Arthur Hayes: Bitcoin bottomed as ‘everyone who could go bankrupt has gone bankrupt’
Arthur Hayes thinks the worst could be over for Bitcoin and the next bull run could be tied to the United States Treasury market.

Arthur Hayes, the former CEO of crypto derivatives platform BitMEX, thinks the worst might be over for Bitcoin this cycle as the “largest most irresponsible entities” have run out of BTC to sell.

“Looking forward, pretty much everyone who could go bankrupt has gone bankrupt,” he said in the Dec. 11 interview with crypto advocate and podcaster Scott Melker.

Hayes elaborates on his stance by explaining that when centralized lending firms (CELs) have financial troubles, they will often call in loans first, then sell BTC first because it operates as the “reserve asset of crypto” and “the most pristine asset and the most liquid:”

“When you look at the balance sheet of any of these of the heroes, there’s no Bitcoin on it because what do they do, they sold the Bitcoin as they were going bankrupt, they sold the Bitcoin during the wave before they went bankrupt.”

Hayes voiced a similar argument in a Dec. 10 blog post, explaining that while this “credit crunch is ongoing,” large physical sales of BTC are taking place on exchanges from both CELs trying to avoid bankruptcy and trading firms who have had loans recalled and must liquidate their positions.

“This is why the price of Bitcoin swoons before CELs go bankrupt. That’s the big move,” he said:

“I can’t demonstratively prove that all Bitcoin held by these failed institutions was sold during the multiple crashes, but it does look as if they tried their best to liquidate the most liquid crypto collateral they could right before they went under.”

Hayes believes the large-scale liquidations are at an end, though, explaining in the blog post that “There is no reason why you would hold on if you had an urgent need for fiat.”

Following the collapse of crypto exchange FTX and the subsequent fallout, the market is still deep in the grips of crypto winter, but Hayes believes the market could see some recovery in 2023.

“I believe the US Treasury market will become dysfunctional at some point in 2023 due to the Fed’s tightening monetary policies,” he said, adding: “At that point, I expect the Fed will turn the printer bank on, and then boom shaka-laka — Bitcoin and all other risk assets will spike higher.”

_____

Bitcoin Lightning Network to be used in fiat transfers between EU and Africa
The new application, Send Globally, allows GBP or EUR to be instantly transferred into the local currencies of Nigeria, Kenya and Ghana.

The ongoing crypto winter is not stopping the industry from pushing for global adoption and accessibility. A new partnership between CoinCorner and Bitnob opens a way for users across continents to perform cross-border transactions involving multiple fiat currencies.

Typically transfer of funds between Europe and Africa requires a third-party facilitator like Western Union, which rely on centralized entities. These transactions often have processing times of multiple parties prior to approval and are known for their expensive cuts. World Bank estimates that remittances to Sub-Saharan Africa went upwards of $40 billion yearly as of 2020 —with Nigeria receiving almost half of the sum alone.

Now, users can transfer funds via the Bitcoin Lightning Network from the United Kingdom and Europe to select countries in Africa. The application, Send Globally, allows British pounds (GBP) or Euros (EUR) to be transferred to the local currencies of Nigeria (NGN), Kenya (KES) and Ghana (GHS).

Through the Lightning Network, the funds are automatically converted into BTC, then instantly converted to the local currency and deposited straight into the bank account or mobile money wallet of the receiver.

Danny Scott, the CEO of CoinCorner, said the remittance market is a big opportunity to highlight the utility of BTC.

“The borderless nature of Bitcoin has always made it a great tool for sending money around the world, but now with the Lightning Network, sending Bitcoin is instant and very low cost.”

In 2021, data from Statista placed Nigeria in the top 10 countries for remittance payments. Additionally, the World Bank reported tha in the last year Sub-Saharan Africa made up 14.1% of global remittances.

However, nearly 80% of African countries restrict the type of institutions that are able to offer local banks remittance-related services. Such exclusivity creates barriers to entry, therefore, access to finance for the people who need it most.

The prevalence of cryptocurrencies in Africa has been a hot topic in the space, as the continent is rife with emerging economies and practical use cases.

Particularly in North Africa, growth in the crypto industry continues to grow. A report from Chainalysis revealed the Middle East and North Africa (MENA) region to be the fastest growing in the world.

In September, the Nigerian government held meetings with Binance to potentially negotiate a special economic zone posed to support crypto and blockchain-related businesses in the region.

A later report from Chainalysis also highlighted Ghana’s rise to prominence in the crypto space. It said the country could potentially catch up to Nigeria and Kenya in terms of crypto adoption.

_____

Paxful CEO preaches Bitcoin self-custody, advises against crypto exchange
Youssef will send weekly emails to users strongly advising against storing cryptocurrencies on all crypto exchanges, including Paxful.

The case for self-custody grows stronger as investors demand evidence of their assets over crypto exchanges. While some CEOs chose to double down on assuring the funds’ safety on their platforms, Ray Youssef, the CEO of crypto exchange Paxful, sided with the idea of self-custody as he took responsibility for over 11 million users.

The fall of FTX was an eye-opener for investors who predominantly entrusted crypto exchanges with safeguarding their assets. FTX CEO Sam Bankman-Fried, however, broke this trust by misappropriating users’ funds via Alameda Research. Ever since, numerous exchanges had to share wallet information as proof of reserves publicly.

In a tweet, Youssef distanced himself from “others in the industry,” reiterating that he never touched investors’ money, adding that:

“My sole responsibility is to help and serve you. That’s why today I’m messaging all of our [Paxful] users to move your Bitcoin to self-custody. You should not keep your saving on Paxful, or any exchange, and only keep what you trade here.”

Youssef will send weekly emails to users strongly advising against storing cryptocurrencies on all crypto exchanges, including Paxful. The entrepreneur further highlighted the problem with trusting custodians such as SBF, stating that “you’re at the mercy of […] their morals.”

Thanks to Satoshi Nakamoto, Bitcoin — as an asset — is shielded from centralized control and manipulation. Youssef pointed out this unique opportunity that Bitcoin brings to the table — “the chance to finally be in control.”

While he strongly advised users to take total control over their assets, Youssef assured their funds' safety for investors that choose to store their Bitcoin on Paxful. Moreover, the entrepreneur plans to remove Ether from Paxful as a tradable asset citing the lack of integrity compared to the Bitcoin ecosystem.

The plan to delist Ether from Paxful came after Jeremy Garcia, the founder and CEO of Satoshi’s Journal, pointed out Ethereum’s poorly designed protocol.

SBF made the headlines after revealing his plan to start a new business for repaying the FTX investors.

“I would give anything to be able to do that. And I’m going to try if I can,” the infamous entrepreneur said when recently asked by BBC during an interview if he’d start a new business to repay FTX users.

_____

This Daily Dose was brought to you by Cointelegraph.

Share this post