The Monthly Report
Bitcoin and Markets - Nov. 2022
So Far This Year
Jan-Nov Recap
Bitcoin opened 2022 at $46,311.74. Since then, it’s down 63%, closing November at $17,168.57. We’re in the middle of a bitcoin market cycle and this year is proof that the volatility swings will feel more pronounced.
The volatility is, however, in line with previous cycles. It feels worse due to the fact that the raw numbers in terms of price and market cap are all significantly higher than in the past.
The more time goes by, the more mainstream adoption occurs, the more expansive the “crypto” industry gets, the bigger the up and downswings will be.
November
November Recap
Bitcoin opened November at $20,494.90.
It closed the month at $17,168.57.
Key Nov. Events
FTX bankruptcy…
Need I mention anything else?
FTX is the elephant in the room. So, let’s talk about it. Bitcoin was steadying around the previous market cycle high of $20,000 prior to the FTX bankruptcy.
In the first week of November, FTX signaled a liquidity crisis and announced that competing crypto exchange Binance was exploring acquiring them.
If it had ended up being a simple liquidity issue where maybe FTX had just expanded further and faster than they should have and Binance did save them, we’d be having a different conversation. The potential “Binance Rescue” would’ve still consolidated and centralized power in the crypto industry into the hands of what is already the most powerful exchange in the world. But, the state of the industry would look different than it does today.
FTX failed.
Plain and simple.
As we sort through the carnage of FTX, it’s clear that the exchange was either an outright fraud or, in maybe a kinder take, Sam Bankman-Fried and his colleagues were wildly irresponsible and incompetent.
More on FTX:
I’m in the camp of FTX being a fraud and irresponsible. We already saw extreme due diligence earlier this year surrounding Terra and 3AC.
It’s important to underscore that FTX is an example of both criminal and irresponsible behavior from the traditional finance space.
When it comes down to it… the reason bitcoin exists is because of moments like this. SBF wasn’t some crypto wiz kid or brilliant trader.
Just as Do Kwon wasn’t some new genius when he built Terra or the guys at 3AC weren’t when they were gambling with other people’s money, SBF and FTX are yet another reminder that there will always be new versions of Bernie Madoff, even if they’re wrapped in different packaging like that of “crypto.”
Bitcoin, by its very nature, rejects trusted third parties and it’s a shame how influential centralized exchanges still are in the crypto space.
Centralization is the antithesis of bitcoin. The entire point is to remove traditional walled guards such as banks, lenders, regulators, and financial service providers and instead replace the system with an open-source decentralized network that empowers the individual to transact with and save money.
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