Bitcoin's October glow-up🌟
Bitcoin's October glow-up🌟
Wall Street's swiping right on Bitcoin derivatives. Hayes hints at $1 million BTC amid economic tensions. South Korea's Tron love grows, and a LastPass breach costs BIG.
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Bitcoin derivatives are seeing some serious love, and the big finance crowd can't get enough of BTC.
Crypto’s October Revival 🎃
October's proving to be quite the month for Bitcoin.
With a surge in open interest for BTC derivatives, it's clear: the traditional finance participants are turning their heads and wallets to the digital gold.
And why wouldn't they? Bitcoin's price has been dancing its way up the charts ($35000).
Bitcoin Options: New all-time high - $16.35 billion.
Bitcoin Futures: Annual peak for 2023 - $13.59 billion.
Previous record (from 2021 bull market) - $24.27 billion.
Understanding Derivatives:
Options: These contracts provide the holder the right (but not the obligation) to buy or sell Bitcoin at a predetermined price in the future.
Futures: These are contracts to buy or sell Bitcoin at a set price on a designated future date.
Both instruments are vital in the financial ecosystem and offer strategies for risk management or speculative activities.
Bitcoin Options: New Heights
Recent data from Glassnode reveals the Bitcoin options market's impressive performance.
As of October 24, the combined volume for options contracts touched $16.35 billion, a milestone that surpasses previous records.
There's a super positive vibe for Bitcoin with lots of bullish signs. All eyes are on the $34,000 mark.
Bitcoin Futures: Not Far Behind
The Bitcoin futures market is no slouch either. Glassnode's stats show a yearly high of $13.59 billion.
This involves the big boys: Binance, Bitfinex, Bybit, CME, and the gang. Despite the positive numbers, the futures market has not surpassed its all-time high, which was set during the 2021 bull market.
Traditional finance is diving back into Bitcoin?
Big Transactions Surge
On October 24, Bitcoin transactions that surpassed the $100,000 mark reached a yearly peak of 23,400. This surge appears to be correlated with Bitcoin's recent price rally above $34,000, as data from IntoTheBlock suggests.
Historically, similar surges in substantial transactions were observed around the time major institutional players, such as BlackRock, showed interest in the cryptocurrency via initiatives like ETF applications.
All Eyes on BTC?
BitMEX’s former head honcho, Arthur Hayes, thinks the BTC train could possibly go all the way up to $1 million.
With the US getting more involved in global disputes, Hayes feels the worldwide tension thermometer is rising.
And guess what’s getting affected? Our economic climate.
With the US Federal Reserve pausing on interest rate hikes and potential economic downturns lurking, things are heating up.
Hayes pens down, “If long-term US Treasury bonds offer no safety for investors, then their money will seek out alternatives. Gold, and most importantly, Bitcoin, will begin rising on true fears of global wartime inflation.”
He suggests that a Bitcoin valued at a staggering $1 million isn’t far from reality. Economic shifts, like the yield curve control (YCC) emerging in Japan, play a significant role in this.
While Bitcoin is enjoying this upswing, Wall Street stocks seem a bit lukewarm.
While Bitcoin, Wall Street isn’t having as good a time. The S&P 500 saw a 2.5% decline, and the tech-centered Nasdaq Composite has dwindled by 3.3% during the same period.
For a significant part of 2022, Bitcoin seemed to shadow stock movements. But this relationship has been evolving, with Bitcoin’s link to stocks becoming progressively weaker.
Senior Analyst Vetle Lunde.
“The correlation story has changed quite a lot in the past year, and that's something that should be acknowledged by market participants,” - K33
To paint a clearer picture
Bitcoin's connection with the Nasdaq and the S&P 500 shifted from 0.79 and 0.82 (last May) to just 0.20 and 0.16. Here's a simple guide: A value of 1 suggests that two assets always move hand in hand, whereas a value of -1 denotes the exact opposite.
Galaxy Digital's research
Crypto fund Galaxy Digital predicts spot Bitcoin ETFs could lure a whopping $14.4 billion in the first year alone.
These ETFs, the fund believes, are superior to existing investment avenues like trusts and futures, which currently encapsulate over $21 billion.
By the second and third years, inflows could swell to $27 billion and $39 billion, respectively. The US wealth management sphere, with assets totalling $48.3 trillion as of October 2023, stands to gain immensely from an approved Bitcoin ETF.
What's Peter Brandt sayin?
TTD Blockquote🎙️
Ripple's CEO, Brad Garlinghouse.
"The hypocrisy is shocking."
Brad Garlinghouse has voiced strong criticisms over comments made by Jay Clayton, the former Chair of the SEC.
This follows the SEC's decision to initiate regulatory actions against multiple crypto firms since early 2023.
Clayton's Stance on SEC Actions
Jay Clayton, in a CNBC interview conducted on June 29, 2023, asserted his belief that the SEC should only initiate legal proceedings against firms when there's solid legal justification to do so.
“When you have the power of the state, you’re supposed to only bring cases and only make rules that you think are going to pass judicial muster.”
Garlinghouse's Retort
Garlinghouse highlighted the inconsistency in Clayton's remarks, considering that under Clayton's tenure, the SEC had filed a suit against Ripple, Garlinghouse, and Ripple co-founder Christian Larsen in December 2020.
This lawsuit accused Ripple and the two executives of conducting an “unregistered, ongoing digital asset securities offering.”
They were alleged to have garnered over $1.3 billion through XRP sales.
Garlinghouse expressed his sentiments candidly, stating:
“As a reminder, Jay Clayton brought the case against Ripple, me and Chris Larsen. And left the building the next day.”
The significance of Clayton’s comments from June 2023 is accentuated due to the recent lawsuit's unfolding involving Garlinghouse and Larsen.
Read more here.
TTD Numbers 🔢
$1.6 Billion
Gemini, the cryptocurrency exchange, is filing a legal complaint against the now-bankrupt crypto lender Genesis, asserting a debt of approximately $1.6 billion, equivalent to 62 million Grayscale Bitcoin Trust (GBTC) shares.
Gemini's central argument is grounded on a security agreement they believe existed between the two firms.
This agreement allegedly designated the mentioned 62 million GBTC shares as collateral.
Post Genesis's bankruptcy declaration, Gemini maintains that their efforts to secure these assets have been constantly thwarted due to Genesis's actions both before and after the bankruptcy commencement.
According to Gemini, Genesis not only hindered but also delayed the "Earn Users'" recovery of their digital assets.
Gemini's stance is clear: if the collateral (the 62 million GBTC shares) was duly handed over, it would sufficiently secure and settle the claims of all Earn Users.
While Digital Currency Group (DCG) – Genesis's parent company – had previously stated a recovery rate plan of between 95% to 100% for Earn Users, Gemini has rejected this proposal, accusing DCG of deceiving the creditors.
Currently, the legal landscape is complex, with DCG, Genesis, and Gemini entangled in various lawsuits:
Gemini's lawsuit against DCG.
The New York Attorney General's suit targets all three companies along with DCG's CEO, Barry Silbert.
Gemini argues that if the court rules in their favor, it would pave the way for the restitution of over $1 billion in digital assets that they claim Genesis has unlawfully retained from Earn Users for nearly an entire year.
TTD South Korea 🇰🇷
While the rest of the world goes gaga over Bitcoin and Ethereum, South Korea has a soft spot for altcoins.
Recent research shows that Tron's got more street cred in Korea than Ethereum. So, what's the story?
According to DeSpread Research:
An impressive 10% of South Korea's population, equivalent to 6 million individuals, are engaged in crypto trading. The influence of centralized exchanges is pivotal, with most investment activities being steered by them.
While global centralised exchanges have observed declining trading volumes since March, South Korea's local exchanges, especially Upbit (the nation's leading exchange), defied this trend.
By July, Upbit's trading volume expansion surpassed even the global giant, Binance.
Ripple's positive court outcome against the Securities and Exchange Commission led to a bullish stance on XRP, considerably impacting the nation's trading volumes.
Following Ripple-related news, trading volumes of major Korean exchanges shot up from $27 billion in June to $37 billion in July – a substantial 37% increase month-on-month.
Upbit: The Korean Crypto Pulse
While the world flocks to big names like Bitcoin, Ethereum, and Polygon, Upbit tells a different tale.
These crypto giants don't really make a splash in Upbit's trading volume. This just goes to show that South Korea's crypto tastes are truly one of a kind.
Here's a head-turner: Tron's network is the go-to in South Korea. Why? low transaction fees.
While South Korea's exchanges are buzzing with activity, many Koreans prefer to keep their crypto assets on foreign soil. A report last September showed South Koreans holding a whopping $99 billion in digital goodies overseas.
TTD Hack 🦹🏻
In a recent crypto heist, $4.4 million vanished in just 24 hours, thanks to the lingering aftermath of the notorious LastPass breach.
Since 2022, this breach has seen victims part with an estimated $35 million in crypto, and it seems the toll is still rising.
The Heist: What Happened? 🕵️♂️
25 unsuspecting souls reportedly woke up $4.4 million poorer.
The reason? A 2022 data breach that targeted the widely-used password management tool, LastPass. The result? $4.4 million in crypto whisked away from 80 wallets.
ZachXBT, the sharp on-chain detective, alongside MetaMask developer Taylor Monahan, spilled the beans in a recent tweet.
They traced the funds from the compromised wallets and found a common thread: Most victims were either loyal LastPass users or had stored their cryptocurrency wallet keys/seeds in LastPass.
Flashback to December 2022: LastPass had a confession to make. An attacker, armed with stolen intel from an earlier August breach, targeted a LastPass employee.
Their prize? The employee's login credentials and the golden key to decrypt stored customer data.
Read it here.
TTD Surfer🏄🏻
US Deputy Treasury Secretary Wally Adeyemo stated that while crypto is used by terrorist groups like Hamas, their use is still limited compared to more traditional funding methods.
Zodia Markets backed by Standard Chartered, has received registration as a VASP from the Central Bank of Ireland.
Global crypto exchange Kraken has appointed Bivu Das as the new UK managing director, succeeding Blair Halliday who is set to depart.
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