Bitcoin Falls as Crypto Market Crashes Again
Most major cryptocurrencies spent most of the day trading in the negative on cryptocurrency platforms.
Bitcoin investors have resumed their defensive attitude from the previous week, as seen by the fact that recent trading activity has been quiet at around $16,700. This is a decrease of 1.4% over the past twenty-four hours. The most recent price of ether on the market was about $1,200, representing a 3.7% decline. The value of two other prominent cryptocurrencies, CEL and UNI, dropped by more than 5% within the last 24 hours. At the time of writing, the FTT token of FTX had dropped by almost 4% and was trading at $1.66. This is a significant decrease from its near-$36 high earlier in the year.
During a conference call with customers, the interim CEO of Genesis, Derar Islim, shared that the firm is investigating several options for the lending division, one of which is identifying a source of fresh funding. He said Genesis would provide customers more information about the strategy the following week. Genesis Global Capital serviced an institutional clientele and had a total of $2.8 billion in active loans as of the end of the third quarter of 2022, as stated on the company's website. Genesis is owned by Digital Currency Group (DCG), the same company that is the parent company of CoinDesk. "Genesis Global Capital, the lending section of Genesis, made the difficult decision today to temporarily halt redemptions and the origination of new loans. This decision was made in response to the significant market disruption caused by the FTX collapse and the loss of faith in the industry "Amanda Cowie, the vice president of communications and marketing for DCG, made this statement.
The stock markets have persisted in ignoring crypto's ongoing issues. While the S&P 500 and the Dow Jones Industrial Average (DJIA) both had declines of less than one percent, the tech-heavy Nasdaq experienced a surge of more than one percentage point.
The statement made by Genesis is the most recent issue connected to FTX's financial situation, which led to the company applying for Chapter 11 bankruptcy protection the previous week. This year, the industry has already been hit by several catastrophes, the most notable of which is the failure of the terraUSD (UST) stablecoin and the LUNA token that served as collateral for it.
Gene Hoffman, president and chief operating officer of the energy-efficient blockchain Chia Network, said in an email to CoinDesk that the issue that Genesis Global Capital is going through is "the type of problem that blockchains are built to handle."
According to Hoffman, "The assumptions and behaviors applied to the growing technology by Wall Street are what continue to erupt and will continue to explode." "Although cryptocurrency contributes nothing to the process of obtaining a loan, we have seen players in the business overextend themselves and raise their debt using assets whose value is uncertain in the absence of supervision.
He emphasized how important it is for the industry to move past frauds using "crypto bros" and pyramid schemes. It is important to proceed with extreme care when dealing with cryptocurrencies and blockchains since they are not an "asset class" but rather a collection of competing technologies."