Crypto Moves — Bitcoin, Ether slightly up; Virtual assets shed $800bn market value in a month; KuCoin valued at $10bn. Crypto assets bled nearly $800 billion in market value over the past month, touching a low of $1.4 trillion on Tuesday Bitcoin, the leading cryptocurrency internationally, traded higher on Wednesday, up 1.34 percent to $31,755 as of 08:20 a.m. Riyadh time.
Ether, the second most traded cryptocurrency, was priced at $2,397, up 1.48 percent, according to data from Coindesk.
Coinbase CEO says new disclosure does not mean firm faces bankruptcy risk
Brian Armstrong, the CEO of Coinbase said a disclosure in its latest quarterly filing did not indicate the crypto exchange operator faced a bankruptcy risk and it had been made to meet a US Securities and Exchange Commission, known as SEC, requirement.
Armstrong made his comments after Coinbase said on Tuesday that, in the event of bankruptcy, crypto assets held by the exchange could be considered property of the bankruptcy proceedings, and customers could be treated as general unsecured creditors.
The unsecured creditor will be one of the last to be paid in any bankruptcy and last in line for claims.
Coinbase, whose shares plunged 15 percent in extended trade on Tuesday, also missed estimates for first-quarter revenue and posted a loss as turmoil in global markets curbed investor appetite for higher risk assets including cryptocurrencies.
Coinbase reported a 35 percent slump in total revenue to $1.17 billion for the three months ended March 31. Analysts had expected revenue of $1.48 billion, according to IBES data from Refinitiv.
Coinbase said its disclosure might lead customers to believe that keeping their coins on the platform would be considered more risky, which would in turn materially impact its financial position.
“We have no risk of bankruptcy,” Armstrong tweeted after the disclosure, which he said was made to meet SEC requirements.
“We should have updated our retail terms sooner, and we didn’t communicate proactively when this risk disclosure was added, my deepest apologies,” Armstrong said.
Among its mix of crypto assets, Bitcoin accounted for 24 percent of trading volume, up 16 percent from the prior quarter but down 39 percent from a year earlier.
The cryptocurrency market has been roiled by extreme volatility due to economic and geopolitical uncertainties, such as fears of rising inflation and the impact of the Ukraine war, leading to a sharp drop in their prices.
Bitcoin has nearly halved from the record high hit in November last year, as the world’s largest digital asset becomes a major target of governments and regulators looking to crack down on privately operated currencies.
SEC’s Gensler says crypto exchanges trading against clients
Gary Gensler is increasing his criticism of the digital asset exchange, arguing that some platforms are evading rules and may be betting against their customers, Bloomberg reported.
The chairman of the US Securities and Exchange Commission reiterated on Tuesday that most digital assets fall under his agency’s purview and venues trading them should register with the regulator.
The SEC is also ramping up its enforcement efforts, Gensler added.
“Crypto’s got a lot of those challenges, of platforms trading ahead of their customers,” Gensler said. “In fact, they’re trading against their customers often because they’re market-marking against them,” Gensler told Bloomberg News in an interview.
Crypto assets shed $800 billion in market value in a month
Crypto assets bled nearly $800 billion in market value over the past month, touching a low of $1.4 trillion on Tuesday, according to data site CoinMarketCap, as the end of easy monetary policy diminishes appetite for risk assets.
Bitcoin, which makes up for nearly 40 percent of the crypto market, hit a 10-month low earlier on Tuesday, before rebounding to $31,450, just six days after touching $40,000. It was more than 54 percent below its Nov. 10 all-time high of $69,000.
Digital asset prices have slumped, mirroring a plunge in equities on fears of aggressive interest rate hikes across the globe to stave off decades-high inflation. The tech-heavy Nasdaq was down 28 percent from its November 2021 record high.
The total crypto market value was at $2.2 trillion on April 2, well off of its all-time peak of $2.9 trillion last November, as per CoinMarketCap.
“Bitcoin remains highly correlated to the broader economic conditions, which suggests the road ahead may unfortunately be a rocky one, at least for the time being,” blockchain data provider Glassnode said in a note.
Signs of weakness in stablecoins, typically a safer crypto currency, further spooked investors. TerraUSD, the world’s fourth-largest stablecoin, lost a third of its value on Tuesday, as it lost its peg to the dollar.
Despite bitcoin’s price slump, funds and products linked to it posted inflows of $45 million last week as investors took advantage of price weakness, according to digital asset manager Coinshares in a report released on Monday.
KuCoin valued at $10 billion in latest funding round
Cryptocurrency exchange KuCoin raised $150 million in a series B funding round led by Jump Crypto, the company said on Tuesday, giving it a valuation of $10 billion.
KuCoin, the fifth largest crypto exchange according to data firm CoinMarketCap, has 10 million users in 207 countries. It plans to use the money to expand its presence in Web3, a utopian version of the world wide web that is decentralized and based on blockchain technology.
The Seychelles-based company offers trading services and plans to use the funds to expand to crypto wallets, digital finance, NFTs as well as to build its online community of crypto users.
The latest funding round includes investment from Circle Ventures, IDG Capital and Matric Partners.
Private investments in crypto firms have exploded in 2022 despite a slump in Bitcoin and other assets this year.
Venture capital investment in such projects totaled $10 billion globally in the first quarter of 2022, the largest quarterly sum ever, and more than double the level seen in the same period a year ago, according to data from Pitchbook.