-down process and will work to ensure a smooth transition. The company’s shares plunged more than 30% in after-hours trading Wednesday after the announcement. Bitcoin volume was also dragged down by 35% in the past 24 hours, according to CryptoQuant data.
U.S. Bankruptcy Judge Approves Binance.US $1.3b Deal for Voyager: A US bankruptcy judge has approved Voyager Digital’s deal with Binance US, which would allow investors to recover between 50-73% of their holdings. However, Voyager must now decide whether to go through with the deal or opt for liquidation. The decision comes amid a push by the SEC for hard-hitting crypto industry regulation, with the commission being criticized for casting too wide a net. US Bankruptcy Judge Michael Wiles expressed frustration with the SEC and the DOJ, stating that he would approve the plan, following minor changes to the deal, and criticized the regulators’ overeager demeanor.
Ethereum Validators Win “Short Term” as Blur, OpenSea Rivalry Drives up Gas Fees: Data shows Ethereum validators are benefiting from competition between non-fungible token (NFT) marketplaces Blur and OpenSea, which has driven up transaction fees on the network. Blur, the emerging NFT marketplace that doesn’t charge transaction fees for users and recommends a low royalty rate payment for NFT creators, has gained traction, resulting in a surge in demand for blockspace and increased fees for validators. However, analysts say this short-term boost is unlikely to bring big changes in the long run and that validators’ earnings will depend on a variety of factors, including user adoption and developer activity.
Mt. Gox Creditors Have Until Friday to File Repayment Claims: Collapsed Japanese Bitcoin exchange Mt. Gox announced that their customers have until Friday to register their claims for repayment under the rehabilitation plan, which was first approved in September 2021. The original deadline of January 10 was extended by two months. Creditors can receive repayment as a lump sum, cryptocurrency, bank remittance, or remittance through a money transfer service. At its height, Mt. Gox was the biggest Bitcoin exchange in the world, handling 70% of global Bitcoin trading volume in 2013. It filed for bankruptcy in early 2014 after losing 850,000 Bitcoin. The trustee holds the remaining 165,000 BTC ($3.6 billion today) in a cold wallet, as of December 27, 2017.
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Matrixport News
Matrixport’s Markus Thielen, Head of Research, joins CoinDesk.tv to break down on the rapid growth of Stacks’ STX token and the impact of NFTs. According to a recent report by Matrixport, the answer lies in the rising popularity of Ordinals’ NFTs being the catalyst to push Stacks into becoming a billion-dollar token.
Watch the full video here.
Our latest blog series explores the pros and cons of two mechanisms: Multi-Party-Computation (MPC) and Hardware Security Module (HSM). In the first article, we dig into how MPC works and discuss the risks and measures to secure your private key while using it.
Matrixport’s Omid Zadeh, Head of Business Development EMEA, looks forward to discussing the latest developments in digital assets with alternative investment professionals as a panelist at CryptoBrunch Zurich (10 March) as part of AYU’s Switzerland Hedge Fund Week.
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