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Cryptos Lukewarm In Post-FTX Crypto World

cryptocurrency sept04 17nov22 lt

Crypto markets extended losses, with market cap falling to $822 billion, from $829 billion a day earlier. Close to three-fourths of the top 100 cryptos are trading in overnight negative territory.

Bitcoin is trading at $16,536.27, up 0.2percent in the past 24 hours and down 5 percent in the past week. BTC ranged between a high of $16,726 and a low of $16,430 in the past 24 hours. BTC's market dominance now stands at 38.5 percent of the overall crypto market. On-chain analysis reveals that 51 percent of Bitcoin holders are out of money at current prices.

Meanwhile, Nayib Bukele, the President of El Salvador, where Bitcoin is a legal tender has announced that it would start buying one Bitcoin per day.

A Working Paper recently released by the Bank for International Settlements has attributed the increase in crypto adoption to the rise in prices of Bitcoin. The study also established that users are being mainly drawn to Bitcoin by rising prices and not due to a dislike for traditional banks, or the search for a store of value or distrust in public institutions. Based on an analysis of blockchain data, the study also found that, as prices were rising and smaller users were buying Bitcoin, the largest holders (the so-called "whales" or "humpbacks") were selling, in other words, making a return at the smaller users' expense.

The study which examined the relationship between the use of crypto trading apps, Bitcoin prices and other macroeconomic variables also concluded, based on back of the envelope calculations that around three-quarters of users have lost money on their Bitcoin investments.

Ethereum, which dominates 17.7 percent of the overall crypto market is trading at $1,195.03, down 1.3 percent in the past 24 hours and 7.5 percent in the past week. 49 percent of Ethereum holders are out of money at current prices.

Among the top 10 cryptos, 10th ranked Polygon (MATIC) is the highest loser on an overnight basis with a 2.4 percent decline. XRP (XRP) topped with gains of close to 2 percent. Among the top 100 cryptos, 63rd ranked Aptos (APT) topped with gains of more than 8 percent. 94th ranked Decred (DCR) was the biggest loser with a 6.7 percent decline.

Solana (SOL) slipped to the 14th rank with a 3 percent decline amidst reports that crypto exchanges Binance, OKX and ByBit have announced temporary suspension of USDC (SOL) and USDT (SOL) deposits.

Amidst fears that the FTX contagion is spreading, the FTX Token (FTT) has gained 3.8 percent overnight and is currently trading at $1.60. In another shocking development, the newly appointed CEO of FTX has in a written submission to the U.S. bankruptcy court at Delaware stated that never in his career has he seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as has occurred in FTX. Meanwhile, in a statement on Thursday, Singapore-based Temasek Holdings Limited has announced that it would write off its $275 million investment into FTX and its associated companies.

In the ranking of all assets according to market capitalization published by companiesmarketcap.com, Bitcoin has slipped to the 27th rank overall, whereas Ethereum is now at the 83rd position. In addition to precious metals Gold (market cap: $11.6 trillion), and Silver (market cap: $1.2 trillion) five corporates viz Apple (market cap: $2.4 trillion), Saudi Aramco (market cap: $2.0 trillion), Microsoft (market cap: $1.8 trillion), Alphabet (market cap: $1.3 trillion) and Amazon (market cap: $991 billion) command market capitalization higher than the overall crypto market capitalization.

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