Cryptofinance: Circulation of Life on Wall Street

Hello and welcome to the FT. This week we look at the less inspiring record of the industry on Wall Street.

The judgment of the famous investor Benjamin Graham that the stock market was a short -term voting machine, but is a long -term scale, could have been delivered with a view to crypto.

This week, Circle, which operates the StableCoin USDC, gave up its range on the New York Stock Exchange when it was time for a $ 7-9 billion deal for fusion with Concord Acquisition, a purpose society, under the chair of the former Barclays boss Bob, Diamond.

The deal was announced in the summer of 2021, but suffered constant delays because the call and prices of crypto collapsed. On Monday it was confirmed that the deal had burst. No diamond hands here if you can excuse the multi -layered pun.

This fits an inglorious interaction between Krypto and Wall Street. For reasons that have never been completely explained, many investors who saw a world full of possibilities in Krypto that they had to tap stocks for cash and credibility.

with low interest rates, money from the barrel and inflation that was included in the history books were given the conditions for a bubble.

Some of them, such as Circle and Bullish Global, were drawn into the hectic rush for special acquisition vehicles. There were signs of mania everywhere. Many forecasts were ridiculous and should have raised a red flag, but stock market investors seemed to like to be seduced.

For example, Bakkt, the crypto retention service, predicted that he would not increase from any users to 18 million in two years. In the meantime it would have made $ 224 million sales. It made $ 13 million in the last quarter, a little less than in the previous quarter.

In the risk of risk of Coinbase, it was mentioned that "many of our employees and service providers are used to working in technology companies that generally do not comply with the same compliance habits and rules as financial services companies". However, it managed to debut with a market capitalization of $ 76 billion, which is more valuable than the parent company of the New York Stock Exchange, Intercontinental Exchange.

As we know, these dreams have long since faded. The Coinbase stocks fell by 83 percent this year. The declines would also have occurred without the wounds that are added by Crypto itself this year. The rapid raising of the interest rates through the Federal Reserve has made it a bad year for stock and bond stagnacles.

But crypto had his own special irrational exuberance. A large number of mining companies are noted to finance expansion plans based on the still increasing prices for Bitcoin and Ethereum. Now they put deep in the red numbers and sit on unused devices for fear of driving up huge energy costs. The scales buzz.

"I still recommend a few of you.. But for the rest of the industry, a lot of money was collected at the height of the market.

Circle still has plans for a list, although it has nothing firm in mind.

being USD coin is still the second largest stable coin, and these coins form the pillars of the market for digital assets. Little is taken care of being overtaken by its most important stable coin rival Tether.

"I do not know whether our business proposal or our goal is to be the biggest stablecoin in circulation. That would mean that our competition only consists of digital-asset companies," said Dante Disparte, Chief Strategy Officer and Head of Global Policy hours after the failed Spac deal was in the news.

A scale is designed so that it provides precise measurements. If crypto is to grow up and respectable, it will want to return to the stock market. It should better bring a more credible story than last time.

What's next for Circle and what could be brought to listed crypto companies in 2023? Mail me to scott.chipolina@ft.com .

Weekly highlights

• The heat turns (very, very slowly) around Sam Bankman-Fried in the USA. Next week, the Financial Service Committee of the House of Representatives holds a hearing of FTX and believes that its contribution could be useful. Sbf said he was not still finished But the chairman Maxine Waters felt that he had enough to say in his round of media interviews. She threatened to present him and SBF came over

• But a no-show: Taylor Swift! FTX wanted to get her on board with a sponsorship contract, without success. Read everything about it.

• My colleagues Mercedes Ruehl and Primrose Riordan looked closely at what happens to the Singapore crypto -dealer Amber Group. It was not an easy time with the sudden death of her 30-year-old co-founder. They also break down and have put expansion plans on hold. Read the story here.

• How FTX made his breakthrough in Hong Kong. With bonus SBF wigs!

• The market price of the GrayScale Bitcoin Trust (GBTC) approaches 50 percent to its net inventory value and investors are obtained. The HEDGEGENS Fir Tree is suing Grayscale Investments to obtain information about potential mismanagement and conflicts of interest in the trust.

• The implosion of the FTX marquee business has given the promise of the British government to regulate the crypto sector of the "wild wire". Take a look at the story of this week from my colleagues Daniel Thomas, Laura Noonan and George Parker through the Ministry of Finance, which completes his plans for a package with comprehensive cryptor rules.

Quote of the week: Gary Gensler increases the print

Gary Gensler, chairman of the Securities and Exchange Commission, talked hard about crypto for a long time and endeavored to more regulatory powers.

Now the midterms in Washington have been out of the way and ftx, his language is becoming tough.

he said Yahoo! Financial crypto needed to start play ball .

"The shop windows or the casinos have to comply with our proven laws. This means that customer funds are not used as many of them do. Your business model currently offers the public.. An interest return in crypto. And then possibly act against your customers.

Data Mining: The Liquidest crypto tokens

In cryptoland, market capitalization is often taken as an early indicator of the liquidity of a tokens. As the collapse of FTT token from FTX showed, this is a metric that can be very misleading.

"Wash trading or other types of market manipulation can make a token appear very liquid without having deep order books," remarked analyst Conor Ryder from Kaiko, the crypto research group.

He was looking for the "real" liquidest tokens in the industry. There is no surprise to see that Bitcoin and Ethereum are far ahead. But afterwards?

In terms of volume, it is the BNB by Binance Coinhund-Inspired Shiba Inu and Ripplei XRP. The picture changes for the depth of the market, which Kaiko describes as the number of purchase and sales orders on both sides of the middle course. The deeper a market, the easier it is to complete business.

Here scenes XRP and the joke Dogecoin. Binance's BNB occupies 10th place.