Alexander Kuptsikevich
FxPro Financial Services Limited
Market picture
Bitcoin is down 2.6% in the last 24 hours to $27K. The crypto market's total capitalisation fell 1.9% to 1.14 trillion. The decline was triggered by the CFTC's surprise lawsuit against Binance. According to the agency, the platform violated derivatives trading rules by operating without proper registration. Its issued coin, BNB, lost more than 5% overnight.
According to CoinShares, investments in cryptocurrencies rose last week for the first time after six weeks of decline, amounting to $160 million - the highest in the previous eight months.
Investments in Bitcoin increased by $128m, while Ethereum decreased by $5m due to investor concerns about the traditional financial sector (TradFi), suggest Coinshares.
As with FTX, it is difficult to question the viability of Bitcoin or Ethereum. However, investors should ask themselves again: Are my funds safe? If banks are a risk, crypto exchanges are an even more significant risk. But is cash and crypto so risky in cold wallets?
News background
Changpeng Zhao, head of major cryptocurrency exchange Binance, has denied allegations made by the Commodity Futures Trading Commission (CFTC). He said the CFTC's claim contained an "incomplete statement of facts" and was "unexpected and disappointing". Zhao pointed to the firm's mandatory KYC programme, blocking US users, interaction with authorities and commitment to transparency.
Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, described the CFTC's lawsuit as an attempt to deal a fatal blow to Binance and did not rule out that the authorities "have a good chance of success". The regulator classified BTC, Ethereum, Litecoin, USDT and BUSD as "commodities" in the lawsuit.
According to Thanefield Capital, exchange customers withdrew more than $1 billion from their accounts overnight following the CFTC's lawsuit. According to Coinglass, Binance users started 3,611 BTC overnight. Binance's spot market share shrank by nearly 10% in a week.
After a month of litigation, US authorities secured a $1 billion settlement between bankrupt crypto lender Voyager and Binance.US.
Speculators have stepped up transfers of BTC to exchanges, confirming profit-taking, Glassnode noted. However, most investors are willing to hold the coins for longer, hoping that the uptrend will continue.
Under pressure from critics, the UK government has abandoned the Royal Mint's plans to issue non-exchangeable Royal Mint NFT tokens.
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