Editor’s note: I’ll have a new crypto pick for you early next week.
Dear Member,
Crypto markets are down today on news that leading South Korean exchange Upbit is under investigation for suspected fraud. Upbit is South Korea’s largest crypto exchange.
According to Cointelegraph, investigators say Upbit “faked its balance sheets and deceived investors.”
On a positive note, withdrawals and transfers are still functioning on Upbit. That means customers can still sell and transfer their coins off the exchange.
Here’s the official statement from upbit.com (translated from Korean using Google Translate and lightly edited for clarity):
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Upbit is currently under investigation by prosecutors, and we are working diligently.
Upbit services such as all transactions and withdrawals are operating normally. Thank you for using Upbit. |
We’re still waiting for more details on the investigation. If this is just about Upbit deceiving investors, then it isn’t a big deal for the market. It’s simply authorities punishing fraudulent corporate activity.
It would be more concerning if Upbit didn’t have all the customer funds it claims to. I’ve seen no evidence of this, but this is the worst-case scenario.
Either way, it doesn’t change our investment strategy. These types of incidents are bound to happen in such a new and fast-growing market.
We have multiple positive catalysts that should take this market higher shortly. Next week, the largest U.S. crypto conference, Consensus, takes place in New York. Crypto companies tend to make their largest announcements of the year at this show, and media coverage this year will be much bigger than it was last year.
According to Fundstrat analyst Tom Lee, prior Consensus rallies have yielded gains between 10% and 70%, meaning if this year does outdo the previous, bitcoin could surge back above $15,000.
Of course, we also got news this week that the parent company of the New York Stock Exchange is working on an institutional crypto exchange. In my view, this news is monumental, and it was underappreciated by the market.
In short, today is a good day to add to positions.
Have a great weekend, everyone.
Adam