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Author Topic: StormGain is a crypto trading platform for everyone.  (Read 117975 times)

Offline stormgain

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Re: StormGain is a crypto trading platform for everyone.
« Reply #540 on: May 09, 2024, 02:03:11 PM »
Bitcoin inflow to crypto exchanges hits 10-year low

While some analysts are predicting that Bitcoin will drop to $40,000 per coin and others are talking about the end of the bull cycle after hitting a new all-time high, network metrics are showing growing pressure from the demand side.

The current cycle is diverging from how things usually go since a new all-time-high price was set before the halving event. This was due to a significant influx of capital as a result of spot Bitcoin ETFs being allowed to go to market in the United States. In the past three weeks, inflows have given way to outflows, confirming the hypothesis about the end of the momentum and a potential reversal.



ETFs have been a strong mover in 2024, but they're far from the only one. Hodlers' sentiment and market participants' long-term assessments continue to play a leading role. One key metric is the inflow of Bitcoin onto crypto exchanges. The more people there are who want to exchange BTC for stable coins or fiat currency, the greater the influx is.

At the end of April, this figure fell below 10,000 BTC per day, hitting a 10-year low.



The high interest in savings is also indicated by the continued rapid influx of coins to savings addresses. These include addresses where two or more incoming transactions have been recorded and where there is no outflow of funds.



The overall picture is spoiled by a decrease in the share of coins that have remained idle for more than a year. That figure has dropped from 70.8% at the end of November to the current level of 65.8%. However, it must be kept in mind that nearly half of this trend was provided by the conversion of the Grayscale trust fund into a spot ETF. Some investors rushed to take profits, while others transferred their investments to similar ETFs with lower management fees.

Since it converted to a spot ETF, this fund has more than halved to 292,000 BTC.



If we talk about time intervals and expectations for setting new all-time highs, the post-halving price rise lasts from 350 to 500 days.



Moreover, in the first two months, there has always been a consolidation with minor price fluctuations.



Only about 20 days have passed since the halving event took place, so it's too early to summarise the new cycle's results, and investors should be patient.


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Re: StormGain is a crypto trading platform for everyone.
« Reply #540 on: May 09, 2024, 02:03:11 PM »

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Re: StormGain is a crypto trading platform for everyone.
« Reply #541 on: May 13, 2024, 10:30:51 AM »
Miners' record profits aren't a reason to buy their stocks

Q1 2024 was phenomenal in terms of many publicly traded miners' profitability. Riot Platforms put up a record-high net profit of $211.8 million, with 249% growth compared to the previous quarter.


Image source: tradingview.com

Marathon Digital, which rose to number one in terms of capacity among publicly traded miners last year, was officially included in the S&P SmallCap 600 index yesterday. This index tracks companies with a market capitalisation between $1 billion and $7 billion. Marathon became the first among its peers to receive this honour. Its capitalisation reached $5.5 billion, while net profit in Q1 2024 was around $200 million.


Image source: companiesmarketcap.com

At the same time, the pace of the arms race remains high, and competition is becoming tougher. Riot plans to nearly treble its computing power this year to 31.5 EH/s and to reach 100 EH/s by 2027.


Image source: riotplatforms.com

Firstly, miners' optimism is associated with Bitcoin's movement. Most of them are baking in an increase for BTC's value to $100,000-$150,000 in their forecast calculations for the next two years.


Image source: cryptocurrency exchange StormGain

Secondly, miners are pinning high hopes on the network, seeing the spread of by-products, such as ordinals and runes, whose hype in April led to an explosive increase in commission payments. On the day of halving, the income from filling blocks was over three times higher than the income from mining the currency, setting a new all-time record.


Image source: hashrateindex.com

After the halving, however, the price stalled, and interest in quasi-tokens faded. Network fees have returned to minimum levels, depriving miners of a promising source of income.


Image source: dune.com

Halving deprived miners of half of the income received for mining a block. Since the new reality was too harsh for some miners, some equipment was turned off. The network hashrate decreased from a record-high 691 EH/s to the current level of 582 EH/s.

The reduction in overall computing power will lead to the highest adjustment in difficulty since December 2022, with a decline of approximately 5.2% today.


Image source: btc.com

Q1 2024 was successful for miners primarily due to the emergence of spot ETFs, which caused Bitcoin's price to rise by 66% during the reporting period. However, Q2 may become a trying period due to the significant decline in revenues.

Mining companies are now reporting record profits, and their stocks are soaring on the news. Nevertheless, now is not the best time to invest in the crypto-mining industry.


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Re: StormGain is a crypto trading platform for everyone.
« Reply #542 on: May 14, 2024, 12:04:46 PM »
Factors for Ethereum's fall in May

For the third year in a row now, Ethereum has been outpaced by Bitcoin. This year alone, it's dropped by 13% compared to the original cryptocurrency. Two important factors point to this trend strengthening in May.


Image source: cryptocurrency exchange StormGain

Shattered hopes

The main catalyst for Bitcoin's rise this year has been the emergence of spot ETFs in the US, which have attracted $11.7 billion in investment in five months of operation.


Image source: farside.co.uk

Ethereum investors are counting on Ethereum experiencing a similar takeoff when the deadline for a decision to be taken on VanEck's application to launch a spot Ethereum ETF approaches on 23 May.


Image source: twitter.com/JSeyff

If the SEC wants to refuse it, it will have to find a compelling argument. Otherwise, the very first judicial objection will put the regulator in an awkward position, which is what happened with Grayscale’s application last year.

Since the staking programme is one of the stumbling blocks, Ark Invest and 21Shares recently introduced an amendment to exclude this option for ETF investors. Most experts, however, agree that this won't help.

The SEC was extremely negative towards Ethereum after the cryptocurrency transitioned to the Proof-of-Staking (PoS) algorithm, which SEC Chairman Gary Gensler notified the public about on the same day. In his opinion, the altcoin should be considered a security rather than a commodity like Bitcoin. This places a completely different level of demands on both ETF managers and investors.

One indirect sign that the SEC will reject the application in May is the lack of negotiations with the applicants. Before Bitcoin ETFs launched, the regulator's representatives met with potential managers several times a week for a month and a half.

If the SEC rejects the application, it would serve as grounds for a sell-off of Ethereum since some investors are disappointed in its prospects.

Inflation

Ethereum became deflationary after the London hard fork and the inclusion of a mechanism to burn part of the reward. In other words, the number of coins destroyed began to exceed the number of new ones issued. All other things equal, this would be a reason for the price of any asset to go up. The effect intensified after the transition to PoS.

However, the staking craze and low network activity led to the undesirable result of inflation taking place again. In the past month, this indicator has stood at 0.4%.


Image source: ultrasound.money

The number of active validators (who must be paid a reward) is now over 1 million, which is more than enough to ensure the network's security and functionality. A further influx will only cause congestion due to the growth of technical messages.


Image source: validatorqueue.com

The algorithm for reducing profitability based on the number of validators turned out not to be flexible enough, which is why developers are considering the option of forcing a reduction in the reward.

At the same time, network activity, which led to increased coin burning, fell due to a shift in interest to L2 and L3 networks. Simply put, users began to spend more time in Base or Arbitrum, from which transactions in Ethereum are received in a compressed form.


Image source: l2beat.com

Since the mentioned trends are gaining momentum, it's likely that inflation in Ethereum is here to stay for a long time. It will have a long-term negative effect on the cryptocurrency's value, and coupled with the SEC’s refusal, it will lead to Ethereum pulling further apart from Bitcoin.


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Re: StormGain is a crypto trading platform for everyone.
« Reply #543 on: May 15, 2024, 04:43:30 PM »
Record outflows from Hong Kong ETFs

The last major event to move Bitcoin's price was the launch of spot ETFs in Hong Kong in early May. The ETF market's small market capitalisation of $50 billion (versus $9 trillion in the US) has been offset by rumours of an imminent connection to the Stock Connect system, which will open up access to mainland Chinese investors.

The hopes were false, though. The Hong Kong stock exchange denied the rumours. On 13 May, Chinese Bitcoin ETFs saw their largest outflow, $32.7 million.



US ETFs don't look much better. After a month-long sell-off, they returned to regular inflows, closing the last week at $286 million.



Despite that, Bitcoin is performing well enough and hasn't fallen into a full-blown correction. The maximum drawdown from the record high is only 23%. In previous bull cycles, it ranged from 36% to 71%.



One key factor for the price's stabilisation is institutionalisation. Bitcoin sees less price turbulence because it's recognised and incorporated into the traditional financial system via the same ETFs. In the past, large US investors overlooked the asset because of the risk that companies would suddenly ban cryptocurrency transactions like what happened in China. However, these companies are now increasingly looking to invest in it.

Even JPMorgan, whose head called Bitcoin a fraud and a worthless asset, declared to the SEC on 10 May that it purchased shares in spot Bitcoin funds worth a total of $760,000. Compared to the bank's total amount of assets under management, the purchase size is modest, but the start of cryptocurrency investments has now taken place.

With inflows into spot ETFs slowing considerably and exchange-traded activity already down 43.8% in April (compared to March), macroeconomic factors are coming to the fore.



The focus this week will be on data from the US. The Fed previously planned to cut its key rate in June. However, the jump in inflation to 3.5% in March forced the regulator to reconsider when it would begin cutting rates.



The data for April may have a surprise in store. If inflation declines significantly, the chances of a monetary policy reversal in the summer will increase significantly. This, in turn, will be grounds for risky assets, including Bitcoin, to strengthen. The indicator will be released on 15 May.


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Re: StormGain is a crypto trading platform for everyone.
« Reply #544 on: May 17, 2024, 01:33:56 PM »
FTX clients unhappy with upcoming 118% bankruptcy payouts

In November 2022, FTX, the third-largest crypto exchange, collapsed as a result of diverting customers' funds to its affiliate company, Alameda Research. Funds from the company it controlled were spent on political donations, purchasing luxury real estate and unwise investments. Each year, the hole got bigger and bigger, reaching $10 billion in 2022.



The debt was masked by issuing more of the FTT token, which was listed on Alameda's balance sheet as an asset and as collateral for loans issued to third parties. On 2 November, Coindesk published an article that triggered a massive outflow of client funds and a liquidity crisis at Sam Bankman-Fried's empire.

On 11 November, FTX declared bankruptcy, leaving over 2 million customers high and dry. The liquidation committee's first valuation showed that the total cryptocurrency held in all controlled accounts was worth only $3.3 billion, while the company had liabilities of $8 billion to customers.



The first compensation announcement presupposed a payout to customers of just 10 cents on the dollar. However, as the values of assets have risen and the commission has succeeded in finding all the cryptocurrency wallets controlled by the company, the expected payout for most customers has risen to 118 cents on the dollar.



It's very rare for global jurisprudence to see clients recover more money than they had in their accounts as a result of a private company's bankruptcy. However, not all customers were happy with this result.

The reason for this is that payments are scheduled in US dollars, according to how things were on the day of the bankruptcy. Meanwhile, the value of Solana, which formed the backbone of assets held by FTX, has risen nine-fold to $162 during this period. Bitcoin's price, meanwhile, has quadrupled to $66,000.



Bloomberg reports that more than 80 petitions have been filed with the bankruptcy court by dissenting customers who want their cryptocurrency funds back. FTX's CEO, John Ray, responded to this by saying that he had the best interests of the majority of customers in mind. The cryptocurrency assets, on the other hand, are simply not enough to meet all requests in full.

In June, customers will be able to vote on the proposed reimbursement plan. If the majority favours a cryptocurrency payout, the judge may reject the bankruptcy commission's proposal and send it back for further review. If the majority of clients are satisfied with a payout in US dollars, they will receive the funds throughout 2024.


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Re: StormGain is a crypto trading platform for everyone.
« Reply #545 on: May 30, 2024, 03:06:01 PM »
Why Bitcoin's price will rise $150,000

We're witnessing a revolution in the financial industry, with professional market participants and regulators recognising decentralised cryptocurrency as an investment asset and a former US president including cryptocurrencies in his election platform.

One clear indication of the recognition is the rise in Bitcoin ownership by licensed exchange-traded funds. Today, their combined holdings exceed 1 million coins or $68 billion. That's 5% of the total circulating supply of 19.7 million BTC.


Image source: StormGain infographic

Canada, Germany, Switzerland, Brazil, China (Hong Kong), Australia and others are among the countries that have launched crypto funds. The US leads the way with an 85% share, where spot ETFs that have emerged this year have attracted $13.7 billion in investments. One-third of this amount was provided by large institutional investors, whose assets under management start from $100 million.


Image source: farside.co.uk

In the past three weeks, US funds have seen a return to pure accumulation, gathering $2.1 billion in investments.


Image source: StormGain infographic

Notably, BlackRock's fund will soon overtake Grayscale, which has been in operation since 2013 and converted from a trust to a spot fund. Grayscale is experiencing outflows for a number of reasons, totalling $17.7 billion this year. Its velocity is weakening, which will further favour the overall ETF statistics.


Image source: x.com/HODL15Capital

Analysts at Bernstein suggest that cryptocurrency funds will see an inflow of $100 billion over the next two years. Significant demand pressure will see Bitcoin's price rise to $150,000 as soon as next year.


Image source: cryptocurrency exchange StormGain

The growing acceptance of Bitcoin is evident in the interest from professional market participants and the changing political agenda. In May, the US Congress approved the FIT21 digital asset bill, which was opposed by SEC Chairman Gary Gensler and President Joe Biden. But it'll be hard for the president to veto since his election opponent Trump has made supporting crypto innovation one of the planks of his campaign platform.

Recent polls in the US have shown that 48% of cryptocurrency-owning voters would support Trump, while only 39% would vote for Biden. Although Trump had a negative view of cryptocurrencies in the previous election race, they've taken a key spot among his positions, posting in recent days:

"Crooked Joe Biden, on the other hand, the worst president in the history of our country, wants IT to die a slow and painful death. That will never happen with me!"


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Re: StormGain is a crypto trading platform for everyone.
« Reply #546 on: May 31, 2024, 12:19:00 PM »
Ethereum is losing influence in the stablecoin market

Many have high hopes for Ethereum in response to the launch of spot ETFs, but the list of the network's internal problems continues to grow. In addition to increased centralisation, excessive MEV influence, high fees and excessive validators, the network is now seeing lower practical use.

One of the key uses of smart contract-enabled blockchains is for stablecoin transactions. At first glance, Ethereum is doing well since the network's stablecoin capitalisation increased by 17.8% to $80 billion in 2024.


Image source: defillama.com

However, at the same time, the segment's total capitalisation jumped 23.1%, while Ethereum's price jumped 65.4%. In fact, the network is losing the weight of its share, especially in terms of ETH.


Image source: cryptocurrency exchange StormGain

Two trends led to this. In terms of Tether (USDT), interest shifted to Tron. For Circle (USDC), interest shifted to Solana. These networks beat Ethereum in terms of fees and transaction speed but are inferior in security and uptime. The latter applies more to Solana.


Image source: defillama.com

However, over time, more and more projects are turning a blind eye to technical risks in favour of low fees. The other day, PayPal announced the upcoming minting of the PYUSD stablecoin on Solana. The same coin debuted a year ago on Ethereum. This is another breakthrough for PayPal after it launched an interbank exchange pilot project with Visa.


Image source: defillama.com

Ethereum's decreasing relevance as a stablecoin operator led to a decline in its share of the relevant segment, going from 62% to 50% in a year and a half.


Image source: defillama.com

Competition is growing, and Ethereum's developers aren't managing to resolve old problems before new ones pile up. If the trends continue, it will be increasingly difficult for the altcoin to maintain its leadership and move the way investors would like to see it move every year.

The only caveat to the conclusion is the development of Layer-2 (L2) networks, which conduct fast and cheap transactions, with Ethereum (L1) used as a security guarantor.


Image source: defillama.com

For example, Base's share of USDC's capitalisation has risen from 0.6% to 9.5% over the past five months, pushing Solana into third place. However, in this case, Ethereum's relevance becomes dependent on the success and loyalty of third-party projects.


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Re: StormGain is a crypto trading platform for everyone.
« Reply #546 on: May 31, 2024, 12:19:00 PM »


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Re: StormGain is a crypto trading platform for everyone.
« Reply #547 on: June 04, 2024, 02:13:06 PM »
The risks of staking the fastest-growing stablecoin in history

The market capitalisation of the new algorithmic stablecoin USDe has grown from $5 million to $3 billion — a 600-fold increase — in six months. In terms of pace, it overtook the Hong Kong FDUSD, which initially secured zero commissions in Binance, and the infamous UST from the Terra project (LUNA). Some users are sounding the alarm just because of the similarities between USDe and UST.


Image source: defillama.com

Apart from the lack of provision for reserves (excluding the nominal compensation fund), the similarity of the projects lies in the high staking fees. For UST, the fee is 20% annualised. For USDe, that number is over 35% on some platforms.


Image source: app.ethena.fi

Here's how it works. A user deposits Ethereum, Bitcoin, USDT or LST tokens (e.g. LIDO) and receives USDe in return. The user can then lock this stablecoin in a smart contract to get the above-mentioned yield.


Image source: app.ethena.fi

Rewards are generated by staking coins that were originally deposited and from arbitrage transactions conducted by the platform when 1 ETH is bought on the spot market and 1 ETH is opened for sale on the futures market. The net position turns out to be neutral, but when buyers prevail (in a bullish phase), a premium is paid to sellers, which is called the funding rate.

Accordingly, the more intensely the price and optimism rise, the higher the preponderance of buyers is and the bigger the reward is.


Image source: coinglass.com

The market is currently booming, and USDe is attracting users with high yields. So, why is the project being compared to the collapsed UST, which had a capitalisation of $20 billion at its peak?


Image source: cryptocurrency exchange StormGain

The reason is the algorithmic nature and lack of rigid scripts for all cases. USDe's sustainability is based on the appeal of staking due to high yields. However, it will only remain stable when prices are rising. Once we move into a bearish phase, short arbitrage positions will become unprofitable. If users start getting rid of USDe en masse, the balancing mechanism could fail, the stablecoin exchange rate would sag, and panic would end its history.


Image source: coinmarketcap.com

However, Ethena founder Guy Young believes this is nothing to worry about.

"If necessary, we will change our strategy to generate income in a bear market".

The second Achilles' heel is the high dependence on platforms where collateral assets are held. On 15 April, Ethena Labs reported $1.3 billion sitting in Copper, $1.1 billion in Ceffu and $0.5 billion in Cobo. A successful hacker attack on any of them would risk USDe's collapse for holders.

These are the two most negative scenarios that may not materialise at all. At the same time, as its capitalisation increases, yields will still decline, even under favourable conditions, which will naturally reduce the project's appeal and limit its growth. For example, the yield from Ethereum staking falls due to the increase of locked ETH. The yield from arbitrage falls when an equilibrium between buyers and sellers is achieved.


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Re: StormGain is a crypto trading platform for everyone.
« Reply #548 on: June 06, 2024, 11:18:03 AM »
Bitcoin is leaking from cryptocurrency exchanges

After setting a new price high in mid-March, Bitcoin went into a prolonged consolidation. During this time, cryptocurrency exchanges' combined BTC balance decreased by 5% to 2.85 million. The decrease is primarily due to withdrawals to cold wallets, which demonstrates traders' anticipation of Bitcoin's price increasing further.


Image source: cryptoquant.com

Young whales showed significant accumulation, adding $1 billion to their wallets every day. The head of the analytics firm CryptoQuant, Ki Young Ju, notes the high similarity in their behaviour to 2020.


Image source: x.com/ki_young_ju

Back then, the consolidation phase around the price point of $10,000 lasted for about half a year. After that, the price increased 2.5-fold in three months.


Image source: cryptocurrency exchange StormGain

Large institutional investors from the US are some of the prominent young whales. 13F reporting showed that one-third of all capital inflows into spot ETFs in Q1 2024, which amounted to $4 billion, came from companies with more than $100 million in assets under management (AUM).

US ETFs continue to grow and now have a value of $14.1 billion.


Image source: StormGain infographic

But the big players are just starting to whet their appetites. For example, Marquette University finance professor David Krause believes the State of Wisconsin Investment Board (with an AUM of $156 billion) is currently pricing in public opinion after buying $150 million in shares of BlackRock and Fidelity funds in Q1. If the response is favourable, Krause is confident that investments in cryptocurrency will increase and that the other pension funds will follow Wisconsin's example.

Institutional capital's interest in cryptocurrency and the renewed outflow of coins to cold wallets are creating favourable territory for Bitcoin's continued growth. The closest event that has the potential to be a catalyst is Franklin Templeton's spot ETH ETF application. The final decision on whether to approve it is due on 11 June 2024.


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Re: StormGain is a crypto trading platform for everyone.
« Reply #549 on: June 10, 2024, 06:24:20 PM »
FDIC: US banks' unrealised losses rose to $517 billion

The US banking sector remains depressed after monetary tightening in 2022. This is clearly evident in the significant increase in unrealised losses, which stood at $517 billion in Q1 2024.


Image source: fdic.gov

Due to tighter credit conditions and lower yields on a number of assets, the net interest margin fell to 3.17%, down from a pre-crisis average of 3.25%.


Image source: fdic.gov

A prime example of the impact of a high key rate was the bankruptcy of Silicon Valley Bank (SVB) last year. Treasury bonds on the balance sheet (about $100 billion at the time) lost a lot of value after the regulator's action. The need to sell to settle deposits resulted in significant losses, news of which increased panic and deposit outflows.

SVB failed and filed for bankruptcy. In response, the Fed announced special terms for banks, allowing them to sell bonds to the regulator at the purchase price rather than the market price. The regulator has also launched an emergency credit line for the sector. Total loans disbursed for the year exceeded $150 billion. The programme was wound down on 11 March.


Image source: bloomberg.com

When three banks in a row failed last spring, and First Republic had to be rescued by government intervention and a consortium of banks (it still went bust a year later), Bitcoin experienced a significant influx of investment. Its independence from financial institutions and decentralisation were once again in demand.


Image source: StormGain Cryptocurrency Exchange

The situation may repeat itself in the near future as the banking sector continues to struggle. According to the Federal Deposit Insurance Corporation (FDIC), the number of troubled banks rose from 52 to 63 in the last quarter and their total assets increased by $15.8 billion to $82.1 billion.

Lending, which is one of the main sources of income, is showing a slowdown. Meanwhile, the real estate sector, which is the leading sector for the banking industry, is signalling an impending crisis. In particular, a significant decline in the number of new housing starts compared to completions is being seen. The last time this happened was before a large-scale recession.


Image source: zerohedge.com

All of this will lead to a drop in banks' operating profit in the near future. With a high key interest rate, new shocks and a string of bankruptcies are likely to occur.


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