🪦 FTX Ready For Relaunch?

Talking points

Quick market outlook 👀

As we start our journey into quarter two of the year, it seems the market is also keen to get a head start, just look at the Bitcoin chart below!

As you can see, WE BROKE THE $30K MARK! Yes, after what seemed like an eternity, $30k was recaptured this week and a push to $31k was even on the cards. However, we may need a little more time before seeing what happens next as this week was also packed with some interesting events.

Firstly, we had the CPI data on Wednesday, which saw inflation come in at 5%, which was lower than than the expected 5.2%. We also saw the Ethereum Shanghai release too, so a lot of volatility and uncertainty which could make short term results differ.

So, now we have hit the $30k mark, what is next?

Well, this was a big milestone to get to, however, there is a likelihood that we see a small pullback as this could trigger a selling point for many investors who got in at closer to the $20K mark.

Although as always, there are no certainties and we could even see a push higher, but we'll need to see what happens post recent events to have a better indication as to what might be next.

As always, have a long term plan and be safe!

⏳ London to clear Bitcoin futures

London Stock Exchange Group's clearinghouse arm, LCH, is making headlines within the crypto world with its most recent announcement.

London Clearing House (LCH) has revealed plans to offer clearing services for cash-settled Bitcoin (BTC) index futures and options, which is a fantastic move for adoption into traditional finance sectors. However, we are not finished there, the company's French arm, LCH DigitalAssetClear, will be finalizing trades made on GFO-X, a UK-regulated digital asset exchange.

Now this is a big move for the United Kingdom as they already have plans to make it a crypto hub so this is another move closer to that goal, but at the same time, this is equally a positive move for crypto adoption too.

Since the 2008 financial crisis, Clearinghouses have become a preferred choice for regulators as they provide a centralized route for finalizing trades upon an exchange.

So not only does this reduce the risk of exposure, but it also reduces the risk of separate bilateral deals among members such as investment banks.

Earlier in March, the Stuttgart stock exchange obtained a crypto custody license from German regulator BaFin, and Euroclear, a Brussels-based clearinghouse, has plans to launch a bond settlement platform based on distributed ledger technology that's similar to crypto.

This is just another example of how traditional finance is trying to implement crypto and dip its toes in where possible.

As we venture further forward, it seems established financial institutions are increasingly recognizing the potential of crypto and blockchain technology.

Digital assets are rapidly gaining popularity and institutions are looking for regulated environments they are familiar with to gain access, hence why this is positive news. Although this is a continued disappointment for US investors as they continue to fall behind other regions that seem to be accelerating crypto.

Will the US be left behind if they do not change their stance soon?

🪦 FTX revival begins

FTX, the former crypto exchange is making strides toward recovery and have found the light at the end of the tunnel it seems.

In a recent U.S. bankruptcy court hearing it has been revealed that the FTX has managed to recover over $7.3 billion in cash and liquid crypto assets, marking an increase of over $800 million since January. The FTX lawyer even went on to say “The dumpster fire is out” which could spark some interest from many investors that lost money via their exchange collapse last year.

FTX's road to recovery hasn't been easy, with months of effort focused on collecting resources and understanding what went wrong under the leadership of indicted ex-founder Sam Bankman-Fried, who has pleaded not guilty to fraud charges.

However, FTX has benefited from the recent rise in crypto prices, which has helped increase the total recovery value to also, with the exchanges native token $FTT rising significantly.

FTX's new CEO, John Ray, has been vocal about improper fund transfers and poor accounting practices that led to the collapse of the exchange, describing it as a "complete failure" of controls. As FTX looks towards the future, it has also been revealed that there are plans to try and relaunch the exchange…

Now this will definitely get some mixed responses, especially with this collapse seemingly dropping the entire crypto market lower and in turn hurting many investors.

So far, only FTX customers in Japan have been able to withdraw any funds, thanks to the country's relatively strong crypto regulations (Round of applause to Japan). FTX’s new CEO also highlighted that restarting the exchange would require significant capital, as the existing customer interface had little connection to the movement of money behind the scenes, and referred to it as a "façade" that appeared to work well on the surface.

One of the key questions that FTX is grappling with is whether to use its own funds to restart the exchange or to repay customers. Now you’d like to think FTX would repay customers first, and if they were not to choose the latter option, there could be a lot of disgruntled customers before the exchange even kicks off again.

However, could there be an argument that relaunching the exchange would enable FTX to pay all customers back in full? Only time will tell with this one, either way, there is going to be a HUGE trust issue if they do relaunch the exchange.

FTX needs to focus on paving its way out of bankruptcy first which could take some time as any Chapter 11 plan approval will likely not be in 2023.

What is also not a good sign is that many company insiders who are being charged with fraud are pleading in different ways, with Bankman-Fried pleading not guilty.

Would you trust FTX if they were to relaunch the exchange? 👀

🧧 Shang-hi welcomed

Ethereum's highly anticipated hard fork, known as the "Shanghai" upgrade or "Shapella" for short, has been successfully completed, marking a historic milestone for the community.

This upgrade, which began at around 22:30 UTC and was finalized around 22:45 UTC, has enabled users who have "staked" their ether to secure and validate transactions on the blockchain to finally withdraw their staked ETH and redeem accrued rewards.

Since ETH staking debuted in 2020, participants have deposited over an estimated $34.56 billion worth of ETH with the network, with over 18M ETH being staked (Approximately 15% of the total ETH supply). With the successful completion of the Shanghai hard fork, approximately 1.1 million accrued ETH from rewards is now eligible for withdrawal by stakers.

In a proof-of-stake system, users stake their cryptocurrency as a form of guarantee to help secure and confirm new data blocks. Ethereum transitioned from its original proof-of-work consensus mechanism, similar to that of Bitcoin, to a proof-of-stake system last year. However, until now, users were unable to withdraw their staked ether or claim their rewards, which has been a crucial feature of the new paradigm.

The Shapella hard fork has resolved this issue, allowing users to access their long-awaited rewards immediately. There were approximately 285 withdrawals processed in epoch 194,408, totalling around 5,413 ETH, equivalent to $10 million, within just half an hour after the upgrade was activated, with more being processed after.

In conclusion, the completion of Ethereum's Shanghai hard fork, or "Shapella" has marked a significant milestone for the Ethereum community, allowing users who have staked their ETH to finally withdraw their rewards. This upgrade has further solidified Ethereum's transition to fully proof of stake too.