This newsletter covers current headlines within the crypto space, my opinion on them and the projects & people I find interesting. Also included is information about crypto community events; both locally & globally.
Howdy crypto-heads! I’ve been struggling with motivation to keep writing this newsletter so we had a multi-month break. With the holidays coming up though I wanted to share my thoughts as it may be January ‘23 until the next post. Here we go!
Bitcoin takes a dip
Binance liquidates FTX
“Denver Crypto Club” Investor Group
1. BTC Slides Lower
With a brief dip under $17k in the last 24 hours Bitcoin seems poised to head lower on the back of recent bearish macro headlines and increasing volume. Surprisingly the correlation we’ve seen between crypto markets and stocks does not seem to be in play at the moment as Bitcoin is falling while stocks have been rallying since mid October.
The way I see it we have a pivot point near $20k for BTC and we are currently under that and heading lower. The next big stop should be near $12k and definitely at $10k, although exact levels are hard to predict as this price will definitely cause some panic and additional volatility if we get down this low.
I expect a rally after we stop our descent and $30k is my biggest overhead resistance to watch. If we can clear this it may mean bear market is ending but we have a ways to go before this confirmation.
2. CZ checkmates SBF
What a wild ride this crypto journey has been and continues to be! The FTX exchange was one of my favorite centralized services and I thought that Sam Bankman-Fried (aka SBF) was an intelligent and capable leader of the FTX exchange. (Full disclosure - I hold both Sam’s FTT token and Binance’s BNB token).
As of yesterday it appears that, subject to due diligence, the Binance exchange run by Changpeng Zhao (aka CZ) will be purchasing their largest competitor FTX.com. If this acquisition goes through Binance will solidify their market dominance globally as FTX is the second largest exchange (after Binance) for cryptocurrency spot and derivatives trading.
So how did this all go down? Well basically CZ dumped a ton of FTT token that was collateralizing loans taken out by FTX. When FTX was about to get margin called and start to have their holdings liquidated, Binance swooped in with a promise of a cash injection to bail them out through the sale of FTX.com to Binance.
Lets let that sink in…the largest crypto exchange in the world sold off a ton of their biggest competitors token to bankrupt them. And this was not an Over-the-Counter (OTC) transaction that minimizes the price impact. Oh no, Mr. CZ sold it on the open market to ensure maximum price movement after he found out that FTX’s token was being used for over-leveraged positions.
While I have to respect the brilliance of this “forced acquisition” I am also a little scared of Binance now. It seems they are willing to go to extreme lengths in their pursuit of market dominance and I have to wonder how long it is before they become a giant corporate tech entity and the “Facebook” or “Google” of the cryptocurrency trading world. (Coinbase has them beat for now but I have a feeling Binance is on the rise…)
While this outcome is far superior to FTX.com being liquidated and investor funds being lost it gives an insane amount of power to Binance, their stablecoin BUSD and the permissioned blockchain network known as Binance Smart Chain (a Layer 2 blockchain compatible with Ethereum). I will definitely be keeping an eye on Binance and their BNB token moving forward as it jumped up quite a bit on the news of this acquisition.
3. Denver Crypto Club news
As the year winds down and our club meetings go virtual until after the New Year it’s a great time to review your own crypto portfolio and think about taxes and positioning yourself for 2023. I fully expect the regulators to give the green light to big entities and corporations getting into crypto and Web3 in 2023 so make sure you don’t get left behind if the markets start moving up - set up a call to get all the crypto help you need from the Denver Crypto Group.
November Meeting
The next Denver Crypto Club meeting will be at 7pm on Tuesday, November 29th and is Virtual Only. If you are not already a member but would like to sit in and see what our crypto investing club is all about please reach out to me by email for the zoom link - matt@denvercryptogroup.com
That’s it for this edition, stay happy and healthy and I’ll catch you soon!
Much Love,
~Matt