Daily futures trading volume on DeFi platforms reached $5 billion. This is the biggest amount since Terra collapsed in May of this year. Crypto-Upvotes expert review.

DeFi platforms increased revenues amid the outflow of funds from centralized exchanges that occurred due to the collapse of FTX. On-chain data showed an increase in activity on decentralized futures trading platforms and an increase in revenue for DeFi protocols, Cointelegraph reported.

However, not all decentralized applications (DApps) and protocols show such a trend. Because some of them have financial ties to FTX and Alameda. But data on DeFi projects’ revenues show that at least three protocols have exceeded $1 million in the last seven days, including Ethereum and OpenSea Marketplace.

Decentralized futures trading platforms have increased their trading volumes to record levels. Their daily turnover reached $5 billion, the highest since the Terra token crash in May of this year.

Despite the increase in trading volume, the total value of locked-in assets (TVL) at DeFi only increased at seven networks. Gains Network, a futures trading platform on the Polygon network, showed the biggest increase. Its TVL increased 17.3% over the week. And inter-network protocol Ren saw its TVL drop by 50%. This is because Ren worked closely with Alameda. And received quarterly funding and stored its funds directly on FTX.

Blockchain’s profit growth comes on top of an unchanged number of daily active users. Compared to previous weeks, the daily profits of leading blockchains have increased by more than 300%. This suggests that transactions among existing users are occurring more frequently.

Despite growth in profits, only Ethereum made profits among PoS-based blockchains. Other leading networks such as Polygon, BNB Smart Chain and Optimism did not profit. Holders of these tokens suffered inflationary losses.

Our experts told us what consequences may arise due to reduced liquidity on CEX exchanges. And how it will affect cryptocurrency prices

FTX exchange collapse caused a significant outflow of funds from centralized platforms. According to analytical platform CryptoQuant, after November 6, when it became known about problems FTX. CEX exchanges users withdrew 200 thousand BTC ($3.35 billion). As well as about 2 million Ethereum ($2.4 billion) and nearly $3 billion in Stablecoin.

For example, from Binance, users withdrew 81.7 thousand bitcoins ($1.35 billion) in just six days, or more than 15% of the total amount of bitcoins on this exchange. However, the head of Binance, Changpeng Zhao, called the surge in withdrawals small and explained that this is normal during a fall in cryptocurrency market.

Where do cryptocurrency owners transfer their funds?

Ordinary investors experience panic when there are some problems on centralized exchanges and market in general. And has a great desire to hide his funds to feel more relaxed. According to him, users primarily withdraw assets to decentralized wallets.

Means in these purses can not only store, but also exchange on the decentralized exchanges (DEX). After FTX started having problems, the number of such transactions increased dramatically.

In the last 24 hours alone, trading volume on DEX exchanges has increased by 38.66%, according to data from the CoinMarketCar platform.

Currently, the leading DEX platforms are Uniswap (v3), Curve (Ethereum), and PancakeSwap (v2). According to our analysts, daily trading volume on the first of them is more than $908 million, on the second and third – $170 million and $150 million, respectively.

In addition to decentralized storage, cryptocurrency owners began to take an active interest in hardware wallets. In the past week, revenue from the sales of Trezor devices grew by 300%. And competing company Ledger also recorded a significant surge in demand for its devices.

Reduced liquidity in CEX exchanges and the whole cryptocurrency market in general, what can it lead to?

Crypto market is now driven by investors’ fear of losing their investments. Reduced liquidity of crypto market and general pessimism mean a further decline in value of cryptocurrencies.

This process has a negative impact on the crypto market, it “slows” it down. This means it is not worth waiting for the recovery yet. Growth of crypto market can be forgotten for a while, now the main thing is not to fall even deeper.

However, our experts believe that cryptocurrencies are unlikely to hold out. The crypto market has not yet realized the scale of the disaster. Lack of liquidity leads to a decrease in trading volume. And hence, the profitability of trading platforms deteriorates greatly.

Large scale capital outflows can lead to a domino effect. One company is followed by collapse of other companies that are connected by common transactions. Some cryptoprojects have already reported financial difficulties caused by the collapse of FTX.

For example, crypto exchange AAX suspended withdrawals and said it lacked liquidity to continue operations. And cryptocurrency lender BlockFi is preparing a bankruptcy filing.

The next two weeks will show how serious the situation in cryptocurrency market is. According to our analyst, new bankruptcy filings will mean a massive collapse of the whole crypto industry.

Participants of trading on CEX exchanges may find it difficult to sell some coins quickly

This could happen because the outflow of assets from such exchanges reduces the volume of liquidity on them. Most likely, popular coins like Bitcoin, Ethereum and Stablecoin will not be affected. But some altcoins traded in tandem with Bitcoin or ether may suffer, according to our expert. Their liquidity will be low. This means traders will prefer not to deal with such liquidity. And prices for these altcoins will go down, largely due to the lack of active trading on exchanges.

“It’s a market, it’s all interconnected. The churn is mostly in Bitcoin and Stabelcoin, and all other pairs are losing liquidity,” explains our expert.

Traders can now pay attention to native coins DEX-exchanges. In addition, our expert noted that DEX crypto wallet tokens may also show growth in price.

In what cases is borrowed liquidity useful in DeFi. And also what dangers it brings. And how to borrow for a user who owns Bitcoins. Crypto-Upvotes expert review

Rapid falls and rises in quotations are characteristic of cryptocurrency sector. Part of the high volatility is due to the large share of borrowed capital involved in transactions. Nevertheless, convenient borrowed liquidity is also one of strong points and features of DeFi finance.

Virtually every blockchain ecosystem has its own decentralized finance loan protocol. And the largest blockchains even have several. Such protocols work roughly the same way: by freezing their coins in a smart contract, users can release liquidity. When they receive credit in desired cryptocurrency or stabelcoins, interest accrues on deposit and borrowing. And for using a platform, a bonus is given as tokens to vote on future protocol development. Stablecoin borrowing usually comes at an impressively low interest rate of 1% to 2% per year.

Annual interest rates for coin deposits to the protocol or borrowing are identical for most large and time-tested platforms. Therefore, users can choose a product based solely on the overall usability of a particular blockchain and its software solutions. Thus, if a user, for example, frequently makes coin exchanges on Solana. And on the same blockchain plays some kind of P2E game, then the loan protocol as well, if needed. It will be more convenient for him to choose on the same blockchain.

DeFi borrowing is very easy and fast

This is an extremely convenient and fast process, which speeds up the already rapid movement of liquidity within the cryptocurrency sector.

When the market falls, traders using DeFi loans are forced to close their positions quickly. Because there is a danger of liquidation of collateral, thereby further accelerating the fall. When the market rises, it is also easy for traders to continue to create new buying volume. As the value of collateral assets rises, it makes it possible to increase the size of loans.

Similarly, borrowing protocols have already been used many times in market manipulations to collapse the rate of coins.

Is borrowing a unique advantage of crypto-assets or a dangerous trap?

The practice of borrowing against property or other valuables has been known since ancient times and is still widely used today. However, cryptocurrencies stand out among all other types of assets because of the incredible ease of obtaining borrowed liquidity. And complete freedom of its movement.

Owners of classic stocks in brokerage accounts might object. Because most brokerage platforms also provide credit leverage. Which is based on the capital available to this user. This is true, but there are two key differences that drastically distinguish web2 and web3.

For web2, the annual interest rate on borrowed brokerage funds will be significantly higher. And you will only be able to use the funds conveniently within the original platform. In the case of DeFi, borrowed funds are instantly deposited into the user’s wallet. And immediately can be used and transferred to third-party wallets and services without any restrictions.

When is borrowed liquidity useful?

The most valuable use of DeFi borrowing will be for those wishing to preserve the growth potential of their assets. Since its launch, crypto sector has been in a correction most of the time. Conversely, only briefly at its price peaks. Such moments are easy to miss if you sell an asset when you need dollar liquidity. And hope to buy it again later. And a rapid rise can happen in a few weeks or even days.

Borrowed liquidity can also be particularly useful for emerging market users with small deposits. Who strive to increase their crypto-assets portfolio step by step, if possible. For such category of users, the use of DeFi-protocols allows not to part with crypto-assets during an unfavorable market phase.

Of course, such tools carry a lot of dangers for inexperienced users. It is critical to keep statistics of all borrowings made. As well as to monitor your open positions. Which is based on the ratio of borrowed liquidity to the provided collateral. The safest ratio is no more than 1/3.

We recommend using only the least volatile of the coins, such as ETH or BTC, as collateral. Volatility of BTC has been steadily declining this year, and amid geopolitical instability has fallen below many fiat currencies and even the S&P500 index.

I have Bitcoin, how do I get liquidity and what are these risks?

The crypto sector’s flagship blockchain does not support smart contracts by default. Therefore, the first action for BTC holders on its main network would be to transfer Bitcoin to another network. One that supports DeFi-interactions. It is possible to move to another network in a decentralized way, using one of the bridges. Or by using a centralized exchange. In this case, the user will need to bring your BTCs to exchange, sell them, withdraw amount in main asset of destination network (for example, for Matic it will be Matic). And then exchange the asset back to the “wrapped” BTC on the new blockchain using any of DEX. At the same time, leaving some asset to the network itself to pay subsequent commissions.

Despite the many pros and little studied new ways of using borrowed liquidity. Its use remains extremely dangerous and involves risks every step of the way. Smart contract hacks, credit protocol oracle failures. Which can lead to accidental liquidations. Or the excitement and gambling addiction from feeling the possibility of getting “free funds” . This is just a short list of dangers awaiting users.

Binance also plans to take a lead in setting global industry standards in wake of bankruptcy of FTX. Crypto-Upvotes expert review.

The Binance exchange will create a relief fund for crypto projects that are strong at the core but face a liquidity crisis, head Changpeng Zhao wrote on his Twitter page. According to him, this fund will be created to reduce negative impact of the FTX collapse on industry.

Head of Binance urged other participants of cryptoindustry to join this project as well. Tron blockchain founder Justin Sun was the first to respond, telling Binance that Tron, as well as Huobi Global and Poloniex exchanges, would support this project. A little later, developers of Ethereum Pow responded to this call.

In addition, Binance plans to take a lead in setting global standards in this industry. Zhao said this, speaking at a conference in Indonesia, according to Blomberg. Binance’s chief executive said there was a need for greater transparency in industry and close cooperation with regulators around the world.

Our Crypto-Upvotes experts told us what dynamics to expect from Bitcoin and digital currency market in short term

On November 14, Bitcoin exchange rate is about $16.5 thousand. During the last week, it fell by more than 20%. Our experts have analyzed this situation on crypto market and told what kind of dynamics to expect in next week.

Any negative news will bring down crypto market

The second week of November reversed all the achievements of buyers since mid-September. The collapse of the crypto market occurred due to the fiasco of negotiations between the head of Binance Changpeng Zhao and the head of FTX Sam Bankman-Fried.

Changpeng Zhao caused a liquidity crisis at the FTX exchange on Monday with his announcement that he would sell FTT tokens. As it turned out, most of the assets of FTX-affiliated company Alameda ($14.6 billion) were FTT tokens.

The Binance CEO wiped out a huge competitor in a matter of days. There is an opinion that he intentionally made public statements about selling FTT. The collapse in crypto market was partly localized by U.S. statistics on Thursday. Slowing inflation in the U.S. collapsed the dollar and boosted demand for risky assets. Traders sold off the U.S. currency on expectations of a slowdown in the U.S. Federal Reserve’s aggressive interest rate hike cycle. The BTC/USDt pair jumped 16% to $18,200.

Although Dollar Index continued to fall on Friday, cryptocurrency halted its rise. Sam Benkman-Fried undermined confidence in the crypto industry. Investors fear the collapse of other cryptocurrencies that have had liquidity problems because of FTX. We just don’t know about it yet. Alameda may be “dumping” its portfolio on the market to take advantage of a price rebound.

The inflation report temporarily diverted investors’ attention away from FTX problems. Although situation in market remains tense. After a collapse and rebound, Bitcoin/USDt is trading at $16,400 in the range of $15,600-$18,200. Shock has passed, but buyer activity is very low. Without new negative news, the continuation of the correction above $18.5k remains. In such conditions, it will be a feat for the buyers. According to our experts, the risks of Bitcoin decline to $12,000 are over 70%. The market is low-liquid, so any bad news on the collapse of some other exchange with its token will collapse crypto market within a day.

Prospects for Bitcoin to rise to $20,000 in coming week

Unfortunately, our experts do not see prerequisites for Bitcoin recovery even up to $20K. All that positive impulse, which the market got after the data about growth of consumption prices in the USA. But crisis around FTX, which is still in its acute phase and just started to develop, didn’t let BTC grow and it fell below $17K again.

This week market will wait for developments around FTX. And the details of the debts of Alameda and FTX. As well as possible solutions to the problem of repayment of debts to clients. Regulators will definitely take action, because many companies related to the American market, Galaxy Digital and Circle, have been affected.

It’s not yet completely clear how catastrophic the collapse of Alameda would be for those companies that Sam Bankman-Fried was actively rescuing in recent months. Rumors have surfaced about Alameda’s liabilities of up to $50 billion. This could be a real counterpart to a collapse of Lehman Brothers for crypto market.

Our forecast for BTC this week is that it might fall to $14-15K and it will hardly go lower because, judging by Order Book, there are huge buy orders. So even if Bitcoin falls below that level, it will be bought back immediately.

FTX founder Sam Bankman-Fried, stepped down as CEO. Then unknown hackers hacked FTX crypto exchange and managed to withdraw about $400 million.

Cryptocurrency exchange FTX reported on its Twitter page about the filing for bankruptcy. According to the report, FTX Trading Ltd., Alameda Research and 130 other affiliated companies began voluntary proceedings under Chapter 11 of the U.S. Bankruptcy Code. The procedure will allow the companies to get protection from creditors’ claims during business reorganization and debt restructuring.

At the same time, it was announced that Sam Bankman-Fried is stepping down as CEO of the platform. John Ray III has been appointed as the new CEO.

FTX needs up to $8 billion to save business and customer funds

FTX CEO Bankman-Fried told investors that his company may need up to $8 billion to save the business and customer funds. After Binance’s failure, he continued looking for a solution and sought help from the U.S. cryptocurrency exchange Kraken. As well as to the founder of the blockchain Tron and one of the leaders of the exchange Huobi Justin Sun, but did not achieve positive results.

At the same time, on November 10, it was revealed that Bankman-Fried secretly covered Alameda’s losses with funds from FTX clients. He used for this purpose at least $4 billion from the funds of exchange.

The Securities and Exchange Commission (SEC) launched an investigation into Sam Bankman-Fried. And the Bahamas Securities Commission froze the funds of FTX Digital Markets. This company is the operator of the FTX crypto exchange. Also, stabelcoin issuer Tether blocked 46 million USDT on its wallet.

All FTT token holders cannot expect to receive funds

Because of FTX problems, capitalization of the entire crypto market decreased by 24%. And the panic of investors will further enhance this effect – the flight from cryptocurrencies will continue – warned our expert.

For crypto market, bankruptcy of a major cryptocurrency exchange is a worsening of the investment climate. It is also another blow to authority of crypto-industry.

FTT holders will likely get a chance to lock in their losses at less catastrophic prices. This will happen after a short technical correction, which may occur in coming days. However, forecasts are negative for future of FTT holders and exchange clients as well. A miracle is unlikely to happen, all who could help this exchange refused.

Hackers hacked FTX and withdrew about $400 million

Unknown hackers hacked the crypto exchange FTX and managed to withdraw about $400 million. The hack was confirmed by the exchange’s official Telegram chat.

Chat administrator advised not to visit official FTX website and to delete exchanger’s application, as they may contain Trojans. At the moment, some of lost funds were recovered, and the stolen USDT of $30 million were promptly blocked by Tether issuer.

Binance CEO Changpeng Zhao explained he could not help FTX solve its problems. Crypto-Upvotes expert review

Crypto exchange Binance will not buy a trading platform FTX. This was announced by the head of the company Changpeng Zhao. He released an official statement explaining his decision.

As a result of the due diligence review, as well as recent news about mishandling of customer funds. And the alleged investigations by U.S. authorities, we have decided that we will not pursue a potential purchase of FTX.com.

“Initially, we had hoped that we could support FTX customers and provide liquidity. But the trading floor’s problems are beyond our control or ability to help,” Zhao wrote.

The cryptocurrency ecosystem has become more resilient over the years, he said. The head of Binance believes that in the future, over time, the free market will weed out those who use user funds in an untargeted way.

Following Zhao’s statement, cryptocurrency exchange FTX suspended withdrawals and urged users not to fund their accounts. At the same time, the head of another cryptocurrency project Tron, Justin Sun, wrote without elaboration. That he is developing a solution with FTX for holders of tokens TRX, BTT, JST, SUN and HT.

According to two people close to FTX, left without a buyer, Bankman-Fried is now looking for other sponsors. After Binance pulled out of the deal, he told FTX employees in Slack that he was “exploring all options.”

Binance confirmed its assets worth $70 billion

Binance published its cryptocurrency wallet addresses to confirm its capabilities. In particular, the company indicated that it holds 475 thousand BTC ($8.265 billion at current exchange rate), 4.8 million Ethereum ($5.76 billion) and 17.6 billion USDT.

Additionally, a trading platform owns 21.7 billion BUSD tokens, 601 million USDC and 58 million BNB ($16.82 billion). Total assets of Binance are estimated at $70.746 billion. In addition, crypto exchange pointed out that this is not complete information, all data will be presented in a report after audit.

Bitcoin fell below $18 ths, other cryptocurrencies were also affected. Our Crypto-Upvotes experts pointed out reasons for market decline. And also told about its short-term prospects

In the evening of November 8 Bitcoin rate momentarily fell to a two-year low of $ 17.1 ths. As of November 9, Bitcoin cryptocurrency is trading at $ 17.2 ths, it has fallen in price by 10% over the past 24 hours.

Bitcoin price decline accelerated as the rate of cryptocurrency exchange token FTX (FTT) plummeted almost six-fold, from $19 to $3. Altcoin now trades at $4+ and shows a daily decline of 74%.

The FTT token collapse and the overall situation around the FTX crypto exchange caused the entire crypto market to fall. First, the FTX exchange lost liquidity and its own token price collapsed. And then Binance announced about buying this exchange.

Possible FTX and Binance deal attracted attention from regulators. As well as other reasons that helped Bitcoin collapse

FTX and Binance deal attracted regulators, raising antitrust concerns. Regulators have the power to block major mergers. If they fear it will limit market choice. And there are strict laws against anticompetitive behavior.

Among other factors in a declining market is the tension between China and Taiwan. Because China is a pretty big player in the crypto market. Taiwan makes chips for mining. So this factor is important and pressures cryptocurrency prices down.

Another reason, our expert called the U.S. Congress elections. At the moment, Republicans are expected to win the elections to House of Representatives.

Cryptocurrency market sympathizes, first of all, with the Democratic Party. At least by the volume of investments in their election campaign. Foreign representatives of the cryptoindustry are betting exactly on Democrats.

In addition, all these problems of crypto-industry coincided with the growth of stock indices and weakening of USD.

Crypto market at an early stage of formation of the “bottom” ?

Buyers could not take advantage of the moment to pass the level of $22.5 ths. While USD is under pressure, and stock indices are set to rise. Buyers have a chance to return Bitcoin price to $20 ths. Now we need to wait for volatility to decrease. And exchanges FTX and Binance clarified the situation and their further actions, said our expert.

Our expert added that the current situation, which now presses the crypto market, could be a culmination of decline. Because the current situation in crypto industry may be the initial stage of forming a “bottom”. Because for many market participants such prices are of interest to increase buying volume or to enter this market.

Now there should be a set of factors that will be able to raise the price up. Therefore now the L-shaped recovery, rather than a sharp reversal of a bearish trend is more probable. If the situation with China and Taiwan does not worsen. It is unlikely that anything else can hurt the market more than it already has.

Binance CEO Changpeng Zhao said that FTX platform turned to his company for help because of a serious liquidity crisis

Cryptocurrency exchange Binance will buy platform FTX. Changpeng Zhao, the head of Binance, wrote about it on Twitter. He said that FTX today sought help from Binance due to a serious liquidity crisis. To protect users, the site signed a letter of intent to acquire FTX.com. As well as help cover the liquidity crisis, Zhao noted.

In addition, the head of Binance wrote that due diligence will be conducted in the coming days. According to Zhao, the situation is dynamic and Binance is evaluating it in real time. Binance has the right to withdraw from the deal at any time.

The FTX exchange ranks 5th in daily trading volume with $3.6 billion in the last 24 hours. 321 cryptocurrencies are represented on the platform and 511 pairs of coins are traded.

The apparent problems at the FTX exchange began over the weekend, after Binance’s CEO said. That his company intends to sell its remaining FTT tokens within a few months. We ran an article about this earlier. The exchange’s FTX native token (FTT) fell more than 73% daily.

FTX platform users have begun to report problems and delays with withdrawals from platform in Bitcoin and Stablecoin. Crypto-Upvotes excerpts explain what’s going on

Exchange responded with a message on Monday that slow Bitcoin withdrawals were caused by limited network traffic. And problems with stabelcoin transfers arose because banks were closed for the weekend. However, according to the FTX team, withdrawal rates are being restored.

Importantly, analysts at Nansen said on the morning of November 7. That over the past 24 hours FTX has received more than $257 million in USDC due to a noticeable outflow of deposits from FTX.

These funds were transferred from the firm Alameda Research. By that point, significant outflows from FTX’s Ethereum balance sheet had also been seen. It dropped from 493,000 ETH to 162,000 ETH. In total, more than $400 million in assets have been withdrawn from FTX in the last 24 hours.

Our experts explain what happened

Problems began against the backdrop of worsening situation in international cryptocurrency exchanges market. FTX head Sam Benkman-Fried said on October 27 that the exchange is working on the launch of its own Stablecoin. November 2, the media actively began to publish the results of the investigation, which conducted a team portal CoinDesk.

The investigation touched the exchange FTX and the trading firm Alameda Research. These two companies that are considered friendly for the reason that Sam Benkman-Fried owns 50% of FTX and 100% of Alameda Research. Journalists gained access to the second firm’s internal documents and found a large number of FTT tokens on Alameda’s balance sheet.

CoinDesk investigation and reaction from Binance CEO

According to the investigation, Alameda Research had $14.6 billion in assets as of June 30. Of that, $3.66 billion was “unlocked FTT tokens” and $2.15 billion was “FTT in collateral” or “collateralized tokens.” That’s the company’s largest asset and third-largest asset, respectively.

Experts have concluded that most of the net equity in Alameda Research’s business is its own centrally controlled token. Alameda Research said in response to the investigation that it didn’t reveal the full picture. And in fact, the company still has “more than $10 billion in assets.” That’s the amount CoinDesk didn’t mention.

However, the investigation still won – the head of Binance Changpeng Zhao said he would get rid of the FTT token. He recalled that as part of the FTX exit in 2021, Binance received approximately $2.1 billion in cash equivalent in BUSD and FTT tokens.

The head of Binance did not name the reason for the CoinDesk investigation. But he said he was making the decision because of “recent disclosures”. He promised that he would minimize the impact of the deal on the market and expressed his willingness to finalize it in a few months.

According to the head of Binance, the decision against a competitor in the form of FTX is not directed. Because it is important for Binance to maintain the sustainability of the emerging industry. In response, Alameda Research CEO Caroline Allison said she was ready to buy FTT from Binance at $22 per token.

Conclusions of our experts

Our experts suggest that the situation between Binance and FTX is related in part to Changpeng Zhao personal offense to Sam Benkman-Fried. Because Sam Benkman-Fried admitted recently that he is one of the main sponsors of Democratic forces in the U.S. elections.

The head of FTX, Sam Benkman-Fried, is accused of lobbying the U.S. authorities, something the head of Binance cannot do. His exchange often faces pressure and investigations from U.S. regulators. As well as accusations of misconduct for ignoring sanctions.

All this annoys Changpeng Zhao, so in retaliation, he wants to move significant liquidity in the market from one exchange to another. Specifically, from FTX to Binance. Selling FTT tokens after FTX exits may be the first step.