Bitcoin and the broader crypto market edged higher over the last seven days. Arguably helping push the market forwards were comments by Federal Reserve Chairman Jerome Powell, who stated last Wednesday that smaller interest rate increases are likely ahead, and could start in December.
At the time of writing, bitcoin is trading at US$17,006. Ethereum outperformed bitcoin for the week, up 3.37% vs bitcoin’s 2.81%.
Bitcoin’s market capitalisation is at US$326.9B, with the total crypto market sitting at US$854.6B. Bitcoin’s market dominance is at 38.9%.
| Price | High | Low | Change from previous week | |
| BTC (in US$) | $17,006 | $17,197 | $16,054 | 2.81% |
| ETH (in US$) | $1,258 | $1,302 | $1,156 | 3.37% |
Source: CoinMarketCap. As at 4th Dec. 2022. Past performance is not indicative of future performance. Performance is shown in US dollars and does not take into account any USD/AUD currency movements.
Source: Glassnode. Past performance is not indicative of future performance.
Crypto news we’re watching
SBF opens up in live interview
FTX founder and former CEO Sam Bankman-Fried (SBF) made an appearance and answered questions in his first live interview since the collapse of FTX earlier this month. During the New York Times DealBook Summit on 30 November 2022 in New York City, Andrew Ross Sorkin had the opportunity to ask a number of questions. SBF joined the conversation virtually from his residence in the Bahamas, against the advice of his lawyers. The interview lasted for just over an hour.
Sorkin asked if SBF thinks what happened was fraud, and whether there was commingling of funds. He also asked SBF to address clients who lost money.
SBF defended himself against accusations of fraud and apologised multiple times throughout the interview. He also said that he had only included FTX US within his bankruptcy filing due to outside coercion, that he did not knowingly commingle customer funds and when asked about any criminal liability, said: “I don’t personally think that … that’s not what I’m focusing on.”1
Blockfi files for Bankruptcy Protection
Crypto lender Blockfi officially filed for Chapter 11 bankruptcy protection according to a press release last week. FTX had extended a $250 million credit line to the lender earlier in the year and had an ‘option to acquire’, however after FTX filed for bankruptcy, the lender suspended withdrawals due to the confusion about FTX’s assets, having some assets on FTX and also still owing some of the credit FTX had extended.
“With the collapse of FTX, the Blockfi management team and board of directors immediately took action to protect clients and the company,” the company’s financial adviser Mark Renzi detailed. “From inception, Blockfi has worked to positively shape the cryptocurrency industry and advance the sector. Blockfi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.”2
FTSE Russell launches digital asset indices
FTSE Russell announced on its website the launch of its first multi asset, market cap index series covering the investable digital asset market. There will be eight indices in total ranging from large to micro cap. The indices were built in association with Digital Asset Research (DAR). Given that price sourcing is more difficult in the crypto space, the indices were developed to provide the data infrastructure and governance to serve client investment and analysis needs.
Arne Staal, CEO at FTSE Russell, a London Stock Exchange Group (LSEG) business, said: “We are pleased with the progress the FTSE Global Digital Asset Index Series launch represents for our digital asset capability, as transparency in this asset class becomes more important than ever. FTSE Russell has taken a measured approach to this frontier investment space and has built a rigorous and transparent framework, underpinned by robust governance and comprehensive data to meet investor needs, both where they are now and as they prepare for change in this market.”3
On-chain metrics
Bitcoin (BTC): Price Drawdown from ATH
This metric is used to give the percent drawdown of the asset’s price from the previous all-time high.
According to data from Glassnode, the current drawdown is at -75.39% making it the 4th largest drawdown in bitcoin’s history and the worst since January of 2019.
Source: Glassnode. Past performance is not indicative of future performance.
Bitcoin (BTC): Relative Unrealised Loss
This metric is defined as the total loss in USD of all coins in existence whose price at realisation time was higher than the current price, normalised by the market cap.
According to the data on Glassnode, tracking the weekly average of this indicator shows that at extreme points of prior bear markets, investors were shouldering a loss in excess of 50% of total market cap at the time. This metric has recently peaked at 56%, which is the highest for this cycle, and comparable to prior bear market floors.
Source: Glassnode. Past performance is not indicative of future performance.
Altcoin news
ApeCoin (APE) the utility token of the APE ecosystem and the native coin of the Bored Ape Yacht Club (BAYC) developed by Yuga Labs, is up over 50% over the last three weeks. APE token holders get to make collective governance decisions, cast votes and decide on issues such as partnerships, project selection, rule framing and more.
Propelling the coin higher is the ability to stake the coin as of 5 December, according to the developer: “It will allow users to lock their APE holdings into four staking pools — ApeCoin pool, BAYC pool, MAYC pool and Paired pool — that will allow them to earn yield periodically.”4
Investing in crypto assets or companies servicing crypto-asset markets should be considered very high risk. Exposure to crypto assets involves substantially higher risk when compared to traditional investments due to their speculative nature and the very high volatility of crypto-asset markets.
Investing in crypto assets or crypto-focused companies is not suitable for all investors and should only be considered by investors who (i) fully understand their features and risks or after consulting a professional financial adviser, and (ii) who have a very high tolerance for risk and the capacity to absorb a rapid loss of some or all of their investment.
Any investment in crypto assets or crypto- focused companies should only be considered as a very small component of an investor’s overall portfolio.
1. https://www.coindesk.com/business/2022/12/01/former-ftx-ceo-sam-bankman-fried-i-didnt-knowingly-commingle-funds/
2. https://www.bloomberg.com/news/articles/2022-11-28/blockfi-latest-to-go-bankrupt-in-aftermath-of-ftx-s-meltdown?sref=6EQWk76O
3. https://content.ftserussell.com/sites/default/files/ftse_da_launch_press_release_final.pdf
4. https://cointelegraph.com/news/apecoin-risks-30-crash-after-ape-staking-debut-in-december
Off the Chain is published every Tuesday. It provides the latest news on bitcoin and the rest of the crypto market, along with analysis and insights into the world of crypto.
It provides general information only and is not a recommendation to invest in any crypto asset, crypto-focused company or investment product.
Written by
Justin Arzadon
Director, Adviser Services & Head of Digital Assets.
C4 Certified Bitcoin Professional (CBP) and Blockchain Council Certified Bitcoin Expert™ with over 18 years’ experience in the ETF market. Passionate about the future of money.
Read more from Justin.