Market Wrap: Genesis Withdrawal Suspension Looms Over Cryptocurrencies

Et tu, Genesis Global Capital? The lending arm of crypto investment bank Genesis Global Trading temporarily suspended redemptions and new loan originations, adding to the rapidly widening fallout from crypto exchange FTX’s collapse.

This article originally appeared in Market Wrap, CoinDesk’s daily newsletter diving into what happened in today's crypto markets. Subscribe to get it in your inbox every day.

Bitcoin fell about 1.5% over the past 24 hours to trade at about $1,600 as investors considered the latest debacle to afflict the crypto industry. Ether was recently changing hands at about $1,200, off more than 3%. Other major cryptocurrencies were largely in the red with FTX’s FTT token declining more than 14% and Serum’s SRM dropping more than 6%. FTX founder Sam Bankman-Fried had been a major supporter of Serum, a decentralized exchange protocol on the Solana blockchain.

Digital asset manager Grayscale Investments sought to reassure investors they will not be affected by Genesis Global Capital suspending withdrawals in the wake of FTX's collapse. Grayscale is a unit of Digital Currency Group, the parent company of Genesis Global Capital and Grayscale. Grayscale announced via Twitter on Wednesday that "Genesis Global Capital is not a counterparty or service provider for any Grayscale product."

Crypto investors in the U.S. filed a class-action suit accusing Sam Bankman-Fried and the company’s host of paid celebrity promoters, including NFL quarterback Tom Brady, comedian Larry David, tennis player Naomi Osaka and NBA team the Golden State Warriors, with fraudulently promoting FTX yield-bearing account (YBAs). The plaintiffs called the FTX platform “a house of cards” and “Ponzi scheme... where the FTX Entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the YBAs and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity.”

By Glenn Williams Jr.

For both BTC and ETH, the magnitude of price movement since January 2022 has been declining, when using the Average True Range of daily price movement as a proxy.

A lack of price movement gives investors less opportunity to generate gains. Now, as investors focus more on avoiding calamity than producing alpha, a new trading range appears to be forming around the $16,500 level for BTC.

Where previously the market saw significant price agreement between the $19,000 to $20,000 range, the recent turmoil has pushed it to a lower level.

Read the full technical take here.