First Mover Asia: Cryptos fly higher as U.S. Turkey Day holiday approaches

The CEO of crypto lending and borrowing platform Hexn.io, believes recent crypto debacles will leave the industry stronger by weeding out weaker companies and fostering stronger regulatory efforts.

Good morning. Here’s what’s happening:

Prices: A day before the U.S. Thanksgiving weekend, bitcoin was trading up more than 2%.

Insights: The CEO of crypto lending and borrowing platform Hexn.io, believes recent crypto debacles will leave the industry stronger.

Prices

BTC/ETH prices per CoinDesk Indices; gold is COMEX spot price. Prices as of about 4 p.m. ET

FOMC Minutes Buoy Crypto Investors

By James Rubin

Bitcoin started celebrating the U.S. Thanksgiving holiday weekend a little early, rising 2.4% as investors savored the latest encouraging signs that the U.S. central bank would soon be ratcheting back its monetary hawkishness.

The largest cryptocurrency by market capitalization was recently trading at about $16,560. With a couple of minor glitches, BTC has remained steadfast over $16,000 even as the fallout from crypto exchange FTX's collapse has widened.

Ether was recently changing hands at $1,183, up 4.4% from Tuesday, same time. Most other major cryptos were recently in the green with LINK and UNI rising more than 5% and 3%, respectively. The CoinDesk Market Index (CDI), an index measuring cryptos' performance, jumped more than 2%.

Crypto prices dovetailed with equity markets, which closed higher Wednesday after minutes from the Federal Open Market Committee (FOMC) revealed that bank officials might be receptive to slowing interest rate increases from their recent diet of 75 basis point hikes. The tech-focused Nasdaq climbed about 1% and the S&P 500 and Dow Jones Industrial Average each rose a few fractions of a percentage point.

Katie Stockton, founder and managing partner at strategy and research group Fairlead Strategies, told CoinDesk TV's First Mover program that bitcoin's price increases came amid "signs" of "short-term downside exhaustion."

"Those are measurable for us, not just a feeling," Stockton said. "These are from some indicators we use on the technical front, and on the daily and weekly charts of bitcoin, we have counter trend signals that suggest we'll see stabilization, not a big relief rally, but stabilization for another few weeks."

Insights

A CEO Sees Pluses in Cryptos Recent Ruins

By Shaurya Malwa and James Rubin

The collapse of crypto exchange FTX and widening fallout have raised fundamental questions about the future of the crypto industry.

Can users trust any projects to protect their assets? How low will prices sink?

Yet Sergei Ivano, CEO at crypto lending and borrowing platform Hexn.io, believes the crisis will leave the industry stronger by weeding out weaker companies, encouraging others to be more transparent and fostering stronger regulatory efforts.

“Recent events connected to FTX and Alameda Research (FTX’s research and trading arm) are positive for the whole industry because they have triggered deleverage,” Ivano said. “All weak and unprofitable businesses that have grown during (the)  bullish phase of 2020-2021 will face problems if they don’t understand risk-management and principles of dealing in a bearish market.”

Ivano noted that markets are weak and that institutions are facing significant outflows. “Onchain metrics reveals that large and old addresses in Bitcoin and Ethereum continue to grow,” he said.

“Customers don't trust centralized entities, choosing DeFi protocols instead and withdrawing their funds from centralized markets,” he added, but said this situation will change in the next several months,” when the current stressful period ends.

He believes that the slapdash business practices and accounting procedures that enabled not only FTX’s implosion (and Chapter 11 bankruptcy protection filing but other debacles over the past six months, including the crumbling of the Terra ecosystem and Chapter 15 bankruptcy filing by crypto hedge fund Three Arrows Capital, will spur “more strict regulation.”

“Regulators will require more information about the structure of balances of centralized exchanges and platforms,” Ivano said.

Yet he also paused over some companies current efforts to share information about their reserves. “Leaders of industry are trying to publish proof of reserves of their companies, but these proofs are funny because this information is useless without knowledge about obligations of companies,” he said. “Proper way to implement such report is to publish reserves and obligations in the same time.”

Important events

5:00 p.m. HKT/SGT(9:00 UTC) Germany's IFO - Business Climate (Nov)

5:45 a.m. HKT/SGT(21:45 UTC) New Zealand Retail Sales (QoQ)