2 Old Friends + A Crypto Crash 💣

Good Morning Switchers  🤗

👋Welcome to Switch Daily.

Heard it yet? Morgan Stanley forecasted that India will be the third-largest economy in the world by 2027.  Apparently, India will be entering a phase where incomes will be compounding at a fast rate on a high base. That means, your investments could also compound faster in the next five years. Cool no?

Okay back to the present! Yep, our portfolios are weeping big time too. Bitcoin, Ethereum, Ripple, Cardano—all the major tokens slumped and threw a post-Halloween scare to all of us yesterday. But WHY? Let’s find out!

BTW, if you like reading this newsletter, give us a shout out on Twitter and get your friends to subscribe. It will mean a great deal to us!

Here’s what we’ve got for you:

• Market pulse

• The Clash of Crypto Clans

• News to cheer you up maybe?

• Mid-week Meme

Market pulse 📈

The market is red like a tomato 🍅

The broader crypto market didn’t have the brightest start to Wednesday morning, as the market cap is down by 11.42% at press time. While the FTX-Binance kerfuffle is currently driving the market, it would be interesting to see what the US CPI (Consumer Price Index) data yields tomorrow, as and when it comes out.

Coin of the day: Binance Coin

Despite all the shadow in the crypto market, the one chain that is untouched was BNB. While other cryptos were crashing, BNB stood in green throughout the day. However, later the coin also fell by 7% and is currently trading at $318.20

⚔️The Clash of the Crypto Clans🛡️

Here’s the story of two old friends in the crypto-verse—Changpeng Zhao a.k.a CZ and Sam Bankman Fried a.k.a SBF.

CZ launched Binance, the largest crypto exchange in the world in 2017. Sam Bankman followed suit and built another crypto exchange ‘FTX’ in 2019. Sam also owns Alameda Research (a firm that deals with institutional crypto). 

They are the two big fish in the crypto pond—think of them like the 1st and 2nd rank holders in class where they pretend to be friends but one always wants to outrank the other. 👨‍🎓👨‍🎓

CZ saw an opportunity in FTX and invested in the exchange during its early days. But soon FTX 🚀 significantly and became the second-largest exchange in the world. Eventually, Binance exited its shares from FTX in 2021 and got $2.1 billion in cash equivalents including BUSD and FTT (FTX's native exchange token). 

Long story short: Binance holds large amounts of FTT tokens. 💰

The real drama was unveiled when Coindesk got hold of Alameda Research’s Balance sheet (SBF’s other crypto child) and revealed shocking facts. Turns out that most of the assets that Alameda Research holds are actually FTT—FTX’s own centrally controlled and printed-out-of-thin-air token. Whattt? 

Obviously, CZ being the smart man he is, wanted to get out of this mess. He decided to get rid of all FTT in Binance’s books as a part of risk management. He even compared the FTX situation with LUNA, ouch! 🥶

Meanwhile, FTX CEO Caroline Ellison tweeted that she would buy all the FTT tokens for $22 each and built a buy wall for FTT which was otherwise on a free fall. 

Okay, but how will they fund this when most of Amelda’s assets are only FTT? Well, they also own another coin in huge amounts—Solana. It seems like Alameda has been selling off SOL to keep FTT from the brink of collapse. As a result, SOL price has dropped big time, nearly 20% in 24 hours.  

How does this impact retail investors?

At this point, the clash of the big crypto giants is already neck deep. While Solana has taken a direct hit from these events, the crypto market is going through FUD. Folks are panic-selling their crypto holdings. And the crypto market fell by 11% in just one day. 

The total market cap also fell below the psychologically important $1 trillion level. Bitcoin, Ethereum, and other major coins took the blow too.🤕While the crypto market was bathing in red, Binance coins alone were in the green. No surprise there!

Also, Sam lost 93% of his net worth and his billionaire status in a single day. 

But here is the real twist—at the end of all this fiasco, CZ and SBF tweeted that they are going to be friends again. Really? 

Not literally though. But, this is how it will go down:

• Binance will acquire FTX

• Conduct full due diligence on FTX

• Binance may also pull out of the deal if things don’t go their way

CZ and SBF making up surely saved us all from another LUNA-like collapse. Yet, we never know how events will unfold in the future. The market is still volatile, so let’s sip on our hot chocolates, DYOR, and stay SAFU.

What else is making headlines? 📰

🟢Crypto no longer in the list of top 10 financial risks: Report

Crypto is no longer in the top 10 financial risks for the US, according to a central bank survey conducted by the Federal Reserve Bank of New York. The report stated 14 factors that pose a financial risk, and crypto stands only at the 11th position.

🆕Ethereum Co-founder launches new crypto project

Anthony Di Iorio, one of the co-founders of Ethereum, unveiled a new blockchain project “Andiami.” This new blockchain was created to complement Ethereum and promote decentralization.

👑Queen of the Netherlands supports digital euro

The digital Euro has found a new supporter in Queen Máxima of the Netherlands. Attending a European Commission (EC) conference virtually, the Queen said she was encouraged by the European Central Bank’s work in launching a digital euro.

Memewhile!

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