January Overview

Your Monthly Brief into the World of Digital Assets

JKL Group
Published in
22 min readJan 31


Article by Ken C. and Sixte CP

1. Market update

2. Into the Web3 Future

3. January in a Nutshell

4. Institutions

  • Gemini declares war against Genesis: BCG in trouble, will BTC see new lows?

5. Mining

  • The end of the tunnel for mining?

6. Crypto Projects

  • Artificial Intelligence: The Hottest New Narrative
  • Ethereum Liquid Staking

7. Regulators

8. February Preview

  • Bitcoin performance calendar
  • Macroeconomic events
  • Crypto events

1. Market update

Crypto markets rallied significantly into the start of the new year. Not only was Bitcoin able to recover the pre-FTX level of $20k, but also found continued strength to attempt $24k, which many see as a key resistance area on the weekly timeframe. Several analysts pointed out that if Bitcoin can reclaim above the $24–25k zone, the price reversal of Bitcoin will be technically established.

In our November newsletter, we pointed out that Bitcoin price usually finds a bottom after a retracement of between 78.6% and 88.6% from its all-time high. Revisiting this, we observe that Bitcoin has now escaped from the mentioned bottoming zone, which is between $10,649 and $17,228.

Experience shows that double-dip bottoming processes are not uncommon, however. For example, Bitcoin hovered back and forth the bottoming zone for nine months in 2015 before finally launching a renewed bull run. In 2019, Bitcoin traded ten consecutive months above the zone before suffering from sudden capitulation caused by the COVID-19 outbreak. To this regard, we are not completely out of the woods.

On-chain data is displaying more encouraging signs. For instance, the aSOPR ratio has resurfaced above 1 for the first time since April last year. As a measure of Bitcoin holder profitability, the aSOPR measure typically serves as resistance for a bear market and support during a bull market.

In the last two instances when aSoPR approached 1, Bitcoin saw resistance and continued to print a down leg. Therefore, the ratio currently rising above 1 is definitely a positive sign. Moving onwards, we should keep an eye on whether aSOPR could sustain itself in the profitable zone. This could define whether Bitcoin is merely under a bear market rally or have truly found a cycle bottom.

Adding to the above, Bitcoin has recovered above the realized price of around $19,750 after trading beneath it for six months. According to past experience, this usually marks the end of the bear market and Bitcoin is likely to experience an expansion afterwards.

Another positive comes from the mining side — at current prices, the Bitcoin mining industry is profitable again. If the current reversal in Bitcoin price proves to be sustainable, forced selling pressure from miners will be greatly reduced. We will cover this with more detail in the Mining section.

2. Into the Web3 Future

JKL Group was present at “Into The Web3 Future”, an event organized by MAGESpire on January 13th in Hong Kong. The event was attended by more than 100 people including industry professionals and crypto enthusiasts, as well as students who are keen to explore opportunities in this quickly growing field.

Lesia Marchenko, Head of Institutional of JKL Group, joined a panel of four to discuss topics around Web3. Titled “What is Web3 and Why You Should Care”, the panel was moderated by Henrique Centieiro, Senior Research Manager from HashKey Capital.

To start the discussion, Lesia summarized the development of the internet in the past two decades. She explained that in the earliest era of the internet, i.e. what is now referred to as Web1, internet users were only able to get information via a one-sided manner. In Web2, internet users could interact with other people, although at the expense of providing volumes of valuable information to the benefit of large and centralized tech firms like Facebook and Google. The upcoming development of Web3 will be revolutionary because internet users will be able to regain ownership of their personal data.

Also sharing insights from the venture capital standpoint, Lesia noted a few key points to consider when evaluating early-stage projects. Firstly, it is important to study the background of the project team. It is preferable to have backgrounds from both Web2 and Web3. Secondly, one should study the project’s tokenomics and make sure that they are favorable. Finally, it is important to keep track of the project’s timeline and monitor whether the project could deliver the promised milestones.

Tanja Sammatti, Senior Manager and Team Lead from Animoca Brands said that the power of the project community must be recognized in the Web3 era. This is because compared to the Web2 world, where consumers are largely on the receiving end, they can now play a much greater role towards project development. In the current bear market, Tanja acknowledges that even good studios can make mistakes. In the end, those who are most resilient will bear the fruits of success.

Livia Yau, co-founder of Updoot Media, introduced the novel idea of “enter-vestment” in Web3. That is, the combination of entertainment and investment that allows people to support their favourite artists by becoming actual stakeholders of their creations. Livia also highlighted how the mass adoption of Web3 could be driven by mainstream brands. She said that according to Binance Labs, 43 out of the top 100 global brands have already established Web3 partnerships. For instance, Starbucks is making a headstart by offering exclusive NFTs and immersive experiences to its loyalty program members.

As a closing remark, Lesia encouraged aspiring students to keep on exploring opportunities in Web3 and described the industry as potentially one of the most rewarding career choices for today’s fresh graduates. She said that there were a lot of lessons learned in the bear market, and that the important thing is to remember them in the future market cycles.

The event also featured speakers from The Sandbox, ConsenSys, BC Group, Mai Capital, OKX and others.

3. January in a Nutshell

4. Institutions

Gemini declares war against Genesis: BCG in trouble, will BTC see new lows?

On November 10th, Genesis announced it had $175 million stuck on their FTX trading account. Despite a $140 million injection from its parent company, Digital Currency Group (DCG), Genesis halted withdrawals six days later. Liquidity on the platform was drying out due to massive withdrawals following the FTX collapse and a $1.2 billion claim against the now-defunct Three Arrows Capital.

In February 2021, Genesis partnered with crypto exchange Gemini to offer up to 8% interest in a program named Gemini Earn. In November 2022, Gemini Earn was available in all 50 US states and 65 countries across the world. When Genesis halted withdrawals on the 16th of November, $900 million belonging to 340,000 Gemini Earn user accounts were still on the platform. Gemini had to stop its Earn program and was later sued on December 27th by its investors for misleading information regarding its interest-yielding services.

Under pressure, Cameron Winklevoss, one of the twins who founded Gemini, wrote two open letters to Barry Silbert, CEO of DCG, on January 2nd and January 10th. He accuses DCG of:

  • Willingly not giving assistance to its subsidiary Genesis when 3AC went bankrupt while assuring during private email correspondences that DCG absorbed most losses on its balance sheet. The only known and actual facts are that DCG only entered a ten-year promissory note with Genesis.
  • Artificially inflating the Grayscale Bitcoin Trust (GBTC) by letting 3AC borrow funds from Genesis with GBTC as collateral. 3AC would then use the borrowed funds to create shares in the Grayscale Bitcoin Trust and sell them at a premium once the lock up expired. At the same time, Grayscale was earning significant amounts of money in fees. It was a profitable strategy until the GBTC shares traded at a discount. The premium trade stopped, and the collateral posted by 3AC for Genesis’ loans dropped in value. Instead of cutting losses, Genesis kept on lending money to 3AC since it reduced GBTC selling pressure and prevented the discount to widen. Cameron’s point is that DCG is voluntarily financially weakening one of its subsidiaries, which has its own creditors and stakeholders, to inflate the numbers in another subsidiary.
  • Accounting fraud on Genesis balance sheet. Cameron considered these trades as swap derivatives between two financial instruments (BTC and GBTC) with 3AC acting only as an intermediary. However, Genesis registered these only as collaterised loans which didn’t transparently represent the level of risk on the balance sheet.

Winklevoss concludes by asking DCG’s board to remove Barry Silbert as CEO. In a letter to shareholders, Barry Silbert denied all accusations but both the US Department of Justice and the SEC will not simply take his word for it, and they launched an investigation into DCG. On January 12th, the SEC also charged both Genesis and Gemini for “Unregistered Offer and Sale of Crypto Asset Securities through the Gemini Earn Lending Program”. On January 20th, Genesis finally kneeled and filed for Chapter 11 bankruptcy, putting even more pressure on DCG. Bad news kept adding up: DCG halted dividend payments, ARK Invest dumped 500k GBTC shares, Genesis creditors filed securities lawsuit against DCG and Barry Silbert, and DCG subsidiaries laid off an additional 500 employees.

Even considering Michael Novogratz’s optimism, and the fact that Barry Silbert is known for starting his career as a bankruptcy restructuring associate, the outcome is still highly uncertain. If DCG implodes down the road, the repercussions on the crypto market will be multiform:

  • First, if DCG goes bankrupt, assets including Grayscale trusts could be liquidated. The most plausible option is for shareholders to redeem their shares at NAV price. This will offer highly profitable arbitrage opportunities and reduce the GBTC discount, as traders will sell spot BTC and buy GBTC shares. Since the trust owns 3.3% of BTC total supply and 2.5% of ETH total supply, selling pressure and market contagion could push BTC towards new lows.
  • Second, if DCG implodes, Foundry, the pool with the largest hashrate share, will close. It will lead to a redirection of hash rate towards the most popular alternative pools and therefore cause greater centralisation. Most of all, it could initiate a strong miner shakeout characterised by a steep fall in mining hashrate and settle the cycle bottom once and for all. (Please refer to “Four Stages of Mining Cycle” in the Mining section)

Read More

- Crypto Bank Silvergate Shares Plunge 46% After $8.1B Withdrawal in Q4 Prompts 200 Job Cuts (Read More)

- Genesis Cuts Staff by 30% as Financial Woes From FTX Fallout Persist (Read More)

- Animoca Slashes Target For Metaverse Fund to $1 Billion: ‘It Could Be Less’ (Read More)

- Hong Kong Firm With Ties to Bitmain Reorganizes to Focus on Crypto Asset Management and Hedging (Read More)

- Apple’s Mixed-Reality Headset to Launch This Spring: Report (Read More)

- Gemini’s Cameron Winklevoss Calls for Barry Silbert’s Ouster From Crypto Conglomerate DCG (Read More)

- Ethereum Software Firm ConsenSys to Cut Upwards of 100 Staff (Read More)

- Goldman Sachs’ Tokenization Platform GS DAP™, Leveraging Daml, Goes Live (Read More)

- FTX Has Recovered ‘Over $5B’ in Assets, Bankruptcy Attorney Says (Read More)

- Circle, Uniswap Research Says DeFi Can Solve $2 Trillion FX Risk Problem (Read More)

- Sam Bankman-Fried Insists Bankruptcy Team Is Wrong About FTX US Insolvency (Read More)

- Coinbase Announces ‘Difficult Decision’ to Shutter Operations in Japan (Read More)

- Crypto Bank Silvergate Reports $1B Net Loss in Q4 Amid Industry’s ‘Crisis of Confidence’ (Read More)

- Crypto Lending Teeters on Brink of Extinction After Genesis Collapse (Read More)

- Digital Currency Group Halts Dividend Payment to Save Cash (Read More)

- Microsoft Invests $10 Billion in ChatGPT Maker OpenAI (Read More)

- A16z leads Series A funding for game studio Voldex (Read More)

- Porsche NFT Floor Price Races Up Following Bumpy Mint (Read More)

5. Mining

The end of the tunnel for mining?

With the recent recovery of Bitcoin price, miners are breathing a sigh of relief.

Not long ago, there was a serious concern for the wider industry that if Bitcoin price continues to drop, the entire mining industry would be under tremendous pressure. This is because, while the breakeven price of mining varies for each separate company, it ranges approximately around $8.5k to $18k. If Bitcoin price were to drop further, it may be more preferable to shut down some of the mining rigs. To say the least, the drop in Bitcoin price was beginning to erode profitability of even some of the strongest players in the industry.

In particular, the financial condition of several public mining companies were concerning. A potential perspective to consider is the debt-to-equity ratio, which is a useful accounting metric to consider the magnitude of debt burden as opposed to company size. A ratio above 2 is usually considered risky, yet for a volatile industry like Bitcoin mining, the measure should be even lower to be seen as healthy.

From the above table, we could see the debt-to-equity ratio for Bitcoin mining companies deteriorated throughout 2022. Indeed, a few names with the highest debt-to-equity are already dealing with liquidity or solvency issues. In December, Core Scientific (CORZ) filed for Chapter 11 bankruptcy. Greenidge (GREE), Stronghold (SDIG) and Argo (ARBK) have also recently completed debt restructuring and asset sales to stay in the business.

Another metric to consider is the net debt per Bitcoin mined. As observed above, miners that had a high proportion of debt relative to their Bitcoin production were prone to finding themselves underwater. Marathon Digital (MARA) is an exception, but this was largely because of the raise of $750 million last year in unsecured convertible notes with a 1% coupon rate.

Galaxy Digital, a leading crypto research firm, noted that the Bitcoin mining industry ended 2022 in “survival mode”. Some miners were forced to default from their loans, and some had to abandon their plans to expand capacity. However, many firms will continue to receive and deploy their machine orders from last year. As such, Galaxy predicts Bitcoin hashrate to increase 23% to 325 EH/s in 2023.

From a high level perspective, the relationship between the Bitcoin price and the hashrate was nicely theorized by Leo Zhang and Karthik Venkatesh. Their theory posits that the Bitcoin market cycle can be separated into four stages, at which Bitcoin price and hashrate could be moving in tandem, or by contrast, diverge in opposite directions.

Since Bitcoin reaching an all-time high in November 2021, we have seen Zhang and Venkatesh’s theory in action. While Bitcoin price fell under a downtrend, the hashrate kept on increasing, which is a signature of the Inventory Flush stage of the cycle. Afterwards, the FTX crash prompted a simultaneous drop in Bitcoin price and hashrate, which are characteristics suggestive of the Shakeout stage.

From the beginning of 2023, the Bitcoin hashrate has begun to climb again to near record highs. Combined with the recovery in Bitcoin price, this could signify the beginning of the Mining Gold Rush phase, when Bitcoin price and hash rate increase together.

In any case, the recent recovery in Bitcoin price proved to be an opportunity for miners to offload some of their Bitcoin to replenish cash reserves. According to CryptoQuant data, Miner Reserves have decreased sharply since the beginning of the year, which is a sign of selling behavior from the miners.

That said, considering the estimated industry average cost of Bitcoin production at $13.3k, if the current recovery in Bitcoin price proves to be sustainable, selling pressure from the miners will be greatly reduced. In turn, this could be a big positive for the market as a whole.

Read More

- BlackRock Gives Bankrupt Bitcoin Miner Core Scientific New $17M Loan (Read More)

- Bitcoin Mining Firm Riot Ditches ‘Blockchain’ From Name in Rebrand (Read More)

- Jefferies Downgrades Bitcoin Miner Marathon Digital on Construction Delays (Read More)

- Bitcoin’s Modest Rally Sends Crypto-Related Stocks Sharply Higher (Read More)

- Hive Earned Equivalent of 184 BTC From Curtailing Its Power Use in December (Read More)

- Bitcoin Miners Deleverage, Scale Back as Crypto Winter Continues into 2023 (Read More)

- Argo Blockchain’s Bitcoin Mining Margin Widens Most in at Least a Year (Read More)

- Bitcoin Miners and Average HODLers Are Back in the Black (Read More)

- Bitcoin Miner GRIID’s NYSE Arrival Delayed Again (Read More)

- Bankrupt Lender BlockFi to Sell Bitcoin Mining Machine-Backed Loans (Read More)

- More turbulent times ahead for bitcoin miners, Galaxy Digital says (Read More)

- Bitcoin Miner Argo Blockchain’s Shares Climb After Regaining Nasdaq Listing (Read More)

- Crypto Infrastructure Firm Blockstream Raises $125M for Bitcoin Mining (Read More)

- Celsius to store 20,000 mining machines, remains optimistic about new hosting sites (Read More)

6. Crypto projects

Artificial Intelligence: The Hottest New Narrative

You may have heard recently about ChatGPT, a chatbot capable of answering in a detailed manner to complex questions across many area of expertise. Launched on 30 November 2022, it obtained 1 million users in just five days after its release, making it the most rapidly adopted technology in human history.

ChatGPT, which stands for Chat Generative Pre-Trained Transformer, allows users to ask open-ended questions about any topic. In response, ChatGPT provides text-based answers that mimic human writing. As opposed to most chatbots, it is also capable of remembering previous exchanges in the same conversation.

ChatGPT is an example of generative Artificial Intelligence (AI), an algorithm that enables the creation of novel content from existing data, images and audio files. With the explosive rise of ChatGPT, many now consider AI to be one of the most disruptive technologies in the upcoming decade.

Users were quick to explore various use cases for ChatGPT. For some, ChatGPT serves as their nutritionist. When asked for a plan to lose weight, ChatGPT was able to calculate the calorie deficit for the individual user, and develop a sample meal program. For entrepreneurs, ChatGPT is like a goldmine of ideas for new business ventures. Among them, we can find startups like DoNotPay, which allows users to file disputes over government fines and generates written letters to negotiate the terms. Finally, for programmers, ChatGPT can be leveraged to build websites and animations.

Nevertheless, large scale language models like ChatGPT lack stability and are prone to factual errors. For instance, when one user asked ChatGPT to compare between one kilogram of beef and one kilogram of compressed air, it crafted a story that substantiated why the beef is heavier. The risk for the average user is that ChatGPT is highly competent at making wrong answers sound right.

The organization behind ChatGPT is the OpenAI Foundation. It was founded in 2015 by a group of 14 people, including Elon Musk, Peter Thiel and Sam Altman. Interestingly, Altman also co-founded a cryptocurrency project named Worldcoin. Before ChatGPT, OpenAI was best known for one of its other projects called DALL-E, which is a text-to-image generator.

At this point in time, the high costs associated with running ChatGPT makes mass usage infeasible. Compared to conventional search engines, the cost per ChatGPT query is 10–100x more expensive. It is estimated that if ChatGPT is being utilized at the rate of the Google search engine, operational costs would amount to $425 million per day. It is not surprising that the next version, GPT4, will likely be put under a paywall. The paid version would provide quicker output and double the number of responses compared to the free version.

Although it is widely considered as a technological breakthrough, it does not come without some controversies. The unconstrained nature of ChatGPT will disrupt many fields of knowledge such as academic research. For instance, ChatGPT passed an MBA exam given by a Wharton professor and passed the U.S medical licensing exam showing “high internal concordance”. In the media industry, ChatGPT malicious use is also feared. For example, a user was able to instruct ChatGPT to create a fake New York Times website and populate it with unauthentic content. Overall, malevolent exploitations can take multiple forms. Another user was even able to work around the safety settings of ChatGPT and obtained a step-by-step guide to make a Molotov cocktail.

Despite its weaknesses, the success of ChatGPT has quickly caught the attention from big tech companies. Microsoft announced in January that it has purchased a 49% stake into OpenAI, which is thought to be worth around $10 billion. The traditional tech giant is planning to integrate ChatGPT into its search engine, Bing. In addition, Microsoft will likely integrate OpenAI technologies into its new product, Microsoft Design, which allows users to create images for websites and social media. According to reports, Amazon employees are already using ChatGPT to assist some of their daily tasks. It was described as “great” at creating training documents and “very strong” in corporate strategy questions. Last but not least, Buzzfeed announced that it is going to replace human writers and instead use ChatGPT to create content for their website. This caused Buzzfeed’s stock price to surge 325% over five days.

Due to the high operational costs, as well as Sam Altman’s history in crypto, it was speculated that ChatGPT could monetize via the form of a crypto token. However, the recent announcement concerning the release of a premium version makes this less likely.

Still, the hype around ChatGPT has caused AI-related crypto tokens to enjoy a significant rally. According to Coinmarketcap, 128 crypto tokens are building AI and Bigdata services, of which eight are ranked in the top 300 tokens by market capitalization. Among them, The Graph (GRT) is the project with the highest market capitalization. As an indexing protocol for querying data on blockchain networks, anyone can make use of The Graph to build APIs and run AI-based algorithms. Ocean Protocol (OCEAN) also received a lot of attention as it was revealed that Elon Musk is a benefactor of the XPRIZE foundation, which is a partner of the project.

Source: Coinmarketcap

While the recent rally of AI-related tokens appears to reflect more hype than actual value, AI and ChatGPT related news will build up throughout the rest of 2023. Therefore, it will not be surprising to see further upside in these AI-related tokens.

Ethereum Liquid Staking

Introduced in late 2020, ETH staking initiative was supported by a large community . Yet a lot more others were reluctant to participate. This is because when ETH tokens are staked, they are locked for an indefinite amount of time. The unlock date was highly uncertain, and the only guidance given was anywhere between six to twelve months after the Ethereum merge. This is about to change with the upcoming Shanghai upgrade, as users will be allowed to withdraw staked ETH.

Traditionally, there is a threshold of 32 ETH minimum to participate in Ethereum staking. Liquid staking derivatives (LSD) offer a favorable alternative by providing a workaround, allowing stakers to delegate any amount of ETH into the staking contract to receive yield. In addition, users that utilize LSDs will receive a liquid, tradeable token that represents the underlying claim to the staked ETH.

Source: Stake.us

That said, the illiquidity constraint was a major deterrent for participating in traditional or liquid ETH staking. Compared to the other blockchains at 35–70%, the staking percentage in the Ethereum blockchain has been low at around 14%.

On the flipside, the statistic also reflects a high potential for Ethereum staking, especially LSDs, to pick up growth after the Shanghai upgrade. As such, LSDs were one of the most sought after crypto narratives in January. Lido (LDO), which is the leader in the LSD space, soared 94% YTD. Rocket Pool (RPL) and Frax (FXS) also benefitted from the hype and gained 83% and 131% respectively.

According to Dune Analytics, the number of staked ETH tokens reached above 16 million as of January, of which 33.4% can be attributed to LSDs. At the same time, centralized exchanges (CEX) also take a significant market share of 28.3%. This is not surprising as for many people who are not advanced crypto users, staking their ETH in a CEX could be the most straightforward and hassle-free solution. Currently, Coinbase is ranked behind Lido as the second-most utilized pooled staking solution, with Kraken and Binance following closely behind at third and fourth. The competition in the LSD space is much less heated with Lido enjoying over 87% dominance, way ahead of Rocket Pool (RPL) which is its largest competitor.

Source: Dune Analytics

A key advantage with using decentralized LSDs is that it provides the flexibility to engage in various DeFi operations, and allows the users to make use of leverage and enhanced yield opportunities.

To illustrate this, we consider a very popular strategy used by DeFi investors, so much so that even Bloomberg created a diagram to introduce the strategy to traditional-oriented investors. The strategy makes use of liquid staking using Lido, as well as Aave which is a decentralized lending and borrowing protocol. With 72% loan-to-value (LTV) permitted for stETH collateral on Aave, DeFi investors can achieve up to 3.57x leverage on their ETH holdings and receive a total yield of around 14.5%.

A potential drawback of this strategy stems from the fact that, because stETH is not yet redeemable for actual ETH tokens, it is possible for the price of stETH to depeg from the 1:1 ratio with ETH. In fact, this has happened before during the Terra (LUNA) and Celsius crises of 2022. As some whales were forced to sell their stETH holdings to satisfy liquidity needs, this caused a signifant drop in the stETH / ETH exchange rate. This caused some DeFi users who employed the strategy to get liquidated and suffered losses.

Nevertheless, after the completion of the Shanghai upgrade, it would only require a few days to convert stETH back to ETH. Therefore, the price parity between stETH and ETH should greatly improve. In turn, this boosts the attractiveness for users to switch from regular ETH to liquid staked ETH, especially for Lido which is the most sizeable LSD.

Currently, Lido has partnered with over 140 DeFi protocols. There is no doubt that its first mover advantage has given it a tremendous edge over less-established LSD alternatives. For instance, its large scale allows it to achieve 72% LTV on Aave. This compares to 40% that was recommended by Aave for Rocket Staked ETH (rETH). With Lido’s overwhelming dominance in the LSD sector, it is highly likely for Lido to remain a comfortable leader on the LSD stage.

Read More

- Solana Surges 16% as Doge-Themed SHIB Rival BONK Takes Off (Read More)

- Lido overtakes MakerDAO and now has the highest TVL in DeFi (Read More)

- Polygon Paid Top Solana Projects Y00ts and DeGods $3M to Migrate Chains (Read More)

- AVAX Slips 2% As Grayscale Dumps Avalanche From Large Cap Fund (Read More)

- Mastercard partners with Polygon to launch Web3 musician accelerator program (Read More)

- Ethereum Staking Tokens Rally as Shanghai Upgrade Nears (Read More)

- Number of Staked ETH Passes 16M (Read More)

- Optimism Activity Hits New Highs As Layer 2s Close In On Ethereum (Read More)

- Amazon Web Services Users Can Now Launch Avalanche Blockchain Nodes (Read More)

- Alkimiya Raises $7.2M Funding Round to Grow Cash Flow Hedging Protocol for Miners, Stakers (Read More)

- Robinhood to Delist Bitcoin SV, Market Sell Remaining User Balances (Read More)

- Shiba Inu Developers Reveal First Look of Layer 2 Blockchain Shibarium (Read More)

- Polygon Completes Hard Fork to Reduce Gas Fee Spikes, Disruptive Reorgs (Read More)

- Frax Triples in Value as Stablecoin System Takes Shape (Read More)

- Fantom Blockchain to Fund Ecosystem Projects Using Portion of Burnt FTM Fees (Read More)

- Vitalik Buterin proposes ‘stealth addresses’ to enhance Ethereum privacy (Read More)

- Crypto Gaming Token AXS Surges 40% Ahead of $64M Token Unlock (Read More)

- Cardano-Based Overcollateralized Stablecoin Djed to Launch Next Week (Read More)

- Ethereum Name Service mulls initiating endowment fund with $17 million (Read More)

- DYDX Token Surges as Unlock Gets Delayed Until December (Read More)

- Pantera, Jump Crypto Back $150M Injective Ecosystem Fund (Read More)

7. Regulators

Read More

- Sam Bankman-Fried Pleads ‘Not Guilty’ to Fraud, Conspiracy Charges (Read More)

- The Fed: Crypto Poses ‘Key Risks’ to Banks, but Carry On (Read More)

- SEC Pursues $45M Scam Based in Fake Blockchain Technology (Read More)

- Coinbase agrees to $100M settlement with NY regulator (Read More)

- Crypto Conglomerate DCG Being Investigated by DOJ, SEC: Report (Read More)

- DCG’s crypto broker Genesis owes creditors more than $3bn (Read More)

- Judge Allows Binance.US Bid to Buy Voyager Assets to Advance (Read More)

- Nexo offices reportedly raided by police in Bulgaria (Read More)

- Hong Kong set to shortlist crypto tokens for retail trading (Read More)

- Republican Lawmakers Push Crypto Regulation With New House Subcommittee (Read More)

- US Charges Crypto Exchange Bitzlato With Laundering $700M (Read More)

- SEC charges Avraham Eisenberg for $116 million Mango Markets exploit (Read More)

- French senators vote to ease crypto licensing regulation (Read More)

- FBI: North Korean Hackers Behind $100M Horizon Bridge Theft (Read More)

- EU Lawmakers Impose ‘Prohibitive’ Requirements on Banks’ Crypto Holdings (Read More)

- Wormhole exploiter converts $150 million in ETH to staked assets and levers up (Read More)

- El Salvador Pays Back $800M Maturing Bond, President Nayib Bukele Says (Read More)

- SEC Rejects Another Spot Bitcoin ETF Bid by ARK and 21Shares (Read More)

8. February preview

The beginning of February will see the Fed announce the first interest rate decision of the year, followed by decisions from the UK and European central banks. Afterwards, the market will be keeping an eye on several metrics that reflect labor and goods price level, including unit labor costs, CPI and PPI. Another talking point is the continued strength of the labor market. While robust data could reflect limited impact from the Fed’s restrictive policies, some worry that policymakers would be reluctant to pause interest rate hikes before seeing weakness in the labor market.

Bitcoin performance calendar

February is historically a bullish month for Bitcoin. Over the past ten years, Bitcoin recorded gains in February for eight out of ten times with an average gain of 14.3%. The outliers were 2014 and 2020, which coincided with the hack of Mt. Gox and the onset of the COVID-19 pandemic.

Source: Glassnode, JKL Group. Data as of 30 Jan 2023.

Macroeconomic events

Source: JKL Group

Crypto events

Source: JKL Group


This material is strictly confidential and is intended for use solely by professional investors (as defined in the Cayman Islands Monetary Authority from time to time). It should not be reproduced, redistributed, passed on to any other person or published, in whole or in part, for any purpose without the written consent of JKL Digital Capital Limited (‘JKL’) and must be returned on request to JKL. Although information contained in this material has been compiled from sources believed to be reliable, JKL does not represent or warrant the accuracy, completeness or reliability of the information contained in this material.

The contents of this material have not been reviewed by any regulatory authorities. You are advised to exercise caution in relation to the contents of this material. If you have any doubt about any of the contents of this material, you should obtain independent professional advice. Neither JKL nor any of its affiliates, nor any of its or their respective directors, officers, employees, and representatives will accept any responsibility or liability whatsoever for any direct, indirect, or consequential loss arising from the use of or the reliance upon any information contained in this material. This material does not constitute an offer or an invitation to subscribe for or purchase any financial product. It is not intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation to purchase any financial product.

JKL, its affiliates and/or any or its or their respective officers, directors, employees, and representatives may from time to time have a material interest in the product(s) described in this material or in any investment related to the product(s), for their proprietary accounts and/or for accounts under their management, and/or for clients, which may result in a positive or negative influence on the value of the product(s).

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JKL Group

Quantitative fund focused exclusively on trading digital assets and blockchain technology. Find out more on www.jkl.capital