An evaluation of the FTX and Alameda Analysis collapse has been printed by the blockchain and crypto analytics agency Nansen and the report notes that the Terra stablecoin collapse, and the liquidity crunch that ensued, possible began the domino impact that led to the corporate’s implosion. The research from Nansen additional particulars that “FTX and Alameda have had shut ties for the reason that very starting.”
On Nov. 17, 2022, 5 researchers from the Nansen crew printed a blockchain evaluation and complete have a look at the “The Collapse of Alameda and FTX.” The report notes that FTX and Alameda had “shut ties,” and blockchain information verify this truth. FTX’s and Alameda’s rise to the highest began with the FTT token launch and the “two of them shared nearly all of the whole FTT provide which didn’t actually enter into circulation,” Nansen researchers detailed.
FTX and FTT’s meteoric scaling led to Alameda’s swelling stability sheet which “was possible used as collateral by Alameda to borrow in opposition to.” Nansen researchers element that if the borrowed funds had been leveraged to make illiquid investments, then “FTT would turn into a central weak point for Alameda.” Nansen researchers say weaknesses started to point out when Terra’s once-stable coin UST depegged and prompted an enormous liquidity crunch. This led to the collapse of crypto hedge fund Three Arrows Capital (3AC) and crypto lender Celsius.
Whereas it’s not related to Nansen’s report, 3AC co-founder Kyle Davies stated in a current interview that each FTX and Alameda Analysis “colluded to commerce in opposition to purchasers.” Davies implied that FTX and Alameda had been cease searching his crypto hedge fund. After the contagion impact from Celsius and 3AC, Nansen’s report says “Alameda would have wanted liquidity from a supply that will nonetheless be keen to provide out a mortgage in opposition to their current collateral.”
Nansen particulars that Alameda transferred $3 billion value of FTT on the FTX trade and most of these funds remained on FTX till the collapse. “Proof of the particular mortgage from FTX to Alameda shouldn’t be straight seen on-chain, presumably because of the inherent nature of CEXs which can have obfuscated clear [onchain] traces,” Nansen researchers admit. Nonetheless, outflows and a Bankman-Fried Reuters interview counsel to Nansen researchers that FTT collateral could have been used to safe loans.
“Primarily based on the information, the whole $4b FTT outflows from Alameda to FTX in June and July might presumably have been the availability of elements of the collateral that was used to safe the loans (value no less than $4b) in Could / June that was revealed by a number of individuals near Bankman-Fried in a Reuters interview,” Nansen’s research discloses. The report concludes that the Coindesk stability sheet report “uncovered issues relating to Alameda’s stability sheet” which lastly led to the “back-and-forth battle between the CEOs of Binance and FTX.”
“[The incidents] prompted a ripple impact on market contributors, Binance owned a big FTT place,” Nansen researchers famous. “From this level on, the intermingled relationship between Alameda and FTX grew to become extra troubling, provided that buyer funds had been additionally within the equation. Alameda was on the stage the place survival was its chosen precedence, and if one entity collapses, extra hassle might begin brewing for FTX.” The report concludes:
Given how intertwined these entities had been set as much as function, together with the over-leverage of collateral, our autopsy [onchain] evaluation hints that the eventual collapse of Alameda (and the ensuing impression on FTX) was, maybe, inevitable.
You’ll be able to learn Nansen’s FTX and Alameda report in its entirety right here.
What do you consider Nansen’s complete report in regards to the collapse of Alameda and FTX? Tell us what you consider this topic within the feedback part beneath.
Picture Credit: Shutterstock, Pixabay, Wiki Commons, Editorial photograph credit score: Nansen Analysis, Maurice NORBERT / Shutterstock.com
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On-chain data shows the cryptocurrency traders have hit the snooze button as Bitcoin and other assets have witnessed a plunge in volume.
According to data from the on-chain analytics firm Santiment, trading volume has seen a slowdown in the cryptocurrency sector during the past week.
The “trading volume” here refers to an indicator that keeps track of the total amount of a given asset that’s becoming involved in trading activities on the major exchanges. When the value of this metric goes up, it means the investors are participating in a higher amount of activity related to the coin. Such a trend implies interest in the asset is on the rise.
On the other hand, the indicator observing a decline suggests the traders may be starting to put their attention elsewhere as they are taking part in a lower amount of activity.
Now, here is a chart that shows the trend in the combined Bitcoin trading volume for four different segments of the digital asset sector:
The value of the metric appears to have gone through a decline for all of these groups | Source: Santiment on X
In the above graph, the four sides or segments of the cryptocurrency market displayed are: Memecoins Top 6, AI & Big Data Top 6, Layer 1 Top 6, and Layer 2 Top 6.
“Layer 1” assets refer to those that circulate on blockchains that handle their own security and aren’t built on top of another ecosystem. Bitcoin and Ethereum are the most prominent examples of coins of this type. The coins that aren’t on primary networks, like Polygon (MATIC) and Arbitrum (ARB), are termed Layer 2.
From the chart, it’s apparent that the six largest coins for both of these categories have seen a sharp decline in their trading volume recently. Segments like meme-based tokens and AI-related coins have also noted cooldowns of their own at the same time.
Back in November and the first half of December, the volume was high across the market as traders made a large number of moves during the Bitcoin bull run hype. It would appear, though, that the recent bearish shift has damaged the investor morale.
After the latest continuation of the decline in the indicator, trading activity in the market has slumped to the lowest level since the 4th of November, a day before the presidential elections in the US.
Generally, the market tends to see volatility when a large number of traders are participating in trading activity, as it’s their trades that fuel price moves. Since the trading volume has slumped across the cryptocurrency sector recently, it’s possible that Bitcoin and others might see a state of calm in the near future.
The low activity may even be considered a sign that there is FUD in the market, which is something that has facilitated bottoms in the past.
At the time of writing, Bitcoin is trading at around $90,700, down almost 8% in the last week.
Looks like the price of the coin has been going down over the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com
A member of Congress disclosed buying three cryptocurrencies in December, as the sector gets ready to welcome in a pro-cryptocurrency White House administration.
What Happened: With many cryptocurrencies hitting new all-time highs after Donald Trump’s 2024 election win, members of Congress like Representative Guy Reschenthaler (R-Pa.) are adding crypto to their portfolio.
According to Benzinga’s Government Trades page for Reschenthaler, the Republican Representative disclosed the trades recently in one filing.
Here are the cryptocurrencies purchased and the dates the trades were made:
The transactions are the first disclosed by Reschenthaler since he joined Congress in 2019.
Did You Know?
Why It’s Important: Reschenthaler, 41, has not been as vocal about cryptocurrency as other members of Congress have been. The purchase could be due in part due to his belief that a Trump presidency will be bullish for the cryptocurrency sector.
Here is a look at how much the Congressman paid for the cryptocurrencies versus where the price is today:
Two of the Congressman’s purchases have lost money while the purchase of XRP has turned into a winning trade. Benzinga will closely monitor the trading activity of members of Congress when it comes to cryptocurrency in the coming months.
Last year, Reschenthaler proposed renaming the Washington Dulles International Airport, which is located 25 miles from Washington, D.C., to the Donald J. Trump International Airport.
“In my lifetime, our nation has never been greater than under the leadership of President Donald J. Trump,” Reschenthaler said at the time. “As millions of domestic and international travelers fly through the airport, there is no better symbol of freedom, prosperity, and strength than hearing ‘Welcome to Trump International Airport’ as they land on American soil.”
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Image: Shutterstock
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HONG KONG SAR – Media OutReach Newswire – 13 January 2025 – VT Markets, an award-winning financial services provider, today releases its 2025 Q1 Economic Outlook. The report highlights how the dual tailwind of favourable policies and market dynamics will propel the cryptocurrency sector into a new era of mainstream adoption. The report also underscores the transformative strides achieved by cryptocurrencies in 2024, which sets the stage for further growth in the upcoming year.
2024 As A Landmark Year for Cryptocurrency
With the conclusion of the 2024 U.S. Presidential election, cryptocurrencies have ascended from niche assets to mainstream investment products. Political developments, particularly arising President Trump’s re-election and his pro-cryptocurrency stance, acted as the main catalyst for this phenomenon. Participants observed Bitcoin’s price surging by over 40%, crossing $108,000 by year-end anticipating dovish policy shifts and renewed investor confidence towards the digital asset.
Key regulatory appointments, such as naming crypto advocate Hester Peirce as SEC Chair, signalled to the market a shift towards a more favourable regulatory framework, instilling optimism in institutional and retail investors alike.
The Rise of Spot Bitcoin ETFs
In early 2024, the U.S. SEC approved multiple spot Bitcoin ETFs; a significant breakthrough for the cryptocurrency industry then. By year-end, assets under management for these ETFs grew from $28.8 billion to $110 billion. Among them, BlackRock’s IBIT ETF stood out, achieving record-breaking $30 billion AUM in under 300 days.
This development not only validated cryptocurrencies as a mainstream investment class but also paved the way for wider institutional participation. The integration of cryptocurrency into traditional finance is seen as a key step toward standardisation – an issue which has plagued the industry since its inception.
Liquidity and Risk Appetite Fuel Growth
Macroeconomic conditions, including the Federal Reserve’s shift towards an easing monetary policy, contributed to increased market liquidity and higher risk asset valuations. Cryptocurrencies, known for their high-risk, high-reward profile, inevitably emerged as a preferred choice for portfolio diversification, further driving their adoption and price momentum.
2025 Will Be A Year of Regulatory Clarity and Technological Innovation
Looking ahead, the cryptocurrency sector is poised for greater regulatory clarity and broader market acceptance globally:
United States: Expected legislation on stablecoins and other crypto assets will a establish a clear regulatory environment.
European Union: The upcoming implementation of the Markets in Crypto-Assets Regulation (MiCA) will enhance transparency and compliance.
Asia-Pacific: Singapore and Hong Kong are set to strengthen their positions as regional crypto hubs, promoting Web3 development and reopening licensing opportunities for exchanges.
Emerging Markets: Countries like Brazil, the UAE, Australia, and South Africa are advancing efforts to legitimize cryptocurrencies, potentially becoming regional leaders in the sector.
A New Era for Mainstream Cryptocurrency Adoption
The VT Markets’ Research Desk suggests that the confluence of supportive policies, transparent regulations, and robust market conditions will accelerate the mainstream adoption of cryptocurrencies.
They believe that this transition from speculative assets to recognised investment products will be a pivotal moment in financial innovation.
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