This too shall pass🤞🏿
This too shall pass🤞🏿
Liquidations, outflows and price drop: BTC struggles a bit after 11 ETF approvals. Stablecoin growth nears $10 trillion? BNB Chain's AvengerDAO reduces losses. Two crypto execs sentenced to prison.
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This is The Token Dispatch 🙌 you can hit us on telegram 🤟
It's been a dizzying 24 hours on the crypto rollercoaster on Monday.
As per Coinglass data, here's what happened:
$300+ million in liquidations.
Long positions took the brunt of it, $270+ million gone.
Short-sellers lost $40+ million as well.
Traders lost about $30 million from leveraged Bitcoin positions and $24 million from long positions.
Why now? The recent approval of 11 spot Bitcoin ETFs by the SEC has heightened Bitcoin's volatility.
Yeah we know that: Bitcoin's burden of ETF 🤔🏋️♀️
Since the approval day
Bitcoin's price decreased from $48,494 to $39,978 today (atm)
Bitcoin has lost over 7%.
Annualised Bitcoin volatility has risen from around 46% to over 52%.
The circulating supply of Bitcoin in profit dropped from over 90% to just over 83%, reducing sell pressure.
Market Observations?
Arthur Hayes, former CEO of BitMEX, hedged against BTC downside by buying put options.
Mike Novogratz expects Bitcoin's volatility to decrease in about six months, with a potential increase in its price.
10x Research notes a bearish trend in Bitcoin since Oct. 2, with potential for further decline.
Anthony Scaramucci notes a delay in ETF inflows due to regulations, specifically the 30-day cooling-off period post-GBTC sale.
Adam Back emphasizes the large scale of ETF inflows, comparing them to the impact of Bitcoin halving events.
Also, European and Canadian Bitcoin ETPs saw significant outflows, partly shifting to US ETF products.
There's also the GBTC selling impact on Bitcoin price.
GBTC, now an ETF, is witnessing investor sell-offs as its share price aligns with the Bitcoin spot price.
Data shows a significant reduction in GBTC's Bitcoin holdings, almost 100,000 BTC this month.
Read: Who's selling? 🪝
Whale Activity: Changes in Bitcoin holdings by large entities, with distribution patterns emerging among whales.
What's upcoming? Federal Reserve interest rate decision on Jan. 31 may influence market trends.
Keep an eye on this👇
Despite all the recent declines, the Crypto Fear & Greed Index indicates a greedy market sentiment.
The index scored 55/100, indicating that overall market sentiment is still leaning towards optimism or greed.
TTD Outflow🚰
$24.7M said "bye-bye" from Bitcoin funds last week.
This follows heavy selling in the crypto market since the approval day.
Nearly $21 million was withdrawn from crypto products between Jan. 11 and 19.
Here’s the numbers👇
Trading volume for ETF products surged, reaching $11.8 billion, dominating 63% of all Bitcoin volumes on trusted exchanges.
Now, about the ongoing sales from Grayscale's Bitcoin Trust (GBTC) which put Bitcoin in a very weird position:
GBTC experienced over $2.2 billion in outflows last week.
Reports suggest bankrupt crypto exchange FTX sold about 22 million GBTC shares, contributing to the outflows.
But GBTC still holds over $20 billion in assets.
We have talked about this: Who's selling? 🪝
Why it matters?
The transition of GBTC to a spot Bitcoin ETF entails sizeable BTC transfers to Coinbase.
As one of the largest Bitcoin funds, GBTC's huge sales introduce a significant amount of Bitcoin into the market. If this increased supply isn't balanced by equal demand, it can result in a decline in Bitcoin's price - that's what's happening.
So there's concerns👇
Despite GBTC's outflows, BlackRock and Fidelity Investments saw substantial inflows into their bitcoin ETFs.
Where’s ETF?🚨
SEC has blamed a "SIM swap" attack for a recent hacking incident that occurred just before the agency was expected to approve Bitcoin ETFs👇
TTD Morgan Stanley🏦
Morgan Stanley recognizes Bitcoin's significant market cap and its impact on global finance.
“The adoption of Bitcoin beyond speculative purposes continues to evolve. U.S. regulators in January gave the green light to BlackRock and 10 other asset managers to offer spot Bitcoin exchange-traded funds (ETF), a potential paradigm shift in the global perception and use of digital assets.” - Andrew Peel, CFA Executive Director Head of Digital Asset Markets at Morgan Stanley, wrote.
There's a shift in global financial dynamics: Nations are diversifying monetary reserves in response to US policies and economic sanctions.
Stablecoin Growth: Transaction volume near $10 trillion in 2022, showing their importance in digital asset trading and settlements.
Morgan Stanley highlights the role of cryptocurrencies, including Bitcoin, stablecoins, and CBDCs, in reshaping the financial system.
“While changes in global trade and currency usage are likely to be gradual during the early adoption stages of these digital solutions, they are expected to gain mainstream acceptance over time… As the world adjusts to these technological advancements, understanding the interplay and nuances between traditional fiat currencies, Bitcoin, E-Money, and stablecoins becomes crucial.”
TTD Losses👋🏻
BNB Chain reported an 85% decrease in investor losses in 2023 compared to 2022.
That's thanks to the superhero squad at AvengerDAO.
This community-led security team focused on high-liquidity protocols like PancakeSwap, providing real-time threat reports.
Overall Losses Down 85% YoY
Hacks Reduced by 91% to $73.2M
Scams Decreased 54% to $87.9M
64% Drop in Losses from Q3 to Q4 2023
165 Rug Pull incidents with $49M in losses
Despite the drop in financial losses, the actual number of attacks increased by 44%.
While trailing Ethereum in deposits, BNB Chain has more daily active users, presenting unique challenges.
High Proportion of Scams: Solidus Labs reported 12% of BNB Chain tokens as scams, with concerns about rug pulls on both BNB Chain and Ethereum.
AvengerDAO's Composition: The DAO includes Binance, BNB Chain, and security firms like CertiK, SlowMist, and BlockSec.
TTD Bars⛓️
Let this be the year of Karma. Two down👇
5️⃣ years in prison
Remember IcomTech, the crypto mining firm promising daily riches? Its CEO, Marco Ochoa, just traded Lamborghinis for prison bars.
Lands a 5-year prison sentence for wire fraud conspiracy.
Judge Jennifer Rochon orders Ochoa to forfeit $914,000 and start his sentence on March 19.
Why? Turns out, those "guaranteed returns" were about as real as a unicorn in a Bitcoin mine.
Ochoa admitted to participating in a crypto Ponzi scheme at IcomTech, where he was CEO from 2018-2019.
Ochoa and others were charged in November 2022, three years after IcomTech's downfall.
Other Executives: IcomTech founder David Carmona also pled guilty; other executives face varying charges.
2️⃣years in prison
Peter Kambolin, head honcho of Systematic Alpha Management, is trading his penthouse for a prison cell thanks to a "cherry-picking" crypto scam.
Kambolin executed trades for investors and his accounts, fraudulently allocating profits to himself.
He used the scam's proceeds for personal expenses and transferred funds to foreign accounts in Belarus and Dominica.
TTD Surfer 🏄
The US House Financial Services Committee is pressuring Meta to disclose any plans it may have related to blockchain and crypto.
Mt. Gox has reportedly contacted creditors to confirm their identity and the existence of their accounts for Bitcoin repayments.
A Bitcoin Ordinals inscription from the Quantum Cat project has sold for over $250,000 at Sotheby's auction house.
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