In the last seven days, several stories have developed that could affect Bitcoin and altcoins and have repercussions for the next week. Let’s take a look at some key themes to consider.
restructuring plans
Not one, but two collapsing crypto institutions announced their plans to come back from the dead last week. According to the opening line of a leaked deck of presentations, first Su Zhu and Kyle Davies, the founders of failed crypto hedge fund 3AC, pitched to raise $25 million for a new crypto exchange called ‘GTX’. The couple is partnering with Mark Lamb and Sudhu Arumugum, who founded the cryptocurrency exchange Coinflex, which is currently undergoing restructuring. After the inevitable mockery of the GTX name on crypto Twitter, Coinflex said that the GTX name will not be used, but will make further clarifications when a possible round or partnership takes place.
FTX also raised eyebrows when new CEO John Ray said that the crashed cryptocurrency exchange could be restarted. Many users have criticized the idea that anyone can ever trust to deposit money on the platform again. Still, Ray fired 30% of the essentially worthless FTT token, telling the Wall Street Journal, “If there’s a way forward in this, then we’re not just going to discover it, we’re going to do it.”
Genesis also wants to take the notorious bunny out of the hat by acting ‘quickly and efficiently’ to exit the bankruptcy process after its crypto lending business filed for Chapter 11 bankruptcy protection, which owed more than $3.6 billion to its biggest creditors. cryptocoin.com As we have reported, the first day of Genesis’ bankruptcy filing will be Monday.
SEC’s eye on cryptocurrencies for enforcement
After a report from Cornerstone Research outlined a 50% increase in U.S. Securities and Exchange Commission (SEC) crypto enforcement actions in 2022, the regulator shows no signs of slowing down. The SEC’s latest accusation of lending products to crypto exchange Gemini and crypto lender Genesis came just days before the latter filed for Chapter 11 bankruptcy protection. In doing so, it fired a warning shot into the industry regarding yielding accounts. This is something we may see more of, given the number of similar services still active in the crypto space. Indeed, soon came the news that Nexo had struck a $45 million deal with the regulator for failing to record the offering and sale of its individual crypto-asset lending product.
The SEC is also not afraid to tackle the decentralized side of crypto, as evidenced by the accusations it leveled against Avraham Eisenberg on Friday after the securities regulator said Eisenberg stole $116 million from DeFi platform Mango Markets. And the SEC is not alone, with an announcement by the US Department of Justice leading to speculation that Binance may be subject to some enforcement action.
Hot topics for bitcoin and altcoins
Outpacing Arbitrum, Optimism was one of the most important narratives embraced by the crypto community in the past week. In addition, transaction numbers among Tier 2 competitors differed significantly. However, after the Optimism Missions ended on January 17, he traces the difference. Optimism also still lags behind Arbitrum in terms of the total value of assets in the protocol. It also holds $636.6 million compared to $1.1 billion in Arbitrum.
Unlike Arbitrum, Optimism launched its native OP token in January, up more than 150%. Meanwhile, some of Optimism’s ecosystem tokens have increased by over 200% since the start of the year. Since launching its V2 derivatives platform on Optimism, Synthetix has also benefited from the ecosystem, doubling its daily users as Layer 2 surpasses Ethereum as Synthetix’s main hub.
Tier 2s is just one area of interest for investors seeking high beta exposure to the Ethereum ecosystem. Tokens underlying liquid staking derivative (LSD) protocols such as Lido (LDO) and Rocket Pool (RPL) also performed well after a week of integrating them into web3 wallet MetaMask. Stablecoin issuer Frax is another project that has continued to benefit since launching its own liquid staking derivative. The FXS governance token is one of the best performing assets since the FTX-induced market crash. Alongside the OP token, LDO, RPL and FRX are among the top earners of the top 100 crypto assets this year.
This particular narrative will likely continue as Ethereum gets closer to the Shanghai upgrade proposed in March. It aims to offer the staking feature that has been missing from Blockchain since its transition to a PoS system, which resulted in The Merge. Finally, the conversation around bridged Bitcoin has also increased on Avalanche after attractive DeFi returns for the token that saw Bitcoin (BTC) surpass BTC held on the Lightning Network. It will be interesting to see how this trend among other hot topics continues next week.
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