Mobius Capital co-founder expects bitcoin to fall to $10,000, BlockFi files for Chapter 11 bankruptcy

Yahoo Finance's David Hollerith breaks down the latest news in crypto as BlockFi files for bankruptcy following the FTX fallout and Mobius Capital issues a bearish call on bitcoin.

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RACHELLE AKUFFO: All right, well, let's get you a check on what we're seeing with crypto. We're seeing Bitcoin under pressure, down more than 3% there. As you can see, that Ethereum also under pressure to the tune of 5%. Hasn't been able to bounce back since the Ethereum merge. You have Solana down 9%. Litecoin down more than 7%. And Dogecoin, a Musk favorite there, down more than about almost 12% there.

Now, this is all happening, of course, today as we get more contrasting calls on the future price of Bitcoin. On one hand, you have legendary investor Mark Mobius saying, it could fall to $10,000. All the while, Cathie Wood sticking to a big call of $1 million for the token by 2030.

Well, lender BlockFi is filing for bankruptcy. BlockFi had halted withdrawals November 11, the same day that FTX filed for bankruptcy and now will join its fellow platform as it files for Chapter 11 in New Jersey. Well, our very own David Hollerith is following this story and joins us now. So David, what's the latest?

DAVID HOLLERITH: So we just picked up the filing and it shows that BlockFi has anywhere between $1 billion and $10 billion in assets and liabilities. And that's for more than 100,000 creditors. And notably, BlockFi was facing similar financial woes over the summer.

You know, we saw the bankruptcies of Voyager, Digital, and Celsius Network, both competitors to BlockFi, during that time. And BlockFi received a bailout from FTX in the nick of time, so to speak. And that was a $250 million line of credit that they received from FTX.

In a statement, the company cited that, you know, a lot of the bank-- the bankruptcy is related to the amount of credit that they're using to run their businesses in FTX's bankruptcy. So this was definitely expected at this point. BlockFi, obviously, did pause withdrawals.

The company did say in its filing that it has $256 million in cash to support itself during the operation. So not a surprise. Obviously, not great to see another bankrupt crypto firm. But the one thing I will point out is this is a little bit more about a firm being in the wrong place, at the wrong time, and getting the wrong cash from the wrong people.

As opposed to what we saw over the summer with Celsius Network, which looked more like mismanagement in terms of management practices.

RACHELLE AKUFFO: Certainly not helping at a time when people are looking for a lot more trust in the crypto industry. Also want to look at what's happening with Bahamian authorities. They're working on an investigation into FTX. What's the latest there?

DAVID HOLLERITH: Right, so last night the attorney general for the Bahamas released a statement sort of addressing the nation's investigation into the FTX collapse. FTX is known to be headquartered in the Bahamas. And the Bahamas has claimed jurisdiction over at least one piece of FTX's affiliated companies under bankruptcy.

So here's the statement from the Bahamian attorney general. Hear what he had-- here's what he had to say.

- It is extremely regrettable that in chapter 11 filings for bankruptcy protection made in New York last week, that the new chief executive of FTX Trading Limited, not the Bahamas-based FTX Digital Markets but an affiliate company Incorporated in Antigua and Barbuda, misrepresented the timely action taken by the securities commission and used inaccurate allegations lodged in the transfer motion they had filed to do so.

It is possible that the prospect of multimillion dollar legal and consultancy fees is driving both their legal strategy and their intemperate statements.

DAVID HOLLERITH: Yeah, so just to wrap up. You know, what he was addressing is he was sort of speaking out to FTX's new CEO under bankruptcy, who's been appointed. And there's been a dispute between the Bahamas and the US lawyers representing FTX. And it's mostly looked like a dispute over jurisdiction for this one part of FTX's business. And potentially just comes down to which jurisdictions' lawyers get the legal fees.

But in FT-- in US filings, FTX lawyers have made the accusations that Sam Bankman-Fried, the former CEO, has been sort of in the league with the Bahamian regulators. And of course, this is an accusation and it's not necessarily verified. But there is this split that's playing out. We're obviously keeping close eyes on that.

RACHELLE AKUFFO: All right, well, thank you for getting us up to speed on that. David Hollerith, thanks so much.