Crypto News: DCG, SBF in Court, Silvergate, OpenAI & More!!

Foreign Bureau weekly crypto review here are This week's top headlines in the crypto News [Music] Totally not guilty Sam bankman freed Claims he's innocent during his first Day in court tries to keep over 400 Million dollars of Robin Hood shares and Starts tweeting again everything you Need to know Exchanges under scrutiny U.S Regulators Turn up the heat on binance huobi Experiences a bank run and coinbase Settles with authorities how could this Affect the crypto Market Digital currency droop dcg Works to Resolve liquidity issues with its Subsidiaries while U.S Regulators Investigate the company's activities What does it mean for other crypto Companies Silvergate gets slashed the crypto Bank Loses billions Cuts its staff in half And sees its debt downgraded as Microstrategy and Marathon digital Stocks crash is this the next Domino to Fall Elon Strikes Back open Ai and SpaceX Reveal funding rounds that result in Multi-billion dollar valuations and chat GPT integrates with Microsoft's Bing Browser why you need to pay attention And of course the thoughts of the one

And only Benjamin Karen all this and More in just a moment Good morning afternoon or evening thank You for tuning in my name is guy and What you're about to see is educational Content not Financial advice you can Find any topics you're looking for using The timestamps in the video timeline and Now for today's top stories Last week disgraced FTX and Alameda Research founder Sam bankman freed Pleaded not guilty to the long list of Crimes U.S authorities allege he has Committed this is despite the fact that Former Executives of FTX and Alameda Have reportedly ratted him out including Ex-girlfriend Caroline Ellison Sam's lawyers also asked the court to Conceal the identity of the entities Which put up the collateral required to Secure his record 250 million dollar Bond to quickly recap Sam's parents and Unknown entities provided 25 million Dollars of assets as collateral so that Sam could be free while awaiting trial Apart from the modest restrictions on Movement and having to wear an ankle Bracelet Sam is a free man until his Next Hearing in early October that's 10 Whole months from now The judge has also prohibited Sam from Making any transactions involving Wallets related to FTX and Alameda Research

For context it's believed Sam cashed out Almost seven hundred thousand dollars of Cryptocurrency after being released on Bail some have speculated that he was Also behind the sudden movement and Mixing of funds belonging to FTX and Alameda research given that he was one Of the few with access to them now Although Sam denied moving the funds Related to FTX and Alameda he has not Denied Cashing Out seven hundred Thousand dollars of cryptocurrency from Another wallet affiliated with him still The fact that the judge explicitly Prohibited him from cashing out any more Crypto is evidence that he may have been Involved after all it looks like Sam is Strapped for cash and he has lots of Legal fees to pay this was the Justification given by Sam's lawyers When they requested that the 460 million Dollars of Robin Hood shares belonging To Sam be returned to him U.S Authorities were in the process of Seizing these shares his lawyers also Argued that these Robin Hood shares Should stay with Sam because he has yet To be found guilty of any crime and it's Therefore illegal for U.S authorities to Take these shares obviously the Intention of taking these shares is that So they can be sold to compensate FTX Users if Sam somehow succeeds in keeping These shares then he would have the

Financial Firepower he needs to ensure His case lasts as long as possible now The Silver Lining to this whole Situation is that the new FTX team and The Bahamian government have come to an Agreement about the sharing of info and Assets those of you who watched our Video about the FTX hearing will note That the Bahamian authorities were Actively working with Sam to try and Move the FTX bankruptcy case to their Sandy Shores by some miracle they've Agreed to play ball with the new FTX Team potentially freeing up 3.5 billion Dollars in assets the downside to that Development is that the sooner assets Are recovered the sooner they will be Liquidated while FTX and Alameda Apparently didn't hold any actual BTC or Eth they held no shortage of altcoins on Their balance sheets this could do Serious damage to the lower end of the Crypto Market In addition to the damage that asset Liquidations from FTX and Alameda could Do there's a real risk that Sam could do Damage to some of the biggest players in The crypto industry this is because Alameda worked closely with the likes of Tether and binance in its early days to Put things into perspective Alameda Research received most of the usdt ever Issued by tether it's safe to assume That Sam has lots of information about

The stablecoin issuer and its Affiliates Binance had also acquired a stake in FTX In its early days if you watched our Video about the collapse of FTX and Alameda you might recall that former Binance US CEO Brian Brooks was Allegedly fired for sharing sensitive Information about binance with Sam and FTX this is alleged because Brian was Spotted speaking at many FTX events Shortly after being fired that's why the News that U.S authorities are expanding Their 2018 investigation into binance is Suspicious U.S authorities are now Demanding that hedge funds reveal Documentation about their dealings with The exchange if that wasn't suspicious Enough Sam met with SEC chairman Gary Gensler more than with any other Regulator as per the aforementioned FTX Hearing that's why it wasn't all that Surprising when the SEC announced that It was opposed to binance us acquiring Bankrupt crypto platform Voyager digital Make no mistake any major move against Binance or tether by U.S authorities Would be catastrophic for the crypto Industry binance is the largest Cryptocurrency exchange by trading Volume and usdt is the largest Stablecoin by market cap the speculation Alone could result in an instant market Crash even so if the U.S does something Like ban binance and tether it's likely

That other countries will follow suit For what it's worth it's extremely Unlikely that either of the two crypto Companies would succumb to a bank run Binance and tether have arguably proven That they are sufficiently capitalized Speaking of which huobi recently Experienced a bank run after the Exchange announced that it would be Laying off staff and rumors of Insolvency started to run rampant for Reference huobi was sold to a firm Affiliated with Tron founder Justin Sun Last Autumn and has basically been Restructuring ever since so far huobi Has managed to hold up and this appears To be because Justin has been Backstopping the exchange with liquidity As I mentioned in My Weekly Newsletter It's questionable whether Justin can Keep huobi afloat when he's also Supporting tron's ecosystem with Liquidity specifically us Double D in Any case it's clear that the crypto Exchange industry is consolidating and It looks like coinbase could be the Biggest beneficiary that's because the Exchange settled a pivotal case with U.S Regulators for 100 million dollars this Case also dates back to 2018 and Suggests binance could secure a similar Settlement Unfortunately the same can't be said for Digital currency group or dcg for those

Unfamiliar dcg is one of the largest Companies in crypto besides having a Stake in many major crypto companies and Projects dcg owns Genesis trading Grayscale coindesk and Foundry the Largest Bitcoin mining pool Genesis trading provides crypto services To institutional investors The Firm was Forced to shut its doors in mid-november After it revealed that it had almost 200 Million dollars of funds stuck on FTX Genesis has been trying to restructure Since that time and is now reportedly Considering filing for bankruptcy now This is a problem because Gemini earn Users have nearly one billion dollars of Funds Frozen with Genesis This prompted Gemini exchange co-founder Cameron Winklevoss to publish an open Letter to dcg CEO Barry silbert on Twitter essentially accusing him of Doing something like FTX and Alameda Barry claimed that the accusations were Incorrect but now dcg is being Investigated by both the U.S Department Of Justice and the SEC about its Relationship to Genesis both Regulators Are analyzing the transactions between Dcg and Genesis to see if there was any Commingling of funds and the like As for grayscale its crypto trusts have Continued to deviate from their fair Value relative to the assets which back Them the latest was grayscale's ethereum

Trust which fell almost 60 percent below The value of the eth backing it This deviation occurs because shares of The trust can't be easily issued or Redeemed as I mentioned in last week's Crypto review Valkyrie a grayscale Competitor somehow affiliated with Justin Sun offered to take over Greyscale's Bitcoin trust Valkyrie would Allow investors to access the BTC Backing the gbtc shares which could Result in lots of cell pressure If Grayscale agrees to the offer and last But not least there's Foundry which Seems to have been overlooked by almost Everyone As I mentioned a few moments ago Foundry Is the largest Bitcoin mining pool Providing almost 30 percent of bitcoin's Hash rate logically if anything happens To Foundry because of dcg it could Negatively affect btc's price The caveat here is that not all a Foundry's hash rate is coming from Miners affiliated with dcg in the event Of an issue with Foundry these other Miners would direct their hash rate to Other pools the risk at that point would Be the concentration of hash power in a Single pool which could threaten Decentralization all I can think of is The historical trend of bitcoin's hash Rate Falling by almost 50 percent from Its highs every time BTC sees its

Cyclical bottom for months I've Predicted that this fall in hash rate Would be due to the energy crisis well An issue with Foundry could be a Contributing factor or even the primary One more about my 2023 crypto Predictions using the link in the Description I digress Now before you worry too much about dcg Bear in mind that Barry is an expert in Company restructuring he will do Everything he can to keep as many dcg Companies afloat and he will probably Succeed the only Black Swan is whatever Cameron Winklevoss has up his sleeve Yesterday was his deadline for Barry to Provide a solution Now another crypto company that's been Struggling lately is silvergate for Those unfamiliar silvergate is a crypto Bank in California it's been facing Scrutiny due to its connections to FTX And Alameda This is a bit of an understatement given That the bank unknowingly transferred FTX user funds to Alameda funnily enough Legal trouble seems to be the least of Silvergate's worries however the bank Confirmed experiencing over 8 billion Dollars in customer withdrawals Following the collapse of FTX silvergate Had to liquidate assets to honor with The withdrawals wiping out all of the Bank's profits since 2013.

Ouch As a cherry on top silvergate reportedly Cut 40 of its Workforce the collective News caused silvergate's stock to Collapse by the same percentage this Prompted Arc invest to dump almost all Of its stake in the bank now this says a Lot given that Kathy Wood has been Buying the dip on almost everything else To add insult to injury Moody's which Rates the debt quality of companies Downgraded silvergate's debt to junk Meaning that it's risky to hold This doesn't necessarily mean all that Much however Moody's ratings of other Crypto companies and pro-crypto Countries have all been negative this Might have something to do with Moody's Allegiance to blackrock's ESG investment Ideology more about that in the Description Now if you're wondering why this is so Significant consider that silvergate Provided banking services to multiple Crypto companies including coinbase Circle Kraken and paxos silvergate even Provided loans to microstrategy and Bitcoin miner Marathon digital yet Another Catalyst for a hash rate Collapse the good news is that Silvergate should be fine the bad news Is that the bank is reportedly Experiencing pressure from investors to Drop its crypto Focus U.S Regulators

Also issued a warning to Banks about Crypto-related risks a few days back Let's hope it's just a warning and not a Prelude to a Crackdown regardless it's Evident that The Dominoes continue to Fall in the aftermath of FTX and Alameda's collapse dcg and silvergate Are just two of many that have been Wobbling over the last few weeks and It's more than likely that we'll see at Least a few more fall before the dust Finally settles this means that the Crypto Market will continue to Experience downward pressure for the Foreseeable future absent any Improvement in any macro factors like Interest rates or the energy crisis it's Quite possible that the crypto Market Will continue to move sideways or Trend Lower Until the end of the year however there Appears to be one sector that's going to Continue to attract Capital despite the Economic contraction and that's Artificial intelligence or AI In case you missed the memo open AI a Company co-founded by Elon Musk recently Released chat GPT and it has been taking The World by storm If you haven't tried chat GPT already I Strongly recommend doing so it's capable Of doing everything from writing essays Grading essays building websites and Even auditing crypto code the only thing

It can't do is tell good jokes which Tells me that it won't be challenging Humanity anytime soon Open AI is now reportedly in talks to Raise Capital that would give the Company a 29 billion dollar valuation This is a timely announcement given that Elon's net worth has been falling off a Cliff for months due to the collapse of Tesla stock I'll be doing a video about That later this week so stay tuned now Open ai's 29 billion valuation will be a Bargain in retrospect because it looks Like chat GPT will compete directly with Search engines case in point Google Reportedly issued a red alert in Response to the popularity of chat GPT Probably because it answers questions Better than Google does rather than run From Innovation Microsoft has opted for Integration the tech company will soon Be adding chat GPT to its search engine Bing this could finally challenge Google's Monopoly on internet browsing But I'd really prefer that Microsoft and Its founder not have any more influence Over us on on that note Elon musk's SpaceX has also reportedly raised 750 Million dollars giving the space Exploration company a valuation of a Whopping 137 billion this valuation will Likewise be a bargain in retrospect Because the company is bringing the cost Of space exploration down exponentially

SpaceX has also been rolling out Starlink which will make it possible to Have internet everywhere on the planet And eventually on other planets starlink Will also centralize the world's Internet which is extremely concerning Regardless of who's in charge luckily Elon's heart appears to be in the right Place again more about that later this Week and with all that said let's now Turn to Ben Cowan's analysis of what He's seeing in crypto this week Hey guy thanks again for having me as Always is a pleasure to be here today I Wanted to first start off by talking a Little bit about some on-chain data and That being the Huddle waves or huddle Waves of Bitcoin the reason why I like These is because they they reflect the Percentage of Supply that has been Unused in a transaction for a certain Period of time and one useful thing About huddle waves is that you can Actually sort of just look at long-term Holders and short-term holders so in This case we're defining long-term Holders to be anyone that have that's Held their Bitcoin for at least six Months and what you'll notice is that in A bear Market this sort of goes up quite Quickly and then it plateaus at some Point during the bear market and then it Essentially just goes sideways until the Bull market is in full swing and the

Reason why this is a useful indicator is Because once you see the long-term Holders start to really sell their Bitcoin where the percentage of supply AI being held by long-term holders Really starts to go down like this it's Often an indication of a major top Coming so you can see that happened over Here in in 2017 it also happened of Course in 2021 and another interesting Thing that we've talked about before is The idea that you know April was the Real top for Bitcoin in 2021 as you can See a lot of long-term holders Basically sold a lot of their Bitcoins Then not so much in in November and one Of the reasons for that is if they sold Over here then they just simply weren't Really long-term holders if they bought It back and then sold it again because It was only a few months later but the Other way I look at this as well is to Look at short-term holders and kind of See what that looks like and and sort of The reverse of long-term holders rather Than the percentage of Supply being held By long-term holders where it goes down At Mania phases for short-term holders It actually goes up so the idea of Course is when you see the percentage of Bitcoin Supply being held by short-term Holders when that really starts to go up It's often an indication of a major Peak Right now we're clearly nowhere near

That because while Bitcoin has gone up a Little bit recently it's back above Seventeen thousand dollars and of course You know everyone is is Um wanting to see how high it can go We're just simply nowhere near the Levels that would you know would really Entice a lot of long-term holders to Really offload any of their Bitcoin and That would go for even if they are Thinking even if they think it could Eventually go lower a lot of the Long-term speculators for Bitcoin just Simply aren't going to be as interested Until you actually see Mania return and That could really take another couple of Years years another thing I want to talk About is the year-to-date Roi for for Bitcoin I think we've talked about this A little bit before but I wanted to show A Nuance of it if you actually take a Look at 2014 and 2018 this is measured Year to date and you were to take the Average of those two years as a function Of time you would get something that Looks like that the reason why this is Interesting is because if you just show 2022 2022 basically mimicked the average Of 2014 and 2018 and by the end of the Year the drawdown from the beginning of The year was essentially the same as the Average from 2014 and 2018. now of Course this could be a coincidence and I I don't think you should take anything

Like this to the bank but it might be Worthwhile to at least speculate Dubiously of course as you know what Happens if you did the same thing with 2015 in 2019 we know that in 2015 Bitcoin basically marked its Market Cycle bottom within the first couple of Weeks or so and then it sort of scraped Along these lows for two-thirds of the Year before seeing a nice move in the Latter part of the Year whereas 20 2019 Saw the opposite we did briefly drop Below the yearly open but then we saw a Rally in the first half of the Year Followed by fading that rally for the Second half of the Year both of those Ended up the year with an Roi between One and two now we should say we we do Have some recessionary concerns this Time around that we're not really Existent back then Um so we do have to contend with Potentially an upcoming recession and Seeing how Bitcoin handles that we Simply do not know because Bitcoin is Not really experienced our recession Before but potentially we will find out But if you were to take the average of 2015 and 2019 you get something that Looks like this and what's interesting About this is if you use this to sort of Get an idea of the potential range the Bitcoin could be in for this year it Would say that the drawdown would be

Somewhere around 25 percent or so Um on the sort of the max move to the Upside would be about a 2X and if it is Going to see a 2X the most likely time For that to occur could actually be Somewhere in the middle of the Year okay My guess is it'll be somewhere in Between but if you actually take a sort Of like a a percent move to sort of Figure out what that range would be if You were to go over to say the the the Bitcoin chart and and just try to get an Idea of what would the price of Bitcoin Look like or what would the range look Like for Bitcoin if it were to stay Within that 2x move from the yearly open Down to a 25 drawdown from the yearly Open well the yearly open was you know Somewhere around 16 between 16 17K so a 25 drawdown would put you between 12 and 13 000 so that would be of course all The way down here but then if it were to Able to go up 2x uh which does seem like Quite an optimistic move considering the Macro Outlook you know you're talking All the way a fairly substantial move Well above thirty thousand dollars now I Do honestly think that thirty thousand Dollars is probably a bit too optimistic For this year especially considering That we're likely looking at a recession Sometime later this year but even if you Were to pull this down Um even to even to sort of this local

High back in August of 2022 perhaps this Is a useful range to consider for Bitcoin in 2023 and and Um you know just kind of go in with the Expectations that it's probably going to Be somewhere all over the place and in The same way in 2015 and 2019 we did Eventually go below the yearly open Um if we sort of look at at 2015 and 2019 both of them eventually did go Below the early open both of which were Accomplished within the first quarter of Of those years so far 2023 has not in Fact it's basically just gone up since The year started uh which is is somewhat Interesting right like you can kind of Just see it's been slowly trending Higher as the year has started so I Thought this was an interesting way to Really look at the uh sort of look at The the chart and the cyclical behavior Of Bitcoin sort of recognize that uh Just by taking looking at the context of History we know there's still potential Room for some downside but it doesn't Mean we're not going to see some Occasional rallies this year hopefully This is somewhat useful and thanks for Thanks again for having me as always Pleasure to be here and I look forward To seeing you next week bye Thanks Ben and I should note that Ben Rob from digital asset news and I now do A weekly live stream every Thursday it

Kicks off at 9 00 a.m eastern time That's 6 PM Dubai time and we take it in Turns to host it on our channels it's Rob's turn this week and I hope you can Join us then if you're not subscribed to Ben and Rob's channels then you're Missing out so don't delay and that is All for today's coin Bureau weekly Crypto review so if you enjoyed it you Know what to do hit that like button Subscribe button and Bell icon too if You're looking to maximize your gains During the bear Market the coin Bureau Deals page is where you should go you Can find the link to that resource and Many others in the description below Thank you all so much for watching and I Will see you in next week's episode Thank you [Music]

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