Crypto Loans – Innovative Words http://innovativewords.com/ Thu, 24 Nov 2022 07:45:56 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://innovativewords.com/wp-content/uploads/2021/04/default.png Crypto Loans – Innovative Words http://innovativewords.com/ 32 32 Three co-founders of $2 billion Fintech Pipe quit abruptly, citing inexperience https://innovativewords.com/three-co-founders-of-2-billion-fintech-pipe-quit-abruptly-citing-inexperience/ Wed, 23 Nov 2022 22:59:14 +0000 https://innovativewords.com/three-co-founders-of-2-billion-fintech-pipe-quit-abruptly-citing-inexperience/ Pipe co-founder and CEO Harry Hurst made the surprise decision to step down less than four years after starting the company. Pipe Three co-founders of fintech lending startup Pipe, valued at $2 billion in a funding round last year, are pulling out of the Miami company. Outgoing leaders include co-CEO Harry Hurst, 33; co-CEO Josh […]]]>

Three co-founders of fintech lending startup Pipe, valued at $2 billion in a funding round last year, are pulling out of the Miami company. Outgoing leaders include co-CEO Harry Hurst, 33; co-CEO Josh Mangel, 29; and CTO Zain Allarakhia, 34. The news comes as a big surprise since the fast-growing company is only three years old, and it’s highly unusual for multiple co-founders to all announce their resignations at the same time.

“While all three of us are still involved with Pipe, of course we recognize that the company needs a seasoned and experienced operational CEO to take the company to even greater heights,” said the former co-CEO Harry Hurst in a statement. Press release yesterday. Pipe is currently looking for a new CEO. Hurst has already resigned but remains on the board as vice chairman. Mangel will serve as interim CEO of Pipe until a replacement is found, in which case he will become executive chairman. Allarakhia will also “remain deeply involved, both at board level and in his role as senior advisor,” the press release said. States.

Investors in Pipe and Hurst, Mangel and Allarakhia decided that, although they have run the company since 2019, the three executives do not have enough fintech operational experience to continue in their leadership roles. Prior to Pipe, Hurst and Mangel founded a rental car delivery company that was later acquired. Allarakhia previously worked as a software engineer at fintech companies Braintree and Plaid. Michal Cieplinski, former LendingClub executive
CL
who joined Pipe a month after its creation, will remain at Pipe as commercial director.

Pipe looks and smells like a moneylender but technically isn’t one. It allows other companies such as software companies to sell their future recurring revenue to large institutional investors for cash that borrowers can spend immediately. Pipe charges transaction fees of around 1% to 2% for the service, and institutional investors earn interest on loans from software companies. Pipe has helped over 22,000 businesses obtain financing and facilitates hundreds of millions of dollars in quarterly loans.

Although Pipe does not hold loans on its books, if the transactions it facilitates go wrong, its business suffers, as investors will stop buying loans through Pipe if borrowers cannot repay them. In March, Pipe announcement that it would help facilitate funding for bitcoin mining companies, which have been decimated by the drop in the price of bitcoin. Some of those loans have gone bad, says a person familiar with the business.

Pipe is also investigating whether Hurst and Mangel had stakes in crypto mining companies that became clients of Pipe, a person familiar with the matter said. (A Pipe spokesperson said Hurst and Mangel do not hold any stakes in the crypto mining companies that have become clients and would not comment further.) Beyond the software and crypto companies, Pipe has expanded into many business categories, including entertainment, consumer brands and real estate, a dispersed strategy that makes it harder to assess risk, experts say.

Over the past year, as interest rates have risen and venture capital funding has slowed, fintech companies have been hit hard. Many have had layoffsincluding the largest private fintech in the United States, Bandaged. Pipe is the latest fintech to feel the pressure of the recession. The Miami start-up complaints he has more than five years of cash in the bank to continue running the business.

Although Pipe is only a few years old, CEO Harry Hurst has already cashed in on some of his shares. It sold shares in a funding round in 2021, according to information. A Pipe spokesperson said Hurst, Mangel and Allarakhia remain the company’s largest shareholders and declined to comment on their holdings.

A venture capitalist who passed on Pipe says Hurst is part of a group of “larger than life” founders. “They were good storytellers,” says the investor. “They had big egos, big personalities. And they dictated conditions to investors… The founder of [failed startup] Fast, the founder of Bolt – he was the kind of founders in this mix.

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FTX Scandal Won’t Sink Crypto Bank Silvergate Capital https://innovativewords.com/ftx-scandal-wont-sink-crypto-bank-silvergate-capital/ Mon, 21 Nov 2022 19:28:44 +0000 https://innovativewords.com/ftx-scandal-wont-sink-crypto-bank-silvergate-capital/ For crypto bank Silvergate Capital Corp. (NYSE:SI), the past few weeks have been nothing short of a nightmare. FTX, one of the world’s largest cryptocurrency exchanges, went bankrupt in November amid allegations of insolvency at leading publication CoinDesk. The bankruptcy of the cryptocurrency exchange is hitting several companies very hard, and Silvergate Capital is no […]]]>

For crypto bank Silvergate Capital Corp. (NYSE:SI), the past few weeks have been nothing short of a nightmare.

FTX, one of the world’s largest cryptocurrency exchanges, went bankrupt in November amid allegations of insolvency at leading publication CoinDesk. The bankruptcy of the cryptocurrency exchange is hitting several companies very hard, and Silvergate Capital is no exception.

Silvergate said its exposure to FTX is minimal and total deposits from this area are “less than 10%”. The company is fully compliant with all applicable digital asset regulations. It has never had any ongoing cryptocurrency-related loans or investments, nor does it act as a custodian for any of the bank’s bitcoin-backed SEN leveraged loans.

However, the stock suffered badly, with its value dropping more than 50% in just one month.

FTX Scandal Won’t Sink Crypto Bank Silvergate Capital

The next few quarters could be painful, but I think Silvergate will come out of this even stronger. It has proven time and time again that it is a solid institution, so I have confidence in its ability to weather this storm. The stock is now trading near its 52-week low, providing value-oriented investors with the perfect opportunity to pounce.

Concerns are valid but exaggerated

The bankruptcy of FTX highlights the unstable nature of the crypto space. For bears, this is one more reason not to get involved in space. Even though the relationship between FTX and Silvergate Capital is limited, investors are still punishing the stock. The bankruptcy of FTX is a reminder that the crypto space is still in its infancy and there are still a lot of risks associated with investing.

However, there is an argument that the company is being treated unfairly. The bank still has strong fundamentals and a Tier 1 leverage ratio, which was 10.10% in June. This places it among the best banks in the United States by this metric.

The Tier 1 leverage ratio is a key measure used by financial institutions to assess their financial stability. The ratio provides insight into the overall financial strength of a bank by measuring the amount of Tier 1 capital it has against its assets. But the Tier 1 leverage ratio is the ratio of a bank’s Tier 1 capital to its average total assets. Tier 1 capital consists of equity and other high-quality instruments, such as certain loans. A higher Tier 1 leverage ratio indicates that a bank is better able to absorb losses without compromising its solvency.

According to the latest Federal Reserve bank stress test, Silvergate is doing better than most banks in the country when it comes to financial health. It maintains its score even with the FTX scandal and numerous bad loans. For this reason, the Tier 1 leverage ratio is an important tool for regulators and investors when assessing the health of a financial institution.

Limited exposure to FTX

Silvergate is an FDIC, Federal Reserve and California DFI approved bank. Even though it focuses on cryptocurrency, it has strong regulatory oversight. The company was one of the first banks to provide services to the cryptocurrency industry and has continued to play an important role in its development. The bank offers a range of services to its customers, including checking and savings accounts, loans and lines of credit. Silvergate is a leader in developing innovative payment solutions for the cryptocurrency industry.

The company also operates the Silvergate Exchange Network, or SEN, a platform that allows users to buy and sell cryptocurrencies using its banking infrastructure. Silvergate is the only regulated bank in the world to develop a network like this, which means it has a first-mover advantage. It had 1,677 customers using the SEN at the end of the third quarter and just over $12 billion in deposits.

Silvergate is a unique company because it does not charge customers a fee for using its platform. Instead, he benefits when clients make large deposits on which he pays no interest. Deposits are perfect for Silvergate for bonds or loans. This way, the company can earn money from the interest rate spread. Deposits are a key part of Silvergate’s business. It also issues loans against bitcoin, a product called SEN Leverage. Overall, Silvergate is a well-run company that has found a way to generate revenue and profit without charging fees to its customers. This rare business model is arguably one that should be applauded.

Notably, like most exchanges in the crypto market, FTX is a client of Silvergate. The bankruptcy of the exchange gives investors and potential clients plenty of reason to worry about the outstanding amount of SEN’s loan portfolio. However, as we discussed, exposure is limited. A mid-quarter update from the company confirmed that total deposits had shrunk to around $9.8 billion, including around $1.2 billion from FTX, which was built over time.

Silvergate’s lack of exposure to FTX and its use of secured loans give the bank little reason to believe it will incur loan losses. Additionally, the bank does not have an official lending relationship with FTX. It requires its borrowers to put aside enough bitcoin collateral to cover their full loan amount and, in some cases, more. Customers’ access to bitcoins is limited; Silvergate can liquidate the fund whenever it wishes and without having to consult them. He also said in his latest update that he hasn’t liquidated any funds yet, which should reassure jittery shareholders.

Carry

Silvergate is a cryptocurrency exchange that allows users to buy and sell digital assets. It is one of the few exchanges that is not very exposed to the bankruptcy of FTX, which has troubled several other companies in the space.

Despite this, Silvergate’s market value has taken a hit as investors have become more cautious about the future of the crypto industry. As a result, this could be a great opportunity for those looking to buy stocks at a discount and earn high returns in the future.

This article first appeared on GuruFocus.

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Crypto Winter: Enron Flushes and the Housing Collapse https://innovativewords.com/crypto-winter-enron-flushes-and-the-housing-collapse/ Sat, 19 Nov 2022 00:00:00 +0000 https://innovativewords.com/crypto-winter-enron-flushes-and-the-housing-collapse/ Kameleon007/iStock Unpublished via Getty Images Deplorable state of cryptography Anyone who follows the crypto world knows FTX (FTT-USD), his former boss Sam Bankman-Fried, and the disappearance of his “empire”. What Many Crypto Faithful Might Not Be Aware Of are the aftermath of the implosion of FTX and its affiliate investment fund, Alameda Research. Having lived […]]]>

Kameleon007/iStock Unpublished via Getty Images

Deplorable state of cryptography

Anyone who follows the crypto world knows FTX (FTT-USD), his former boss Sam Bankman-Fried, and the disappearance of his “empire”. What Many Crypto Faithful Might Not Be Aware Of are the aftermath of the implosion of FTX and its affiliate investment fund, Alameda Research.

Having lived in the markets through both the Enron bankruptcy and the global financial crisis, I see many similarities between then and now: excessive leverage poorly disclosed or not disclosed at all, interdependent entities of usefulness and ownership, pervasive conflicts of interest and lack of reasonable oversight.

These traits have spelled disaster in the past and I suspect it won’t be any different now. The phrase “There’s only ever one cockroach” was apt then and seems apt to describe the events following the collapse of FTX. I expect to see a lot more crypto-related bankruptcies in a fairly short time frame and more weakness in most cryptocurrencies.

Lenders

I think one of the biggest surprises of the FTX debacle is the amount of leverage that was used. Sam Bankman-Fried has been tweeting aggressively (and probably at great risk) since the bankruptcy and made a startling confession this week.

In a November 16 Twitter thread, he said leverage at FTX was $5 billion and was backed by $20 billion in assets. We can argue about the $20 billion asset value portion given the drop in crypto asset prices, but the $5 billion should have been pretty indisputable. Somehow it wasn’t.

Later the same day he tweeted,

“I was wrong. Leverage wasn’t about $5 billion, it was about $13 billion. Leverage of $13 billion, total run on the bank, collapse total asset value, all at once.That’s why you don’t want this leverage.

Uh, really, Sam? Didn’t you know you had $13 billion instead of $5 billion? $8 billion in debt just magically appeared?

It’s hard to think of a CEO (or somebody by the way), who could be so ignorant. I’m of the opinion that Bankman-Fried is probably more aware than that. However, his organization was clearly a mess. John Ray III, who replaced SBF, wrote a scathing letter on the state of the company in which he crushed the old management, saying:

“Never in my career have I seen such a complete failure of corporate controls.”

and

“From the compromised integrity of systems and faulty regulatory oversight overseas, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented. “

In case anyone wants to question Ray’s credentials, he led the restructuring of Enron’s bankruptcy. More and more details continue to emerge as Ray’s choices work their way through the mess he’s gotten into and none of them are constructive.

As was the case for both Enron and the global financial crisis, there are repercussions for such a major player collapsing with so much leverage in a world where derivatives create labyrinthine interconnections. The effects in this case start knocking down other players.

Crypto lender BlockFi is rumor has it that he is planning a bankruptcy. FTX provided BlockFi with a $400 million line of credit, and BlockFi in turn loaned money to Alameda Research, SBF’s hedge fund, which also received funds from FTX. Genesis Global Capital, the lending arm of Genesis Global Trading, which, like Grayscale (OTC:GBTC) owned by Digital Currrency Group is suspending new loans and repayments.

This suspension apparently affects accounts at Gemini, the crypto exchange owned by the Winklevoss twins. Gemini had a program called “Gemini Earn”, where customers could earn high interest rates on digital currency assets. The company tweeted,

“We are aware that Genesis Global Capital, LLC (Genesis) – the lending partner of the Earn program – has suspended withdrawals and will not be able to meet customer refunds under the 5-year service level agreement. working days.”

Questions are now emerging about the volume of deposits at Silvergate Capital (IF), whose stock has fallen dramatically this week. SI had no loans to FTX or Alameda, only deposits. Yet it provides loans backed by Bitcoin (BTC-USD), which could become a problem. Coinbase (PIECE OF MONEY) is also declining, less due to concerns about margin lending exposure and more due to declining trading volume value thanks to declining crypto values.

Possible consequences

I published an article on Microstrategy (MSTR) earlier this week. MSTR is another massively exploited player in the crypto space, although simpler than FTX, BlockFi, Genesis or Gemini. He simply has 130,000 Bitcoins underwater compared to the leverage he used to buy everything. Despite this, in my opinion, reckless bitcoin speculation, many Michael Saylor advocates commented on this article. Most of the defenses center on the belief in a potential Bitcoin price recovery. The reasons given for why he will recover are flimsy at best.

This brings me back to my central view of cryptocurrencies. Considering the price decline that almost all cryptocurrencies have experienced this year, I think it is safe to say that cryptocurrencies are not:

  • a store of value. What store of value drops from 75% to 99%?
  • a replacement for fiat currencies. The volatility is too high to be legal tender.
  • a hedge against inflation. They were tested this year and failed.

If cryptocurrencies are not in these categories, what are they? Judging by the hanky panky (to put it lightly) that has occurred at places like FTX, cryptocurrencies are just examples (if perhaps the most egregious) of the rampant speculation caused by very flexible monetary and fiscal policies. Such an environment spawned a style of investing where the fundamental intrinsic value of assets didn’t matter as much as momentum, if at all. People bought things just because they went up. The fear of missing out has replaced the risk of capital depreciation.

Crypto is the epitome of this risk-taking dynamic. Fed Governor Neel Kashkari tweeted today “The whole notion of crypto is nonsense. Not useful 4 payments. No inflation hedge. No scarcity. No tax authority. Just a tool for speculation and bigger fools.”

Well said. With the end of easy money, it is the end of this type of speculation.

Conclusion

My two favorite Warren Buffett quotes are:

“Rule number one is don’t lose money. Rule number two is don’t forget rule number one.”

and

“When the tide goes out, you see who’s swimming naked.”

I think it’s pretty clear that a lot of people like were skinny and that many crypto loyalists who hung on to his every word forgot rule number one.

Investing is difficult. There can be many pitfalls. One can lose money even in situations that seem quite safe. Speculation in highly volatile assets is just a bad idea, period. Using leverage is a recipe for disaster for both the investor and potentially the lender (as we see with FTX, BlockFi, etc.).

I expect true believers in crypto to disagree with this coin or claim that I don’t understand the asset class. My only response will be, please tell me the intrinsic value of this stuff.

Editor’s Note: This article discusses one or more securities that do not trade on a major US exchange. Please be aware of the risks associated with these actions.

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Silvergate will be battle tested in the ongoing crypto bloodbath (NYSE:SI) https://innovativewords.com/silvergate-will-be-battle-tested-in-the-ongoing-crypto-bloodbath-nysesi/ Wed, 16 Nov 2022 00:01:00 +0000 https://innovativewords.com/silvergate-will-be-battle-tested-in-the-ongoing-crypto-bloodbath-nysesi/ bizoo_n I’ve been very bullish on Silvergate (New York stock market :IF). I see the company as a regulatory play on the bitcoin ecosystem, a way to gain exposure to bitcoin without being overtly dependent on Bitcoins (BTC-USD) price direction. The The company is taking advantage of the Bitcoin adoption trend by securing zero-cost funding […]]]>

bizoo_n

I’ve been very bullish on Silvergate (New York stock market :IF). I see the company as a regulatory play on the bitcoin ecosystem, a way to gain exposure to bitcoin without being overtly dependent on Bitcoins (BTC-USD) price direction. The The company is taking advantage of the Bitcoin adoption trend by securing zero-cost funding from institutions using the SEN network. Silvergate then applies these funds to high-quality assets (primarily mortgage-backed securities, 97% AA- or higher).

However, one of the main drivers of growth is a bitcoin collateralized loan product that allows its customers to use their bitcoin as collateral for funding, the SEN Leveraged Loan. This is where the cracks start to show. The company publicly disclosed a margin loan to MacroStrategy, an entity owned by MicroStrategy (MSTR). Let’s see how this could unfold.

domino crypto

Right now, a crypto domino of bankruptcies is unfolding as we speak. It started with by Luna (LUNC-USD) the fall (the stablecoin algo), then spread to 3AC (the crypto venture capital fund) which was heavily leveraged, and ended with the fall of Voyager (OTCPK:VYGVQ) and BlockFi. We thought the effect stopped when Sam Bankman-Fried appeared in a white horse, buying some of the troubled assets. However, the fall of FTX is now causing concern across the crypto space and has rekindled the domino effect.

The million dollar question is who’s next? At this point, a big competitor is MicroStrategy. The company has benefited significantly from buying Bitcoin over the past couple of years. While the first acquisition is always lower than the current price, the next one costs more than Bitcoin is worth now.

Chart

MicroStrategy Bitcoin Purchase (Twitter: @Elementcapl)

In other words, from public information, we can estimate that the company purchased nearly $4 billion worth of Bitcoin at an average cost of around $30,000. At the current market price of $16,000, unrealized losses represent almost 50% of the total position. The company might be able to cover the collateral on the margin loan and continue to service the loans until the first maturity, and it might survive, but it got itself into a tough spot.

Obviously, the current problems will not end with MicroStrategy. It’s just one of the best known names in the industry. Others will probably fall too. Players used credit in illiquid markets, but more importantly they used leverage on a highly volatile asset like Bitcoin. Ironically, in previous bankruptcies (such as 3AC), it appears lenders using smart contracts in crypto platforms have automatically recouped their loans. However, in these cases, loans made through traditional financing will have to wait for the bankruptcy courts to try to recover something.

Impacts of crypto domino on Silvergate

The most direct will be the ability to protect MicroStrategy’s margin loan from losses. The loan has plenty of collateral and is likely to be fully collectible. However, the uncertainty is higher than ever. Not losing money in these SEN leveraged loans will serve as a proof of concept for the entire business model. According to the company’s financial information, Silvergate has 9% of its balance sheet in direct loans:

Circular diagram

Silvergate Asset Allocation (Silver Gate)

Of which approximately $300 million are SEN leveraged loans.

table

loan portfolio (Silver Gate)

Conclusion

However, even if Silvergate does not lose money in loans, it will not come out unscathed. They will lose customers in the SEN. FTX will be gone, and rumors are now circulating about Crypto.com (USD-CRO) also facing a race. silver gate issued a statement claiming that the relationship with FTX is limited to deposits, corresponding to less than 10% of the 11.2 billion total deposits.

Table

SEN (Silvergate)

Silvergate has traditionally avoided using all of its crypto repositories in its business. If this conservative approach proves effective, it will be good for the company in the current turmoil. Nevertheless, the market sees this as a weakness and downgrades the company’s growth prospects. The current market multiple already recognizes weaker growth and some recognition of losses with a P/BV below one (stock price: $34.32).

If the company is able to hold on and avoid significant losses on its credits, it validates the current management strategy and can constitute an interesting entry point. However, the uncertainty has never been higher due to the multiple unpredictable effects that the fall of the crypto of several companies involved could bring. The current environment is a huge stress test for Silvergate’s management strategy and execution.

The balance sheet reveals what appears to be somewhat contained exposure. However, the strategy for growth is highly dependent not on the price of Bitcoin but on the prosperity of the crypto ecosystem, and the fall of the domino will be a major headwind. Provided the company avoids losses and the crypto industry can push back, I think Silvergate will be a good investment. But both hypotheses will be tested over the next few months.

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Voyager’s deal reopening process could have this impact on VGX’s holdings https://innovativewords.com/voyagers-deal-reopening-process-could-have-this-impact-on-vgxs-holdings/ Sun, 13 Nov 2022 01:33:10 +0000 https://innovativewords.com/voyagers-deal-reopening-process-could-have-this-impact-on-vgxs-holdings/ As FTX US Files for Bankruptcy, Voyager Announces Resumption of Asset Auction Process This has caused an astronomical rally in VGX over the past 24 hours Bankrupt crypto lender Traveler [VGX] announcement the reopening of the tender procedure for its assets on 11 November. The announcement was made after news broke that crypto exchange FTX […]]]>
  • As FTX US Files for Bankruptcy, Voyager Announces Resumption of Asset Auction Process
  • This has caused an astronomical rally in VGX over the past 24 hours

Bankrupt crypto lender Traveler [VGX] announcement the reopening of the tender procedure for its assets on 11 November. The announcement was made after news broke that crypto exchange FTX US had filed for Chapter 11 bankruptcy protection.


Lily Traveler [VGX] Price Prediction 2023-2024


Earlier in September, the now bankrupt FTX US won the auction for the assets of the bankrupt crypto brokerage firm with an offer of around $1.4 billion.

Voyager said in the new press release that it had opened “discussions with alternative bidders.” He further confirmed that with Voyager’s Official Unsecured Creditors Committee (UCC), he was,

“Act with due diligence and deliberate speed to identify an alternative plan of reorganization consistent with the primary objective throughout this process: to maximize the value returned to customers and other creditors.”

Although FTX US won the bid for its assets in September, Voyager claimed it did not transfer any assets to the exchange “as part of the previously proposed transaction.” He said, however, that FTX US had submitted the $5 million as a “good faith” deposit in the auction process, which was held in escrow.

Additionally, Voyager said it has no outstanding loans with FTX’s sister trading company, Alameda Research.

“Voyager has successfully recalled loans from Alameda Research for 6,500 BTC and 50,000 ETH. Voyager currently has no outstanding loans with any borrower,” the crypto brokerage said.

Traveling doing numbers

Following Voyager’s confirmation that it had reopened the auction for its asset, the price of VGX rallied. According to data from CoinMarketCap, VGX traded hands at $0.329, after rising 27% in the past 24 hours. The trading volume has also increased by more than 500% during the same period.

With $38.15 million worth of VGX tokens traded in the past 24 hours, the token recorded its highest daily trading volume in the past month, data from Santiment revealed.

Source: Santiment

The recent surge in the price of VGX has put buyers in control of the market on a daily chart. The asset’s Directional Movement Index (DMI) position has shifted over the past 24 hours to place the strength of the buyers (green) at 25.21 above the sellers (red) at 22, 51.

Additionally, buying pressure continued to mount at press time. As a result, VGX’s Money Flow Index (MFI) hit a high of 73.

Source: Trading View

Interestingly, as prices spiked in the past 24 hours, many VGX holders were still at a loss. At press time, its Market Value to Realized Value (MVRV) ratio was 92.88%. Sentiment around VGX remained negative at -0.326.

Source: Santiment

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Mercedes to keep F1 FTX logos despite crypto exchange crisis https://innovativewords.com/mercedes-to-keep-f1-ftx-logos-despite-crypto-exchange-crisis/ Thu, 10 Nov 2022 21:30:08 +0000 https://innovativewords.com/mercedes-to-keep-f1-ftx-logos-despite-crypto-exchange-crisis/ FTX faces bankruptcy if it cannot raise billions of dollars in funds to pull itself out of a liquidity crisis that erupted this week at its affiliate Alameda Research. A first plan for it to be rescued by rival exchange Binance, which is a sponsor of the Alpine team, collapsed after just 24 hours amid […]]]>

FTX faces bankruptcy if it cannot raise billions of dollars in funds to pull itself out of a liquidity crisis that erupted this week at its affiliate Alameda Research.

A first plan for it to be rescued by rival exchange Binance, which is a sponsor of the Alpine team, collapsed after just 24 hours amid concerns over the extent of the financial hole FTX was facing.

A statement from Binance said, “At first our hope was to be able to help FTX customers provide liquidity, but issues are beyond our control or ability to help.”

Reuters news agency reported that the United States Securities and Exchange Commission (SEC) is investigating FTX’s handling of client funds and its crypto lending activities.

Problems at FTX, one of the world’s most prominent crypto exchanges, sparked a crash in crypto markets and pushed Bitcoin to its lowest price in two years.

The FTX exchange’s FTT token fell from a price of over $25 earlier this week to a low of under $2 at the height of the panic selling after news broke. He has since made a small recovery.

FTX Founder and CEO Sam Bankman-Fried is still hopeful that a bailout can be put in place to save the exchange, but there are doubts whether it will succeed or not. This has fueled speculation that his partnership with mercedes could end prematurely.

Lewis Hamilton, Mercedes attends FTX Off The Grid

Photo by: New Revolution Media

At the height of its success, FTX became involved with several high profile sports sponsors. This included a $135 million deal to have the Miami Heats’ NBA arena in Miami renamed FTX Arena through 2040, in addition to being the official cryptocurrency brand of Major League Baseball.

FTX has also partnered with Team Mercedes in a multi-year sponsorship deal announced last September. In addition to the FTX logos appearing on the car and the drivers’ suit, they have worked together on other projects, including NFT launches.

During this year’s Miami Grand Prix, FTX performed a major activation, called Off the Grid, on South Beach, which included live music and Mercedes show car demonstrations.

But despite the cloud hanging over FTX, Mercedes has confirmed that the company logos will continue to feature on the car and other associated assets for this weekend’s event at Interlagos. The team will, however, keep a close eye on developments surrounding the swap as things move forward.

Speaking about the FTX deal earlier this year amid questions about the risks F1 teams were taking by being associated with the volatile crypto industry, Mercedes boss Toto Wolff said the series would have had wrong to ignore potential business opportunities.

“You can’t close yourself to modern technology,” he said. “It’s definitely an area that will grow.

“When we look 10 years from now, having to make payments that take two days and can’t be made outside of weekday hours is something that’s going to be a relic of the past. And that’s where cryptocurrencies come in.

Read also :

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The best ways to find cryptocurrency lending sites https://innovativewords.com/the-best-ways-to-find-cryptocurrency-lending-sites/ Mon, 07 Nov 2022 15:42:31 +0000 https://innovativewords.com/the-best-ways-to-find-cryptocurrency-lending-sites/ Read up on cryptocurrency lending and find out what to look for when selecting a crypto lending platform that suits your needs. What to Look for in Cryptocurrency Lending Platforms The growth of cryptocurrencies has been phenomenal with over one billion people worldwide estimated to own and use cryptocurrencies in 2022. One of the fastest […]]]>

Read up on cryptocurrency lending and find out what to look for when selecting a crypto lending platform that suits your needs.

What to Look for in Cryptocurrency Lending Platforms

The growth of cryptocurrencies has been phenomenal with over one billion people worldwide estimated to own and use cryptocurrencies in 2022. One of the fastest growing areas of crypto -currency is crypto lending. There are now a multitude of websites where you can get crypto-backed loans without even being subjected to a credit check.

Crypto loans are not only beneficial for borrowers. Investors have found crypto loans to be profitable and a good way to profit from their digital assets. Rather than simply buying cryptocurrency and holding it until it increases in value, investors can earn passive income from their digital coins while maintaining ownership through crypto lending.

What is Crypto Lending?

Crypto lending is a process in which investors lend their digital assets to borrowers in exchange for interest payments. The borrower secures the loan by using their own digital assets as collateral to secure the loan. No credit check is required to obtain the loan as long as the borrower fulfills the KYC requirements and provides the required collateral.

There are two types of crypto loans; Centralized lending (CeFi) and decentralized lending (DeFi).

  • CeFi Lending: CeFi lending platforms are also known as custodial platforms because crypto assets are deposited and held by the site. You have no control over your guarantees with the platform holding your private keys. All aspects of loan terms and interest rates are determined by the platform. Generally, CeFi platforms are easier to use. Loans can be made in fiat currency or cryptocurrency.
  • DeFi lending: DeFi lending platforms are not custodians. You keep control of your guarantees and your private keys. Rather than being managed by the platform, loans are managed through smart contracts. Loans are not available in fiat currency and will be made in cryptocurrency or stablecoins.

Basic Crypto Lending Steps

The process of getting a crypto loan will vary slightly from platform to platform, but the basics are the same.

  • The borrower applies for a loan. CeFi platforms will require the borrower to meet KYC requirements
  • Upon acceptance of the loan application, the borrower will deposit the required guarantees
  • The loan amount is returned to the borrower
  • Once the loan has been repaid on the agreed terms, the collateral is returned to the borrower

Advantages and disadvantages of crypto loans

Advantages of crypto loan:

  • Fast Loan Approvals: Loan approvals for crypto loans are fast and loans are often cleared within a day
  • No credit check required: As long as the borrower provides the required collateral, no credit check is required
  • Lower interest rates: Interest rates are generally lower than personal loans from traditional lenders or credit cards

Disadvantages of crypto lending:

  • Little regulation: there is very little regulation of the crypto lending industry, which can lead to certain risks
  • Volatility of cryptocurrencies: Cryptocurrencies are often volatile and subject to large fluctuations in value. Borrowers could be subject to margin calls if the cryptocurrency they are using as collateral falls below a certain value, and may need to increase the amount of collateral
  • Certain cryptocurrencies are not eligible as collateral: not all cryptocurrencies will be accepted as collateral for a loan, which may require the borrower to exchange for another cryptocurrency
  • Locked crypto assets: Borrowers will not have access to their digital assets until the loan is repaid

Selecting a Crypto Lending Platform

A quick search online will provide you with dozens of sites offering crypto loans. Here are some of the things to consider when choosing a crypto lending platform.

  • Amount of collateral required: The amount of collateral is determined by the Loan to Value (LTV) ratio of the loan. LTV is the amount of the loan divided by the value of the collateral. For example, a loan of $1,000 with collateral worth $2,000 has an LTV of 50% [$1000 (loan amount) / $2000 (collateral value) = 50% (LTV)]
  • Interest Rate: The interest rate charged for loans is one of the most important factors to consider. Generally, the lower the LTV, the better the interest rate the borrower will receive. A loan with an LTV of 20% will have a more favorable interest rate than a loan with an LTV of 90% in most cases.
  • Loan term: This can vary greatly from a few days to several years. Also check if you are being charged for prepayment of a loan
  • Fees: Some platforms charge a loan origination fee, usually 1% to 2% of the loan amount.
  • Cryptocurrencies accepted as collateral: Some platforms limit accepted collateral to a few popular cryptocurrencies such as Bitcoin, Litecoin, and Ethereum. Others accept 50 or more different cryptocurrencies as collateral.
  • Currency loans are unblocked: Find out in which fiat currencies and/or cryptocurrencies the loans are made
  • Minimum and Maximum Loan Amounts: Some sites will allow you to borrow as little as $50 while others have a minimum loan amount of $1,000 or more.
  • Platform Reputation: How has the lending platform performed in the past?

You should always do your research on the lending platforms you are considering before making a final selection.

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Who helped fund Musk’s Twitter purchase https://innovativewords.com/who-helped-fund-musks-twitter-purchase/ Sat, 05 Nov 2022 15:00:00 +0000 https://innovativewords.com/who-helped-fund-musks-twitter-purchase/ The banner hung above the New York Stock Exchange in 2013 when the company first went public. Now that the company is private again, there are quite a few former shareholders hoping to see a return on their investment in Elon Musk.Photo: Christopher Penler (Shutterstock) While Elon Musk’s massive $44 billion takeover of Twitter may […]]]>
A banner above the New York Stock Exchange with the Twitter logo and the word @twitter below.

The banner hung above the New York Stock Exchange in 2013 when the company first went public. Now that the company is private again, there are quite a few former shareholders hoping to see a return on their investment in Elon Musk.
Photo: Christopher Penler (Shutterstock)

While Elon Musk’s massive $44 billion takeover of Twitter may seem like a one-man show, it’s really kind of a suicide squad big tech moguls and financiers coming together in a weird rogue gallery meeting. Not only were Musk’s wealthy personal friends in the mix, but holding companies from Middle Eastern countries and a few wealthy crypto supporters jumped in head first. All have Musk’s ear and are looking to steer Twitter one way or the other.

As much as the last week seemed like a migraine dive in one man’s ridiculous, single-minded pursuit to make Twitter profitableit’s also just as likely that Musk is feeling pressure from more than 20 corporations, venture capitalists, banks and at least one Saudi prince who have certain return-on-investment expectations.

But despite their hopes, investors may have already lost. Because Musk spent so much time trying to get out of the Twitter deal, he sent the company’s stock price tumbling and sinking generally, not to mention that many of the biggest Tech companies haven’t gotten too hot in 2022. That initial $54.20 per share asking price has become a bigger rock to bear over the past few months.

One of the executives of Manhattan Venture Partners, Andrea Walne, admitted to having Business Intern in October, “we’re all trying to get through this,” referring to the Twitter deal. They were particularly unhappy with what they were paying for a business that might look more like a $10 billion or $12 billion business, rather than the $44 billion they expected to be part of. MVP invested $7.1 billion in the Twitter deal.

Alex Spiro, Musk’s attorney, told Insider that “the vast majority of equity investors have been contacted and are all in.” So far, we don’t have a single idea about how many of those who pledged funds are all paid.

With some advertisers seek to cut ties with Twitter, the platform could run out of funds over time. Musk himself remarked that Twitter had “a massive drop in ad revenue” and further blamed “activists” for pressuring advertisers off the platform.

Musk took out nearly $13 billion in loans for his purchase, and he will spend years paying the interest on those loans. Now that Twitter is a private company, these loans and interest payments are deposited like a steaming cow’s slurry in Twitter’s financial books. Bloomberg reported that Musk will have to pay $1 billion on that debt every year for the next few years. In April, the New York Times warned against this exact situation where Musk and Twitter could lose enough publicity that paying off the loans seems like a tougher prospect.

Apart from loans and equity investments, most of the funds came from the richest man in the world himself, about $25 billion, although to this day we still don’t know if there is had more people contributing, according to The New York Times. The billionaire sold Tesla stock and used more stock as collateral for those loans, the past says Filings with the Securities and Exchange Commission.

Bloomberg puts Musks’ total net worth at just under $200 billion. Although his status as the world’s richest man remains intact, he, like most of the world’s ultra-rich, has seen declines. It will be interesting to see how the ongoing Twitter debacle impacts Musk’s wealth. He certainly has the time and the platform to complain about it more than ever.

All the info included in this article is what we know so far. It’s unclear which investors paid off and whether others were shy. We will continue to update this post if more information comes out all the way.

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Some Seattle banks have thrived during the pandemic by cutting single-family loans https://innovativewords.com/some-seattle-banks-have-thrived-during-the-pandemic-by-cutting-single-family-loans/ Wed, 02 Nov 2022 21:40:36 +0000 https://innovativewords.com/some-seattle-banks-have-thrived-during-the-pandemic-by-cutting-single-family-loans/ These are strangely good days for local bankers. Of course, home sales in Seattle and elsewhere have plummeted under high interest rates, and prices are finally coming down. The once lucrative refinancing business is in a coma. Even the “crypto millionaires” who had “bought nice homes along Lake Washington” have largely disappeared, says Brent Beardall, […]]]>

These are strangely good days for local bankers.

Of course, home sales in Seattle and elsewhere have plummeted under high interest rates, and prices are finally coming down. The once lucrative refinancing business is in a coma.

Even the “crypto millionaires” who had “bought nice homes along Lake Washington” have largely disappeared, says Brent Beardall, CEO of Seattle-based WaFd (formerly Washington Federal) and a seasoned observer of the Seattle real estate market.

Yet despite the downturn, some of the local banks that serve the Seattle area have fared well.

WaFd, which operates in Washington and seven other Western states, just posted the best annual results in its 105-year history, breaking records in everything from earnings to loan volumes. Several local competitors — including Seattle-based HomeStreet and Tacoma-based Columbia Bank — also performed well.

This partly reflects individual banks’ strategies through several years of pandemic-related turmoil. But it also illustrates how much the housing sector has changed since the Great Recession, when many banks were wiped out by bad debt – and how those changes are likely to continue to happen even after the pandemic subsides and the economy resumes. housing market in the Seattle area.

Part of the banks’ contrarian performance is due to the recent rise in interest rates, which has allowed banks to charge more for loans. Although the banks themselves are also paying higher rates on the funds they lend, those rates “have not gone up as fast, and so we’re getting that expanding margin,” Beardall says.

Many banks have also benefited from the administration of pandemic-related relief programs. Some community and regional banks, for example, have actually expanded their lending business, despite the economic uncertainty, by offering Paycheck Protection Program loans to small businesses. Half of the WaFd’s 10,000 PPP loans went to non-clients, some of whom have since become WaFd clients.

In total, gross business income in Washington’s banking sector actually grew nearly 2% in the first two years of the pandemic, according to data from the state Department of Revenue. Overall business income rose 5.4% to $266 billion over the same period.

But bankers are also benefiting from deeper changes in the way housing is financed.

For example, even though housing in the Seattle area has boomed for much of the past decade, many local banks have moved away from consumer mortgages, for several reasons.

First, the mortgage industry is painfully volatile. When interest rates are low, “you make a lot of money because there’s a lot of refinancing and home sales are generally good,” says Mark Mason, CEO of HomeStreet, a Seattle-based regional bank with branches in Washington, Oregon, California and Hawaii. But when interest rates rise, Mason says, the volume of mortgages and refinances is reduced by more than 50%.

Lower loan volumes can mean lower profits and disgruntled shareholders. WaFd, Columbia, and HomeStreet are all publicly traded companies and have recently experienced wild swings in stock prices.

Second, profits on home loans are shrinking. One reason is that post-2008 banking regulations have increased the cost of loans. Smaller banks also face increasing competition from low-cost nonbank lenders, which now handle more than half of mortgages and home refinancing, according to the federal government. Data.

As a result, banks often earn less on a 30-year fixed-rate residential mortgage than they can on other types of loans, including the short-term, variable-rate commercial loans that many businesses prefer and that many local businesses and regional banks are now giving priority.

At WaFd, residential mortgages now represent less than 35% of the bank’s total loan portfolio, down from nearly 50% in 2019.

At HomeStreet, mortgage-related business represents just 7% of revenue, down from about 35% in 2018, Mason says. He expects the bank to pursue even more commercial business lending in the near future – or at least until “mortgage rates normalize and house prices moderate,” he adds. .

These changes are part of broader changes in the banking sector.

Small community banks and regional banks are particularly facing increasing pressure from large banks, which have the resources to, for example, reduce compliance costs by automating loan processing.

That pressure has pushed some smaller banks to focus on niche lending like building apartments or banking services for high-net-worth customers, says Glen Simecek, president and CEO of the Washington Bankers Association.

Other community and regional banks have sought to increase their size and resources through mergers – as with the recently approved affair between Columbia Bank and Umpqua Bank.

Meanwhile, the pressure to control costs, combined with an ongoing pandemic labor shortage and the popularity of online banking, has accelerated the trend of branch closures. (About 45% of customers prefer mobile banking, according to one new industry survey.)

Seattle alone has lost at least 87 locations, or nearly 10%, since 2017, according to The National Coalition for Community Reinvestment.

These changes don’t mean Seattle-area banks are abandoning the housing market. But many are increasingly focusing on the business side of housing. Since 2019, WaFd and HomeStreet have both roughly doubled lending on apartment projects, which can be more profitable than single-family homes, especially in markets like Seattle where rents are rising.

Multi-family loans “have always been one of the safest loans to make,” says HomeStreet’s Mason.

The apartment loan is not without risk. During the pandemic, some investors were skeptical of apartment projects in downtown Seattle due to uncertainty around remote working and concerns about safety. “Is anyone going to want to live there?” Beardall recalls investors asking about the downtown projects.

But Beardall expects the downtown Seattle housing market to eventually recover, and he and other bankers say they are also optimistic about a regional housing recovery.

But these forecasts come with many caveats.

Recovery may take some time. The searing Seattle-area housing market has been fueled by years of unusually strong local hiring, particularly by tech companies. This suggests that a recovery will drag on if recent hiring slowdowns announced by some tech companies get worse.

Indeed, if hiring slows too much, according to several bankers, the local economy will likely slide into a mild recession, perhaps as early as the end of 2023. Beardall, for his part, puts the chances of a recession at 90%.

Prospective home buyers also shouldn’t expect to see these ultra-low interest rates since the start of the pandemic. Mason thinks it’s too early to tell “where mortgage rates will stabilize.” Beardall thinks the “new normal” rate for home loans could be around 6%, which would likely discourage some buyers.

And whenever it happens, Seattle’s housing recovery will likely be weaker in market segments that were lagging before the interest rate hike.

The sale and construction of single-family homes, for example, had already faced constraints that had limited the supply of housing. These include zoning laws, soaring land costs, and stricter lending requirements enacted after the Great Recession.

Some bankers expect these constraints to worsen even after interest rates fall. That likely means a housing recovery with even fewer single-family homes for Seattle-area buyers — and even more incentives for buyers, developers and bankers to consider other types of housing.

Put it all together, and going forward, new housing in the Seattle area will be “disproportionately weighted toward multifamily,” Beardall said. Given the high cost of land and permits, developers know they’ll get “more doors, more density” and better profits on multi-unit apartments than on multi-unit single-family homes.

There will always be a demand for single family homes in and around Seattle. But in the absence of a dramatic collapse in house prices – King County’s median single-family home sold for $875,000 in Septemberand given the possibility of higher interest rates, demand will likely be even more concentrated among high-end buyers who were already beginning to dominate the single-family home market before the downturn.

Before the recent downturn in tech stocks, tech workers routinely used stock options to make down payments — and bankers expect that to pick up again once tech stock prices rebound.

Other big spenders may not be back.

Beardall doesn’t expect crypto millionaires to return to the Seattle-area housing market, in part because he doesn’t expect crypto prices to hit their recent highs.

“I kind of knew it was at its peak when Matt Damon started doing the Super Bowl commercials,” Beardall said.

Coverage of the economic impacts of the pandemic is partially subscribed by Microsoft Philanthropies. The Seattle Times maintains editorial control over this and all of its coverage.

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The NEXUS project is preparing to be the once-in-a-lifetime leap for traditional finance https://innovativewords.com/the-nexus-project-is-preparing-to-be-the-once-in-a-lifetime-leap-for-traditional-finance/ Mon, 31 Oct 2022 15:45:00 +0000 https://innovativewords.com/the-nexus-project-is-preparing-to-be-the-once-in-a-lifetime-leap-for-traditional-finance/ Disclaimer: The text below is a press release and is not part of Cryptonews.com editorial content. Project NEXUS, a name that is quickly gaining mainstream attention, is an evolution of investment portfolios and market access. Project NEXUS works so radically different from what the world is used to that it could even be considered a […]]]>

Disclaimer: The text below is a press release and is not part of Cryptonews.com editorial content.

Project NEXUS, a name that is quickly gaining mainstream attention, is an evolution of investment portfolios and market access. Project NEXUS works so radically different from what the world is used to that it could even be considered a revolution.

Important details

The term “Nexus” in this context refers to the link between traditional finance and DeFi, allowing everyone equal access to a selection of markets that require research and financial insight that is not available to most. we.

Through the mobile app, Project NEXUS provides a wide range of valuable features, so users won’t have to venture into the DeFi space alone.

The team uses blockchain technology and tokenization to unify real estate, stocks and crypto into one merged market. Most of the traditional barriers to entry including high capital requirements, multiple KYC applications and usability issues are removed through tokenization.

Nadeem Alrabeychief operating officer of the NEXUS project, said: “this is just the beginning as NEXUS explores ancillary markets, tools and strategic partners that will continue to bring value to the company, investors and users of the NEXUS app for years to come.

How does Project NEXUS effectively use splitting?

You can invest in exclusive real estate, in a development project or a concrete building, for as little as $5. The platform offers equity derivatives for just $1. These asset classes are no longer just for the wealthy and you can earn more efficiently using the Savings aspect of the app.

Earn with the Project NEXUS app

Investors can earn rents/dividends by owning real estate tokens and equity derivatives. Thanks to tokenization and the secondary market, the real estate market is now liquid, which means it is tradable 24/7.

Mohammed KhashogjiCEO of Project NEXUS, shared that of “my experience in traditional finance, I saw several constant repeat problems that were frustrating and nonsensical. During the introduction of Blockchain technology by co-founder Nadeem, potential solutions to real-life problems such as ease of use, best value and efficiency quickly bubbled to the surface of my mind. spirit. I was immediately hooked and focused on fixing unresolved issues.

Traditional swatches, property listings and third-party requirements are now redundant with the simple, user-friendly and highly efficient Project NEXUS mobile app. When clients select “sell” in the app, their real estate tokens will be sold instantly to market makers. So the sale will no longer be long, expensive and stressful, with buyers and sellers relying on multiple third parties.

The NEXUS token

The NEXUS project wants to reward investors who hold the platform token and have invested considerable energy in finding a way to achieve this through what they see as a valuable long-term asset.

Vasileios Ntamtsioshead of cryptography research and tokenization for the NEXUS project, confirmed: “We do not offer the basic tradable asset that many projects offer. Instead, we provide a token that holders genuinely want to keep for the long term because of the benefits that my team and I are meticulously sculpting.

With that in mind, the initial use cases for the token created by the team involve the world’s first real estate launchpad, with industry-leading partnerships, an over $1 billion portfolio exclusive to Project NEXUS at launch, and discounted early access for investors contributing at higher tiers. capital. There are also random airdrops for token holders, better terms on self-paying loans, and a one-of-a-kind NFT lottery for private and public sales.

Other use case include reduced fee structures, enhanced APY on user savings accounts, referral program, incentive rewards, enhanced credit card terms, access to exclusive services, conversion of small balances, the possibility of unlocking trading robots as signals, and much more.

About the NEXUS project

NEXUS Project enables its investors to use real estate tokens, equity derivatives, and cryptos as collateral for crypto payout loans with flexible repayment options for borrower selection. The application is not only practical and aesthetic, but also truly revolutionary in its design and functionality.

Users of the Project NEXUS app also have the “Risk Reserve” feature to further build confidence and protect investors while showing the seriousness of the platform and the team behind it. If the risk reserve is required, the NEXUS project will attempt to buy back NEXUS tokens on the open market with company profits to maintain the 5% allocation. Unforeseen and operationally challenging events and circumstances are disruptive. Thus, with the in situ risk reserve, the users of the application have this additional insurance.

The developers have worked tirelessly to ensure that the Project NEXUS app presents only relevant information, providing the best user experience and keeping the interface clutter-free. They see the big picture, enabling effective decision-making. For example, when a user accesses an asset, news, financial data, charts, and other critical information are presented in the application.

Highlights, real estate for $5, equity derivatives for $1, and all the crypto you want. One app, one KYC and one BIG vision. This is exactly the package that the NEXUS project provides. Many unique use cases are offered, many obstacles are broken down, and many opportunities to win! Even more exciting, the Private sell for their token begins today, which means investors have the opportunity to embark on which is still very early.

For more information and regular updates, join their Telegramsee their Clear paperor visit their other chains.

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