Galaxy Digital CEO Mike Novogratz found mass layoffs rational in the marketplace
Cryptocurrency companies are doing the right thing by laying off staff because of impending difficulties in the market. Mike Novogratz, CEO of venture capital firm Galaxy Digital, voiced that opinion in an interview with CNBC.
According to him, the recent layoffs at Coinbase are the right reaction to the impending difficulties that the industry will face. Novogratz believes that soon the cryptocurrency market will face regulatory tightening that has not been seen before. He did not elaborate on exactly what changes he was referring to. Mike Novogratz, head of Galaxy Digital, also thinks that the market will take time to recover. But how long this process might take, Novogratz did not say.
However, not everyone in the crypto market is preparing to reduce resources to survive the crisis. The cryptocurrency exchange Binance, for example, has planned to increase its headcount by 30 percent this year. Changpeng Zhao, chief executive of Binance, said at a conference in Switzerland that they intend to increase the exchange’s staff by 15-30 percent this year. They said the exchange has grown from 3,000 to “almost” 8,000 people in 2022.
So far, Binance has not officially announced any structural changes to its business, although competitors have already carried out several rounds of layoffs. For example, platforms like Coinbase, Kraken, and Bybit have already laid off several hundred employees to survive the crisis.
According to unofficial information, the cryptocurrency exchange Binance in 2022 still left almost a dozen top managers, but the reason for their departure is unknown. Against the background of problems in the cryptocurrency market, which dropped the rate of Bitcoin by 70%, this is not surprising. Officially, Binance did not comment in any way on the rumors about the departure of the managers. Notably, Zhao had previously warned on Twitter that users should “avoid platforms that conduct layoffs.” The Binance founder did not give any reason for his call, and later deleted the tweet altogether.
Earlier we reported that the UK’s criminal agency has begun a search for a “crypto-investigator” to investigate cryptocurrency fraud cases.
Cryptotraders lost more than $250,000,000 in liquidations after Fed rate hike
Cryptotraders had a tough day: almost 68,000 positions were liquidated on exchanges in the last 24 hours, and the total volume of liquidations exceeded $257,000,000. All this happened against the news of the US Federal Reserve’s rate hike and another Securities and Exchange Commission regulatory action against cryptocurrencies.
Cryptotraders lost $132,000,000 in BTC
Bitcoin, Ethereum, and Ripple were the leaders in the number of forcibly closed positions. BTC liquidations totaled almost $132,000,000; Ethereum traders lost $51,000,000. XRP positions accounted for about $8,000,000 of liquidations. Bitmex exchange executed the largest order of $7.39,000,000.
Cryptocurrency market capitalization has declined 2% in the last 24 hours, but is still above the $1 trillion mark.
The weekly CoinShares report also recorded a massive outflow of funds for six consecutive weeks. During that period, nearly $500,000,000 was withdrawn from cryptocurrency platforms, with $113,000,000 coming from bitcoin. Analysts at the company believe the outflow is due to liquidity needs during the banking crisis rather than a negative outlook. The company mentions that a similar scenario was seen in March 2020 amid a COVID-19-induced panic.
Regulators continue to hunt the cryptobusiness
Another reason for the increased volatility in the market has been harsh action from U.S. regulators. Last night it became known that the U.S. Securities and Exchange Commission sued cryptomagnate Justin Sun, accusing him of fraud and market manipulation.
The SEC also issued a notice of wrongdoing against Coinbase, the largest U.S. cryptocurrency exchange. The securities regulator sued Coinbase Global Inc, for some of the products it offers.
We previously reported that Bitcoin (BTC) tests $28,000, but onchain metrics urge caution.
Binance was caught circumventing KYC to register Chinese clients
Employees of the cryptocurrency exchange Binance help clients from China to bypass compliance and verification. CNBC writes about it, citing hundreds of corporate emails from exchange employees on Discord and Telegram. It is reported that Binance has helped over 200,000 users register, bypassing its own security system. One case describes correspondence between a user from China and a Binance employee.
The employee under the pseudonym yaya.z suggested the user from China turn on a VPN, register as a Taiwanese resident and then return the location to China. Binance employees also advise customers not to use VPN services from the U.S., Hong Kong and Singapore, because the exchange does not provide services in those regions, writes CNBC. At the same time, Binance freely processes applications from U.S. email providers like Gmail or Outlook for registration.
The exchange even offers specialized mobile applications for customers from China. A CNBC reporter could download a special mobile application from Binance via email. At the same time, no VPN was needed to download the app, as the download was conducted through the domain of binance[.]com. It is also alleged that the exchange still verifies users with Chinese phone numbers.
An exchange spokesperson denied the existence of a special Chinese version of the mobile application. The exchange also added that it has improved the system to identify users from banned regions. CNBC notes that after providing evidence, Binance removed employee messages from corporate chats to circumvent KYC.
We previously reported that the Ethereum (ETH) price crossed the $1,800 mark, opening the way to $2,000.
Why cryptoanalysts expect bitcoin to fall
The market remains in a bearish trend and bitcoin (BTC) will resume its fall and test $16,000. There are two reasons:
The first statement can be confirmed or disproved by a technical analysis of the cryptocurrency market, but there is not enough additional information for the second.
The market capitalization of altcoins (ALTCAP) does hold nearly $605 billion of resistance. Although ALTCAP has risen above it several times, it didn’t develop above this area.
However, the daily RSI has broken through the bearish divergence trendline (green line). Such a breakout often precedes significant reversals into a bullish trendline. As a result, ALTCAP will move higher towards the $680B resistance area. If not, ALTCAP could fall back to the $518B support area.
There are also those who argue that bitcoin will test the $10000-$11000 area because there is a CME price gap that needs to be filled. The gap refers to the difference between the closing price of bitcoin futures on the Chicago Mercantile Exchange (CME) on Friday and the opening price on the following Monday.
We previously reported that Hong Kong has allocated another $50,000,000 to the crypto industry.
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