Cryptocurrency
Binance exit aftershock: Can one resignation tip the crypto trust scales?
On Sept. 13, news broke of yet another high-level executive parting ways with Binance.US.
This time, it was none other than Brian Shroder, the CEO and president of the exchange, who, after two years in the hot seat, was heading for a “deserved break,” as Binance CEO Changpeng “CZ” Zhao was quick to announce on X (formerly Twitter) that same day.
There has been some speculation regarding recent management changes at @BinanceUS. Brian Shroder is taking a deserved break after accomplishing what he set out to do when he joined two years ago. Under his leadership, https://t.co/hSHrrlF7o7 raised capital, improved its product…
— CZ Binance (@cz_binance) September 15, 2023
The news coincided with the announcement that around 100 people had also lost their jobs that day — about a third of the workforce.
A massive outflow of funds followed, with the highest being just over $66 million in a single transaction. Zhao was keen to underline that Shroder’s departure was amicable and that he had achieved everything he had set out to do.
“Ignore the FUD,” was the call from the parapets, the common plea for calm when any kind of disruption occurs.
In an industry strained and battered by tales of fraud and wrongdoing, however, this call went unheeded once again. The days since the news broke have seen significant outflows from Binance to platforms such as Jump, AU21 Capital, QCP Capital and Wintermute.
Once again, it raises issues that have long dogged the cryptosphere, chiefly those of influence and trust. There are few other sectors where layoffs or a change at the top of a company can have such an impact.
Such things are generally accepted as the natural ebb and flow of the business world, and while there may be a momentary blip, more often than not, things are back on track fairly soon afterward.
Even in this instance, from the chart, it is apparent that there were still sizeable inflows to Binance during the period. The two incidents may be completely unrelated. With so many factors involved, no one can say for sure.
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Jim Graham, a cryptocurrency analyst at think tank PsyBold, told Cointelegraph: “While we can’t attribute the shift in funds wholly to last week’s announcement, we most certainly can’t reject it, either. There have been several key managerial changes in the past few months, and virtually all of them have been accompanied by a dip in holdings on the platform. Trust remains a massive obstacle for crypto platforms, and it’s an obstacle they are failing to overcome.”
Money is a valuable commodity, and even the hint that it may be in jeopardy is reason enough to react quickly and decisively.
As the saying goes, trust is earned, not given away, and the recent negative events involving crypto platforms have done little to raise that level of trust. Graham added:
“Crypto platforms need to be on par with banks regarding trust. Investors need to know that entrusting their money to them is a good, safe idea, not a risky one. Unfortunately, they are nowhere near that, and until we reach that level, these spikes are inevitable.”
So, how do the platforms get to that level of trust? Most people would simply say, stop doing bad things. Once crypto platforms act more like banks, people may trust them more.
But this is much easier said than done. For one, most banks have been around for years, some even hundreds of years. Trust has an element of longevity to it, which people like. The general feeling is if something or someone has acted responsibly and transparently for a long time, there is more of a chance that they will continue to do so.
Crypto platforms don’t have that luxury, of course. Most can only look back on a few years of existence; the only pledge they can give is their word.
On top of that, there is the age-old discussion of regulation. Licensed banks are regulated. That means an authority monitors what they do and is there to step in if things go wrong.
The last thing such an authority or the bank wants is a bank run, as this represents a complete breakdown in trust for all concerned, with the consequences that go with that. Once that has happened, it is tough to win that trust back, as witnessed during the economic crisis of 2008.
In the unregulated world of crypto exchanges, there is currently a stalemate. Some investors are in the middle, clamoring for regulation, fearing for their investments. In contrast, others are vehemently opposed, stating regulation is the very thing cryptocurrency was created to avoid.
And on either side are the exchanges and the authorities, each accusing the other of this and that in what seems like an endless spiral, with neither ready to back down.Sandra McAllister, an attorney specializing in tech litigation with Clifford Chance, told Cointelegraph:
“The need to clarify the legalities around trading cryptocurrencies, particularly in the U.S., is vitally important for the future of the industry, but the protracted processes and tactics being employed are damaging, for both sides, and that, in turn, is turning investors away.”
“The power of social media is also a pressure on the market. The bounce in the Ripple price we saw in July following the court ruling on XRP underlines that perfectly. The decision was anything but conclusive and, in reality, nothing more than a step along the path, but it was blown up on social media as a huge victory that drove up prices. We only have to see where the Ripple price is today to see how much of a victory it actually was,” she said.
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Moving assets around between different exchanges or different assets is nothing new or unusual, of course. In times of economic downturn, funds tend to flow toward the “safer” havens, such as bonds and gold, before reverting to more profitable areas when things pick up.
Graham commented, “While diversifying holdings and being ready to react to ensure you are not unduly affected by negative pressures is sound financial advice, the problem facing crypto holders right now is which platform is safer than another. The FTX demise showed us that ‘too big to fail’ does not apply, so what remains?”
After heading toward $100,000 yesterday, bitcoin’s price has taken another wrong turn as the asset has lost over three grand since then.
The altcoins are also deep in the red, with massive daily price declines from the likes of SOL, DOGE, ADA, AVAX, LINK, SHIB, and many others.
BTC’s Short-Term Recovery
Although the business week started quite spectacularly for BTC, whose price skyrocketed from $101,000 to a new all-time high of over $108,000 by Tuesday, it actually turned sour on Wednesday after the latest US FOMC meeting.
The primary cryptocurrency began a massive correction that culminated on Friday with a price slump to around $92,000. Thus, the asset had lost more than $16,000 in just 72 hours.
At this point, the bulls finally managed to halt the freefall and helped BTC climb to $95,000. It kept going north on Saturday morning and jumped to $99,600. As the community was preparing for a potential challenge for the six-digit mark, bitcoin’s trajectory reversed once gain.
BTC started to lose value once again and dropped to just under $96,000 hours ago. Despite being above that line now, bitcoin is still 2% down on the day.
Its market capitalization struggles to remain above $1.9 trillion, while its dominance over the alts has risen to 55% as most altcoins have suffered a lot more.
Alts Back in Red
Yesterday’s brief relief was halted as the altcoin market is back in red again. Ethereum failed at $3,500 and has slumped to $3,350 after a 3.5% daily decline. XRP was stopped ahead of $2.4 and has slipped to $2.24 now.
Even more painful daily declines are evident from SOL, DOGE, ADA, AVAX, LINK, SHIB, XLM, DOT, HBAR, APT, ICP, AAVE, and CRO, with losses of up to 11% in the case of APT.
The total crypto market cap has shed another $100 billion in a day and is down to $3.460 trillion on CG.
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Cryptocurrency charts by TradingView.
Cryptocurrency
This Pivotal Level Will Determine Whether XRP Goes to $2.7 or Below $2 Again (Analyst)
TL:DR;
- Ripple’s cross-border token took the recent market-wide meltdown quite badly, with its price dumping from over $2.7 to under $2 within days.
- The asset has recovered some ground but now sits at a pivotal level that will determine whether it resumes its bull run or slips once again.
The start of the business week was quite bullish for XRP as the company behind it announced on Monday that its long-anticipated stablecoin will be officially released for trading on the next day.
XRP went on a massive run, surging from under $2.4 to above $2.7 by the time the launch date arrived. However, it reversed its trajectory shortly after, and the broader market’s collapse took it south hard.
In fact, Ripple’s token came crashing by 28% from the aforementioned local peak to $1.96. Many XRP whales used this opportunity to stack up on more tokens, which perhaps helped the asset recover some ground as it pumped to almost $2.4 yesterday.
Nevertheless, it has lost its momentum once again and now struggles to remain above $2.2. According to popular crypto analyst Ali Martinez, this level is particularly significant for XRP’s future price movements.
If it manages to maintain it, the token could resume its recent bullish activities and head toward $2.7 once again. In contrast, it risks falling beneath $2 for the third time in December if it breaks below it.
If $XRP can hold above $2.20, it might consolidate for a while before taking another shot at the $2.70 resistance. But if the $2.20 support breaks, a downswing to $1.96 becomes imminent. pic.twitter.com/cdtdtSwzKy
— Ali (@ali_charts) December 21, 2024
XRP indeed slipped below that line to $2.17 earlier today but managed to bounce off, at least for now. The next few days will be crucial to determine XRP’s closing price at the end of the year and if there will indeed be a Santa Claus rally, as many expected.
With its most recent correction, XRP’s market cap has dropped once again to under $130 billion. This means that it has lost its third-place position to USDT, whose market capitalization is close to $140 billion.
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TL;DR
- Internet Computer (ICP), Chainlink (LINK), and Hedera (HBAR) retained their top spots in terms of “notable development activity.”
- The rankings are based on filtered development events that reflect real progress, emphasizing active contributions from developers.
The Top 10 List
Cryptocurrency analytics platform Santiment recently estimated that Internet Computer (ICP) ranked first in terms of “notable development activity” in the past month, collecting a score of 409.63.
The asset started December on the right foot, with its price jumping to a multi-month high of over $15. However, the latest market correction negatively affected ICP, which plummeted below $10 (per CoinGecko’s data).
Chainlink (LINK) claimed the second spot with a ratio of 287.07, while Hedera (HBAR) ranked third. It is interesting to note that the top 3 club looked exactly the same after the previous research.
Starknet (STRK) climbed the ladder and was positioned in fourth place, while Cardano (ADA) lost some steam and is now fifth.
Similar to ICP and many other cryptocurrencies, ADA was at the forefront of gains in the first week of the month. On December 7, its price touched $1.30 (a level last observed at the start of 2022). The peak was short-lived, though, with ADA currently trading at around $0.84.
The other digital assets down the line include Optimism (OP), Polkadot (DOT), Kusama (KSM), DeFiChain (DFI), and sUSD (SUSD).
Santiment’s Methodology
To conduct the aforementioned research, the platform’s team employs the so-called Ecosystem Dev Activity Dashboard, which shows the number of development events created on various blockchains and their associated dApps.
“These events are carefully filtered and predefined to be representative of real programming progress, meaning no low-value actions are taken into consideration. This way, any crypto-curious person can easily see which are the most active crypto ecosystems out there,” the working group explained.
The team emphasized the importance of the size of a project’s community, particularly focusing on how many members are developers and actively contributing to the ecosystem.
Finally, Santiment clarified that development activity differs from GitHub activity. The former focuses on specific types of events, excluding things like commits, forks, comments, and project management tasks. In contrast, GitHub is comprised of all kinds of factors apart from commits.
“One key distinction between Dev Activity and GitHub Activity is that Dev Activity allows for a fairer comparison between different organizations. This is because some events excluded in Dev Activity are related to Issues and Issue Comments,” Santiment’s team concluded.
Disclaimer: CryptoPotato has received a grant from the Polkadot Foundation to produce content about the Polkadot ecosystem. While the Foundation supports our coverage, we maintain full editorial independence and control over the content we publish.
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