Market Update: August 22, 2022
Bears Take Back Control of Market, Investors Look ahead to Fed's Annual Economic Symposium, FTX's Revenue Reports, FDIC Issues Cease and Desist Orders
A rocky week for crypto continues on Monday as investors look ahead to the US Federal Reserve’s Annual Economic Symposium in Jackson Hole, Wyoming. Crypto assets were down across the board over the past week with Bitcoin down over 11% and ETH down about 18%. Without much news over the past 7d outside of the FDIC issuing cease and desist orders, investors are focused on technical levels, with bears having taken control of the markets over the weekend.
Total Crypto Market Cap (Coin Market Cap): $1.01T (-15.40% 7d)
Total Crypto Market Cap Ex-BTC (Coin Market Cap): $602B (-12.75% 7d)
Bears Take Control of Market
Over the last month, total market cap is down ~8% relative to the US Dollar, down ~9% relative to ETH, and down ~2% relative to BTC. David Duong, head of institutional research at Coinbase, stated that Bitcoin’s daily technical chart has flipped and bears have regained control over the market in the short term. Duong noted in his weekly research notes that “BTC will likely retest support at $20,830 and $19,230 over the coming few weeks.” He also notes that markets will likely be following the Fed’s economic symposium closely saying that “Fed Chair Jerome Powell will likely try to take a more measure approach in Wyoming and emphasize that the tightening cycle isn’t over yet.” Bottom line - as we wait for more news, expect some retests to lower levels in the short term.
FTX’s Revenues Grew by over 1,000% in 2021
Leaked reports from this week show that FTX’s revenues grew by over 1,000% to $1.02 billion under the leadership of Sam Bankman-Fried (SBF). Often referred to as the leading company in crypto, FTX has positioned themselves financially to take advantage of the recent market downturns. While most companies over levered themselves and are scrambling to cut costs, FTX has been acquiring. With the release of the overly impressive revenue numbers, the acquisitions are not a surprise. Because of their fiscal responsibility, commitment to the technology, and stellar track record of leadership, we can expect FTX and SBF to continue to outpace the market in innovation, brand equity, and bottom line revenues.
FDIC Issues Cease and Desist to 5 Crypto Companies
It wasn’t all good news for FTX this week; the FDIC issued 5 cease and desist orders to crypto companies, including FTX, over “misleading claims”. The FDIC alleged that these companies misled investors to believe that their funds were insured, when in fact they are not. The FDIC insures federally regulated bank accounts up to $250,000, however they wanted to make it clear this week that crypto accounts are not included. FTX leadership has since come out to clarify that user funds are not FDIC insured, despite a previous tweet that has since been deleted from FTX president Brett Harrison stating that user funds with FTX are federally insured.
If nothing else, FTX continues to show that clarity and transparency wins out in crypto, so this is a good opportunity for them to show that.
What to Watch for This Week
US Federal Reserve’s Annual Economic Symposium in Jackson Hole, WY
SushiSwap Looking for new “Head Chef” CEO
ETH Merge Updates
Australia’s Plans for Crypto Regulation “Unlike Anywhere Else in the World”