Crypto trading/market thread

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This report has more details on the Binance deal:
Crypto exchange Binance will leave the U.S., pay billions in fines and appoint a monitor for five years to settle charges with the Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Asset Control (OFAC), the U.S. Treasury Department's money laundering and sanctions watchdogs, according to press releases shared Tuesday.

The exchange will pay $3.4 billion to FinCEN and $968 million to OFAC as part of these settlements, which saw both agencies accuse Binance of violating the Bank Secrecy Act and sanctions programs. Binance had already said it will pay $4.3 billion in fines and forfeitures to the U.S. Department of Justice to settle charges it violated sanctions law and failed to maintain a proper know-your-customer program. Changpeng "CZ" Zhao, the exchange's founder and CEO, is resigning from his role as part of that settlement.

In addition, Binance will make a "complete exit" from the U.S. as part of its settlement with FinCENand appoint a monitor for five years who will oversee the exchange's sanctions compliance program. The U.S. Treasury Department will have access to Binance's record and systems during that time.
The official clarified that the separate exchange called Binance.US, which is the operating name for BAM Trading Services, a U.S. affiliate for Binance, is a registered money services business and therefore is not affected by Binance's exit.


I must say that I am a little bit confused on how the US had jurisdiction to pursue Binance as - AFAIK - they didn't operate in the USA.
Some ripple effects from the Binance deal:
The loss of Binance's CEO and the leading digital assets exchange's $4 billion settlement of U.S. criminal charges on Tuesday failed to destabilize the wider crypto market in a big way. It has, however, impacted Binance's order book liquidity, complicating trading conditions for large traders.

Liquidity for top cryptocurrencies on the exchange, measured by 0.1% and 1% market depth indicators, has declined by 25% or more to less than $150 million and around $180 million, respectively, in the past 24 hours, data tracked by Kaiko show. Market depth is a collection of buy and sell orders within a certain percent of the mid-price, or the average of the bid and the ask prices.

In other words, moving the market by 0.1% and 1% in either direction is now 25% easier than it was 24 hours ago. It also means trading large orders on Binance at stable prices has become tougher, exposing so-called whales to slippage, that is movement between the price quoted when a trader places the order and what they actually pay when the order is filled.


This explains why liquidity dropped on Binance:
Crypto exchange Binance saw over $950 million in net outflows over the past 24 hours ...

“There are constant hourly net outflows of bitcoin and stablecoins after the CZ's resignation announcement,” Hochan Chung, head of marketing at CryptoQuant, told CoinDesk. “However, compared to the total reserves of Binance, the current volume is not yet significant at all.”
Data from a Dune Analytics dashboard shows over $2.37 billion in various tokens left the exchange, but some $1.78 billion in tokens were deposited.
Binance's BNB tokens were the most deposited and withdrawn tokens, the data shows.
Meanwhile, DefiLlama data shows the exchange sits on over $67 billion worth of tokens and stablecoins.

Well I haven't watched much of this yet but he seems super bullish on Bitcoin and crypto... Maybe I need to add a crypto equity like MSTR or MARA

Well I haven't watched much of this yet but he seems super bullish on Bitcoin and crypto...

I haven't watched it yet either, but I've been posting the significant events on the horizon regarding Bitcoin in this thread and 2024 is set to be Uber bullish for BTC (and that implies bullish coattails for the rest of the crypto market).

Crypto scam: Inside the billion-dollar ‘pig-butchering’ industry​

Filed Nov. 23, 2023, 11:45 a.m. GMT

At a Thai police headquarters in October 2022, Chinese businessman Wang Yicheng congratulated one of Bangkok’s most senior cybercrime investigators on his recent promotion, presenting the official with a large bouquet of flowers wrapped in red paper and a bow.

Wang, the vice president of a local Chinese trade group, wished the new cybercrime investigator “smooth work and new achievements,” according to the group’s website, which displays photographs of the event.

Over the past two years, Wang has forged relationships with members of Thailand’s law-enforcement and political elite, the trade group’s online posts show. During that time, a cryptocurrency account registered in Wang’s name was receiving millions of dollars linked to a type of cryptocurrency investment scam known as pig butchering, a Reuters investigation has found.

In total, crypto worth more than $90 million flowed into the account between January 2021 and November 2022, according to registration documents and transaction logs reviewed by Reuters. Of that, at least $9.1 million came from a crypto wallet that U.S. blockchain analysis firm TRM Labs said was linked to pig-butchering scams. Two other major crypto-tracking firms also said the account received funds linked to such scams.

Read the rest here:

Ran across this video this morning that was published back in January this year (I started at ~6:10 mark for discussion of his "Realized Price Chart" and Bitcoin predictions for 2023-2025):

Okay...after being negative on crypto-fiat for 20 years, I'm considering taking the plunge. Be happy to talk about why, on another thread.

What I want, is the mechanics of it. First, I don't have any online payment mechanisms - I cut connections with PayPal after they started penalizing users, or threatening, for impure online posts/thoughts. Already I had issues getting paid for some firearms-related equipment (perfectly legal). So, PayPal is bye-bye.

No Apple Pay, Google Pay, and no smartphone. Does this disqualify me? do I GET and HOLD this code. I don't want it in an exchange - waiting for it to be used without authorization, to cover short moves, or to disappear when the exchange closes or is seized by the Fudds. I want my crypto on a flash drive I hold.

Is that possible?

How do I DO this? Need I identify myself? If so, how? Crypto-name, or customer-number...if I have my crypto under the name Richard Cranium, can I buy and sell that way?

Or, to make response there a site online that offers CORRECT information on this?
How do I DO this? ...

I tried to answer your questions here:

Bitcoin funds enjoyed most of the inflows ($312 million), similar to the previous weeks' trend and bringing yearly net inflows to over $1.5 billion.

Meanwhile, short BTC funds – which seek to profit from declining prices – saw their third week of outflows in a sign of "short-sellers continuing to capitulate," the report said. Assets under management (AUM) of short funds are now down 61% from their peak in April 2023.

Funds holding ether (ETH) experienced $34 million of net inflows last week, extending the positive trend to four consecutive weeks and surpassing $100 million of net inflows during this period. ETH funds now have almost nullified their dismal run of outflows earlier this year, which marks "a decisive turnaround in sentiment" towards the second largest cryptocurrency, CoinShares added.

Solana (SOL) funds attracted the largest inflows among the rest of the altcoins with a $3.5 million influx.

Polkadot (DOT) and Chainlink (LINK) investment products also enjoyed $0.8 million and $0.6 million inflows, respectively.

Crypto sentiment appears to be strengthening.
Data provided by CoinGlass shows that Bitcoin open interest (OI) increased by 1.71% over the past 24 hours and currently stands at $17.44 billion, led by the Chicago Mercantile Exchange (CME), which currently accounts for $4.38 billion of the total Bitcoin OI.

The demand on CME is notable as its standard Bitcoin futures contract is worth five BTC and the exchange serves as a barometer for institutional interest in digital assets.

At the same time as demand is rising, the available supply of BTC on exchanges continues to decline, setting the stage for a liquidity-driven rally where the amount of Bitcoin available to buy is inadequate to meet bids to purchase.

Now where have I heard of this dynamic before? I know there was some market - a commodity I think - where physical supply/demand was supposed to overwhelm futures/paper markets... It's right there on the tip of my tongue...
The surging price of bitcoin has pushed the asset’s largest public holder, business software company MicroStrategy (MSTR), to unrealized gains of over $1.1 billion, 25% more than their cumulative investment.

Michael Saylor is like the character Morpheus from The Matrix. He believes 100% with every fiber of his being that Bitcoin is "the one" and nothing is going to dissuade him. He puts his money where his mouth is at ...

Microstrategy (MSTR), the largest corporate holder of bitcoin (BTC), boosted its holdings in November, buying some 16,130 BTC, worth around $608 million at current prices.

The Michael Saylor-founded software developer bought the bitcoin for around $593.3 million in cash at an average price of about $36,785 apiece, according to a regulatory filing on Thursday. It now holds 174,530 BTC bought at an average of about $30,252 per coin.

The November purchase marks an acceleration in the firm's bitcoin buying activities. As of end-October MicroStrategy held 158,400 BTC, having acquired 6,607 BTC since the beginning of the third quarter. It's now increased its holdings by over 10% in a month.

A bit more detail on the comment in the article referenced in post #413 about "the available supply of BTC on exchanges continues to decline":
The case for a continued rally in bitcoin (BTC) to $40,000 and higher by the year-end has strengthened, with centralized exchanges recently witnessing a sizeable exodus of coins.

Data by Glassnode shows just over 37,000 BTC, worth $1.4 billion, has been withdrawn from exchanges since Nov. 17 in a sign of investors taking direct custody of their coins.
Exchange outflows have historically marked local price lows, supporting expectations of a medium-term price rise.

"taking direct custody" means people are moving Bitcoin from their exchange accounts to cold/hard storage like a Ledger or Trezor wallet. Folks who are wanting to sell their crypto generally leave it on exchange accounts so it's easier to sell. Moving to cold/hard storage indicates they don't plan to sell in the near future. Less selling supply and more buying demand mean prices likely go up.
The streak of inflows into digital asset investment products extended to another week, albeit at a slower pace than the 2023 high mark for inflows recorded the week prior, as the assets under management (AuM) for globally listed cryptocurrency products increased $1.76 billion during the week ending December 1.

Data provided by CoinShares shows that digital asset investment products have now seen 10 consecutive weeks of net gains, the longest run of inflows since October 2021 when the first futures-based Bitcoin (BTC) ETF launched in the U.S.

According to James Butterfill, CoinShares head of research, the $1.76 billion of inflows represents 4% of the total AuM, which has increased by 107% so far this year.


Not terribly surprising given cryptos rise over the year, but it is another measure of investor interest in the sector.
An apparent large ether (ETH) holder moved nearly $90 million worth of the token to the crypto exchange Kraken after being dormant for five years, on-chain analytics tool Lookonchain posted early Tuesday.

The “whale,” a term for a large holder of any token, deposited 39,260 ether to Kraken in Asian morning hours, blockchain data shows. The address previously received 47,260 ether, worth just over $11 million at the time, from one transaction in 2017.

A CoinDesk analysis of the address shows previous transactions are not tied to the cold storage of any exchange. However, at least one transaction may be possibly connected to an address belonging to trading firm Cumberland, a labeling on data tool Arkham shows.

Moving to an exchange usually means the holder could sell tokens for stablecoins – increasing selling pressure – or convert to other tokens.

Meanwhile, data shows Kraken’s available market depth on ether trading pairs is over $5 million as of Tuesday morning – meaning a buy or sale of that amount could move the market by at least 2%.

Some details on the Blackrock filing:
Asset manager BlackRock and crypto investment firm Bitwise both filed amended S1 forms with the Securities and Exchange Commission (SEC) on Monday, answering further questions likely asked by the regulator in earlier conversations.

While it is unclear what exact topics the SEC asked applicants to provide further information for, analysts had predicted that changes to the prior filings would be made following several meetings between the SEC and applicants last week. The filings signal that both parties are “working hard to iron things out,” Bloomberg Intelligence’s James Seyffart wrote on X.

Amendments by the other 11 applicants, including Fidelity, Franklin and WisdomTree, will likely follow soon, he said.

In total, the company made 21 notable amendments on Dec. 4 to address various factors related to the Trust’s structure, operations, risks, and disclosures. These changes reflect BlackRock’s efforts to enhance the robustness of its offering and provide clarity to potential investors on issues like security, valuation, regulatory compliance, and risk management.

The amendments span critical topics such as custody arrangements, valuation policies, principal market determinations, indicative pricing, fork handling procedures, liability limitations, risk disclosures, and cash management protocols. They aim to fortify security measures for private keys and Bitcoin holdings, ensure reliable and transparent valuations, streamline operational processes between key entities like the Bitcoin Custodian and Prime Broker, and delineate contingency plans for disruptive events.

Additionally, the filing provides more details on regulatory considerations in major jurisdictions like the UK and EU, underscoring the complex and shifting landscape that Bitcoin ETFs must navigate. It also includes illustrative examples of potential regulatory impacts, like the SEC’s action against Ripple’s XRP token, to demonstrate tangible consequences for the cryptocurrency space.

Through these targeted updates, BlackRock seeks to demonstrate its commitment to creating a robust, compliant, and investor-friendly Bitcoin ETF product. The additional disclosures offer clarity into the risk management philosophy and governance standards that would underpin the Trust. However, the unpredictability of new regulations and Bitcoin’s inherent volatility remain key variables for this pioneering ETF attempt.

Below is a breakdown of the 21 major changes to the BlackRock ETF filing made on Dec. 4:

More (details):

A quick surge in bitcoin (BTC) early Tuesday afternoon lifted the price above $44,000 on some crypto exchanges, including Coinbase, for the first time since early April 2022 as the largest crypto extended its rally supported by declining interest rates and anticipation for a spot bitcoin exchange-traded fund in the U.S.
The volatile action liquidated $73 million of leveraged bitcoin derivatives trading positions, predominantly shorts betting on lower prices, Glassnode data shows.

$73M =

From the link:

Short traders betting against higher bitcoin (BTC) prices lost some $90 million on Tuesday alone, adding on to the $70 million in short liquidations on Monday.

Bitcoin’s ever-growing prices are leaving at least one group startled by the rapid bumps: Those placing highly leveraged short futures bets aimed at profiting from potential price reversal.

Short traders betting against higher bitcoin (BTC) prices lost some $90 million on Tuesday alone, adding to the $70 million in short liquidations on Monday, according to data source CoinGlass. These may have contributed to the asset’s strength since the start of this week – a move that has seen it jump to $44,000 from $39,000.

There are whales swimming in these waters. Placing bets against them is a good way to get crushed. Read the room. It's all about institutional interest in the pending spot ETFs right now. Maybe some insider gets advance insider info on a SEC decision to reject the applications and make a mint shorting the market at the right time, but outside of that scenario, going short right now is incredibly risky IMO.
To help give investors a heads-up on which sectors of the crypto market could be big moving forward, venture capital firm Andreessen Horowitz (a16z) released its “big ideas” report for 2024, which includes a list of trends that could impact the world of crypto in the year ahead.

  • Decentralization - This is a valid point to the extent that Joe Sixpack starts paying attention to what crypto actually is and what nations and central banks are trying to build with CBDCs. I still think that Joe Sixpack is largely sleeping on these issues. Maybe the BTC spot ETF and 2024 bull market wake some people up.
  • User experience - The tech here is still developing (see Solana SAGA phone for an example). Making it easier/more accessible for people will definitely help.
  • AI and blockchain - I think the hype over AI is overblown.
  • The evolution of play to earn - There is no free lunch. I don't see how this genre ever really breaks out.
  • Non-fungible tokens (NFTs) - I've never seen the value proposition for NFTs. Maybe an evolved use case changes my mind.
  • SNARK adoption - This was all Greek to me. I need to do more reading to understand what they are talking about.
Hopefully a portent of things to come.
Market cap for BTC/crypto will continue to grow as that sentiment expands and ETFs enable institutional investors opportunities for allocating some percent of their portfolios accordingly.
The "alt coins" (esp. Cardano (ADA), Solana (SOL), Polkadot (DOT), Cosmos (ATOM) and Avalanche (AVAX)) are having a good day.
Conio, a cryptocurrency wallet company partly owned by Poste Italiane and Banca Generali, has teamed up with Coinbase (COIN) to bring a wide range of digital assets to Italian banks and financial institutions, the companies said on Monday.


Italy's central bank seems supportive of crypto. Conio is working to make crypto services available for their banking industry.

Cryptoverse: Bitcoin defies its doubters in 2023​

Dec 12 (Reuters) - If 2022 was the year that "broke bitcoin", 2023 has been the year of trauma recovery.

Bitcoin has bounced pluckily in the face of depressed crypto prices, low trading volumes and tough economic conditions. It even found a second wind in October following a summer slump.

"We've had a nice recovery, but we're just in the cusp of the new cycle," said Kevin Koh, co-founder and managing partner at investment firm Spartan Group.

Indeed, 2023 has been a surprisingly good year for bitcoin.

The king of cryptocurrencies has leapt 164% since Jan. 1 and is trading above $40,000. It has outpaced traditional assets, including gold which has risen 10% and the S&P 500 (.SPX) which has gained 20%.


A change to the mechanics of BlackRock's proposed spot bitcoin (BTC) ETF opens the door for Wall Street banks, which face restrictions holding cryptocurrencies, to play a key role.

BlackRock recently made it so authorized participants – a vital part of the ETF ecosystem – will be able to create new fund shares with cash, rather than only with cryptocurrency.

As highly regulated U.S. banks are unable to hold bitcoin themselves, this set-up would enable the likes of JPMorgan or Goldman Sachs – firms with some of the largest balance sheets in the world – to act as APs to BlackRock's ETF. (Whether they want to is another matter.)

The cash APs use in this process can then be exchanged into bitcoin by an intermediary and warehoused by the ETF's custody provider, as per a memo filing relating to a Nov. 28 meeting involving the U.S. Securities and Exchange Commission, BlackRock and Nasdaq.


Cosmos (ATOM) is up over 20% in the last 24 hours. Traders seem to think it could run another 40% or more...

From yesterday afternoon:
Native tokens of Polkadot (DOT), Cosmos (ATOM) and Injective (INJ) were among the best-performing crypto majors, gaining 10%-20% over the past 24 hours.

Avalanche (AVAX) overtook the popular dog-themed meme token dogecoin's (DOGE) market capitalization, gaining nearly 5% on the day and more than doubling its price in a month.

Avalanche has had a good week.

I wasn't aware of the accounting rules change. Interesting.

The Financial Accounting Standards Board (FASB), a U.S. entity that details how companies should report assets on their balance sheet, published a standards update on Wednesday that will let corporations recognize "fair value" changes in crypto holdings.

The move will benefit companies with crypto on their balance sheets, like MicroStrategy (MSTR). Under the existing rulebook, companies have to report a loss if the crypto they hold is worth less than the purchase price, even if they haven't sold the assets. Under the new rules, companies will have to report the fair value, cost-basis and types of assets they're holding.
The new rules were adopted unanimously by the board and will take effect after Dec. 15, 2024, the document said.

From the link:

After a year of inactivity, a big Ethereum whale has reemerged, causing waves in the crypto market, according to Lookonchain. The whale, who had been silent for over a year, went on a massive selling frenzy, selling 18,865 ETH for a whopping 42 million DAI via four newly formed wallets. This activity amounts to a $2,229 average selling price per ETH.

DAI is a stablecoin that maintains a 1 to 1 peg to the dollar. 42m DAI = $42m

While a lot, it really did not move the market much.

Avalanche (AVAX) and Cosmos (ATOM) are having nice up 4% days while the rest of the crypto market is slightly red.
Bitcoin Hovers Over $41K as Memecoin, Ordinals Frenzy Clogs up Blockchains

Bitcoin (BTC) opened the trading week marginally higher, trading above $41,000. Ether (ETH) was also up slightly, trading above $2,100.
Data from Coinglass have been $103.5 million in liquidations of token-tracked futures in the past 12 hours, and $95 million of them have been longs, or bets on higher prices. Of the $103.5 million in total liquidations, $33 million in bitcoin positions were liquidated, with $29 million of those being long bitcoin positions


Belgium to Push European Blockchain Network During EU Council Presidency, Digital Minister Says

Belgium will give Europe’s ambitious blockchain initiative a political push when it takes the EU Council presidency in January, the country’s digital minister said in an interview with CoinDesk.

Mathieu Michel has already shared his grand vision for an EU-wide digital infrastructure that – at the very least – could store records such as driving licenses and property titles on a common blockchain controlled by the bloc’s governments.


BlackRock updates spot bitcoin ETF proposal to allow cash redemptions​

Dec 19 (Reuters) - BlackRock (BLK.N) has updated its proposed filing for a spot bitcoin exchange-traded fund (ETF) to allow cash redemptions, in a move which could help it secure an approval from the U.S. Securities and Exchange Commission.

A spate of filings for spot bitcoin and ether ETFs, including from traditional finance heavyweights, have revived the crypto market this year after a series of meltdowns in 2022.



US court approves order for Binance to pay $2.7 bln to CFTC​

WASHINGTON, Dec 18 (Reuters) - A U.S. court entered an order against crypto exchange Binance and its former CEO, Changpeng Zhao, approving billions of dollars in fines for money laundering following a case brought by the U.S. Commodity Futures Trading Commission, the agency said on Monday.

Zhao will pay $150 million and Binance will pay $2.7 billion to the CFTC as a result, the agency said in a statement.

The U.S. District Court for the Northern District of Illinois approved the previously announced settlement and entered a consent order of permanent injunction, civil monetary penalty, and equitable relief against Zhao and Binance, the CFTC said in its statement. The settlement was reached in late November.


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