Constructive price action of major crypto tokens; FTX keeps the purse strings open

NEW YORK, NEW YORK, USA, July 7, 2022 / — ALT 5 Sigma Inc., a global fintech that provides next-generation blockchain-powered technologies for tokenization, trading, clearing, settlement, payment and safe custody of digital instruments, releases its Digital Assets Morning Call.

• Constructive Bitcoin and Ether price action helped by improving risk assets

• The Outlook for the Economy and Corporate Earnings Will Remain Important for Crypto

• Sam Bankman-Fried keeps the door open for more investment in the industry

The consolidation in bitcoin and ether prices continues, which comes as a relief considering the difficulty that crypto tokens and the industry in general have endured over the past few months.

Bitcoin and Ether continue to show strong correlation with risky assets…

In the short term, it is worth pointing out that the price stabilization of major crypto tokens has coincided with the modest improvement in the prices of risky assets. This is evident in the recent rally in the Nasdaq Composite Index, which has risen over the past week and is 8% above the mid-June low.

…which keeps the outlook for the economy and stocks important for crypto prices

The immediate conclusion is that bitcoin and ether continue to have a strong correlation with risky assets. As such, it is important to continue to monitor developments that will impact risky assets. In this regard, Friday’s US jobs report will be a clear target for the market. This will help further refine the outlook for the economy and, more importantly, expectations for Fed policy. Beyond that, next week will kick off earnings season in the US, where the focus will not just be on the second quarter results, but on the guidance companies are giving for the quarters ahead.

Sam Bankman-Fried Stresses the Need to Maintain Trust in the Crypto Ecosystem

FTX CEO Sam Bankman-Fried said it’s extremely important that consumers have confidence in things [in the crypto industry] work as advertised, pointing out that it’s “incredibly difficult” to regain that trust if it’s broken. Essentially, he pointed out that consumers/depositors should be able to get their money back on demand. As a result, he said his company still has a “couple billion” of dollars to shore up struggling companies to achieve that goal, adding that “a few more companies” have approached FTX.

FTX stepped in to lend money to and ultimately buy crypto lender BlockFi, and also established a $200 million line of credit at crypto lender Voyager Financial (which filed for bankruptcy this week). Bankman-Fried’s efforts to financially support major crypto market players likely helped prevent a larger contraction in the crypto lending industry and an associated drop in crypto asset prices.

Welcome FTX Support…and Potentially Smart Investments

These efforts have been a welcome development for the crypto industry (not to mention companies receiving FTX investment). But it’s also worth noting; 1. the opportunistic reality that FTX investments represent the purchase of assets/interest at deep discounts and, 2. are consistent with FTX’s business interest in supporting the crypto ecosystem. There is certainly nothing wrong with that and, on the contrary, it is to be expected in times of extreme price discounts.

Bankman-Fried said he believed the worst of the recent liquidity crisis and deleveraging was likely over, and his optimism would be welcomed by crypto markets. But going forward, some key questions are whether he/FTX will make similar investments and, more importantly, whether the cumulative financial support provided will be enough to help stabilize the industry.

Robert Lynch
Research and Strategy Manager
ALT 5 Sigma Inc.
[email protected]


ALT 5 Sigma is a global fintech that provides next-generation blockchain-powered technologies for trading, clearing, settlement, payment and safe custody of digital instruments. ALT 5 was founded by specialists in the financial sector out of the need to provide the digital asset economy with security, accessibility, transparency and compliance. ALT 5 offers its customers the ability to buy, sell and hold digital assets in a safe and secure environment deployed with best practices in the financial industry. ALT 5 Sigma’s products and services are available for banks, brokers, funds, family offices, professional traders, retail traders, digital asset exchanges, digital asset brokers, developers blockchain companies and financial information providers. ALT 5’s digital asset custodian services are secured by Fireblocks.

Digital Asset Morning Call is for informational purposes only and does not constitute, expressed or implied, any provision of services or products by ALT 5 Sigma (“ALT 5”). Investors should determine for themselves whether a particular service or product is suitable for their investment needs or should seek such professional advice for their particular circumstances. ALT 5 Sigma. makes no representations or warranties to any investor regarding the legality of an investment, the tax or income consequences, or the suitability of an investment for such investor. ALT 5 Sigma does not solicit or provide financial advice. This is at the sole discretion of the individual.

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