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Bitfinex Alpha | Silicon Valley Banks Crash, But Bitcoin Remains Long-Term Strong
This week we dive into the debacle of Silicon Valley Bank (SVB) and the decoupling of the US dollar stablecoin USDC. As we explain, the collapse of SVB is a classic case of poor risk management in a rising interest rate environment. The same can be said for the pressure seen on USDC. We haven't seen a complete collapse of USDC, but estimate its "fair" value to be less than $1.
But more fundamentally, with interest rates expected to continue rising, investors are turning to risk-free securities, ironically creating additional risk for the financial system. The concentration of capital in short-term securities rather than lending them out to the wider market increases the risk of reduced liquidity in the banking system. This becomes a source of stress for smaller banks with reduced access to funding sources, and the closure of SVB is one example of what could happen. As a result, bank stocks have begun to fall.
Still, economic indicators point to strength in the overall economy. Employment remains strong, but the pace of growth is starting to slow, suggesting the Fed's long-running efforts to curb inflation are beginning to pay off. However, in the absence of major changes, markets are now pricing in a 50 basis point rate hike at next week's FOMC meeting.
Meanwhile, cryptocurrency news remains full. , Silvergate Bank announced that it would wind up its operations and liquidate its assets in light of recent developments in the industry; Blockchain.com suspended its asset management subsidiary, Blockchain.com Asset Management (BCAM), citing the ongoing cryptocurrency winter; the New York Attorney General Sued cryptocurrency exchange KuCoin for allegedly operating in the state without proper registration. In more positive news, Voyager Digital has received court approval to sell its assets and transfer its clients to Binance.US in a deal worth $1.3 billion; FTX Trading and its affiliated debtors continue to seek recovery of funds for FTX users, suing Grayscale Investments lawsuit, and seek injunctive relief, to free up $9 billion or more in assets for shareholders of the Grayscale Bitcoin and Ethereum Trust.
https://blog.bitfinex.com/wp-content/uploads/2023/03/Bitfinex-Alpha-45.pdf
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Bitfinex Lists Wrapped Minima (WMINIMA)
Bitfinex announced that it will be one of the first cryptocurrency exchanges to list the Wrapped Minima (WMINIMA) token, an ERC-20 token issued by Minima.
Launched in 2018, Minima is a "hyper-lean" Layer 1 blockchain designed to run fully on mobile devices or the Internet of Things.
While most Layer 1s require specialized hardware or expertise to participate in chain verification and construction, Minima's lightweight design enables anyone to run a full blockchain node on a smartphone, simply by downloading the Minima app That's it.
Minima says it has hundreds of thousands of full nodes run by community members around the world contributing to the Minima network.
Hugo Feiler, Co-Founder and CEO of Minima, said: “We are delighted to be partnering with Bitfinex to bring Minima to market. As the only decentralized Layer 1 protocol, our goal has always been to get as many people involved as possible, And the strength of Bitfinex makes this possible."
Minima's WMINIMA pre-sale started on February 14, 2023, and 10 million tokens have been acquired so far, with a total supply of 125 million WMINIMA tokens.
Bitfinex will open WMINIMA deposits and withdrawals around 10:00 am UTC on March 16th. WMINIMA trading will open on March 21 at around 10:00 AM UTC for the US dollar (USD) and Tether token (USDt) trading pair.
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Bitfinex Derivatives launches UKOILF 0:USTF 0, XPDF 0:USTF 0, XPTF 0:USTF 0 perpetual contracts
The new contract product will be launched at 10:30 am UTC on March 15th, and will provide users with up to 100 times leverage and settle in USDt.
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Bitfinex has resumed Stargate Finance (STG) deposits and withdrawals
Bitfinex previously announced that it will support the contract conversion of Stargate Finance (STG), which is expected to take place on March 15, so the deposit and withdrawal of STG tokens will be suspended on March 13. However, following the initial announcement, the Stargate Foundation came up with a new proposal to eliminate reissuing any STG, which was voted unanimously. Therefore, the address of the STG contract on the Ethereum network remains unchanged.
