Bitcoin (BTC) starts a new week still replaying November 2020 after its lowest weekly close in two years.
The largest cryptocurrency, just like the rest of the crypto industry, remains highly susceptible to downside risk as it continues to deal with the fallout from the implosion of exchange FTX.
Contagion is the world on everyone’s lips as November grinds on — just like the Terra LUNA collapse earlier this year, fears are that new victims of FTX’s giant liquidity vortex will continue to surface.
The stakes are decidedly high — the initial shock may be over, but the consequences are only just beginning to surface.
These include issues beyond just financial losses, as lawmakers attempt to grapple with FTX and place renewed emphasis on urgent Bitcoin and crypto regulation.
With that, it is no wonder that price action across cryptoassets is weak at best — and there are plenty of voices arguing that the worst is still to come.
Cointelegraph takes a look at some of the major factors to bear mind this week when it comes to BTC price performance.
FTX contagion turns to GBTC
As clouds swirl over the fate of FTX’s executives and ex-CEO, Sam Bankman-Fried, commentators and crypto investors alike are wondering where contagion will strike next.
Sentiment suggests that everyone is expecting the worst. A case in point comes in the form of Genesis Trading, part of the Digital Currency Group (DCG) conglomerate, which last week halted payouts at its crypto lending arm.
This not only set off a string of rumors over Genesis’ solvency, but also over DCG’s future. Reassurances from executives have failed to stem the narrative, which has also focused on the largest institutional Bitcoin investment vehicle, the Grayscale Bitcoin Trust (GBTC).
Thus, over the weekend, a growing debate over GBTC mushroomed into a full blown panic over financial buoyancy.
As Cointelegraph reported, this was made worse by Grayscale refusing to provide address details to prove its BTC reserves, allegedly for reasons related to security.
Suspicions over a $1 billion owed by DCG to Genesis add to the melting pot of misgivings.
At the same time, some well-known investors have added to their GBTC positions in recent weeks.
“Is the next black swan GBTC already around the corner?” trading resource Stockmoney Lizards thus queried on Twitter.
“GBTC holds ~648k BTC.Grayscale discount off to a record 43% as FTX spreads great uncertainty.Lots of hysteria in the market and everyone is looking for the…