AscendEX Sunday Note (8.6-8.13)
Something to remember:
“The truth suffers from too much analysis”
What’s driving markets?
Crypto Market volatility (CVI) remains near multi-year lows. This appears to be the least volatile year in terms of price action in crypto history
Bitcoin (BTC) and Nasdaq spot price correlation at multi-year lows. This week saw Fitch downgrade the US long-term credit issuer rating and a lackluster AAPL earnings report, which dragged down equity markets.
US CPI data will be released this Thursday. This past week, many big banks altered their forecasts to predict the probability of a recession being much lower than previously thought
Ark 21Shares Bitcoin ETF Re-filing date August 13th
Crypto markets are optimistic that a Bitcoin spot ETF is coming before the end of this year. The question is whether markets have accurately priced in the probability of the ARK ETF being approved later this week. Optimistic speculators have been piling into BTC ahead of decision dates, hoping to front run post-launch ETF flows. In addition to the flows themselves, the approval of a crypto spot ETF would be a significant step towards the validation of crypto as an asset class
Thursday 8/10 @8:30am ET: US CPI & Core Inflation Rate
Sunday 8/13: Ark 21Shares Bitcoin ETF Re-filing date
Centralized Exchanges continue to receive negative attention, as multiple nation states attempt to wrangle Binance International and CEO CZ, and it is widely speculated over the weekend that Huobi execs were arrested by Chinese authorities. CEX Fud is nothing new in crypto, but since the demise of FTX, crypto analysts have cranked up their scrutiny to new heights. Speculation ranges from reasonable to borderline conspiracy theories. Considering that Binance alone accounts for a 50%+ market share of all crypto trading activity, the scrutiny is well deserved.
GC Jim’s Take:
DOJ has been considering charges against Binance for at least 2 years for sanctions violations
Criminal charges are a question of when (and what they will be), not if
Binance is likely to pay a record-breaking fine, but the main hinge of the deal will be whether CZ faces jail time as a result of any criminal charges. Binance indicated that they intend to fight if the DOJ tries to put CZ in a cell.
Final Verdict: “Binance is the JUUL of the crypto industry. It broke all the rules knowingly, played all the stupid games on the bet that it could grow an incredible market share and would then pay a fine that would allow it to stay in business while continuing to benefit from this market share.
JUUL lost that bet in the US with the FDA. It got put out of business. We will see how that dice roll goes for Binance.”
Q2 2023 had the lowest overall CEX traded volume since Q4 2020 ($1.6T). This is due in part to Binance rolling back no-fee trading- Binance’s volume dropped ~70%
Binance still has a 52% spot market share, although it is down from 63% volume dominance in January ’23. Bybit, Coinbase and OKX have each won pieces of their market share.
Binance (53%), OKX (15%), Bybit (12%) and Bitget (12%) make up >90% of perpetual derivatives volume. Overall derivatives volume is up slightly since the beginning of the year
Many of the largest startups in crypto have failed to raise capital at an increased valuation since last year. Take a look at some recent secondary market offers for shares in popular venture-backed projects
Curve Pool Reentrancy bug Post-Mortem by Defillama team
Crypto VC monthly funding report
Polygon ZkEVM team accuses zkSync of copying Plonky2 source code for their new prover, Boojum
CRV offers exploiter 10% bug bounty in exchange for return of hacked funds
Coinbase files a motion for judgement in its case with the SEC
Elon Musk: X will never launch a crypto token
Binance Research report on Telegram bot-related crypto projects
BALD deployer revealed as Milkyway16eth
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