Crypto clings to rally

Bitcoin began Friday morning by getting a bead on $21K after a 1% overnight gain, even as risk assets quake and crypto lenders keep running into trouble.

Nevertheless, most big coins and a wide swath of smaller altcoins are in the green. Many gains are in the range of 1%-2%.

ApeCoin caught our attention as it climbed 6.8% in the past 24 hours to reach nearly $5 as of 6:45 a.m. (EST).

Solana is flat today. But the No. 11 coin (per CoinGecko) has recorded one of the sector’s largest seven-day surges. SOL is up 27% since last Friday.

In the week between Sunday, Jan. 8th and Sunday, Jan. 15th, BTC sprang from just below $17,000 to roughly $21,000, launching debate over what the next few months might have in store – is this the start of something bullish or a straight-up bushwhack?

Meanwhile, NEXO, which ranks as CoinGecko's 85th-largest digital asset, has spiked 17% after lending firm Nexo Capital agreed to pay $45 million to resolve U.S. regulatory charges related to an unregistered yield offering. Nexo's NEXO was lurching toward 84 cents at last glance. Back in May of 2021, NEXO hit a record high above $4.

In the beginning, a decade ago, there was an over-the-counter trading desk specializing in then-nascent Bitcoin – and it was good.

Then crypto really took off and that operation, called Genesis, grew into a behemoth, facilitating hundreds of billions in annual trades. And it started offering leverage to crypto hedge funds and other OTC trading firms. Last year came centralized money supply reduction measures, pinching liquidity and roiling risk assets; the turbulence in tandem with big, wrong-way bets led to the implosion of hedge fund Three Arrows Capital and, subsequently, in an even more impactful development, the implosion of giant exchange FTX.

And so, after being rocked by two of 2022's biggest industry failures, Digital Currency Group-owned Genesis Global Holdco LLC, parent company of two Genesis lending subsidiaries, late yesterday filed for Chapter 11 bankruptcy protection, according to CoinDesk, which is also owned by DCG. In its filing in a Manhattan court, Genesis lists more than 100,000 creditors. The firm owes some $3.5 billion to its top 50 creditors, including Gemini with which Genesis is grappling over access to funds frozen in a crypto lending program that Genesis facilitated for Gemini, the crypto exchange founded by Cameron and Tyler Winklevoss. The identical twins have publicly accused Genesis’s parent DCG of stall tactics and misleading statements in an effort to cordon funds in dispute.

All eyes are now on Genesis' sister company, Grayscale, which runs a huge BTC-pegged trust vehicle which is feared to be vulnerable to the financial strains on DCG.

After a brutal 2022, the crypto market has enjoyed some relief to start January. Bitcoin and Ethereum are rallying. Most of the credit goes to general bullish momentum in traditional markets, experts have said.

The recent price action in BTC is evidence that investors are back to accumulating, according to Forkast. Mining activity is increasing. The recent all-time high in hashrate underscores the fact that miners ran out of coins to sell.

BTC’s 23% rally in the one week ending Jan. 15th represents its best weekly performance since February of 2021. Weekly climbs of at least 20% have occurred nine times in the past five years. Such sprees usually signal the start of a bigger rally.

In those nine instances, according to Bloomberg analysts (who examined the ensuing three-month periods following the nine weekly spikes), BTC went on to increase by an average of 40%.