The US Secretary of Defense is putting pressure on China over Taiwan. Lloyd Austin told his Chinese counterpart, Wei Fenghe, to avoid “destabilizing actions” across the self-governing island. Their talks, in Cambodia, came days after a meeting between President Biden and Chinese leader Xi Jinping sparked faint hopes of a reduction in tensions. They were also the first since Nancy Pelosi to visit Taiwan this summer, angering Beijing.
A nationwide railway strike is one step closer. A union representing mostly rail carriers narrowly voted against a White House-brokered contract deal, raising the risk of union action next month, which could cost the economy more than $2 billion a day.
Investigations and bankruptcy fears keep crypto busy
Crypto’s month-long decline continued this morning with Bitcoin plunging to a two-year low as investors braced for more bankruptcies following the collapse of crypto exchange FTX. Even more tension on the markets: Federal prosecutors reportedly began an investigation into FTX, which was founded by crypto prodigy Sam Bankman-Fried months before his demise.
Crypto brokerage Genesis is also said to be faltering. According to Bloomberg, the company is in a make-or-break dashboard to secure $1 billion in emergency funding. Genesis, one of the first to reveal its close ties to the fallen FTX, reportedly reached out to Binance, the world’s largest crypto exchange, and private equity firm Apollo Global for funding. With $175 million of its funds tied up in the collapse, Genesis says it wants to close the gap in its balance sheet and avoid bankruptcy.
Is Genesis’ Parent Company Digital Currency Group at Risk? Valued at around $10 billion last year, the crypto conglomerate includes asset manager Grayscale and news site CoinDesk, and was backed by blue-chip investors such as Alphabet and SoftBank’s Vision Fund 2. Grayscale’s Bitcoin Trust – the world’s largest bitcoin trust fund, pitched as a convenient way for retail investors to access the market – reached a new low yesterday after falling to about half the value of Bitcoin amid parent group fears. Grayscale denies it is in trouble, but its refusal to provide any evidence about its reserves weighs heavily on the value of the assets it is selling.
Digital Currency Group’s connections span cryptocurrencies. It has invested in about 165 companies, including Coinbase, the largest US crypto exchange, whose share price is down nearly 90 percent since last year. That hasn’t stopped Cathie Wood. Her Ark Investments has bought crypto, including Coinbase and Grayscale, but few on Wall Street share her enthusiasm.
