Crypto Markets Under Pressure Amid LIBRA Controversy and FTX Repayment Uncertainty

By Francisco Rodrigues (All times ET unless specified otherwise) Despite bitcoin's relatively stable performance, with a 0.7% decline over the past 24 hours to $87,140.36, the broader cryptocurrency market is experiencing bearish sentiment due to the fallout from the Libra token controversy. This has led to allegations of fraud and calls for the impeachment of Argentina's President Javier Milei, contributing to market uncertainty. The CoinDesk 20 Index has dropped approximately 2.3% in the last day, and the market's short- to medium-term direction may be influenced by the outcome of the U.S.-Russia negotiations in Riyadh, which aim to resolve the conflict in Ukraine and normalize relations between the two countries. An additional factor affecting the market is FTX Digital Markets, the Bahamian subsidiary of FTX, which begins repaying creditors today as part of a $16 billion repayment program. The initial phase will involve creditors with claims under $50,000, who will receive roughly 119% of their adjudicated claim value, including 9% annual interest accrued since November 2022, in the form of stablecoins. The impact of these repayments on the market is uncertain, with some analysts believing the amount is insufficient to significantly affect the market, while others speculate that FTX's historical interest in the Solana ecosystem could lead to some of these funds being directed towards it. Investors have been focusing on ether, with U.S.-listed spot ETFs offering exposure to the second-largest cryptocurrency by market capitalization experiencing a cumulative net inflow of $393 million this month, in contrast to a net outflow of $376 million for spot bitcoin ETFs. These inflows coincide with the upcoming Pectra upgrade on the Holesky testnet, which promises to enhance scalability and security and allow users to pay gas fees with tokens other than ether. Meanwhile, individual investors have turned bearish due to trade-war threats, reduced expectations of interest-rate cuts, and persistent inflationary surprises. A survey by the American Association of Individual Investors found that bearish sentiment among investors has reached a two-year high, as reported by the Wall Street Journal. However, this pessimism often serves as a contrarian indicator. Institutional investors' risk appetite has also decreased this month due to concerns over the potential effects of a trade war and the diminishing likelihood of a Fed rate cut. It is essential to remain vigilant. Key Events to Watch Upcoming Conferences: CoinDesk's Consensus will take place in Hong Kong on February 18-20 and in Toronto on May 14-16. Use the code DAYBOOK to receive a 15% discount on passes. Token Talk By Francisco Rodrigues Derivatives Positioning Market Trends: Bitcoin Statistics: Technical Analysis Crypto Equities ETF Flows The data below is current as of February 14. U.S. markets were closed on February 17. Spot BTC ETFs: Spot ETH ETFs Source: Farside Investors Overnight Flows Chart of the Day While You Were Sleeping In the Ether