The Weekly Pen: The year and week that went by

TRADFI
MONEY
BULLMARKET
INVESTING
CRYPTO
DEFI
By the Pen

We made it to week 52. A year of unprecedented market turmoil and skeletons pouring out of the crypto closest, combined with crony capitalism, war, inflation, rate hikes, and slumping cash reserves in tech darlings. The Pen team is back for the last this year with another drop of the weekly pen, serving you the top trending news from the week that went by and a short outlook of the year that passed and what’s waiting for all in the year ahead. Happy new year, have a good read, and see you in 2023.

TOP 5 CRYPTO STORIES THAT SHAPED 2022

Let’s start this week’s drop-off with an outlook on the year that went by. As much has happened in 2022 here are the top 5 stories that shook the world of crypto:

TerraUSD and LUNA’S demise: The Luna crypto network crumbled in what is assumed to be the major crypto crash already, erasing approximately $60 billion and rattling the worldwide cryptocurrency market. This story is one of the top 5 crypto stories of 2022 that shook the entire crypto market. Little did we know, that it was only the beginning.

Celcius network: Launched in 2017 and operated similarly to a bank. Users could transfer cryptocurrency and get a to 17% interest, based on the firm’s site, and Celsius would loan money against those reserves. (The year before, regulatory authorities across several states termed Celsius products illegal.) The business precluded its 1.7 million users from trying to withdraw or send money — appreciated at $20 billion at its high point — in June 2022. The corporation filed for bankruptcy in July.

The Fall of 3 arrows capital: Singapore-based crypto hedge fund, declared bankruptcy. This was accomplished after the issuance of a court order in the British Virgin Islands after lenders defamed the hedge fund for its incapability to remunerate “ claims to a big decrease in cryptocurrency markets. Three Arrows Capital utilized a bold trading strategy that would include trying to identify favorable light collateralized shareholdings in multiple cryptocurrencies. The business was also susceptible to the stablecoin Terra USD and its sister coin, Luna.

FTX AND SBF: Faith in crypto markets held steady until upsetting disclosures about FTX and sister company Alameda Research popped up in November. Binance CEO Changpeng Zhao voiced growing concerns about FTX’s financial health and ability to maintain its self-issued token, FTT, instantaneously. Traders began withdrawing money from FTX. The FTT price fell from about $26 to $1 in a matter of days and FTX stopped client withdrawals. After conflating customer funds and investments, the seemingly healthy firm was found to be bankrupt. In late November, FTX declared bankruptcy. BlockFi’s prior bailout was annulled, and the firm was compelled to go bankrupt. The cryptocurrency markets have collapsed.

BlockFi Crash: The FTX crash exposed many other cryptocurrency companies that were involved with it. BlockFi was yet another company that declared bankruptcy, leaving its users in the lurch. 

BlockFi declared bankruptcy on Monday, November 28th, 2022. They were the most visible example of the financial crisis induced by FTX. BlockFi earlier in November announced that it would no longer receive withdrawals due to its “substantial exposure” to the FTX exchange throughout its sister company Alameda. FTX, Alameda, and other associates filed for bankruptcy on November 11.

CATHIE THROWS CASH AT COINBASE

Wood’s hedge fund with a 0.75% management fee ETF ARK Innovation has declined more than -60% this year, which means it’ll have to overperform by 120% just to recover the losses. In a surprising turn of events, Cathie Wood has bought more Coinbase shares on the cheap, possibly to average down on their original entry price and shorten the recovery projection. Coinbase has lost almost 90% this year serving as the biggest loss of the Fintech ETF. The firm has now bought more than 158.000 shares totaling the entire investment at $24 million.

HISTORY REPEATING ITSELF

While we’re on the stock trend of news, Wall Street ended this year as the worst year since 2008. You remember right? The year everyone thought was going to be the end of the world with no recovery in sight, and what happened instead was an unprecedented Gold rush with 14 year old’s 10xing their s*** stock portfolios and CFA graduates looking at how they will outperform even themselves. Amongst all the other major indexes S&P500 finished this year with a 20% downfall.

ETHEREUM KILLER GETTING KILLED

What many believed to be the Ethereum killer, Solana has now lost over $ 50 billion in value since the beginning of 2022, a year marked by outrages, overloads, and significant exposure to SBF’s FTX. Proponents argue that Solana is more critical than ever as a decentralized finance platform, but recent price action suggests that investors continue to be skeptical even after the broader crypto markets have stabilized. Solana was designed as an efficient and speed-first platform, using an innovative consensus mechanism to differentiate itself from Ethereum, but has faced developer attrition throughout the year.                        

NASDAQ NEAR DEATH

As if Wall Street didn’t pull a Britney Spears again (Oops I did again reference), Nasdaq closes out its first fourth-quarter slump since the dot-com crash. The tech-heavy Nasdaq fell 1% in the fourth quarter, wrapping up its first four-quarter losing streak since 2000-2001.  It is then no surprise that ARK Innovation has subsequently performed as badly as any individual hyped up tech-stock.

SPIRITUS SANCTUS

2022 brought to us many unfortunate events and ended this year with the former Pope Benedict the 16th passing away after years of struggling with declining health issues, leading him to resign in 2013 as the first ever to leave his position before his death. At the age of 95, the former Pope leaves the world already void.

HOT CRYPTO WINTER IN THE BAHAMAS

Unlike Celcius Network where the majority of investors are hopelessly waiting for their assets to be freed, the victims of Sam Bankman-Fried might have some light at the end of their tunnels. The Bahamas securities regulator has said it has seized assets worth $3.5bn (£2.9bn) from the failed cryptocurrency exchange FTX and plans to return them to creditors and former customers.

The Securities Commission of the Bahamas said it had transferred all digital assets under the custody or control of FTX Digital Markets, a Bahamas subsidiary of the FTX operation, to its own digital wallets for “safekeeping”.

2023 AND THE YEAR AHEAD

The year has finally come to an end and we can all look past the worst year in the existing era of global financial markets and world peace. Enters 2023, where we will be looking forward, not trying to fix what’s broken but building it the way democratization of finance was initially intended. Penning is set and hopeful for the future and believes that from the learnings of crony capitalism, mindless crypto and meme stock pump and dumps and many greedy scammers will be to bring forth the truth in trades, open investments, and equal financial opportunities for all. This also means that TradFi and DeFi should and will be working closely together through the bridges of regulation which Penning is tirelessly working to achieve, already being one of the most FSA regulated in the market with local banking relations and open-trust investment platforms which will reveal on the side of the new year of 2022 in 2023. Here’s the full coverage from coindesk on what to expect from crypto regulation in the year 2023 and to all a Happy New Year.

Till we yield again

STAY UPDATED ON NEWS FROM THE PEN TEAM

READ OUR PREVIOUS DROPS FROM THE PEN

The Penalyst - February Market Outlook
BTCUSD
ETHEREUM
BULLMARKET
BITCOIN
By Timothy Hellberg
14 Feb 2024 - 4 min read
The Penalyst - Market Overview & Outlook
NASDAQ100
MINING
FX
MONEY
BULLMARKET
INVEST
By Timothy Hellberg
30 Jan 2024 - 5 min read
The Penalyst Special Edition - 2024 Outlook
USDX
BTCUSD
NASDAQ100
TRADFI
BULLMARKET
BITCOIN
By by Timothy Hellberg
09 Jan 2024 - 7 min read