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SPIRIT Blockchain – Weekly Wrap-up 7/29/2022

Here’s what happened in blockchain and crypto this week.

Cryptoassets had a strong rebound, with both BTC and ETH reclaiming previous levels after a brief pullback mid-week. While it was another busy week in crypto-related deals, it was a more quiet, albeit not uneventful week in terms of headlines. A number of news articles shed some more light on filings and recent developments surrounding troubled crypto lenders and exchanges. Elsewhere, Coinbase faces an SEC probe on assets that should have been registered as securities, according to the agency. On a related note, Ark Investment Management – which had been bullish on Coinbase – revealed it had sold more than 1.4 million in the company’s shares. 
 

More information on troubled crypto lenders and exchanges came to light this week (see also headlines below) including Asian firm Babel Finance which reportedly engaged in prop trading with customer funds. CoinDesk had another revealing story about the 2020 bankruptcy of crypto lender Cred. The liquidation trust for the failed firm sued Uphold Friday, alleging the crypto exchange masterminded the product that ultimately caused Cred to seek bankruptcy protection in 2020.

Coinbase is facing a U.S. probe into whether the company improperly let U.S. users trade cryptoassets that should have been registered as securities, according to a Bloomberg report. Two weeks ago, we wrote about how the SEC listed nine cryptocurrencies as  securities in the wake of charges against a former Coinbase employee and two others with wire fraud. The assets in question were each mentioned in connection with alleged insider trading. Given recent comments by SEC chair Gary Gensler, it is likely that the agency will continue to list additional cryptoassets as securities. 

Meanwhile, Cathie Wood’s Ark – a fund considered by many to be at the forefront of investments in financially innovative companies – has sold some of its Coinbase holdings. Conversely, the stock has seen clear institutional demand, according to data compiled by Whale Wisdom which tracks quarterly filings that disclose asset managers’ new investments, showing that institutional investors collectively bought 2.6 million in Coinbase shares. Shortly after that data was released, however, Wood’s Ark Investment Management revealed it had sold more than 1.4 million shares. Ark still owns almost five million Coinbase shares.

Market Overview

The global cryptoasset market capitalization currently amounts to $1.14 trillion –  up from $1.09 trillion since Friday last week, with bitcoin accounting for 39.9%. Among the Top 30 cryptoassets by market cap, Ethereum Classic (ETC) outperformed once again, gaining roughly 50.6% over the week. During the same period, the price of bitcoin (BTC) rose by 3.2% to $23,887 while the price of ether (ETH) increased by 9.2% to $1,721. The total value locked (TVL) in DeFi sits at $88.7 billion – up from $86.6 billion last week – with Ethereum accounting for about 65% of TVL.

This Week’s Headlines

 

Notable Deals and Fundraising

 

Manuel Trojovsky, Head of Crypto Investments & Research

 

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