The cryptocurrency market resembles the Nasdaq in the early 2000s. Here’s why

Good morning! Welcome to Distributed Ledger, our weekly cryptocurrency newsletter that arrives in your inbox every Thursday. I’m Frances Yue, a cryptocurrency journalist at MarketWatch, and I’ll walk you through the latest news in this bear market.

Find me on Twitter at @FrancesYue_ to send feedback or tell us what you think we should cover. You can also contact me by email to share your personal stories with cryptocurrencies.

As the Federal Reserve raised its benchmark interest rate for the fourth time this year to calm inflation, I sat down with Ben McMillan, founder and Chief Investment Officer of IDX Digital Assets, to discuss the recent state of the cryptocurrency market.

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Crypto at a glance

BitcoinBTCUSD,
+ 4.43%
it gained 0.8% over the past seven days and was trading at around $ 23,908 on Thursday, according to data from CoinDesk. Ether ETHUSD,
+ 7.74%
it advanced 6.4% over the seven-day period to around $ 1,732. Dogecoin DOGEUSD Meme Token,
+ 5.21%
fell 3.5% while another dog-themed token, Shiba Inu SHIBUSD,
5.22,
it’s down 5% from seven days ago.

Cryptographic metrics
The biggest winners Price % return in 7 days

Bitcoin Gold

$ 26.86

45.2%

Classic Ethereum

$ 33.75

44.1%

Celsius network

$ 1.14

42.4%

Qtum

$ 4.30

40.5%

Lido CAD

$ 2.22

38.7%

Source: CoinGecko as of July 28
The biggest drops Price % return in 7 days

amp

$ 0.009

-7.3%

Houbi

$ 4.42

-6.2%

Dogecoin

$ 0.07

-5.7%

Frax sharing

$ 6.26

-5.6%

Algorand

$ 0.33

-5.5%

Source: CoinGecko as of July 28
Nasdaq in the early 2000s?

Today’s cryptocurrency market “looks a lot like Nasdaq in the early 2000s after the washout,” IDX’s McMillan said in a telephone interview. For the past couple of months, the cryptocurrency market has struggled with contagion as digital asset hedge fund Three Arrows, broker Voyager, and lender Celsius went bankrupt.

“You’ve had some big, high-profile closing events,” McMillan said. “Similar to long-term capital management in the late 1990s or Pets.com, there were many flawed business models that simply tampered with the hype of digital assets that have disappeared.”

“Eventually, we saw a similar paradigm in the early 2000s with tech stocks, and it ended up being a generational buying opportunity,” according to McMillan.

Yet, in a risky environment, IDX’s BTIDX Risk-Managed Bitcoin Strategy Fund mutual fund,
+ 4.29%
has kept its investments mostly in cash since late last year, with bitcoin trading more than 67% from its November high, McMillan said.

The fund is recently starting to “put some risk back on the table,” according to McMillan.

“What we are looking for is what we call some sort of belief buying behavior. We want to see this, especially with a volatile market like bitcoin or other digital assets. For an asset class that is no stranger to withdrawals above 50%, risk management becomes really important, especially for institutional clients, who are primarily the ones we serve, “according to McMillan.

Hear Mike Novogratz at the Best New Ideas in Money Festival September 21-22 in New York City. Galaxy Digital CEO has ideas for navigating the cryptocurrency winter.

The FTX rescue plan for Voyager?

Bankrupt cryptocurrency broker Voyager Digital has rejected a proposal from cryptocurrency exchange Sam Bankman-Fried FTX and Alameda Ventures, saying it is a “low offer disguised as a rescue of a white knight.”

On July 22, FTX and Alameda jointly offered to purchase all of Voyager’s digital assets and crypto loans other than its Three Arrows hedge fund credits, in “ready cash” at fair market value. This value would be “calculated by Alameda in good faith on the basis of market practices and available pricing information,” with confirmation from Voyager, according to the proposal.

As part of the proposal, FTX and Alameda also offered to provide upfront liquidity to Voyager customers, where they could choose to create a new account with FTX and receive a cash balance equal to a portion of their credits with the trip.

In response to FTX and Alameda’s proposal, Voyager’s attorneys said it would harm the company’s customers, undermine efforts to maximize value in the bidding process, limiting users’ encryption requests to their dollar value, and letting consumers bear the tax consequences of transactions, among other things. other concerns.

“AlamedaFTX’s proposal is nothing more than a liquidation of the cryptocurrency on a basis that benefits AlamedaFTX,” Voyager’s lawyers wrote in a July 24 court filing.

However, “the deal isn’t necessarily dead,” Bankman-Fried said Tuesday in an interview with Yahoo Finance. “At the end of the day, shareholders will decide what they want to anticipate. And I don’t think we’ve seen any kind of final journey there.

In a series of tweets, Bankman-Fried said their proposal would benefit consumers by allowing them to be reimbursed earlier. “The longer the bankruptcy process drags on, the more options customers lose,” the crypto billionaire tweeted. He also tweeted that some other third parties may be bidding on plans that will give customers more haircuts.

Crypto companies, funds

Actions of Coinbase Global Inc.. PIECE OF MONEY,
+ 5.56%
It gained 3.4% to $ 60.84 on Thursday, after falling 17.5% in the past five trading sessions. by Michael Saylor MicroStrategy Inc.
MSTR,
+ 4.10%
Thursday was up 2.3% to $ 268.32, while stocks fell 7.4% over the past five days.

mining company Blockchain Riot Inc. REVOLT,
+ 1.33%
The stock was up 1.5% to $ 7.25 on Thursday, after losing 4.8% over the past five days. Actions of Marathon Digital Holdings Inc.
MARA,
+ 3.73%
It advanced 5.5% to $ 12.99, a 3.7% gain over the past five days. Another miner Ebang International Holdings Inc.. EBON,
-0.19%
On Thursday, the stock was up 1.8% to $ 0.48, a loss of 15% over the past five days.

Overstock.com Inc.
OSTK,
+ 7.73%this is
the shares were up 7.7% to $ 30.45. The shares gained 3.8% over the five-session period.

Actions of Block Inc.
SQ,
+ 0.67%,
formerly known as Square, it fell 0.3% to $ 72.56, while its shares fell 2.7% over the week. Tesla Inc.. TSLA,
+ 1.96%
shares were up 1.5% to $ 836.90, contributing to a 3% gain over the past five sessions.

PayPal Holdings Inc.
PYPL,
-1.68%
it was down 2% to $ 84.68, although the stock was up 2.9% over the five-session period. Nvidia Corp.
NVDA,
+ 0.70%
shares were down 0.3% to $ 177.45, down 1.3% over the past five trading days.

Advanced Micro Devices Inc.
AMD,
+ 0.79%
On Thursday, the stock was up 1.4% to $ 90.21, a loss of 0.6% from five trading days ago.

Among the crypto funds, ProShares Bitcoin ETF Strategy
BITO,
+ 4.50%
jumped 5% to $ 14.80 on Thursday while his Bitcoin Short Strategy ETF
FUCK,
-4.40%
fell 4.9% to $ 32.58. Valkyrie Bitcoin ETF Strategy
BTF,
+ 4.67%
rose 4.9% to $ 9.21, while VanEck Bitcoin ETF Strategy
XBTF,
+ 5.86%
rose 4.9% to $ 23.28.

Bitcoin Trust in grayscale
GBTC,
+ 3.87%
rose 3.2% to $ 14.69.

Mandatory reading

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