Something to remember: 

“It’s OK to be wrong. Just don’t be confident and wrong.”

Week Ahead

What’s driving markets?

• Crypto market capitalization added 4.39% this week as bitcoin continues its rally. ETH and SOL were most notable altcoin performers, both gaining relative to BTC.

• October inflation numbers were down sharply, declining from 6.7-4.6% according to last week’s CPI. This reduces pressure on the US Federal Reserve to continue hiking interest rates, increasing the positive outlook for risk assets.

• Blackrock and Fidelity both filed for Ethereum Spot ETFs this week, increasing confidence in a Bitcoin Spot ETF approval in the coming months and helping Ethereum reclaim 0.054 ETH/BTC ratio.

Catalysts

• Tuesday, November 21th @2:00PM ET: FOMC Meeting Minutes

Return of the Derivatives

Over the past month, BTC has seen over $720mn in short and $400mn in long liquidations, as well as the largest single-day liquidation event since the August selloff. Liquidation cascades are familiar events during bull markets and times of volatility, but they have become increasingly infrequent over the past year’s volatility drought. As traders return from the summer to a positive macro outlook paired with the potential catalysts of Spot ETF approvals as well as the approaching BTC halvening, volatility has jumped to its highest level since April while market participants position themselves and seek outsized returns via perpetual futures. Binance has continued to dominate derivatives volumes, but OKX and Bitget have both made relative gains by capturing the long tail of assets, listing newer tokens more quickly than Binance to cater to a risk-seeking retail audience.

Charts

• Bitcoin’s daily transaction fees spiked at the beginning of November, mostly driven by BRC-20 related token activity. Bitcoin’s daily fee revenue surpassed Ethereum’s for the first time since 2020

• Bitcoin whale volume (addresses with >$10m) crosses 30% of total network activity

• Ethereum trades higher relative to Bitcoin in the days following Blackrock’s ETH spot ETF filing

• ETH derivatives volume and open interest has recovered and gained relative to Bitcoin’s derivatives volume in the past three months

Research Content

• Fake Blackrock ETF filing causes volatility in XRP, wider market

• OKX launches “X1”, a zkEVM L2 built on Polygon

• Foresight Ventures buys a majority stake in “The Block” for $70m

• Vitalik writes about layer-2 economics and scaling 

• Uniswap Foundation cross-chain bridge report

• Kaiko derivatives report

• SEC 2023 annual enforcement results

• Binance Research 2023 Crypto Fundraising report

• Certik reports Solana Saga phone vulnerability

• Blackrock submits Spot Ethereum ETF proposal

• Tether will invest $500m into Bitcoin mining

• A16z annual 2023crypto report 

• Bitcoin daily fee chart

• Pantera Capital report on the intersection of crypto & AI

• Kronos loses access to API keys, leading to the pausing of trading on Woo network and loss of $25m

• Dydx insurance fund loses $9.5m as a result of a highly profitable trading strategy on YFI

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