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JPMorgan says FTX collapse has positive implications

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FTX collapse

JPMorgan said that FTX collapse could help dramatically accelerate the passage of a law to regulate cryptocurrencies. This view is shared by other market participants.

In a recent report, the investment bank detailed the events that led to the liquidity crisis and FTX crash. And while JPMorgan characterized them as a major setback, it also highlighted the positive aspects of the exchange’s collapse.

JPMorgan believes that because of the public outcry over FTX, the authorities will speed up the adoption of regulations. The bank analysts also noted the similarity of the situation with the global financial crisis of 2008.

According to the JPMorgan report, comprehensive reforms further promote the adoption of blockchain technology by financial institutions and the public.

JPMorgan demands transparency from crypto exchanges

The bank also highlighted areas of concern that require special attention. According to JPMorgan, exchanges and stablecoin issuers should conduct more thorough audits and provide users with full transparency. After all, one of the reasons FTX’s collapse was so shocking was its questionable handling of customer assets.

Despite the arguments of skeptics, JPMorgan remains optimistic about blockchain technology. In a report, the bank pointed out that centralized structures, not decentralized protocols, are to blame for recent events. And earlier this week, the bank registered a trademark for a cryptocurrency wallet.

FTX collapse hastens regulatory legislation

JPMorgan’s view that the FTX crash incident will accelerate the adoption of a law on cryptocurrency regulation is shared by other market participants.

The Bank of England, for example, has called for more cooperation from companies to create a comprehensive cryptocurrency framework. Deputy Governor John Cunliffe said that this would offer users all the benefits of blockchain technology.

MicroStrategy founder Michael Saylor holds similar views. He told CNBC that recent developments will “strengthen the hand of regulators” and “speed up intervention.”

Saylor said he hopes regulators will allow consumers to register digital securities. In his view, combining the market around fewer tokens would allow the industry to grow much faster.

Earlier we reported that the founder of Binance regrets that he was late in reporting on the crisis at the cryptocurrency company FTX.

Cryptocurrency

Bitcoin ETF Inflows Fall as Grayscale Sees Record Outflow

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Bitcoin ETF fever appears to be waning as the amount of BTC being scooped up by funds and institutional investors slows down.

Moreover, the world’s largest crypto asset manager, Grayscale, saw a record outflow of $643 million on March 18. It beats the previous daily outflow record from GBTC of $640 million on Jan. 22.

The new record equates to around 9,600 BTC, according to BitMEX research.

Grayscale Still Bleeding BTC

Grayscale’s Bitcoin holdings have declined almost 40% since its fund was converted to a spot ETF in mid-January. The firm has seen a whopping outflow of around 241,830 BTC over the past ten weeks.

Grayscale held around 620,000 BTC at the beginning of this year, which has now dwindled to 378,169 BTC, according to the company website.

Investors are pulling out of the company because they can finally convert their shares into BTC directly. This was not previously an option under the old GBTC structure. Additionally, Grayscale has higher fees than rival ETPs, causing investors to rebalance their portfolios.

In response to this, the company filed an application to launch a “Grayscale Bitcoin Mini Trust” under the ticker BTC that would be more competitive.

In addition to Grayscale’s record outflow, it has also been the lowest inflow for Fidelity’s FBTC fund, which saw just a $5.9 million inflow on March 18. BlackRock’s IBIT inflows have also been in steady decline over the past four trading days.

As a result, total net inflows have slowed, dropping below $200 million for the past couple of days. This follows a record inflow of more than $1 billion on March 12.

Low Portfolio Allocations

On March 18, Carson Group vice president and investment strategist Grant Engelbart told Bloomberg TV that just a “handful of advisors” are allocating 3.5% of Bitcoin ETFs on average to client household portfolios.

ETF analyst Eric Balchunas commented that this matches his findings that “so far it’s only ones into BTC already, they are “handful” of early adopters inquiring, then making allocations.”

“Advisors are not yet soliciting the rest of their clients,” he said before adding, “All these flows are from inbound traffic.”

Meanwhile, Bitcoin prices continued to decline, dropping 5% on the day to trade at $65,100 at the time of writing. BTC has now corrected 12% from its all-time high five days ago.

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Crypto Markets Lose $220 Billion in 2 Days as Bitcoin Slumps Toward $63K (Market Watch)

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Bitcoin’s price continues its downfall, and the asset has now lost roughly ten grand since its peak last Thursday at nearly $74,000.

The alternative coins also bleed out heavily and the total crypto market cap has dumped to under $2.5 trillion after exceeding $2.9 trillion last week.

BTC’s Nosedives Continue

The primary cryptocurrency was on a roll for weeks, which culminated last Thursday when the asset blew past $73,000 and charted a new all-time high of $73,800. After gaining more than 30% since the start of the month, though, analysis started to emerge that BTC is due to a correction.

This indeed started to transpire since last Friday. Bitcoin dropped to $68,500 and tried to recover toward $72,000 but was quickly halted and pushed back down to $66,000.

There was some elevation during the weekend that saw BTC jumping to $70,000, but that was short-lived. Once Monday arrived, BTC plunged again and once more in the past 12 hours or so.

The latest decline drove the cryptocurrency to its lowest price level in about two weeks of $63,000. Although that support level has not been breached yet, BTC is still more than 6% down on the day.

Its market capitalization has dropped to $1.250 trillion, but its dominance over the alts has increased to just over 50% on CG.

BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

Alts Bleed Out Heavily

The rising BTC dominance when Bitcoin’s price is plunging means only one thing – the altcoins are suffering even more. The largest one, for example, has dumped by another 9% and sits at $3,250. Recall that ETH had soared past $4,000 less than a week ago.

Solana, which surpassed Binance Coin yesterday, had declined by over 13% in a day and is back down to $180. BNB (-8.5%) has retraced to $515. Dogecoin, Polkadot, Polygon, and NEAR have shed over 10% in a day.

The landscape with most lower- and mid-cap alts is similar, and the total crypto market cap has plummeted to under $2.5 trillion on CG. The metric was above $2.9 trillion last Thursday and over $2.7 trillion during the weekend.

Cryptocurrency Market Overview. Source: Quantify Crypto
Cryptocurrency Market Overview. Source: Quantify Crypto
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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

BTC Under $10K? Bitcoin Price Flash Crashed on BitMEX to $8.9K

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Late Monday, Bitcoin (BTC) witnessed a sudden and significant plunge on BitMEX, plummeting to as low as $8,900 within a matter of minutes.

Since the flash crash, BitMEX has announced via social media that it is currently investigating the substantial sell orders.

Bitcoin’s Flash Crash on BitMEX

According to data from the charting platform TradingView, the flash crash started at 22:40 UTC, with prices plummeting to $8,900 in just two minutes, marking the lowest level since early 2020. However, the recovery was equally rapid, with prices bouncing back to $67,000 by 22:50 UTC. Meanwhile, throughout this period on BitMEX, Bitcoin’s global average price remained stable at around $67,400.

Following the incident, BitMEX, one of the leading cryptocurrency derivatives exchanges, issued a statement on X acknowledging the unusual activity and assuring users that their funds were secure.

“We are investigating unusual activity in the past few hours involving a user selling large orders on our BTC-USDT Spot Market,” the exchange stated.

The exchange clarified that while the incident impacted its BTC-USDT spot market, it did not affect any of its derivative markets or the index price for its XBT derivatives contracts.

BitMex also reassured users that its trading platform is operating normally and all funds are safe.

Whale Sell-Off Triggers Bitcoin Flash Crash

The incident has sparked concerns among traders and observers, with many speculating that large sell orders, often attributed to institutional investors or “whales,” triggered the rapid price decline. Social media platforms, particularly X, were abuzz with discussions surrounding the crash.

One user, @syq alleged that a single entity offloaded over 850 BTC, equivalent to approximately $55.49 million driving Bitcoin’s price down to $8,900.

The BitMEX XBT index, which tracks Bitcoin’s price, serves as a benchmark for traders on the platform. Meanwhile, the XBT/USDT pair represents Bitcoin’s tether-denominated price, with USDT being the world’s leading dollar-pegged stablecoin.

A flash crash is commonly defined as a sudden and significant drop in the price of an asset followed by an equally rapid recovery. This isn’t the first time Bitcoin has experienced such price fluctuations. CryptoPotato has reported numerous previous incidents where the price of Bitcoin plummeted by double-digit percentages within seconds.

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