The Daily Blurt - January 14

Crypto markets continue upward trend while traditional equities trend lower

The total cryptocurrency market capitalization reached its highest level in over two months on Jan. 13 after breaking above the $900 billion mark. Despite the 15.5% year-to-date gain, the level is still 50% below the $1.88 trillion crypto market cap seen before the Terra-Luna ecosystem collapsed in April 2022. Many investors are showing "hopeful skepticism" as the market struggles to recapture the $1 trillion market capitalization seen in November, which was followed by a 27.6% correction in three days.

Bitcoin has gained 15.7% year-to-date, but a different scenario has emerged for altcoins, with a handful of them gaining 50% or more in the same period. The market's sentiment is neutral to bullish as the crypto market is seeing job cuts from companies such as Crypto.com, Kraken, Coinbase, and Huobi. Despite the job cuts, the crypto market is still seeing positive performance in crypto assets as companies like Coinbase, Silvergate, MicroStrategy, Hut 8, and Marathon Digital have all seen gains in their stock prices. Stephane Ouellette, CEO at FRNT Financial, said "we're absolutely seeing some surprising positive performance in crypto assets" and that "many of those equities have significant short interests that are likely contributors to the accelerated moves."

While crypto markets diverge from equities and continue to see an upward trend with bitcoin leading the charge, the trend is not being mirrored in the broader stock market, with the S&P 500 and Nasdaq both trending lower. GSR said in a market update that "crypto markets are diverging from equities and continuing their upward trend with bitcoin leading the charge forward."

The Reservbe Bank of India Governor labels cryptocurrency as “gambling”

The Reserve Bank of India (RBI) Governor, Shaktikanta Das, has once again called for a ban on cryptocurrencies, stating that they are speculative and similar to gambling. Das said that the RBI’s stance on crypto remains the same, stating that they cannot be considered as a financial product and should be treated like gambling activities. He argued that the threat posed by crypto on the financial sector is due to the lack of underlying value while warning that allowing digital assets to grow will undermine the bank’s role in controlling the money supply. Despite the call to ban cryptocurrencies, the governor acknowledged that the government needs to support blockchain technology due to its underlying benefits. The bank is pushing for the rollout of a central bank digital currency (CBDC) and has since released a concept note. However, the note has received backlash from the crypto and blockchain industries operating in the country on the grounds of being regressive.

Media companies demand disclosure of FTX CEO's $250 million bond guarantors

Eight major media companies, including Bloomberg, Financial Times, and Reuters, are demanding public disclosure of the two individuals responsible for guaranteeing FTX's former CEO, Sam Bankman-Fried's $250 million bond. In a letter addressed to New York District Court Judge Lewis Kaplan, attorneys from Davis Wright Tremaine LLP argued that the public's right to know Bankman-Fried's guarantors outweigh their privacy and safety rights, particularly given Bankman-Fried's close relationships with leaders of the financial industry, investors, prominent Silicon Valley billionaires, and elected representatives. The letter also argued that non-disclosure could possibly undermine public confidence in government institutions and political leaders. Bankman-Fried's lawyers have argued that the sureties should be kept under wraps, as they have received ongoing physical threats since FTX's catastrophic collapse in early November.