Coinbase plunges 86% in 2022, amid an FTX-inspired crisis. But one analyst says “you have to have a multi-year schedule.”
Hello and Seasons Greetings! Meet Mark DeCambre, editor of MarketWatch.
The hottest story in the land of crypto remains FTX, even as we rush into 2023. It’s a rapidly changing situation. Sam Bankman-Fried has not been defined
of the Bahamas and the co-conspirators begin to emerge.
We’ll let you know about these developments and more in DL’s latest installment. before Christmas.
You can find me at @mdecambre. And, of course, Happy Hanukkah, Kwanzaa, Christmas, Festivus, Three Kings Day and everything in between from us at MarketWatch and Dow Jones to you and your loved ones.
Quote(s) of the week
““They may be planting tomatoes on Mars by the time this guy gets out of the FCI.””
““Let me reiterate a call I made last week: If you were involved in a foul at FTX or Alameda, now is the time to get ahead. We move quickly and our patience is not eternal.”
It is the “reversal” and not the “returning” that have captivated crypto watchers this week.
“Framing” is the practice of inducing lower level targets in a criminal investigation to go after higher level targets in exchange for reduced penalties.
That appears to be what happened for Caroline Ellison, 28, and Gary Wang, 29.
Wednesday, FTX co-founder and former chief technology officer Wang and Ellison, who ran the Alameda hedge fund, pleaded guilty to charges related to their role in the fraud that contributed to FTX’s collapse, said Wednesday evening. U.S. Attorney Damian Williams. They cooperate with the authorities.
Prosecutors for the Southern District of New York accuse FTX founder Bankman-Fried of hiding the exchange’s financial troubles from the public and defrauding investors of more than $1.8 billion. Ellison and Wang are accused of helping him do it.
“Ms. Ellison and Mr. Wang pleaded guilty to these charges and they are both cooperating with the Southern District of New York,” William said.
Flipping the pair is bad news for Bankman-Fried, 30, and comes as he was extradited to the United States from the Bahamas. It is said that he will be brought before a federal judge “as soon as possible”, William said.
According to a separate but parallel complaint issued by the Securities and Exchange Commission, Ellison helped manipulate the price of the FTT crypto token issued by FTX, which served as collateral for undisclosed loans of FTX client assets to Alameda.
SEC says Wang created software to allow Alameda to embezzle funds from FTX clients, and that Ellison used those funds for Alameda’s trading business, a no-no in money management traditional.
Coinbase Global Inc. COIN,
is down 87% so far in 2022, making it one of the worst stocks of the year.
Despite this astonishing slowdown, MoffettNathanson analyst Lisa Ellis says MarketWatch’s Emily Bary as the crypto exchangethe largest domiciled in the United States, still has promising prospects.
“This, in my opinion, is a pretty unique investment asset, but you have to have a multi-year timeframe,” Ellis said.
Currently, Coinbase’s business is very retail-oriented, but the company has the potential to be “more of a crypto-economy infrastructure provider” with opportunities in areas such as clearing, settlement and cross-border trade, Ellis said.
A positive outlook may be difficult for investors, or potential investors, to comprehend, but it should be noted that applications using blockchain technology are continuing, albeit at a slower pace, and bitcoin, the #1 crypto , held up pretty well despite the FTX Drama.
Ellis has among the highest price targets, at $200, of analysts covering Coinbase, according to FactSet. Shares on Thursday were trading around $33.11, at last check.
Jim Cunha, Boston Fed Executive Vice President said a now-completed “agnostic” project on central bank digital currencies, or CBDCs, known as “Hamilton Project,took a crucial first step “towards a better understanding of how money might work better for everyone.”
The project, the Boston Fed’s work on CBDC with the Massachusetts Institute of Technology, is one that could help pave the way for a CBDC, by determining whether it is viable.
“The OpenCBDC codebase resulting from this successful collaboration provides a credible and unbiased resource to assess design choices and ensure that a potential future CBDC could serve the public interest,” said Neha Narula, Director of Digital Currency. Initiative.
OpenCBDC is “open” because the research paper and code that powers the experimental CBDC architecture has been uploaded to GitHub, so other developers around the world can provide feedback and refine the framework.
Back in SeptemberTreasury Secretary Janet Yellen said the United States should “advance political and technical work on a possible central bank digital currency, or CBDC, so that the United States is ready if the CBDC is determined as being in the national interest”.
CBDCs differ from existing digital currency, such as a bank account balance, in that they would be a direct responsibility of the Federal Reserve, not a commercial bank.
CBDC advocates believe it could be used to foster greater financial inclusion. However, crypto purists view CBDCs, potentially controlled by governments, as contrary to the original concept of decentralized permissionless platforms like bitcoin and other cryptos.
The current volatility in crypto means that careful regulation will be needed if such initiatives are to go ahead.
Crypto at a Glance
Bitcoin has gained 3.4% over the past week and was trading at around $17,397 as of Thursday midday, according to FactSet.
Ether rose 3.54% over the same period to reach around $1,271.
Meanwhile, FTX native coins, known as FTT tokens, are down around 3% in the past seven days, trading at $1.36, according to data provider CoinGecko.
Notably, Binance’s native token, known as Binance USD, or BUSD, was stable over a seven-day period, Binance is the largest crypto exchange on the planet and its stablecoin has a circulating supply of around 19 billion BUSD and a total supply of 18.6 billion, according to CoinGecko.
|The biggest winners||Price||% return over 7 days|
|Source: CoinGecko at December 22|
|The biggest losers||Price||% return over 7 days|
Crypto companies, funds
Coinbase shares plunged 15% for the week to around $33. MicroStrategy Inc. MSTR,
fell more than 18% to $161.54.
Crypto mining company Riot Blockchain Inc. RIOT,
is down 9% to $3.67 on Thursday afternoon. Shares of rival Marathon Digital Holdings Inc. MARA,
fell 23% to $3.54 over the past week. Ebang International Holdings Inc.EBON,
another miner nose plunged more than 40% in the past week and was trading at $2.81.
Overstock.com Inc. shares OSTK,
fell about 15%, to $18.65, over the week.
Shares of Block Inc. SQ,
formerly known as Square, slipped 13.7% to $59.15 for the week so far. Tesla Inc. shares TSLA,
were down 20% at $124.24.
PayPal Holdings Inc. PYPL,
fell 6.3% over this period, to trade at around $66.64. Nvidia Corp. NVDA,
fell 13.7%, to $149.19, for the week.
Advanced Micro Devices Inc. shares AMD,
were down 8.3% at $62.37 for the week on Thursday.
Among crypto funds, ProShares Bitcoin Strategy BITO,
fell 5.9% to $10.33 on Thursday, while its ETF Short Bitcoin Strategy BITI,
rose 5.9% to $40.25. Valkyrie Bitcoin BTF ETF Strategy,
fell 5.9% to $6.51, while VanEck Bitcoin Strategy ETF XBTF,
down 6.1% to $16.58.
Grayscale Bitcoin Trust GBTC,
slipped 1.3% to $8.09 on the week.
In comparison, the S&P 500 SPX,
is down 4.5% on the week so far, while the Dow Jones Industrial Average DJIA,
is down about 3.4%, and the Nasdaq Composite Index COMP,
is down 6.2%, when last checked on Thursday.
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