The crypto market stands like Nasdaq in the early 2000s. Here’s why – MarketWatch | Region & Cash

Hi! Welcome back to Distributed Ledger, our weekly crypto newsletter, hitting your inbox every Thursday. I’m Frances Yue, Crypto Reporter at MarketWatch, and I’m going to guide you through the latest developments in this bear market.

Find me on Twitter at @FrancesYue_ to send feedback or let us know what you think we should cover. You can also email me to share your personal stories with Crypto.

As the Federal Reserve hiked interest rates for the fourth time this year to cool inflation on Wednesday, I caught up with Ben McMillan, founder and chief investment officer at IDX Digital Assets, to get an update on the crypto market.

Crypto in a snap

Bitcoin BTCUSD
Gained 0.8% over the past seven days to trade at around $23,908 on Thursday, according to CoinDesk data. Ether ETHUSD
rose 6.4% in seven days to around $1,732. Dogecoin DOGEUSD meme token
declined 3.5% while another dog-themed token, Shiba Inu SHIBUSD,
down 5% from seven days ago.

Crypto Metrics
Biggest Winners

Price

%7 days return

Bitcoin Gold

$26.86

45.2%

Ethereum classic

$33.75

44.1%

Celsius network

$1.14

42.4%

Qum

$4.30

40.5%

Lido DAO

$2.22

38.7%

Source: CoinGecko, as of July 28

Biggest Loser

Price

%7 days return

amp

$0.009

-7.3%

Huobi

$4.42

-6.2%

Dogecoins

$0.07

-5.7%

Frax stock

$6.26

-5.6%

Algorand

$0.33

-5.5%

Source: CoinGecko, as of July 28

Nasdaq in the early 2000s?

The current crypto market “looks very much like Nasdaq did in the early 2000s after the washout,” IDX’s McMillan said in a phone interview. Over the past two months, the crypto market has struggled with contagion as digital asset hedge fund Three Arrow, broker Voyager and lender Celsius all went bankrupt.

“They’ve had some very high-profile big liquidation events,” McMillan said. “Similar to Long Term Capital Management in the late ’90s or Pets.com, there were a lot of flawed business models that just swerved off the hype of the disappearing digital assets.”

“Finally, we saw a similar paradigm in technology stocks in the early 2000s, and that ended up being a buying opportunity for all generations,” McMillan said.

Still, in a low-risk environment, IDX’s investment fund Risk-Managed Bitcoin Strategy Fund BTIDX
has kept its investments mostly in cash since late last year as Bitcoin trades more than 67% below its November peak, McMillan said.

According to McMillan, the fund has recently started to “put a little risk back on the table.”

“What we’re looking for is what we call a kind of convinced buying behavior. We want to see it, especially in a volatile market like bitcoin or any other digital asset. For an asset class that’s no stranger to 50% plus drawdowns, risk management becomes really important, especially for institutional clients that we primarily serve,” McMillan said.

Hear from Mike Novogratz at the Best New Ideas in Money Festival on September 21-22 in New York. Galaxy Digital CEO has ideas for navigating the crypto winter.

FTX’s rescue plan for Voyager?

Bankrupt crypto broker Voyager Digital has dismissed a proposal from Sam Bankman-Fried’s crypto exchange FTX and Alameda Ventures, saying it was a “low-ball bid disguised as the white knight’s rescue.”

FTX and Alameda jointly proposed on July 22 to buy all of Voyager’s digital assets and crypto loans, with the exception of its claims on hedge fund Three Arrows, in “cash immediately available” at fair market value. This value would be “calculated by Alameda in good faith based on market practices and available pricing information,” with Voyager’s confirmation, according to the proposal.

As part of the proposal, FTX and Alameda also offered to provide early liquidity to Voyager customers, whereby they could elect to open a new account with FTX and receive a cash amount equal to a portion of their Voyager receivables.

In response to FTX and Alameda’s proposal, Voyager’s attorneys said it hurts the company’s customers, undermined efforts to maximize value in the bidding process, capped users’ crypto claims to their dollar values, and exposed consumers to the tax consequences of, among other things Transactions would carry other concerns.

“The AlamedaFTX Proposal is nothing more than a cryptocurrency liquidation on a basis that benefits AlamedaFTX,” Voyager’s attorneys wrote in a July 24 court filing.

Still, “the deal isn’t necessarily dead,” Bankman-Fried said Tuesday in an interview with Yahoo Finance. “Ultimately, shareholders will decide what to proceed with. And I don’t think we saw the last trip on this site.”

In a series of tweets, Bankman-Fried argued that their proposal would benefit consumers as they would allow for earlier repayment. “The longer the bankruptcy process drags on, the more options customers lose,” the crypto billionaire tweeted. He also tweeted that some other third parties may be bidding for plans that give clients more haircuts.

Crypto companies, funds

shares of Coinbase Global Inc. COIN
rose 3.4% on Thursday to $60.84 while down 17.5% over the past five trading sessions. Michael Saylors MicroStrategy inc
MSTR
rose 2.3% to $268.32 on Thursday, while shares fell 7.4% over the past five days.

mining company Riot Blockchain Inc. REVOLT
Shares rose 1.5% to $7.25 on Thursday while down 4.8% over the past five days. shares of Marathon Digital Holdings Inc.
MARA
Soared 5.5% to $12.99, up 3.7% over the past five days. another miner, Ebang International Holdings Inc. ebony
Shares rose 1.8% to $0.48 on Thursday, down 15% over the past five days.

Overstock.com Inc.
OSTK‘s
Shares rose 7.7% to $30.45. Shares gained 3.8% over the five-session period.

shares of block inc
Q,
Formerly known as Square, it fell 0.3% to $72.56 as its shares fell 2.7% on the week. Tesla Inc. TSLA
Shares rose 1.5% to $836.90, contributing to a 3% gain over the past five sessions.

PayPal Holdings Inc.
PYPL
was down 2% at $84.68, despite shares gaining 2.9% over the five-session period. Nvidia Corp.
NVDA
Shares lost 0.3% to $177.45, down 1.3% in the last five trading days.

Advanced Micro Devices Inc.
AMD
Shares rose 1.4% to $90.21 on Thursday, down 0.6% from five trading days ago.

Under crypto funds, ProShares Bitcoin Strategy ETF
BITO
rose 5% to $14.80 on Thursday during it Short Bitcoin Strategy ETF
BITI
down 4.9% to $32.58. Valkyrie Bitcoin Strategy ETF
BTF
rose 4.9% to $9.21 while VanEck Bitcoin Strategy ETF
XBTF
rose 4.9% to $23.28.

Grayscale Bitcoin Trust
Conditions
rose 3.2% to $14.69.

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