Crypto market wrap: Coins follow the leader, go in the red
Updated
Cryptocurrency prices played follow the leader on Monday, dropping in the red as macroeconomic forces appeared to affect digital assets.
With bitcoin (BTC) trending downward, altcoin prices followed suit, but there were some notable exceptions.
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EOS to USD
Double-digit gains
EOS and chiliz (CHZ) both posted double-digit gains. Chiliz spiked in the hour after conventional markets closed in North America. (All figures based on CoinMarketCap data.)
For the most part, though, price declines prevailed as bitcoin fell below $22,000 and stock markets declined.
The Dow Jones Industrial Average, S&P 500, and NASDAQ, which contains many tech companies that tend to influence crypto, were down modestly.
FTT to USD
FTX exchange coin plunges
The FTX crypto exchange’s coin (FTT) plunged after the company behind it got into hot water with the US Federal Deposit Insurance Corporation (FDIC).
The regulator issued FTX’s US subsidiary a cease-and-desist letter on Friday over alleged misleading statements regarding federally insured accounts. (The FDIC insures bank deposits, excluding cryptocurrencies and stocks.)
FTX president Brett Harrison had stated in a subsequently deleted tweet that “direct deposits from employers to FTX US are stored in individually FDIC-insured bank accounts in the users’ names,” the Verge reported.
The tweet also said that “stocks are held in FDIC-insured and SIPC [Security Investor Protection Corporation]-insured brokerage accounts.”
After complying with FDIC’s request to delete the tweet, Harrison defended it.
Clash with FDIC
“The tweet was written in response to questions raised on twitter regarding whether direct USD deposits from employers were held at insured banks (i.e. Evolve Bank),” he wrote.
But the FDIC argued that the comment falsely suggested that FTX and investors funds were insured by the FDIC.
“We really didn’t mean to mislead anyone, and we didn’t suggest that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance,” Harrison wrote in another tweet.
“I hope this provides clarity on our intentions. Happy to work directly with the FDIC on these important topics.”
CHZ to USD
Company’s revenue skyrockets
Only one day after the flap, FTX’s audited financial statements were leaked to CNBC, showing that the crypto exchange operator’s revenue skyrocketed more than 1,000% to $1bn (£850m) from $89m in 2021. Private companies like FTX rarely reveal such figures.
FTX is owned by 30-year-old billionaire Sam Bankman-Fried, who has baled out distressed crypto companies.
According to CNBC, the firm’s operating income exploded to $272 million from $14m a year earlier. Meanwhile, net income soared to $388 million in 2021, up from only $17m in 2020.
Citing data provided by an investor, CNBC reported that FTX generated $270m in the first quarter of 2022 and expects to produce $1.1bn over the course of the year.
But the impressive financial results did not sway investors on Monday.
Ethereum coin tumbles
Ether (ETC), the Ethereum blockchain’s main coin, fell under $1,600. A week earlier, ETH was above $2,000.
ETH had gained from buzz surrounding Ethereum’s upcoming hard fork known as the Merge. Once the network upgrade is completed in September, ETH and many other coins will be produced via the proof-of-stake method rather than the more expensive and energy-intensive proof-of-work model.
But Ethereum leaders have confirmed that the Merge will not significantly reduce transaction costs known as gas fees.
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