All Been Crypto — Week 9 Aug 2024
What a week we had a wide spread macro induces panic selling to kick off this week only to rebound and finish BTC -5% ETH -15%. I won’t go into details of the macro triggers ect but focusing on the structural parts. We had 1bn of liquidations within 24h and a lot of people got caught off guard as correlation with equity indices bounced back for our asset class. There were rumors about Jump exiting crypto as we can watch ETH onchain activity spotted unstaking and transfers to CEX. Meanwhile mining difficulty has reached new all time highs putting further pressure on miners at a time when some of the larger ones have started pivoting towards HODL strategy again (see ABC 26 July 2024). ETFs flows were more reactive with selling earlier in the week and then buying towards the end. Saylor disclosed he personally holds 1bn in BTC and Morgan Stanley advisors are now allowed to actively pitch BTC ETFs to their clients. We have more US regulatory action both +ve and -ve and of course more blow ups and scams, rugs. Enjoy reading!
Bat Tai Chi — btc21@mail.com
HEADLINES:
FED going after Customers Bank
The FED on Thursday imposed an enforcement action against Customers Bancorp for “significant deficiencies” around the bank’s risk-management and anti money-laundering practices. Customers Bank as many of you know is one of the very few crypto friendly banks left and as some in our industry view it’s a continuation of chokepoint 2.0. Austin Campbell is arguing that going after Customers Bank for AML issues is arbitrary and likely a targeted action against a crypto friendly institution. It’s probably not surprising that their founder Caitlin Long is ‘calling BS’ on a crypto executives meeting with the White House officials to discuss policy. This all comes as crypto players in the US are still struggling to keep the topic bipartisan and force Democrats hand to more pro-crypto policies vs republicans already fully embracing the industry and almost courting the crypto vote.
XRP vs SEC
Ripple came away with a small 125mm civil penalty in their SEC lawsuit vs the 2bn demanded after a judge ruled that institutional sales of XRP violated federal securities laws but the programmatic sales of XRP to retail on exchanges did not. Ripple Labs CEO Brad Garlinghouse stated “This is a victory for Ripple, the industry and the rule of law. The SEC’s headwinds against the whole of the XRP community are gone.” And indeed XRP was up >20% right after the news broke. It’s now getting clearer that SEC won’t label XRP a security and so big overhang is getting closer being removed.
Ethena expands to Solana
Ethena experience another major stress test this week with >100mm redemptions and things operating normal. Of course with the current 40mm overcollateralization fund there’s quite a bit of buffer to compensate even if funding rates remain -ve for a while but the real stress test will come next bear market. For now USDe is still in expansion mode and they launched on Solana this week and also adding SOL to the asset mix backing USDe. They had expanded from just ETH at launch to include BTC in April and so might continue down that path. Although ENA has been under quite some pressure and the looping unlocks of course still remain an overhang.
QUOTES:
Maybe we’ll pay off our $35 trillion debt by handing them a little crypto check, handing them a little Bitcoin
Donald Trump
Amid the macroeconomic climate and yesterday’s market downturn, Binance recorded a net inflow of US$1.2 billion in the past 24 hours [06/08/2024], according to DefiLlama’s CEX Transparency metrics. This marks one of the highest net inflow days of 2024, indicating strong investor confidence. Yesterday also saw one of the highest trading volumes on Binance year-to-date. We are now witnessing a rebound in major token prices, with current market trends validating this.
Richard Teng — Binance CEO
I often wonder if I’m in the wrong industry. […] crypto is a damn casino for dum-dums (apologies to the select few). Number go up? Yay, when lambo. Number go down? Lives get wrecked. Where’s the contribution to humanity? Yes, it takes time to “build a new monetary system”. For sure… but how about we make a few useful things along the way? Everyone is so focused on becoming the next V that nobody wants to build useful stuff, everyone’s in it for value extraction […] IMO it’s past time this industry creates something genuinely useful that people want to use, or should just close up shop. Bitcoin at least tries (and fails) to be a safe haven asset. But the rest are all selling shovels with no gold rush in sight.
Péter Szilágyi — Ethereum Core Dev
