The liquidity situation has worsened considerably, said Johnny Teng, Senior Researcher at LBank Labs. While the S&P 500 continues to achieve new monthly highs, the crypto market remains troublesome. Despite regulatory challenges and liquidity issues, the crypto market, especially Bitcoin (BTC) and Ether (ETH), remains resilient.
The resilience of Bitcoin is due to the buying pressure that is keeping it from dipping more. U.S. regulators are on a warpath, going after major crypto exchanges and declaring a handful of major altcoins as securities. BitBull Capital’s Joe DiPasquale pointed to Bitcoin’s support at $25K as still holding up reasonably well, but the upcoming release of new Federal Open Market Committee (FOMC) minutes could change that.
The complexity of crypto exchanges’ corporate structures is also a factor. Sam Bankman-Fried’s former empire, FTX, had 300 employees but controlled 130 companies when it filed for bankruptcy in November 2022. SEC Chair Gary Gensler told Bloomberg in an interview that there are parallels between FTX and Binance. Both are being accused of comingling, for starters. Coinbase has 15 subsidiaries, according to a Feb. 2023 filing with the SEC, showing that it is possible to be a large crypto exchange and have a corporate structure that would fit on an A4 piece of paper.