The Digital Asset Insider is your monthly recap on what’s been going on in the digital asset space. Brought to you by Andrew Han, Director of Business Research at Fireblocks.

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Despite challenges faced by the digital assets and crypto space in the crypto-native arena, interest in blockchain technologies remains positive. FTX’s filing in the United States for Chapter 11 bankruptcy protection dominated the headlines for most of November. Now, more than ever, counterparty risk is top-of-mind for organizations who continue to operate and expand into the digital asset industry. Fireblocks firmly believes that the optimal solution is for organizations to have 100% ownership and control of their funds — read our 5 key principles on Direct Custody to learn more.

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Digital Assets Market

FTX’s filing in the United States for Chapter 11 bankruptcy protection dominated the headlines for most of November. The effects of the exchange’s collapse reverberated through an already weak cryptocurrency market. Many lessons will be learned by all market participants, from venture capital firms to sophisticated investors. The process for assessing counterparty risk in the digital asset ecosystem and investment due diligence procedures will be high on the agenda for urgent review.

  • In the United States, FTX filed for Chapter 11 bankruptcy protection after failing to be acquired by rival Binance when its sister firm Alameda’s balance sheet revealed unexpected levels of specific token holdings in the FTX ecosystem. Further, there were concerns raised over client funds’ use. Not only were FTX’s clients affected, but also well-known venture capital firms who have announced write-offs in their investment into FTX and FTX.US.
  • BlockFi, due to its close ties to FTX, also filed for bankruptcy protection. Genesis Trading is working with creditors to avoid filing for bankruptcy.
  • Binance will publish its Bitcoin proof of reserves to lead the industry in its attempt to regain confidence in large market participants. Assessing counterparty risk should be more accessible in the digital asset ecosystem, which had formed out of the distrust of centralized financial institutions in the aftermath of the Global Financial Crisis. While financial information was available in traditional firms, often, it was not timely nor transparent enough. This is not the case for digital assets, where everything is available on the blockchain. Binance has also initiated a $1 billion bailout fund with other players, again to reassure market participants.

Regulation | Regulators

Brazil has made progress in passing its crypto bill, which will go before the President for approval. Blockchain infrastructure gets support in Europe by passing a policy program focused on digital assets. Financial regulators granted digital asset licenses to firms in Asia and the United Kingdom.

  • Brazil’s Chamber of Deputies passed the crypto bill, that defines digital assets and their service providers. However, there remains a debate around the requirements for segregated accounts, which were removed from the bill that passed. Legislators will bring the bill in its current form before the President for approval.
  • The European Parliament approved the Digital Decade policy program, which includes support for building the European blockchain infrastructure. The program sets goals for 2030 and includes developing digitally skilled professionals, secure and sustainable digital infrastructures, and the digital transformation of businesses and public services.
  • The United Kingdom’s Financial Conduct Authority (FCA) granted TP ICAP a license to operate a digital asset exchange, Fusion Digital Assets, aimed at institutional investors. MetaComp received full approval to provide digital payment token services in Singapore. The digital exchange aims to provide services to corporates and institutional investors. 


Stablecoins could provide a shorter pathway for central banks to bring retail customers to use digital assets versus creating their own retail central bank digital currency. A large and influential fund management firm sees tokenization as the future of markets and securities.

  • In London, Antoine Martin, advisor to the Federal Reserve Bank of New York, commented on the issuance of a retail central bank digital currency (CBDC). He said a central bank could support stablecoins by allowing them to be backed one-to-one with deposits in their reserve account rather than create a retail-facing infrastructure, which the private sector establishes today.
  • BlackRock’s chief executive Larry Fink still believes in the technology behind digital assets despite the current market conditions. He commented that the tokenization of securities is the next generation of markets and securities. As far back as April, Blackrock announced interest in asset tokenization and permissioned blockchains, and in August announced a partnership with Coinbase to offer institutional investors access to crypto.


Revenue opportunities for content creators using non-fungible tokens (NFTs) will benefit from new royalty enforcement tools. NFTs continue to be used by brands and corporates as token gateways to draw customer loyalty and, therefore, recurring revenue.

  • NFT content creators on the Solana-based exchange Magic Eden are getting more infrastructure support to collect and pay royalty payments as their creations change hands. New collections will have an opt-in selection for the new enforcement tool, Open Creator Protocol (OCP). OpenSeas has a similar tool for its creators. According to OpenSeas, NFT creators earned $1 billion in royalties in 2022.
  • Porsche will provide purchasers of its NFTs to shape its design. Holders will select a “route” for their NFT — Performance, Lifestyle, or Heritage. Each route embodies a specific aspect of Porsche’s premium brand identity and will influence the overall design and character of the NFT. Similarly, Timex will allow 500 owners of Bored Ape NFTs to customize their watch with a choice of case, strap, and etchings.

Digital Asset Infrastructure

Scaling infrastructure and strengthening network security and technology against exploits will be crucial for the greater adoption of digital assets. Large and small investors alike want a level of privacy for their on-chain identity while at the same time complying with anti-money laundering and know-your-transaction requirements.

  • Ethereum scaling protocol, zkSync, passed a security audit by OpenZepplen. Layer 2 scaling protocols allow more transactions to execute at a lower cost before being recorded on the underlying Layer 1 blockchain. The protocol has also integrated with the on-chain identity solution RNS.ID that allows users to prove their identity without disclosing personal data.
  • RabbitHole is a new feature on the decentralized exchange 1Inch, aimed at preventing “sandwich” attacks (or front-running) for MetaMask users. This feature checks for transactions likely to be subjected to “sandwich” attacks and submits such transactions directly to a validator to avoid them from being seen publicly.


More central banks have announced their interest in central bank digital currencies (CBDC). Trials conducted using CBDCs have involved the issuance and settlement of digital bonds, and in the future, trials could include equities.

  • France and Luxemburg conducted a trial involving the issuance and settlement of a digital bond worth 100 million euros (US$104 million using an experimental central bank digital currency (CBDC). The financial institutions involved in the trial included the European Investment Bank, Goldman Sachs, Santander, and Societe Generale.
  • The National Bank of Ukraine is looking to create a CBDC, or e-hryvnia, that would facilitate the exchange and issuance of digital assets. The CBDC would enable retail non-cash payments, digital asset circulation, and cross-border transactions.
  • Indonesia’s central bank released its plans for a CBDC, Project Garuda, which will roll out in three phases. The first phase will involve a wholesale CBDC between large and central banks. The second phase will include the interbank money market and monetary operations. The last phase of the digital rupiah will involve retail users.

Crypto-Native Market Analytics

Crypto-native markets fell early in the month and traded sideways to end under $1 trillion in Total Market Capitalization (TMC). The catalyst for the drop in prices was the surprise in specific token holdings held by Alameda Research in the FTX ecosystem prompting a “bank run” on FTX.


Source: Coingecko

Crypto-native markets ended the month of the fourth quarter lower after dropping at the start of the month on news of issues with FTX and its subsequent filing for U.S. Chapter 11 bankruptcy protection.


Source: Coingecko

Digital asset markets broadly fell in November. The exceptions are U.S. Dollar based stablecoins which saw flows out of Tether and inflows into Binance USD.


Source: Glassnode

Bitcoin broke down and reached $16,000 on news of the troubles experienced by crypto exchange FTX on November 8th and 9th. Price has remained around these levels, last seen in November 2020.


Source: Glassnode

Netflows continued negative throughout November as concerns around holding assets on centralized venues were raised triggered by the events surrounding FTX.

REGIONAL BTC FLOWS [Last 7 Day Average, Dec 2]

Source: Chainalysis

Overall, BTC regional flows have fallen significantly, most notably between Eastern Asia and North America.

Assets typically flow within a region, likely due to preferences for local exchanges, but flows between regions often occur as a result of regulatory concerns, geopolitical changes, or significant market price variations.


Source: Glassnode

Ethereum remained above the $1,000 level and set a lower high starting in November. The overall trend remained down and could continue with a break of $1,000.


Source: Glassnode

DeFi TVL continued to move sideways along with the underlying token prices.


Source: Glassnode, Defi Llama Total Value Locked

Total value locked (TVL) for the protocols ranking all fell, with the most significant reductions being Avalanche and Tron.

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This reCap is distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. For other important disclosures.