Court allows FTX to proceed with sale of LedgerX and other divisions

FTX may begin looking for buyers for its business units to raise liquidity to pay creditors. This was stated by a bankruptcy judge as part of the restructuring of the bitcoin exchange.

The decision will allow the attracted investment bank Perella Weinberg to conduct auctions. In the future, the court will issue permission for each potential transaction.

Applications will be accepted from January 18 to February 1.

The platform previously reported that LedgerX, Embed, FTX Japan, FTX Europe, and other companies within the FTX Group have generated interest from 117 entities.

The Department of Justice responsible for bankruptcy cases has previously filed a protest against the sale of a debtor's valuable assets in the presence of allegations of serious wrongdoing. According to the judge's decision, the trustee will be able to review the sale process and file objections.

Recall that in early 2023, FTX Group advisers restored access to assets worth more than $5 billion, which can be used to pay off affected creditors.

This figure does not include funds previously frozen by the Bahamas regulator. Their cost was estimated at $170 million.

Rise to $250 thousand or fall to $5 thousand: what awaits bitcoin in 2023

Last year was one of the worst for cryptocurrencies in history. The total market capitalization fell from $2.2 trillion to $0.8 trillion. The past twelve months were remembered for the long fall of bitcoin and other popular coins, the bankruptcy of numerous crypto companies and the record activity of various kinds of scammers. Let's figure out what prospects open up for the crypto in the new year and whether it has a chance of recovery.

 Losers and winners of the year

At the end of 2022, Bitcoin lost about 63% of its value. The second most popular Ethereum coin fell in price even more significantly - by 67%. Against this background, Binance Coin, the third coin by capitalization, is up 53%. True, BNB faced a sharp collapse at the end of the year.

The biggest drop was the collapse of LUNA by almost 100%. The coin, which at the beginning of 2022 was worth about $85, fell to a meager fraction of a cent and the project was restarted.

Despite a significant drop, Helium, Solana and Convex Finance are still “in the game” - the first token lost 95% in a year, and the rest by 93%.

Among all the cryptocurrencies that are in the top hundred by the highest capitalization, at the end of the year, the price of only two increased. Trust Wallet Token, the eponymous coin of the famous crypto wallet, has risen in price by 90%. And GMX, the exchange token with the same name, immediately increased by 108%.

The growth of some not too well-known tokens had practically no effect on the performance of the entire crypto market. At the end of the year, the Crypto 200 index (taking into account the price of the 200 most popular cryptocurrencies excluding bitcoin) fell by 63%. In fact, the same as the main coin.

What influenced the crypto market during the year

The collapse of cryptocurrencies occurred in parallel with the fall of the stock market and, especially, the sector of new technologies. Shares of the key technology index NASDAQ Composite for the year went into the red by 33%. The Cathy Wood Foundation, which selects companies with development prospects, ARK Innovation lost 67%, even outperforming the crypto market in terms of the rate of decline.

 The main reason for these falls is the sharp increase in the key rate by the Fed and other key central banks.

 “As the Fed began raising rates and dumping assets from its balance sheet, all markets, including crypto, have entered a bearish phase. There was pressure on the market and an outflow of liquidity - due to the increase in the interest rate, people had less funds.

 In May, the LUNA coin and the UST stablecoin, created by its authors, crashed. The total losses of investors because of this reached $40 billion.

 “This crash led to the first wave of panic and the most cowardly began to sell bitcoin. If by the beginning of May bitcoin was estimated at $39 thousand, then a month later it was already closer to $29 thousand. The worst situation arose for altcoins, because many began to doubt their reliability.

An even more significant blow to the market was caused by the bankruptcy of one of the largest crypto exchanges in the world, FTX. This situation led, on the one hand, to the sale of assets owned by the company (Solana became the biggest victim of this), and, on the other hand, showed the vulnerability of storing cryptocurrencies on exchanges. As a result, the outflow of assets to cold wallets accelerated.

 In this series of fatal events for the market, there was also a place for positive events. One of the most notable is a large-scale update in the Ethereum network.

 On September 15, the Ethereum network successfully completed the merger of the main blockchain, which previously worked on the basis of the Proof-of-Work consensus algorithm, with the Beacon Chain network, which runs on Proof-of-Stake. As a result, the second largest cryptocurrency by capitalization switched to a new Proof-of-Stake consensus algorithm. Now, not miners, but validators are responsible for ensuring the operability of the Ethereum network. This reduces the power consumption of the Ethereum network by over 99%. Now developers will scale the blockchain to make it faster and cheaper.

 Also, the transition to a new consensus algorithm completely changes the ETH tokenomics. Whereas previously the mining reward was 2 ETH per block, now these coins will not be created, and Ethereum stakers will receive the reward. This will reduce the ETH issuance rate by about 90%. Along with the burn mechanism, ether can become a deflationary asset.

 True, critics noted that there were still no significant changes in the implementation of the blockchain, it remained quite expensive. Investors did not respond positively to the changes either, and Ethereum ended the year with a significant drop.

 Regulation will increase and applications will expand

The collapse of FTX will not go unnoticed by regulators.

 “Europe plans to tighten the Regulation of Virtual Asset Markets (MICA). The document will include new categories of crypto assets that were not previously subject to legislation. Also, the legislative context will include more cryptocurrency lawsuits.

 For example, you can look at the Toronto Cash crypto exchange, which is accused of money laundering. Hong Kong, the Seychelles, Panama and others are currently planning to fend off regulatory scrutiny from leading economies, and therefore could see an increase in such cases in 2023.

Tighter regulation of the crypto market is expected by many experts. Thanks to this, during the current “bear” phase, the crypto market will be able to clear itself of scam projects.

Now experts are betting on the emergence of new technological projects on the crypto market and their integration with current traditional services.

Observers predict further growth in the global acceptance of cryptocurrencies as a means of payment. The emergence of cryptocurrency debit cards, the simplification of online crypto transfers have already attracted a wider audience to this area.

Cryptocurrencies will continue to be legalized in the legislation. So, in December, Brazil adopted legislation that creates a regulatory framework for the use of cryptocurrency as a means of payment and investment asset. An increasing number of countries are expected to follow this path.

How will the price change

The current fall of cryptocurrencies is not something extraordinary and new for the market. Similar situations have already happened many times. So, at the end of 2014, bitcoin decreased by 58%, and in 2018 - by 73%, that is, even more significantly than this time. It experienced the largest collapse at the dawn of its existence in 2011, when its price from $32 fell to 1 cent per coin in a matter of days.

 As historical experience says, each time after such collapses, bitcoin managed to update the historical maximum. Behind him, he traditionally pulled up altokinas. Therefore, this gives investors hope for a resumption in 2023 as well.

 First of all, the growth of crypto will depend on the actions of the Fed and global economic processes. If we see an economic recovery, and not a recession, then we can talk about sustainable growth in the crypto.

But while macroeconomic forecasts are not too comforting. According to the IMF, a third of the global economy will suffer from a recession this year. In particular, experts predict a recession in the EU and the UK. Regarding the US, opinions differ: the Fed still expects economic growth of 0.5%, but some analysts see the possibility of a recession. A further increase in the Fed's base rate is also expected, although not as significantly as last year. Of the current 4.5%, it will reach 5-5.25%, observers suggest.

 Against the backdrop of disappointing economic news, the hope for an early recovery in the price of bitcoin is given by the future halving - a decrease in remuneration to miners. The next halving should take place in early 2024.

 Theoretically, along with the decrease in rewards to miners, bitcoin itself should become more valuable, which has already happened during this procedure before. Traders assume this and typically start raising the price of bitcoin about 15 months before the halving. That is, based on this factor, a new cycle of Bitcoin growth should begin this year.

 Forecasts for the change in the price of the number one cryptocurrency during the year traditionally differ by dozens of times. For example, trader Ton Wais suggests that Bitcoin could reach $100,000, fear of missing out on the price will push the price. Even more optimistic about the prospects of the coin, the American venture investor Tim Draper, who raised the bar for this year to $250,000.

 But a significant part of the observers assumes a further fall of the cryptocurrency. In particular, Bloomberg analysts note that the crypto winter may be protracted. One of the reasons for this will be the inability of the market to quickly recover from high-profile bankruptcies.

 According to the forecast of Fairlead Strategies LLC, this year it is quite possible for bitcoin to sink below $14,000 per coin. Veteran investor Mark Mobius expects to see it at a price of $10,000. Standard Chartered analysts are even more pessimistic about the prospects of the coin, which provides for a collapse to $5,000.

According to independent analysts, bitcoin may fall to the level of $11-13 thousand, but after that it will begin to recover. This year will not be easy for cryptocurrencies, because several negative factors coincided at the same time.

At the same time, in his opinion, in the longer term, the prospects for the crypto market remain. Institutional investors and large corporations continue to invest in cryptocurrencies. Banks are adding the ability to process transactions and accumulate in cryptocurrencies. And heightened regulation is pushing out players looking for short-term profits or engaging in scams.