Weekly Newsletter – 11 Nov 2022

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Weekly Summary

  • FTX is facing bankruptcy with over US$8b liabilities after Binance abandons bailout plan
  • Bitcoin once fell below US$16k, hitting a 2-year low as FTX fallout spurs contagion fears
  • Market rallies as CPI came in at 7.7%, lower than market forecast
  • Google x Solana: Google Cloud is running a Solana validator to secure the network
  • Vitalik reveals new updates for the Ethereum technical roadmap

Industry Stories

Summary of FTX vs. Binance Saga: The whole saga started when CoinDesk released a leaked report about Alameda Research’s finances showing cracks in its balance sheet. There were $7.4 billion of loans against $14.6 billion of assets, 41% of which are FTT tokens. CZ later announced to sell all its FTT positions (7.4% of the total supply) due to internal risk policies. This move caused further panic as FTT fell by more than 80% during this week and FTX saw around $6b of net withdrawals. Shortly after, SBF announced an agreement on a strategic transaction with Binance to clear out its withdrawal backlog but that plan was subsequently abandoned after Binance conducted its due diligence. The defunct exchange had $8b in liabilities and is on the search for a bailout plan as users’ withdrawals are halted, and looked for US$9.4b in rescue funds as of November 10.

Why Bitcoin’s price fell below $16k?: News of FTX becoming insolvent is likened to the ‘Lehman Brothers’ moment in crypto. Sequoia, one of the investors of FTX, has marked its value to zero and the fallout of the exchange will have a shockwave effect across the industry leading to forced selling by related firms who got impacted negatively. The collapse of LUNA in May 2022 has led to over-leveraged firms like 3AC, Hodlnaut, Celsius to go bankrupt and we could potentially see a similar impact in the next few months if there are no bailout plans.

Has US inflation peaked?: Inflation data for October came in at 7.7%, 0.2% lower than the market’s forecast of 7.9%. It is the 5th consecutive monthly decline since the peak of 9.1% in June, and this is the first time inflation has fallen below 8% since seven months ago. Investors’ sentiment is positive as the Fed might start easing its aggressive stance of rate hikes. Though 7.7% is still a far cry from the target rate of 2%, signs of slowing inflation are showing and the probability of a 50 basis point hike in December has increased to 85.4%. S&P 500 rallies 5%, the biggest one-day gain since 2020, and bitcoin rallies 10% at the daily close.

Solana x Google Cloud partnership: Google Cloud announced its partnership plans with Solana in four different ways. The first is they are going to launch their own validator on the Solana network to help validate and secure the network. Secondly, it is working on a new feature to launch Solana nodes easily in a click of a button. Thirdly, Google Cloud will be indexing Solana data making it easier for developers to access data and build applications. And finally, it will be launching a $100,000 cloud credit program for startups in the Solana ecosystem.

Ethereum updated roadmap: The current roadmap for Ethereum includes, The Surge, The Verge, The purge, The Splurge and a newly added feature, The Scourge. Three major changes are 1) The Scourge attempts to solve MEV issues and ensure reliable neutral transaction inclusion. 2) The Verge will now utilize SNARK technology adding privacy-preserving features to Ethereum transactions Ethereum. 3) Single-slot finality will be the second stage of the merge allowing blocks to be finalized in just a single slot compared to the current 64-95 slots.

Product Highlight

Matrixport’s Cactus Custody™ released an announcement to assure our clients that their digital assets under custody will always be within their control.

Cactus Custody™ is a Hong Kong Trust Company with a TCSP license, with a proven record of safeguarding digital assets under tamper-proof and bank-grade vaults. Each client’s assets belong to themselves only and are segregated on chain. We promise that the custodian or its creditors will never own clients’ assets.

In October, Matrixport also announced an additional USD 50 million of insurance coverage for digital assets held in cold storage with Cactus Custody™.

>> Manage your wealth with Matrixport

Matrixport News

Jihan Wu, Co-Founder and Chairman of Matrixport, spoke at “CEX vs. DEX” main-stage session at the recent LA Blockchain Summit about how DEX could play a role in Web3.
“DEX is a pathway as an open engine that enables endless innovations. As the web3 era gets underway, we’ll see much more content being created, distributed and traded on the blockchain. Assets, such as NFT or digitalized tokens that are traded by smaller communities of hundreds of fans can be supported by DEX. As interest in these assets widens and grows, such as Shiba Inu, it will eventually get on a CEX.”

Team Matrixport attended ALTSHK Forum 2022, an investor-centric and education-focused forum in Hong Kong. Eugene Lim, head of Private Wealth, spoke at “Exploring Digital Assets & Hedge Funds as an Investable Landscape” panel discussion about how and why success has been achieved within hedge funds and private wealth, and how institutions may overcome challenges in risk, experience and fiduciary duty to enter the digital assets market.

Matrixport’s Markus Thielen, Head of Research, explored “What next for Digital Assets” at Deutsche Bank’s round table as a panel speaker in Singapore, discussing the future of #DigitalAssets in Asia and various factors shaping today’s landscape.

Grow and manage your digital wealth with the Matrixport app: 

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