Bitcoin wobbles as Hong Kong ETFs disappoint, but hope grows for FTX creditors
DATA from CryptoCompare shows that Bitcoin's price initially saw a significant drop from around $64,000 to a low of little over $60,000 before it started recovering, with the cryptocurrency then seeing a sharp increase to now trade at around $62,700.
Ethereum’s Ether, the second-largest cryptocurrency by market capitalisation, saw similar price performance, seeing a sharp drop from $3,125 to a $2,850 lo before the cryptocurrency started recovering, with ETH now trading at $2,960 after failing to reclaim the $3,000 during the recent surge.
Headlines in the cryptocurrency space over the week kept on showing that Hong Kong’s highly-anticipated spot Bitcoin exchange-traded funds (ETFs) have fallen short in their debut, having attracted a fraction of the assets and trading volumes that their US counterparts did.
Senior Bloomberg ETF analyst Eric Balchunas noted that the $310 million of inflows seen by Hong Kong’s spot crypto ETFs were “equal to $50 billion in the US market,” with Hong Kong’s $4.5 trillion equities market being dwarfed by the $50 trillion of U.S. listed equities.
Notably, in the US, cryptocurrency wallet provider Exodus Movement’s planned listing on the NYSE American exchange was postponed, as the US Securities and Exchange Commission (SEC) is still reviewing the firm’s registration statement.
On top of that, the SEC has maintained that Ripple, a major player in the XRP ecosystem, should pay nearly $2 billion in fines for its XRP sales to institutional investors, after the fintech firm argued that the fine should be of around $10 million.
Per the SEC, Ripple’s suggestion would be a “slap on the wrist” and would undermine investor protections as it would “encourage other crypto asset issuers to violate Section 5 by making it a remarkably lucrative endeavour”.
Despite the criticism the cryptocurrency industry’s criticism of the SEC, US President Joe Biden’s office issued a statement declaring it plans on vetoing a congressional resolution to undermine the regulator’s cryptocurrency policy.
The administration has argued that the resolution would affect the regulator’s efforts “to protect investors in crypto-asset markets and to safeguard the broader financial system.”
Meanwhile asset management giant WisdomTree has launched its digital assets app WisdomTree Prime in New York, making it available in 21 states. The app allows users to buy, sell, and hold Bitcoin, Ethereum dollar-backed stablecoins, and gold-backed tokens.
Top exchanges see trading volume decline in April
Leading cryptocurrency exchanges saw their trading volumes drop in April, with Binance seeing a 39.2% drop to $679 billion, and Bybit seeing a 26.9% drop to $133 billion. OKEx, Bitget, and Coinbase all saw a similar fate, with drops of between 43.4% and 10.3%.
That’s according to CCData’s latest Exchange Review report, which details that centralized cryptocurrency exchanges saw their monthly spot trading volumes fall 32.6% to $2.01 trillion in their first decline in seven months.
The derivatives market, which has been experiencing a consistent decrease in dominance over the past seven months, saw its dominance fall to 69.5% in April after reaching a record high in March.
Over the past week it was also revealed that financial regulators hit Binance with a $4.3 million fine over two separate “administrative violations” of the country’s financial regulations. The fine came months after Binance agreed to pay US authorities $4.3 billion for violating anti-money laundering laws and just after its former CEO Changpeng Zhao was sentenced to four months in prison.
FTX creditors to receive 118% pay-out
Customers of the collapsed cryptocurrency exchange FTX may recover all of the money the lost at the time of the company’s 2022 collapse, according to a new reorganisation plan that adds in interest to the funds.
The plan, filed with the Delaware bankruptcy court, proposes returning 118% of claims in cash to 98% of creditors in a pay-out that would come from a pool of assets recovered by FTX's legal team over the past year and a half.
The recovery amount is based on the value of customer holdings at the time of FTX's bankruptcy filing in November 2022, which means customers won't benefit from the recent rise in crypto prices – even though Bitcoin, for example, is now trading above $60,000.
This potential full recovery is a significant turnaround from the initial bleak outlook following FTX's collapse. It led to the resignation of founder Sam Bankman-Fried, who was recently convicted to 25 years, and the appointment of John J. Ray III to oversee the bankruptcy proceedings.
READ MORE: FTX caretakers looking to 'overpay' on customer losses
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
