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Coinbase will lay off another 20% of its staff because of the FTX collapse. Will Coinbase fail?

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coinbase will fail

Will Coinbase fail? Cryptocurrency exchange Coinbase will lay off 950 employees (about 18%) to conserve the company’s capital amid worsening market conditions. This was reported by CNBC, citing comments from the exchange’s founder Brian Armstrong.

According to him, the exchange took this step, considering the information received. The head of Coinbase did not elaborate on which insider information was involved. He added that the exchange was pushed to another round of layoffs by various stress tests:

“It became clear that we would have to cut costs to increase our odds in any of the projected scenarios.”

The layoffs are expected to help the exchange reduce operating expenses by 25%. Will Coinbase go up? However, the exchange still expects spending increases of $149 million to $163 million in Q1 2023. Coinbase will also curtail the development of projects whose profitability is projected to be low. Nevertheless, all this does not prevent the growth of USDC capitalization.

The founder of the U.S. cryptocurrency exchange believes that the industry was hit hard by the bankruptcy of FTX, which triggered a cascade of other falls (BlockFi and other companies also went bankrupt). According to Armstrong, the collapse of FTX will lead to increased oversight of the industry, which will result in new regulatory repression. Notably, back in late 2022, the exchange predicted positive changes in 2023, but now Coinbase does not seem to think so.

Earlier Coinbase already fired over a thousand employees, citing the need to “maintain stability during the economic downturn. Armstrong argued then that the company could not afford the high costs of staff in conditions of high volatility. It is noteworthy that in early 2022, high volatility did not stop the head of Coinbase from spending more than $130 million to buy a mansion in Los Angeles.

The cryptocurrency exchange FTX declared bankruptcy in November 2022 due to a large shortage of assets to cover customer liabilities. The bankruptcy decision came days after the head of the cryptocurrency exchange Binance, publicly announced that he would sell his stake in FTX. As the media found out, FTX founder Sam Bankman-Fried arbitrarily used customer assets on the trading floor to cover the debts of his trading firm Alameda Research. The exchange owed over $3 billion to large investors.

We previously reported that Galaxy Digital CEO Mike Novogratz found the mass layoffs to be rational.

Cryptocurrency

Metaplanet and K33 Deepen Bitcoin (BTC) Exposure With Strategic Initiatives

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In a strategic move to accelerate its Bitcoin acquisition goals, Japan-based Metaplanet issued $21 million in interest-free bonds to the Evo Fund on May 29, following a separate $50 million raise the previous day. These zero-coupon bonds, known as the 17th series, come with a $525,000 face value and are set to mature on November 28, 2025.

As they bear no interest, Metaplanet avoids additional financial costs tied to borrowing.

Metaplanet Adds to Bitcoin Warchest

According to the official document, the terms allow Evo Fund to initiate early redemptions with a five-day notice, either in full or in multiples of $525,000. Additionally, redemptions may be linked to future funding rounds with the same investor.

The bonds are unsecured, with no guarantees or administrators, which is in line with Japanese corporate law. Payment processing will take place at the company’s Tokyo office.

This fundraising effort contributes to Metaplanet’s larger goal of amassing 10,000 BTC by the end of 2025. Year-to-date, the company has raised $135.2 million, including previous rounds in February ($25.9 million), March ($13.3 million), and earlier in May ($25 million).

Currently holding approximately 7,800 BTC, worth around $840 million, Metaplanet ranks 11th among global corporate Bitcoin holders, with an average purchase price of $91,340 per BTC. In March, it used cash-secured put options to acquire 696 BTC, followed by an additional 145 BTC in April for $13.6 million.

Metaplanet isn’t the only company doubling down on Bitcoin. In Scandinavia, K33 is taking a similar approach.

K33 Joins Corporate Bitcoin Trend

K33, the Oslo-based cryptocurrency brokerage company, announced plans to begin holding Bitcoin on its balance sheet after raising 60 million SEK ($6.22 million). As per the announcement on May 28th, the funding was secured via interest-free convertible loans and a new round of share and warrant issuances.

The Norwegian firm confirmed that 100% of the funds will be used to buy Bitcoin, possibly acquiring up to 57 BTC at current prices. The firm secured 45 million SEK ($4.66 million) through loans maturing in June 2028, and 15 million SEK ($1.5 million) via equity and warrants. Investors converting their warrants before March 2026 will be granted additional free warrants, which would potentially allow K33 to raise a total of 75 million SEK ($7.77 million).

In its Q1 financial update, CEO Bull Jenssen said K33 is partnering with other Nordic Bitcoin treasury firms and intends to leverage its holdings to create Bitcoin-based services, including collateralized lending.

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Crypto Markets Shed $200B in 48 Hours as Bitcoin Dumps to 12-Day Low (Weekend Watch)

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Perhaps driven by the latest escalation of tensions between the US and China, bitcoin’s price has tumbled over the past 12 hours to a multi-week low of $103,000.

The altcoins have it even worse, with massive price drops from the likes of SUI, LINK, DOGE, SOL, ADA, and more. CRO has defied the market-wide trend with a double-digit price surge.

BTC Dumps to $103K

Ever since it skyrocketed to almost $112,000 last Thursday to chart a new all-time high, bitcoin’s price has been unable to recapture or even sustain its momentum. It started to fall on the next day when US President Trump recommended a new set of tariffs against the EU.

Although he delayed their implementation for over a month, BTC failed to bounce off decisively and was stopped at around $110,000 on a couple of occasions. The latest rejection, which came on Thursday at $109,000, was the worst one (for now) as it drove BTC down to $105,000.

It recovered some ground to $106,000 yesterday, but the bears reemerged and pushed the cryptocurrency south to a 12-day low of just over $103,000. This decline transpired after Trump said China “violated” the trade agreement between the two, while Beijing responded kindly.

Although BTC has regained some ground and now sits above $103,500, its market cap has slid to $2.06 trillion on CG, while its dominance over the alts has shot up to 61.3%.

BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

Alts Bleed Out, Not CRO

The alternative coins have marked some big losses over the past day. Ethereum is close to breaking below $2,500 after a 4.5% drop. XRP has plunged beneath $2.15, while DOGE, SOL, ADA, SUI, LINK, and AVAX have plummeted by up to 9%.

The situation with the lower-cap alts is even more painful, as many, such as ENA, INJ, VIRTUAL, and PEPE, have charted double-digit price declines.

CRO is the only exception, having gained 17% in the past day and trading close to $0.11.

The total crypto market cap has seen roughly $200 billion gone in the past two days and is down to $3.360 trillion.

Cryptocurrency Market Overview. Source: QuantifyCrypto
Cryptocurrency Market Overview. Source: QuantifyCrypto
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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

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Cryptocurrency

Ethereum Price Analysis: Is ETH Dumping to $2K Next as Momentum Fades?

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ETH continues to consolidate beneath a key resistance level around $2,800, struggling to break higher after a strong rally earlier in May.

While the bulls have held higher lows in the short term, repeated rejection from the same level raises questions about buyer conviction at these highs.

Technical Analysis

The Daily Chart

Ethereum is currently consolidating below the major resistance at $2,800, which aligns with the 200-day moving average. The uptrend that began near $1,500 has paused, and the RSI has slightly dropped below 70, reflecting weakening bullish momentum.

Despite this, the price remains above the 100-day MA and the previous breakout zone near $2,200, indicating structure remains bullish unless those levels are lost. A clean breakout above $2,800 would open the path toward the $3,400–$3,600 supply zone. On the other hand, failure to do so could trigger a retest of the $2,200 demand block.

The 4-Hour Chart

The 4H chart shows that the price has formed a clear ascending triangle between the $2,800 resistance and roughly $2,500 support. The structure resembles a potential distribution phase following two strong accumulation zones below $1,850 earlier this month. While ETH continues to set higher lows, the repeated rejection at the highs is starting to weigh on the short-term outlook.

The RSI is also hovering near 47, suggesting a neutral momentum shift. A break below $2,500 and the lower boundary of the pattern would signal bearish reversal toward $2,100, while a confirmed breakout above $2,800 would invalidate the distribution idea and favor upside expansion.

Sentiment Analysis

The Coinbase Premium Index is currently holding slightly above zero, indicating moderate spot demand from US-based investors. Historically, a rising premium has often preceded strong bullish trends driven by institutional or high-volume retail buyers on Coinbase. Although the current levels are not aggressively high, they reflect underlying strength in the spot market and a willingness to pay slightly more for ETH on U.S. exchanges.

If this premium begins expanding while ETH approaches resistance again, it could signal renewed confidence and front-running of a breakout. On the other hand, if the premium fades or turns negative, it may signal waning interest and a possible short-term top, which is the scenario that is seemingly occurring at the moment.

Therefore, if the demand from the US declines, it would be highly likely for ETH to go into a correction phase once more.

 

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

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