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The strong start to the year has continued over the past seven days for bitcoin and the broader cryptocurrency market. Bitcoin, which peaked at $23,350 a few days ago, is up nearly 50% from its 2022 low. Bitcoin has managed to outpace other major asset classes and establish itself as one of the most attractive investments globally. So far in 2023, there is a recovery in many other sectors, while inflation rates are beginning to decline. Since hitting lows in November, gold and the S&P500 have gained 19% and 13%, respectively.
Among the main themes of this letter that have been recurring since the fall, it is impossible to ignore that the Genesis cryptocurrency lender officially filed for bankruptcy last Thursday. “Restructuring the court is the most effective way to protect assets and create the best possible outcome for all Genesis stakeholders,” Genesis interim CEO Derar Islam said in a prepared statement. The company in question, which is a subsidiary of Digital Currency Group (DCG), claims to have substantial cash of more than $150 million, enough to fund operations during the restructuring period.
The entities that filed for US bankruptcy (Chapter 11) protection in the Southern District of New York are Genesis Global Holding Company and its credit subsidiaries Genesis Global Capital and Genesis Asia Pacific. According to a Genesis spokesperson, Genesis Global Trading and other subsidiaries engaged in derivatives, cash trading and securities custody are not affected by this procedure and will continue to operate.
This program is a new chapter in the saga between Genesis and Gemini win. In response to the announcement, Gemini co-founder and chairman Cameron Winklevoss wrote on Twitter that “We will use every tool at our disposal in bankruptcy court to maximize recovery for Earn users and any other parties subject to the bankruptcy court’s jurisdiction. He added: “If Barry and DCG do not come to their senses and make a fair offer to creditors, we will soon be filing a lawsuit against Barry and DCG. It is critical that the Genesis bankruptcy order does not shield Barry, DCG and other defaulters from liability.”
Genesis has also filed a lawsuit against industry veteran Roger Ver, sometimes referred to as the “Jesus of bitcoin,” for “monetary damages in an amount to be determined for the defendant’s failure to settle cryptocurrency options trades expiring on December 30, 2022.” in court, but not less than $20.9 million. However, this amount is very small in the balance of debts of Creation. Indeed, Genesis was found to owe $3.6 billion to 50 different creditors, including investment firms and hedge funds. However, with an estimated debt of $765.9 million, it is the Gemini stock market that tops this poor list. The second-largest creditor is Singapore-based Mirana Corp, which owes about $151.5 million.
How long will it take to resolve this dispute? According to Sean O’Neal, one of Genesis’ lawyers, these disputes with creditors could be resolved as early as this week. At least this was reported yesterday by the Reuters news agency. “Sitting here right now, I don’t think we’re going to need a mediator,” O’Neal told a Manhattan court during a preliminary hearing on Monday. “I’m very optimistic.” According to O’Neal, Genesis and the company’s creditors are “closer” to a deal. At the same hearing, Genesis also announced plans to auction off various assets held by the company and exit bankruptcy by May 19.
According to a court document released Friday, FTX founder Sam Bankman-Fried had about $50 million in a bank account at a little-known financial institution in Washington state. Until then, this little-known bank was the 26th smallest bank out of 4,800 in the U.S. Farmington, population 146. Back then, the bank had just three employees specializing in lending to farmers and didn’t offer online banking or credit cards when Bankman-Fried invested. Alameda Research, SBF’s trading firm, bought an $11.5 million stake in Farmington last March, more than double the bank’s total net worth at the time. The bank in question registered the name “Moonstone” a few days before the Alameda investment. Until recently, it was referred to online as the “Moonstone Bank”. While its website doesn’t explicitly refer to cryptocurrencies, it says it wants to “support the evolution of the next generation of finance.” However, the institution announced last week that it would retire the Moonstone name and focus on operating as a community bank.
The Bitcoin mining industry is set to bounce back from 2022, to say the least. Bitcoin tech company Blockstream has raised $125 million to scale its business. Meanwhile, Argo Blockchain shareholder ARBK has resumed trading on the Nasdaq, the company filed with the SEC on Monday morning. On December 16, Nasdaq first notified Argo that it had to suspend trading because its stock had not maintained a closing price above $1 for 30 consecutive days. “To regain compliance, the company was required to maintain a minimum closing bid price of $1.00 for ten consecutive trading days,” the company wrote in an SEC filing. “This request was fulfilled on January 13, 2023.” Remember, the Argo mines are located here in Quebec.
Mining one bitcoin is often compared to a lottery where all computers perform computer work. We had a perfect example of this this week, when a single bitcoin miner solved a block with a hash rate of just 10 TH/s, beating extremely unlikely odds. At the time the block was added, bitcoin’s total hash rate was just over 269 exahashes per second, meaning that a solo miner’s 10 TH/s hash rate was only 0.000000037% of the blockchain’s total computing power. In return, the miner received 98% of the total 6.35939231 BTC allocated for block reward and payments.
Bitcoin is currently consolidating in a channel between $22,300 and $23,300 after last weekend’s rally. The price creates a technical picture very similar to the increase that occurred in the first half of January – a bull flag – This could allow a retest of the $23,300 resistance if the scenario repeats itself. On the downside, we are looking at possible support at $21,500. However, still and always the S&P 500 trend line currently leads all markets. Will we fall back or will the downward trend observed for more than a year be broken? We are definitely at a turning point.
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Disclaimer: This column does not necessarily represent the opinion of CryptonewsFR and does not constitute investment advice or trading guidance..
