• The total cryptocurrency market capitalization broke above $1 trillion on Jan. 21.
• Derivatives metrics are not showing increased demand from bearish traders at the moment.
• South Korean prosecutors requested an arrest warrant for Bithumb exchange owner Kang Jong-Hyun.
The cryptocurrency market is continuing to show signs of strength despite the continued negative news headlines. On Jan. 21, the total cryptocurrency market capitalization broke above $1 trillion for the first time ever, a remarkable milestone for the industry. Derivatives metrics are also not showing increased demand from bearish traders at the moment, a positive sign indicating more upside is in store.
The most recent crypto news that has been dominating headlines is the bankruptcy of Genesis Global Capital on Jan. 19, and the potential impact it could have on Grayscale funds management. Genesis Capital was the largest debtor of the Digital Currency Group, which is the parent company of Grayscale. Investors have been left unsure if Grayscale Bitcoin Trust assets could face liquidation. The investment vehicle currently holds over $14 billion worth of Bitcoin positions for its holders.
To make matters worse, a United States appeals court is set to hear the arguments relating to Grayscale Investment’s lawsuit against the Securities and Exchange Commission (SEC) on March 8. Grayscale Investment is questioning the SEC’s decision to deny their asset-backed exchange-traded fund launch.
The situation in South Korea is also not helping, with prosecutors requesting an arrest warrant for Bithumb exchange owner Kang Jong-Hyun. On Jan. 25, the Financial Investigation 2nd Division of the Seoul Southern District Prosecutor’s Office raided Bithumb’s headquarters as part of an investigation into potential embezzlement and fraud.
Despite the recent bad news, the cryptocurrency market is still showing strength, with Bitcoin (BTC) stabilizing near the $23,100 level at 18:00 UTC on Jan. 27 and the total crypto market cap rising above $1 trillion on Jan. 21. This indicates that traders are not reacting to the news and that the market is still optimistic about the future of crypto. Furthermore, derivatives metrics are not showing any increased demand from bearish traders, suggesting more upside is in store for the market.