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We have an eventful and volatile week behind us. US Equity and Digital Assets markets split routes substantially last week, with NASDAQ closing aggressively higher by (NASDAQ⬆️8.10%) at $11.323 and S&P 500 up by (S&P500⬆️5.89%) at $3.992. On the contrary, Ethereum closed down by more than (ETH⬇️22%) at $1.222, while Bitcoin ended the week also lower by almost (BTC⬇️22%), closing at $16.353. The week started off with a strong sell-off in the crypto space, with ETH dropping to $1.073 and BTC to its new low of $15.588.
The sell-off in the crypto markets was caused by a collapse of Sam Bankman-Fried’s FTX, a centralized crypto exchange that suffered an $8 billion liquidity gap after being encircled by numerous withdrawal requests from customers and, eventually, forced its founder and CEO to file for bankruptcy proceedings last Friday after several failed attempts to raise the needed capital to fill out the hole in its balance sheet. The FTX meltdown brough down several other companies associated with Sam Bankman-Fried, including his quantitative trading shop Alameda Research, and caused a havoc across the crypto space.
According to a blockchain analytics platform Nansen, more than $2 billion worth of Ether (ETH) left centralized crypto exchanges, indicating investors are now pulling their digital assets to cold wallets and away from centralized entities.
Although crypto’s reputation and credibility has been hit hard this year, these events only provide further evidence how important is to push for more decentralization where investors, traders and customers are directly in-charge of their digital assets and avoid losing their funds because a centralized entity goes bankrupt abruptly. As a result, we expect an acceleration of usage shift to decentralized exchanges (DEX) and users securing their digital assets in cold wallets.
The Digital Asset market sentiment (Crypto Fear & Greed Index) dropped to ⬇️24/100, which indicates Extreme Fear. Last week, the index stood at 33/100. As a result of the FTX fallout last week, The Total Cryptocurrency Market Cap dropped below the $1 trillion mark, closing at roughly 845 billion on Sunday’s close, more than ⬇️15.00% lower compared to a week ago. Ethereum (ETH)’s Dominance decreased further to 18.2%, lower by more than ⬇️1.0%, while Bitcoin (BTC)’s Dominance decreased by ⬇️3.6% to 38.2%.
WHAT TO WATCH FOR: The next monetary policy meeting for the FED: December 13–14th, 2022 and for the ECB: December 15th, 2022; US CPI for November 2022 will be released on December 13th, 2022.
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