THE CRYPTO FUNDAMENTALS HAVE NOT CHANGE
One reason I remain skeptical of this current rally is because crypto fundamentals haven't change, in fact they have only gotten worse. Crypto trading firm Genesis has finally filed for bankruptcy and reported owns anywhere between 1 to 10 billion dollars to creditors. You can tell for sure that it will be selling what ever asset it as. More importantly, the implosion of Genesis that it parent company Digital Currency Group (DCG) could the next firm to falls. As some of you make know, DCG owes 3 billion dollars to creditors and CEO Barry Silbert has been using is restructuring experience prevent it bankruptcy.
It is possible that allowing Genesis to go under was part of Barry's plan but it only added to the sense that DCG is trouble. Additionally evidence could be found in the crypto news site Coindesk which is owned by DCG is out for sale, the asking price is 200 million dollars. Assuming that the rumors on crypto Twitter are true, then coindesk could be acquired for a lot less. The beg the question of how money DGC $500 million VC portfolio will be worth buyer. I am sure it won't be $500 million and that mean DCG won't be able the capital it need to stay solvent.
You may recall that crypto bank, Silver Gate recently experience the bank run. It's now been revealed that Silver Gate has revealed a 3.6 billion dollars loan from US home-loan banks. The loan was reported given in the fourth quarter of last year when Silver Gate rush to honor withdraw which in not a good sign and signature bank also received also received 10 billion dollars loan from US home-loan bank the fourth quarter of last year. What is concerning is signature been used by Binance for Swift payment and Signature recently set a minimum of 100k for USD Swift transfer, sighting it desire to decrease it exposure to crypto.
Regardless of the reason why Signature made this move, the fact that crypto banks have exposure to the US housing market is likely to result in serious regulatory scrutiny. Imagine a scenario where crypto banks can repay it loan to home-loan banks, that will be an instant crack down. Cryptocurrencies that were heavily founded Venture Capitalist (VCs) are scheduled to experience 2023 token unlocks totally $102 billion. You should know that the sell pressure coming from early investors would cause most of these cryptocurrencies to dip. This is why it hard for me to believe that the currency crypto rally is sustainable.