BTC Miner Core Scientific Files For Chapter 11 Bankruptcy; Coinbase Granted License To Operate In Ireland

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• Upbeat consumer confidence, earnings from Nike & FedEx salvaged markets (more in Macro & TradFi)
• The Central Bank of Ireland approved Coinbase as a Virtual Asset Service Provider (VASP); Bitcoin miner Core Scientific files for Chapter 11 bankruptcy (more in DeFi & CeFi)
• BTC Ownership continues skyrocketing despite tough market conditions (more in On-Chain)
• BTC RV falls to lowest level in December (more in Crypto Derivatives)
• BTC and ETH rebound but fail to reclaim key levels (more in Crypto Technical Analysis)

Macro & TradFi

Strong Dec US consumer confidence data (108.3 actual vs 101 consensus), upbeat earnings from consumer discretionary giant Nike and shipping juggernaut FedEx jointly boosted risk sentiments, pushing US & European stocks and bonds higher. The BOJ shocker is still a short-term overhang preventing further upside before Japanese central bankers come out with a clear path to normalize their monetary policies. On the geopolitics front, Ukraine President Zelenskiy arrived in the US to deliver an in-person address to congress, likely asking for incremental military support.

US stocks rebounded strongly; NASDAQ rose 1.46%, SPX 1.57% and DOW 1.56%. European equity indices also followed higher as the fear from BOJ roil from earlier faded; France’s CAC40 closed more than 2% higher, while indices in UK & Germany also gained 1.5-1.7%. Crude oil jumped further after US inventories showed more-than-expected declines; both WTI and Brent March 2023 futures rallied more than 2.5%. US Treasury yields stabilized as the 10-year yields traded 4bps tighter.

DeFi & CeFi

• Raydium releases user compensation proposal
• Nomad Bridge relaunches, allowing madAsset holders access to recovered funds
• The Central Bank of Ireland approve Coinbase as a Virtual Asset Service Provider (VASP)
• Oracle network Pyth partnerwith Bybit
• Bitcoin miner Core Scientific (~10% of computing power on the BTC network) file for Chapter 11 bankruptcy in the Southern District of Texas
• Kana Labs launch their staking aggregator
• Uniswap partner with MoonPay

Coinbase reported that the Central Bank of Ireland has approved it as a Virtual Asset Service Provider (VASP), allowing it to continue serving customers in Europe and beyond from Ireland. Coinbase Europe Limited and Coinbase Custody International Limited, both domiciled in Ireland, are covered by the VASP registration. Coinbase Europe offers crypto trading to European customers, while Coinbase Custody International offers crypto custody to European institutions.

Raydium released a proposal concerning user compensation. Officially, Raydium will in its capacity compensate users if the exploiter does not refund the funds. Specific compensation process/logistics options will follow. To prepare for user fund cleanup, it took time to gather data and evaluate the exploit's effect. Raydium increased the whitehat bug reward for the protocol exploiter to speed up recovery. Raydium offers all compromised $RAY and 15% of the remaining cash to the exploiter if it returns the stolen funds.

Kana Labs launched a liquid staking aggregator. The platform offers liquid staking for $SOL and $APT and integrates with Marinade and Lido for Solana and Ditto for Aptos. Kana Labs plans to incorporate additional ecosystems' liquid staking mechanisms.

On-Chain

Looking on-chain, the number of addresses that hold more than 1 BTC has reached a new ATH of 974,441 BTC. The 30-day change in addresses holding more than 1 BTC is at its highest since 2016 and can be indicative of how investors have been capitalizing on periods of low prices to accumulate BTC.

Elsewhere, the BTC MVRV has continued plummeting, signaling an extreme market slowdown. MVRV is the ratio of market capitalization to realized capitalization, and the current depressed levels have historically occurred at the end of a bear market.

Crypto Derivatives

• BTC and ETH funding rate remain positive
• BTC and ETH 30-day ATM IV fell from 51% to 50% and 63% to 62% respectively.
• 30-day 25-delta put skew eased for both BTC and ETH, going from -30% to -4% and -55% to -4%

For futures, total liquidations came in at $14.3M, with the majority coming from longs at $9.4M.

On the options front, the spike in 7-day put skew for both BTC and ETH yesterday returned to its usual level of around -4% for both. Term structure is still in contango, largely unchanged. The 30-day RV for BTC is trading at its lowest point for December, standing at 32.6%. Put/call ratio for BTC and ETH remains relatively unchanged at 0.53 and 0.24 respectively.

On the flow front, most of the volume comes from long-dated call options expiring in June 2023. One of them includes a 11k contract of ETH 30 June 2023 $5k call with a notional value of $55M. The predominant strategy for both BTC and ETH in the past 24 hours is the long-dated bull call spread.

Crypto Technical Analysis

Onto TA, BTC retreated since yesterday morning but found support at the $16.7K level again. RSI has maintained near the 50 level suggesting that price action remains neutral as markets await which direction it may take after finding support.

ETH, on the other hand, has been moving sideways since yesterday while RSI on the H4 has remained in the same fashion. Price action looks indecisive and could break out in any direction. Given it’s a current formation, a potential bull flag is forming. The potential upside here is likely to the $1,239 level, the weekly range high.

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Daily Readings

TradFi

• Rouble slumps to weakest vs dollar since May

• AMC abandons talks to acquire bankrupt Cineworld's theaters

• German yields steady, spreads tighten after recent repricing

• Weary Wall Street cheers improved consumer confidence

• U.S. dollar likely has further upside vs yen despite BOJ move -Goldman

• Dealmakers brace for slow 2023 recovery after global M&A sinks

• Oil prices rise over $2 on drawdown in U.S. crude stocks

• U.S. consumer confidence rebounds; existing home sales sink

• Japan warns of China's COVID situation, cuts view on factory output

• Portugal approves windfall tax on energy firms, food retailers

• Semiconductor maker Micron announces 10% staff reduction, suspends bonuses.

Crypto

• Inside Core Scientific’s Prearranged Bankruptcy.

• One of Crypto’s Favorite US Senators Drops Swan-Song Bill on Eve of Retirement.

• Uniswap DAO Community Members Vote in Favor of New Governance Process.

• DeFi Project Popsicle’s ICE Token Triples as Controversial Wonderland Founder Returns.

• See You on the Otherside: How Yuga Labs Is Bringing Its Billion-Dollar Business Into the Metaverse.

• DeFi Protocol Ankr Says Ex-Employee Caused $5M Exploit.

• Peer-to-Peer Crypto Marketplace Paxful Removes ETH From Platform.

• Is Ethereum’s Censorship Problem Taking a Turn?.

• Genesis, DCG Creditors Propose Plan to Resolve Liquidity Issues, Gemini Says.

• DEX aggregator OpenOcean enables cross-chain swaps across major networks.

• UK includes crypto investments under the Investment Manager Exemption.

• Polygon’s zkEVM launched its second testnet, the last step before mainnet goes live

Yours sincerely,
Treehouse Research 🌳