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Why is the crypto market up today?

The crypto market is up today as Bitcoin and altcoins react to $300 billion liquidity from the Federal Reserve — move being labeled new quantitative…



The crypto market is up today as Bitcoin and altcoins react to $300 billion liquidity from the Federal Reserve — move being labeled new quantitative easing (QE).

The crypto market is up today as the impact of the ongoing United States banking crisis plays out — the Federal Reserve has injected $300 billion into the economy. 

Data from Cointelegraph Markets Pro and TradingView shows Bitcoin (BTC) up 7%, Ether (ETH) 4.5% and Binance Coin (BNB) 5.7% in 24 hours.

A broad rally in crypto markets means Bitcoin is back challenging the week's highs, which also marked its best performance since June 2022. Can bulls sustain the momentum?

Nerves are palpable everywhere as the latest economic data shows the extent to which the Fed has gone to contain a banking crisis which some argue is unlike any other.

Amid warnings that more banks could fail in the coming weeks and contagion spreading to Europe, it appears that crypto is one of the few safe havens from the kind of turmoil reminiscent of the Global Financial Crisis (GFC) of 2008.

Cointelegraph takes a look at the major reasons why the crypto market is up today.

Fed liquidity pump boosts crypto amid claims QE is back

"It's the liquidity, stupid!" popular markets commentator Holger Zschaepitz summarizes on the day as data showed the true extent of the Fed's latest cash injections.

The combined implosion of Silicon Valley Bank (SVB) and Signature Bank has resulted in the Fed providing an emergency $297 billion — growing its balance sheet for the first time since it began to raise interest rates. 

Its latest discount window borrowing has further seen banks take $150 billion, which makes for a new record even topping the 2008 GFC.

Unsurprisingly, reactions are heralding the end of quantitative tightening (QT) — the process of removing liquidity from the economy — and a return to its opposite, quantitative easing (QE).

Such a policy was enacted previously by the Fed after the GFC, as well as in March 2020 during the COVID-19 cross-market crash. The years that followed saw the U.S. M2 money supply grow 46% before QT began — and Bitcoin went from under $4,000 to nearly $70,000.

"Last week the Fed's balance sheet swelled by $300 billion, wiping out 4 months of QT in one week," gold bug Peter Schiff wrote in part of a Twitter reaction.

"By the end of the month the balance sheet could reach a new high. Rate hikes don't matter. Inflation is headed much higher, thanks to bank bailouts."

As Cointelegraph reported, crypto market performance was already sensitive to central bank liquidity trends — and not just in the U.S.

The more liquidity pumped into the global economy by central banks, the better, former BitMEX CEO Arthur Hayes claimed in February, with both the People's Bank of China (PBoC) and Bank of Japan (BoJ) subsequently copying the trend this month.

In his latest blog post released on March 16, meanwhile, Hayes draws a striking contrast between March 2020 and this month's Fed fund to rescue banks from the edge, the Bank Term Funding Program (BTFP).

"The Fed printed $4.189 trillion in response COVID. Right off the bat, the Fed implicitly printed $4.4 trillion with the implementation of BTFP," he noted.

"During the COVID money printing episode, Bitcoin rallied from $3k to $69k. What will it do this time?"
Fed balance sheet chart. Source: Holger Zschaepitz/ Twitter

Bitcoin leads crypto to multi-month high retest

Bitcoin price volatility may still be rampant, but the message from crypto is increasingly clear — bulls are determined to ditch the past eighteen months' downtrend.

Related: Bitcoin dominance nears 50% as research hails ‘bullish’ narrative flip

BTC/USD is trading at over $26,000 at the time of writing, eyeing up a retest of its nine-month highs from earlier in the week.

The combined cryptocurrency market cap is attempting to do the same, up over 3% on the day to $1.098 trillion.

Total crypto market cap 1-week candle chart. Source: TradingView

Commenting on the latest events, popular trader Crypto Tony remained modest in his outlook amid a still-reactionary Bitcoin trading profile.

"Good to see some strength on Bitcoin this morning," he acknowledged.

"Want to see this momentum sustain today to take out the highs. Holding $25,200 range high is now the bulls mission today."
BTC/USD annotated chart. Source: Crypto Tony/ Twitter

Trader and analyst Josh Rager meanwhile eyed what could be a significant resistance/support flip for Bitcoin on weekly timeframes — fueling potential continuation. This comes in the form of the 200-week exponential moving average (EMA).

"Even with the lower time frames chopping around, the daily for BTC looks good and showing strength," he tweeted on March 15.

"And if you zoom out, the weekly could close above the 200 EMA for the first time since June 2022."
BTC/USD 1-week candle chart (Bitstamp) with 200EMA. Source: TradingView

At the same time, fellow trader and analyst Rekt Capital was hoping that Bitcoin might break out of a "macro downtrend" pattern in place since the $69,000 all-time high.  

"A breakout past the BTC Macro Downtrend would confirm a new Bull Market and in turn confirm that November 2022 was the bottom," he added.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.

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VanEck to donate 10% of profits from Ether ETF to core developers

The Protocol Guild, a team of over 150 Ethereum core developers, will be the beneficiary. VanEck argues that asset managers should give back some Ether…



The Protocol Guild, a team of over 150 Ethereum core developers, will be the beneficiary. VanEck argues that asset managers should give back some Ether ETF proceeds to the community.

Global asset manager VanEck will donate 10% of all profits from its upcoming Ether futures exchange-traded fund (ETF) to Ethereum core developers for 10 years, the company announced on X (formerly Twitter) on Sept. 29. 

The beneficiary will be the Protocol Guild, a group of over 150 developers maintaining Ethereum’s core technology. According to VanEck, it’s only fair for asset managers to return part of their proceeds to the community building the crypto protocol. It stated:

“If TradFi stands to gain from the efforts of Ethereum’s core contributors, it makes sense that we also give back to their work. We urge other asset managers/ETF issuers to consider also giving back in the same way.“

With this move, VanEck joins other crypto-native communities supporting the Ethereum network, including Lido Finance, Uniswap, Arbitrum, Optimism, ENS Domains, MolochDAO and Nouns DAO.

According to a public dashboard tracking donations sent to the Guild’s mainnet, 4,846 contributions have generated over $12 million in donations. Funds are then distributed among its members according to a weighted ratio based on their contribution periods.

The network core developers are reportedly working on Ethereum Improvement Proposal EIP-4844 (Proto-Danksharding). The upgrade will introduce a new kind of transaction type to Ethereum, promising to reduce transaction fees for layer-2 protocols.

VanEck disclosed its upcoming Ethereum Strategy ETF on Sept. 28, saying it will invest in Ether futures contracts. The fund will be actively managed by Greg Krenzer, head of active trading at VanEck, and is expected to be listed on the Chicago Board Options Exchange in the coming days.

Other traditional investment firms set to offer exposure to Ether futures include Valkyrie and Bitwise, while the line for a spot Ether ETF keeps growing with Invesco Galaxy, ARK 21Shares and VanEck waiting for regulatory approval. The United States Securities and Exchange Commission (SEC) recently delayed a decision on whether to approve a spot Ether product until December.

Magazine: Joe Lubin — The truth about ETH founders split and ‘Crypto Google’

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FTX exploiter moved over $17M in ETH in the last 24 hours

A significant portion of the 7,749 ETH, worth roughly $13 million, was directed toward the THORChain router and Railgun contract.



A significant portion of the 7,749 ETH, worth roughly $13 million, was directed toward the THORChain router and Railgun contract.

According to recent information from Spot On Chain, an address linked to the FTX exploit identified as 0x3e9, has conducted transfers exceeding 10,000 Ether (ETH), worth roughly $17 million, across five different addresses since Sept. 30. The addresses had remained inactive for several months before the recent activity.

Within these transactions, a significant portion of 7,749 ETH, equivalent to $13 million, was directed toward the Thorchain router and Railgun contract. Furthermore, the exploiter engaged in a swap involving 2,500 ETH, valued at $4.19 million, converting it into 153.4 tBTC at an average rate of $27,281 per token. This address, which has recently become active, has exhibited noteworthy activity and is anticipated to continue transferring ETH, most likely to Thorchain.

At the time of the initial hack on Saturday, Sept. 30, the approximate losses amounted to nearly 50,000 ETH. This incident occurred just a short while before SBF's criminal trial scheduled for Oct. 2023.

Nevertheless, these occurrences have generated a significant amount of downward pressure on the ETH price, which currently maintains a level slightly above $1,650. This situation arises as the market anticipates the introduction of Ethereum futures ETFs on Monday, Oct. 2.

FTX co-founder Sam Bankman-Fried, commonly known as SBF, is scheduled to go to trial in October. This comes after his arrest in The Bahamas and subsequent extradition to the United States, marking several months since these events occurred.

The trial is expected to last for six weeks, beginning with the selection of the jury on Oct. 3, followed by the initial court proceedings on Oct. 4. Bankman-Fried faces a total of seven charges connected to fraudulent activities, comprising two substantive charges and five conspiracy charges.

Related: Valkyrie backtracks on Ether futures contract purchases until ETF launch

During the legal proceedings, the FTX founder has consistently pleaded not guilty to all allegations. Despite numerous attempts to secure temporary release, Bankman-Fried continues to be held in custody at the Metropolitan Detention Center. His most recent request for release was denied by Judge Lewis Kaplan, citing concerns about the possibility of him fleeing.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

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SEC initiates legal action against FTX’s auditor

The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor…



The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor independence.

The United States Securities and Exchange Commission (SEC) has commenced legal proceedings against an accounting firm that had provided services to cryptocurrency exchange FTX before its bankruptcy declaration.

According to a Sept. 29 statement, the SEC alleged that accounting firm Prager Metis provided auditing services to its clients without maintaining the necessary independence as it continued to offer accounting services. This practice is prohibited under the auditor independence framework.

Extract from the SEC's September 29 statement. Source: SEC

To prevent conflicts of interest, accounting and audit tasks must be kept clearly separate. However, the SEC claims that these entwined activities spanned over a period of approximately three years:

“As alleged in our complaint, over a period of nearly three years, Prager’s audits, reviews, and exams fell short of these fundamental principles. Our complaint is an important reminder that auditor independence is crucial to investor protection.”

While the statement doesn't explicitly mention FTX or any other clients, it does emphasize that there were allegedly "hundreds" of auditor independence violations throughout the three-year period.

Furthermore, a previous court filing pointed out that the FTX Group engaged Metis to audit FTX US and FTX at some point in 2021. Subsequently, FTX declared bankruptcy in November 2022. 

The filing alleged that since former FTX CEO Sam Bankman-Fried publicly announced previous FTX audit results, Metis should have recognized that its work would be used by FTX to bolster public trust.

Related: FTX founder’s plea for temporary release should be denied, prosecution says

Concerns were previously reported about the material presented in FTX audit reports.

On Jan. 25, current FTX CEO John J. Ray III told a bankruptcy court that he had “substantial concerns as to the information presented in these audited financial statements.”

Furthermore, Senators Elizabeth Warren and Ron Wyden raised concerns about Prager Metis' impartiality. They argued that it functioned as an advocate for the crypto industry.

Meanwhile, a law firm that provided services to FTX has come under scrutiny in recent times.

In a Sept. 21 court filing, plaintiffs allege that U.S. based law firm, Fenwick & West, should be held partially liable for FTX's collapse because it reportedly exceeded the norm when it came to its service offerings to the exchange.

However, Fenwick & West asserts that it cannot be held accountable for a client's misconduct as long as its actions remain within the bounds of the client's representation.

Magazine: Blockchain detectives: Mt. Gox collapse saw birth of Chainalysis

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