This week.

1. Bitcoin and Ethereum continue to trade tight range v USD (With some macro sauce.) 🍲

2. An insider’s perspective into what was happening at FTX/Alameda during the crash. ( It’s as chaotic as you’d imagine) 🔥

3. What we know so far about FTX/Alameda’s bankruptcy proceedings. (The adults are in the room now.) 🧙🏽‍♂️

4. On-chain analysis: The implosion of FTX/Alameda. (Without the jargon) 🌐

5. NFT Update: Nike NFT Market place, Yuga Labs, Azuki to race at F1. 🦧

1. BITCOIN/DOLLAR

Between our last issue and this, Bitcoin hasn’t moved at all.

Our areas of interest remain the same. $19,000 resistance and $14,000-$12,000 for support.

It’s never a good thing when Bitcoin loses high time frame support. But we are not betting against a reclaim of $19,000 either.

The FTX implosion seems to be weighing heavily on the market. The fear of yet-to-be-detected contagion might be holding traders back even as CPI data came in less than expected, which would have been a good buy signal.

Not much selling or buying is happening. And when things finally move, we reckon they’ll move in a big way. Our advice is to avoid catching knives.

Don’t be a hero.

ETH/DOLLAR

As it’s for Bitcoin, so it is for Ether this week. There’s no significant price action to speak of since the last issue.

ETH has held onto its HTF support as it continues to hover around $1200.

We expect the $800-$1,000 zone to hold and withstand any violent move. We are really just you know.. hoping 🤞🏽.

Up top, $1,500-$1,700 is the resistance zone.

We wait.

Is the bottom in?

While we believe we are close, we are not quite there yet. Barring any more FTX scale ****ups of course.

In their 2023 Outlook, Goldman economists expect the U.S. to narrowly avoid a recession next year as Europe's economy contracts.

What does this mean for risk-on assets like crypto? Tbh, it’s hard to put a finger on it at this point. A recession in the Euro area would imply that spending dwindles. Which will suck liquidity out of risk-on assets.

But it could also lead to quantitative easing which was the trigger for the last bull market as governments increased the money supply to cover the spending shortfall.

What this chart shows, if the predictions are true, is that we are not out of the dog house yet. There’s more to it obviously but we are trusting that the geniuses at Goldman have done their assignments and we can depend on them to factor as many relevant inputs as possible into these figures.

2024 looks like a good year and may coincide with the next bull market as major economies come out of inflation in 2023 and strengthen in 2024. Bitcoin $100k anybody? 🤑

Barring any major ****ups. 🤞🏽

2. An insider’s perspective into what was happening at FTX/Alameda during the crash. (12 mins read)

As we continue to try to understand the events that led to the catastrophic FTX/Alameda crash, we have been drawing from various streams of information to help us understand exactly what went wrong.

Maybe it’ll help someone find closure and help them realize it wasn’t their fault and stop beating themselves up.

We must first accept that this terrible thing has happened. We must go past denial. And attempt to find peace and forge a path forward.

The account in the linked post aims to provide a fuller picture of what went down as we continue to piece the puzzle together to try to understand how millions of people lost their fortunes, including employees of SBF’s companies.

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3. What we know about FTX/Alameda’s bankruptcy proceedings so far. (7 mins read)

The linked Twitter thread provides insight into the ongoing Chapter 11 First Day Affidavit released by John Ray, the appointed CEO of FTX and all its subsidiaries included in the bankruptcy filing.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

Read on by clicking on the topic.

Side note to help you understand some of the terms in the filing:

Chapter 11 is the US Bankruptcy Code that governs reorganizations of operating businesses: If you are a business, and you run out of money and can’t pay your bills and creditors, but you need to continue operating to try to find the money to pay, you file Chapter 11. (If you’re just going to liquidate all your stuff and close up shop, you file Chapter 7.) Chapter 15 is the US Bankruptcy Code that governs international bankruptcies where the *main* proceedings are somewhere else: E.g Bahamas. FTX is headquartered in the Bahamas. “Generally, a chapter 15 case is ancillary to a primary proceeding brought in another country, typically the debtor's home country.”

4. On-chain analysis: The implosion of FTX/Alameda. (20 mins read)

The linked article contains a timeline of on-chain transfers between FTX, Alameda and other third parties like Celsius.

Its aim is to use on-chain data analysis with dates of events to establish verifiable proof of activities that led to the bankruptcy of FTX. From inception to demise.

Key Takeaways

• FTX and Alameda have had close (on-chain) ties since the very beginning.

• FTX created FTX Token (FTT), a token for their platform, involving Alameda since day one. The two of them shared the majority of the total FTT supply which did not really enter into circulation.

• The initial success of Alameda, FTX, and the meteoric rise of FTT most likely led to a rise in the value of Alameda’s balance sheet. This high balance sheet value of the FTT positions was likely used as collateral by Alameda to borrow against. If the borrowed funds were used to make illiquid investments, FTT would become a central weakness for Alameda.

• With the collapse of Terra/UST in May, a liquidity crunch ensued as many creditors started to call back loans following the 3AC and Celsius crashes. Alameda would have needed liquidity from a source that would still be willing to give out a loan against their existing collateral

• Alameda deposited around ~$3b worth of FTT on FTX of which most remained there until the end

• Evidence of the actual loan from FTX to Alameda is not directly visible on-chain, possibly due to the inherent nature of CEXs which may have obfuscated clear on-chain traces

• Based on the data, the total $4b FTT outflows from Alameda to FTX in June and July could possibly have been the provision of parts of the collateral that was used to secure the loans (worth at least $4b) in May / June that was revealed by several people close to Bankman-Fried in a Reuters interview. 

• While it was known that Alameda and FTX were both founded by SBF & Co., the Coindesk report had exposed concerns regarding Alameda’s balance sheet. The majority of net equity in Alameda’s business had consisted of FTX’s own centrally controlled token, FTT

• The back-and-forth battle between the CEOs of Binance and FTX caused a ripple effect on market participants, Binance owned a large FTT position. - Nansen.

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5. NFT Market update: Nike NFT Marketplace and Yuga Labs acquire WENEW. (4 mins read)

RTFKT @RTFKT

RTFKT, together with Nike CryptoKicks, introduce the future of Sneakers, powered by Skin Vial tech Welcome to 2052 : 🌐👟🧪

8:03 PM ∙ Apr 22, 2022

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12,267Likes3,519Retweets

Despite crypto winter, web3 builders have continued to lay the foundation for the future.

• Yuga Labs is the parent company behind 4 of the highest NFTs by volume on OpenSea.

They recently announced an acquisition of WENEW labs co-founded by Beeple, one of the top-selling NFT artists.

The acquisition means Yuga labs adds 10KTF to their collection of arts which includes BAYC, MAYC, Bored Ape Kennel Club, Otherdeed for Otherside, CryptoPunks and Meebits collections. 

• Nike just launched their own NFT marketplace called .Swoosh where users can trade virtual collectables.

Users will be able to create their free .Swoosh IDs as free NFTs on the Polygon blockchain. Registration for .Swoosh IDs started Nov 18.

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Thank you for reading.

For comments, feedback and ad inquiries, kindly write to us at ecoinomicsweekly@gmail.com.

Groovy and Oloye for CryptoRoundUpAfrica ®️

Till next time.

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