Cryptos Subdued Amidst FTX Effects, Macro Concerns

Cryptocurrencies hovered close to the flatline on Friday amidst a weak market sentiment driven by developments in the FTX saga as well as lingering macro-economic concerns. The SEC’s recent classification of the FTX token FTT as a security and the warnings from SEC officials about proof-of-reserves also weighed on market sentiment.

In the complaint filed by the SEC against Caroline Ellison and Gary Wang, the SEC has stated that FTT was offered and sold as an Investment Contract and, therefore, as a Security. If demand for trading on the FTX platform increased, demand for the FTT token could increase, such that any price increase in FTT would benefit holders of FTT equally and in direct proportion to their FTT holdings, the SEC has noted in the complaint. The classification of a cryptocurrency as a security has wide ramifications from the perspective of Securities laws and markets are worried about how the case would evolve and impact the regulation of crypto industry.

Anxiety is also writ large ahead of the release of the PCE based inflation readings on Friday. The Fed’s preferred inflation indicator would reveal whether the Fed has sufficient headroom to start moderating on rate increases. Data released on Thursday had shown only a marginal increase in claims for unemployment benefits, unnerving markets of a prolonged period of high interest rates.

Sam Bankman-Fried, the ex-CEO of FTX getting released on a $250 million bond bail in the U.S. dominated crypto newsrooms and lifted the 211th ranked FTX Token (FTT) by 9 percent overnight.

Overall crypto market capitalization is currently at $812 billion, versus $811 billion a day earlier.

A big-picture view of the overall crypto market shows Bitcoin dominating almost 40 percent of the market. Bitcoin is trading at $16,879.19, up 0.2 percent on an overnight basis.

The Smart Contracts category led by Ethereum (ETH) is currently commanding 27.1 percent of the market. Ethereum is trading at $1,224.04, having gained 0.50 percent in the past 24 hours. Cardano (ADA) is trading at $0.2608 after gaining 3 percent overnight.

Stablecoins led by Tether (USDT), USDCoin (USDC), Binance USD (BUSD) etc. are now occupying 17.3 percent of the overall crypto market.

Cryptocurrencies of Centralized Exchanges now add up to 5.96 percent of the overall market. BNB(BNB), UNUS SED LEO (LEO), and Cronos (CRO) are the toppers in this category. BNB (BNB) has edged up 0.04 percent overnight but is still 1.4 percent lower on a weekly basis.

The DeFi category led by Dai (DAI), Uniswap (UNI), Avalanche (AVAX), Wrapped Bitcoin (WBTC) etc., commands 4.8 of the overall crypto market.

XRP (XRP), tagged as medium of exchange crypto gained 1.15 percent in the past 24 hours. Dogecoin (DOGE), also gained 5.4 percent in the past 24 hours.

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