Blockchain founders, enthusiasts and financiers –
This is CCM’s Blockchain Weekly Newsletter. Today, we cover the ongoing story of how FTX founder, Sam Bankman-Fried (known as SBF), is bailing out crypto companies.
The crypto industry is going through a credit crisis and SBF has offered lifelines, drawing comparisons to J. Piermont Morgan’s rescue of Wall Street during the Panic of 1907.
29-year-old billionaire, founder of FTX and Alameda research, SBF is picking up distressed assets and lending to companies in a liquidity crunch – so far he has:
Why has he had to step in?
- Similar to JP Morgan in 1907 or the Fed during the GFC in 2007-2008, SBF has stepped in to stem further contagion and calm the markets
- Interest rate hikes and the crash of UST/Luna set off a wave of deleveraging that forced several companies into a liquidity crunch or insolvency
- Bank runs: Some companies, like Celsius, have frozen customer accounts and limited customer ability to withdraw funds
- Regulators do not seem concerned about any individual company but they are working on regulation to protect retail accounts
- In the meantime, it is up to industry veterans such as SBF to maintain the balance and find solutions to come out of this ‘crypto winter’ in stronger shape
- Some of the week’s biggest news
- Valuation and operating metrics for publicly traded companies
- The latest VC funding metrics
- M&A deal flow
- and often we’ll include deeper dives to help understand various aspects of the ecosystem
- Top banks investing in crypto
Solana is Building a Crypto Native Smartphone (Decrypt)
- The company revealed the Saga, a powerful Android smartphone that will be released in early 2023
- Solana Labs also revealed a mobile platform called SMS and an Android smartphone
- The Solana Mobile Stack (SMS) software kit, provides tools for developing native Android mobile apps, walls, and games, and also includes a decentralized app store
- Whether Solana Labs can get Apple or even top Android makers onboard with SMS remains to be seen
Hedge Funds Are Betting Against Tether (WSJ)
- Last week we wrote about what’s happening with Tether - this week, the WSJ reported that traditional hedge funds are betting against the stablecoin
- Short sellers have been ramping up their bets against tether, the world’s largest stablecoin, amid a broad market selloff that has called into doubt the financial health of some crypto companies
- “There has been a real spike in the interest from traditional hedge funds who are taking a look at tether and looking to short it,” head of institutional sales at Genesis Global Trading, Leon Marshall said in an interview
- Tether is a stablecoin, which are virtual currencies that are supposed to be pegged to the dollar or other national currencies, and it is the most widely traded in the world
Mastercard survey says 51% of LatAm users have crypto experience (The Block)
- The digital payments revolution that began during the pandemic is driving Latin American interest and use, as 51% of consumers in the region have made a transaction with crypto, a Mastercard survey shows
- Additionally, more than a third said they’ve made a purchase with stablecoin
- In its second edition, the study shows that financial innovation — cryptocurrencies, DeFi solutions, blockchain, NFTs — registers significant activity in the region, with consumers eager to learn more about the ecosystem
- “Increasingly, Latin Americans are turning to technology to conduct their financial transactions and this trend is expected to continue to rise, with an overwhelming 95% planning to use a digital payment method in the coming year and 29% acknowledging having used less cash in the past year,” said Walter Pimenta, executive vice president for products and engineering, Mastercard Latin America and the Caribbean.
Presentation linked above and here
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