Hi friend,
It’s Vanessa here! It’ll be so rude of me to get into the hot takes of the day without an introduction. I’m a writer from the buidlbee team, assigned with the special task of delivering all the trending topics on the streets of crypto to our awesome readers such as yourself, and trust me, it’s guaranteed to be a great time. So sit back, relax and let me offer you daily updates that are going to help you make it with crypto 🚀
Let’s get into it…
New Year Crypto Resolutions
It’s that time of the year and we’ve all been here too many times before. Just like me, I know you wrote down resolutions that you probably have no intention of keeping. This year, mine is to start working out…for the hundredth time 😅 Anyway, this isn’t about bashing those rituals but instead highlighting how common they are, so much so that even the crypto industry is guilty of them 😏
Coinbase has released a lengthy report on the “2023 Crypto Market Outlook.” If you’re a fan of reading 57 pages worth of analytical mumbo jumbo, then be my guest, but if you’re like me and love to skip to the good parts, here they are:
Investors are becoming increasingly skeptical of accumulating altcoins, and with the way capitalization collapsed this year, who can blame them? 🤷♀️
There’s a popular saying, “The original is always better than the copy,” and it’s safe to say the same thing goes for crypto. We expect a lot more investments into Bitcoin and Ethereum this year, at least until all this snow from the crypto winter is cleared.
Speaking of crypto winter, don’t let the bears get you down. The market is still alive, and according to Coinbase, is in the process of cleaning up speculative money and insolvent businesses which is bound to lead to more interest in the industry.
Growth takes time. With that being said, we also should expect the next growth cycle for digital assets to surely take some time, but eventually, adapt with the help of new standards and regulations put in place.
Don’t get too excited though, the experts still have no clue when the winter will end or the top of BTC’s value this year. However, here are some facts on individual sectors to give us some clarity.
There are very few things that were as volatile as Bitcoin this year. One is a roller coaster ride and the second was my stomach after going in on the spicy quesadillas on Christmas weekend. 🥵 Unlike my stomach, however, BTC’s price is steady and outperforming most of the Top 10 Forex currency pairs and Mt․Gox will most likely distribute 140,000 BTC. Fear not, as this will not really affect its price or cause a market dump.
On the side of Ethereum, experts are hopeful about its growth regardless of the recent merger and expect it to become deflationary during the bull market. Liquidity continues to flow into Layer-2 blockchains and we are expecting more transparency once staking withdrawal is opened.
Being a member of the creative community myself, I’m happy to say NFTs aren’t going anywhere! Just like you, they have a bright future ahead of them and marketplace aggregators are set to solve the problem of low liquidity.
Channeling my inner Oprah…You get a stablecoin, I get a stablecoin, and everybody gets stablecoins! Stablecoins will become less of an option and more of a necessity as the growing dominance of its market share confirms this asset’s value and importance.
A Conspiracy Theory Lingering In The Air
The big guys saw a lot of low blows, scandals, and bankruptcies last year. Amongst others, some of the biggest names that suffered this fate were 3 Arrows Capital (3AC), FTX, and LUNA, and word on the street is DCG is about to make an entry into that list. There is, however, a major plot twist that no one could have expected 🤯
3AC’s co-founder, Zhu Su, is writing a “Tell All” on Twitter, claiming that SBF and DCG’s CEO, Barry Silbert, might have been more involved in LUNA’s collapse than we thought. In his recent Tweet thread, Zhu made a few disturbing but rational claims.
SBF and Barry are apparently tight buds. In fact, the former was a board member at Genesis, a subsidiary of DCG, that was responsible for approving FTX’s first FTT-backed loan.
Zhu also highlights the worthlessness of DCG and a fraudulent transfer to return the capital of Alameda to Genesis, which will, in turn, make creditors drive DCG to bankruptcy, taking its remaining assets with it.
DCG also turned a blind eye to losses incurred after the collapse of its Bitcoin trust company, Grayscale.
Now, this is where the plot thickens and the story gets more interesting…
Lookonchain analysts also weighed in on the possible involvement of DCG and FTX in LUNA’s collapse. According to the team, after its collapse, an unknown person withdrew 110,286 stETH (~$131M) from Anchor Protocol and transferred all funds to an FTX account, after which, stETH/ETH began to de-peg. The same address ‘0xd5c6’ then received a 12 ETH gas fee from FTX before transferring the remaining 10,5 ETH back to FTX. Although Lookonchain decided not to place any direct association of SBF with the transfers, the company said it’s very likely the address is connected to the fraudster.
If these theories are true, it could restore faith in Luna and increase its value. However, with the asset being down by 100% in 24 hours, we can only wait and see. Here’s a backstory to give you a better understanding, and trust me to keep you in the loop with future updates! 😉
DCG Is Causing Double Trouble
As if we haven’t had enough of DCG in the news today 🙄 The venture capital fund is anticipating another case of crypto bankruptcy very soon, no thanks to its subsidiaries, Genesis Trading and Grayscale. The beginning of the end was on November 17th, when The Wall Street Journal reported Genesis was trying to raise $1 billion in investments, or pause all withdrawals on the platform, to pay off debts incurred from the collapse of FTX and 3AC.
Fast-forward to yesterday, Gemini’s co-founder, Cameron Winklevoss, accused DCG’s CEO of “unfair disruption tactics" over plans to resume withdrawals from Genesis, stating that both Genesis and DCG owe Gemini and its customers $900 million. He then gave Silbert till January 8 to resolve this issue… “else what?” you may ask. Well, popular Twitter trader and influencer, Andrew suggests that if DCG does not pay Genesis $575 million in May 2023, which is the actual loan’s due date, it could face “Chapter 11 bankruptcy,” which means the company can continue operations while restructuring existing debt.
Now, what does this mean for the market? If Genesis goes bankrupt, DCG will have to liquidate assets, which could lead to even more bankruptcy. Grayscale might have to sell its balance sheets to cover Genesis’ creditors. The former is the second largest Bitcoin holder in the world after Satoshi Nakamoto, owning about 632,000 BTC (~$10.5B) which is 3.28% of the market value. Furthermore, Grayscale may also have to sell off its Ethereum assets, valued at over 3 million ETH (~$3.6B) which is 2.54% of the market value, and more than 11.84 million ETC (~$190M) which is 8.5% of the market value.
I think you know where this is leading to, as the circulation of such huge amounts of two of the strongest cryptocurrencies will undoubtedly cause a real collapse of market prices.
Whew 😓 I know that was as much to take in as it was for me to write. I’ll let you digest all these juicy details while I go meditate the stress away with some yoga. Don’t forget to share with your friends and stay subscribed for all the latest crypto news!