Crypto Market Slides After Genesis Withdrawal Halt, but Big Investors May Hunt for Bargains

Most digital assets traded lower on Wednesday as another crypto firm gets hit by the FTX contagion, although institutional investors may be looking for bargains.

AccessTimeIconNov 16, 2022 at 7:41 p.m. UTC
Updated Nov 16, 2022 at 8:02 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Digital assets extended losses on Wednesday after the crypto financial firm Genesis Global Capital announced that it was temporarily suspending redemptions and new loan originations, the latest industry player to struggle in wake of crypto exchange FTX's meltdown.

Bitcoin (BTC) dropped 3.5% to $16,456 during U.S. morning trading hours on Wednesday, according to CoinDesk data, erasing some of the prior day’s gains. At press time, bitcoin was changing hands at $16,473.

The cryptocurrency also appeared buffeted by an economic data release showing that U.S. retail sales rose 1.3% in October, a sign that consumers are resilient going into the holiday season. That might mean the Federal Reserve will maintain its aggressive campaign to tamp down economic activity to combat inflation – typically a negative factor for risky assets like stocks and cryptocurrencies.

“We don’t expect any sharp drops or selling pressure due to contagion fears alone since the bulk of the move is likely to be priced in already,” said Joe DiPasquale, CEO of BitBull Capital, a firm that manages crypto hedge funds. “At this point, any new development will result in temporary drops, but we don’t expect investors to be shocked by more FTX-related ramifications either. That being said, recovery from these lows may need time, both in terms of market capitalization and general sentiment.”

Will Tamplin, a senior analyst at technical research firm Fairlead Strategies, said that if bitcoin can’t get back above its long-term support near $18,300 by Sunday’s weekly close, “a major breakdown would be confirmed in a bearish message from the market, which would increase risk to next support near $13,900.”

Altcoins struggle along with bitcoin

The CoinDesk Market Index (CMI), which measures the performance of 162 major digital assets, lost about 1.8% over the past 24 hours.

Smart-contracts platform Solana’s native SOL token slid 0.2% to around $14 after the Solana Foundation confirmed in a blog Wednesday that FTX entities are in control of around 50 million SOL tokens.

The blog said the tokens were sold from Solana Foundation to FTX and Alameda Research in three transactions between August 2020 and January 2021. The second and third transactions had a linear monthly unlock mechanism, meaning that as the SOL token tranches are to be paid out evenly once a month to FTX, the entities could gradually gain access to millions of tokens up until January 2028.

Aptos, the new layer 1 blockchain established by former employees of Facebook parent Meta Platforms, was one of the few winners Wednesday. The APT token was up 11% to $4.70 in recent trading.

Interest from institutional investors

While FTX’s collapse and its ramifications for the broader crypto industry are a serious blow, it won’t scare away institutional investment from entering the market, according to Sheraz Ahmed, managing partner of Storm Partners.

“General speculation and panic will continue,” Ahmed told CoinDesk, but he said that institutional investors’ “choices are more likely to be informed by how innovation and technology could benefit them."

“They will most likely rethink their short-term strategies as the market infrastructure remains unstable.”

Once all the stakeholders directly and indirectly affected by the fall of FTX absorb the losses, “we could see institutions swoop in at the lows with their heavy pockets,” he added.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Helene Braun

Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show. Helene is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.

Jocelyn Yang

Jocelyn Yang is a markets reporter at CoinDesk. She is a recent graduate of Emerson College's journalism program.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.