WazirX moves closer to trading comeback

Phoenix rises 50% on ADX debutDubai-headquartered crypto mining firm Phoenix has debuted on its Abu Dhabi Securities Exchange (ADX). The mining equipment hardware retailer witnessed a 50% surge in its share price following a successful initial public offering (IPO) that raked in $371 million.Photo by Marios Gkortsilas on UnsplashFortuitous IPO schedulingIt emerged last week that the company had adjusted its ADX IPO launch date from Monday to Tuesday to account for the holiday schedule in the United Arab Emirates (UAE) and to “ensure comprehensive participation in the IPO.”That adjustment may have been significant in garnering the level of participation that transpired. Bitcoin and to a lesser extent, the broader crypto market, surged to levels not seen since early 2022. From a low of $876 billion on June 15, 2022, overall crypto market capitalization currently stands at $1.6 trillion.With the Bitcoin unit price having exceeded the $42,000 level on Monday for a time, it’s likely that news of a crypto market resurgence would have aided Phoenix Group’s IPO success on Tuesday morning. In trading on Monday, publicly quoted bitcoin miners such as Riot Platforms, Marathon Digital and CleanSpark had recorded share price gains of between 8 and 11% on the Nasdaq in the United States.Surpassing expectationsTuesday’s trading surpassed the expectations of even the most optimistic analysts, with shares opening at 2.25 dirhams and marking a 50% increase from the IPO price of 1.50 dirhams. The ADX, chosen as the platform for Phoenix’s IPO, was strategically selected due to its alignment with the company’s dynamic vision and the rapidly expanding financial market it offers.The overwhelming response from investors resulted in a 33-times oversubscribed offering, translating into orders totaling $12 billion. The retail portion of the offering experienced an even more astonishing over-subscription rate of 180x.Munaf Ali, Co-Founder & Group MD of Phoenix, sees this milestone not merely as a listing event but as a profound declaration of the Middle East’s ascendance in the global tech and blockchain landscape. He attributes the success of Phoenix’s debut to a burgeoning appetite for financial innovations in the Middle East, underscoring the growing interest in exposure to the cryptocurrency sector among investors in the region.Mining to AI pivotPhoenix’s debut on the ADX occurs at a time when other publicly listed companies in the cryptocurrency sector are reorienting their focus from mining digital currencies to supporting the computational needs of the artificial intelligence (AI) industry. In 2022, the sector generated revenues of $6 billion, a slight dip from the record-breaking year of 2021.Industry analysts, including JPMorgan, posit that the high-performance computing (HPC) sector in AI could prove more profitable than Bitcoin mining. This strategic shift is evident in the rebranding of well-known Bitcoin mining entities such as Riot Blockchain (now Riot Platform) and Hive Blockchain Technologies (now Hive Digital Technologies), emphasizing their diversification efforts.Phoenix, acknowledging the potential of the AI-focused sector, believes it could complement its existing operations and contribute to future growth, aligning with JPMorgan’s forecasts regarding the profitability of HPC in the AI industry.

Flybit Achieves Top Score in FIU’s Anti-Money Laundering AssessmentSouth Korean virtual asset exchange Flybit said Monday that it has received the highest rating in the comprehensive anti-money laundering (AML) evaluation conducted annually by the Financial Intelligence Unit (FIU) under the Financial Services Commission for all financial companies in Korea.Photo by REDioACTIVE on PixabayRanking among top-performing financial institutionsThe comprehensive AML evaluation is aimed at facilitating the optimal establishment and implementation of strong AML systems. It is operated under a control system where financial authorities assess and oversee a given company’s AML risk management, and the company receives verification on the adequacy of its risk management levels.In this year’s evaluation, Flybit achieved a score of 89.70, scoring in the highest ranks among all financial institutions, including virtual asset service providers (VASPs). This places Flybit among the upper echelons of financial companies that received an “Excellent” rating, which make up only 15% of all evaluated firms.Robust and varied effortsThe exchange explained that it has taken a risk-based approach (RBA) to control and manage its AML risk factors that were found in the results from the FLYBIT Enterprise-Wide AML Risk Assessment (FARA) — an AML risk assessment model developed in-house — and the FIU’s semi-annual AML system compliance evaluation, where FLYBIT was deemed as a “self-monitoring” company.Notably, Flybit operates customized AML education programs for different ranks and job roles within its corporation, which leverages both external and internal resources, including the Korea Banking Institute. It also conducts over 40 hours of advanced-level training — three times longer than the FIU recommendation — for employees directly involved in AML-related tasks.“The basis for this [evaluation] result was the active interest and support of the management, as well as the operation of a specialized AML control system for VASPs,” said Seol Ki-hwan, a compliance officer in charge of AML reporting at Flybit. “In the future, we will continue our efforts, not only in AML compliance but also in fulfilling our responsibilities and roles as a model VASP.”

As the cryptocurrency market anticipates the approval of a spot bitcoin exchange-traded fund (ETF) in the United States and the subsequent boost to bitcoin’s unit price, Arthur Hayes, Chief Investment Officer (CIO) of family office Maelstrom, has issued a warning of potential market turbulence. Hayes, better known as the founder of crypto derivatives platform BitMEX, has moved on to Hong Kong-based Maelstrom, a family office that invests in early stage infrastructure ventures that implicate a move towards the decentralization of everything.Photo by Kanchanara on UnsplashMacroeconomic risk factorsIn a detailed blog post on Friday, Hayes outlines a number of macroeconomic variables that could lead to a bitcoin unit price downturn. Hayes begins by highlighting the depletion of the Federal Reserve’s reverse repo program (RRP), which has served as a significant driver for risky assets over the past year. This program allows qualified banks and investment firms to park cash and earn interest on it. The RRP balance has rapidly declined from a record high of $2.5 trillion at the end of 2022 to $700 billion. Hayes projects it to reach its historical average of $200 billion by March. As this liquidity source dwindles, he anticipates negative impacts on bonds and stocks, as well as cryptocurrencies. Fed BTFP expirationThe second factor contributing to the potential market turmoil is the expiration of the Bank Term Funding Program (BTFP) on March 12. This crucial Fed facility is designed to provide longer-term loans to commercial banks. The mechanism aids banking sector stability. Hayes is concerned that the BTFP might not be extended. Such an eventuality could lead to bankruptcy for banks holding massive unrealized losses on their bond holdings. It could lead to a “liquidity rug pull” event reminiscent of the banking crisis in March of the previous year. The crypto OG predicts that such an eventuality would force a response. “The combination of a lack of liquidity gushing from the RRP and the lack of printed money to cover the bond losses on banks’ balance sheets will decimate the financial markets globally,” he wrote. Hayes asserts that the combination of reduced liquidity from the RRP and the lack of printed money to cover bond losses could have a global impact on financial markets. In response to this scenario, he predicts that the Fed will cut interest rates during its March 20 meeting and reinstate the BTFP funding line. ‘Healthy’ correctionIn terms of bitcoin’s price, Hayes foresees a “healthy” correction of 20% to 30% from early March prices if the outlined scenario unfolds. However, he suggests the decline could be as much as 40% if BTC rallies to $60,000-$70,000 in the coming weeks. Despite this temporary plunge, Hayes remains optimistic about bitcoin’s resilience, emphasizing its status as a neutral reserve hard currency that is not a liability of the banking system and is traded globally. In a recent podcast appearance, Hayes expressed the view that the business model of U.S. dollar stablecoin issuer Tether will be challenged once multinational banks receive the go-ahead to offer fiat-backed stablecoins. Overall, Arthur Hayes has urged investors to be cautious and to prepare for potential market volatility in March, emphasizing the importance of understanding the interconnected factors influencing both traditional finance and the cryptocurrency market.