Genesis Owes $3.5B To Its Top 50 Creditors; GDP and PCE Data Next In Focus

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• Investors eye GDP and PCE data for further indication of economy health (more in Macro & TradFi)
• Genesis owes $3.5B to its top 50 creditors in its bankruptcy filings; Solana based gaming platform Fractal to expand into Polygon (more in DeFi & CeFi)
• Percentage of BTC Short-Term Holders hits ATH (more in On-Chain)
• IV continues to rise for BTC and ETH as RV continues to fall (more in Crypto Derivatives)
• BTC and ETH show signs of falling momentum, with ETH soon to retest its support (more in Crypto Technical Analysis)

Macro & TradFi

Kong Hei Fat Choi and happy CNY to those who celebrate the regional holidays! Treehouse Research team wishes you all the best in your Year of Rabbit endeavors.

US stocks pushed higher since last Friday after major Asian markets closed down for CNY holidays. SEA reopens today while China/Hong Kong remains closed. NASDAQ net rallied ~4%, SPX ~3% and DOW ~2% after the indices pulled back from a three-day momentum higher that saw tech-heavy NASDAQ up almost 5%. Tesla stocks had now rallied almost 40% from the trough in a fierce short-squeeze style pump higher. US Treasury yields swung; 10-year yields first widened around 15bps to trade above 3.5% before trading tighter below that key level again yesterday. US GDP data on Thursday and PCE data on Friday would be key data prints for markets to determine next steps.

DeFi & CeFi

• Solana-based gaming platform Fractal to expand into Polygon
• Ribbon Finance to migrate liquidity from Uni V2 to Balancer
• JonesDAO launch date postponed to 27th January
• MakerDAO to deploy 100 million USDC into Yearn Vault
• Ethereum Developers Launch Shadow Fork of Mainnet to Test Shanghai Upgrade
• Genesis Owes Over $3.5 Billion to Top 50 Creditors
• Gemini to Lay Off Another 10% of Staff
• Aave Community begins Voting for Proposal on V3 Deployment on Ethereum
• Circle to Launch Cross-Chain Transfer Protocol
• Hadeswap, a NFT AMM, Launches Governance Token $HADES

In DeFi, Solana gaming platform Fractal have announced that they will begin expanding into Polygon. The project will bring it’s gaming features such as its NFT marketplace, game launchpad and hosting of esports tournaments. Elsewhere, Ribbon finance announced yesterday that it would be migrating liquidity from its Uni V2 contract to the Balancer RBN/USDC pool this Thursday. The DOV platform will also be partnering with Aura Finance to incentivize liquidity for Aura/BAL LP to improve liquidity.

According to Genesis' bankruptcy filing, its top 50 creditors include crypto exchange Gemini, trading business Cumberland, Mirana, Babel Finance's parent company MoonAlpha Finance, and VanEck's New Finance Income Fund. Genesis owes Gemini Trust Company $766 million, Cumberland DRW $18.7 million, Mirana (which invested in ByBit) $151.5 million, MoonAlpha Finance $150 million, and VanEck's New Finance Income Fund $53 million. Creditors have also been redacted. $462.2 million and $230 million are owed to unknown creditors. $55 million is owed to Heliva International Corp.

On-Chain

Following the move higher in BTC price, the percentage of STH in profit has reached 92%, a level last seen in Nov 2021.

Total WBTC wrapped on ETH has declined more than 35% since the collapse of UST/LUNA. There were 285K WBTC at its height and had decreased by 101.55K WBTC through the course of 2022. Despite the recent price appreciation for BTC, there was no significant movement on the WBTC front as WBTC balance remains stagnant.

Crypto Derivatives

• BTC and ETH funding rate remains positive
• 30-day ATM IV rose for both BTC & ETH to 57.93% and 65.65% respectively
• 30-day 25d call skew rose for BTC to 2.08% & fell for ETH to 0.51%

For futures, total liquidations for the last 24hrs came in at $194.01M, with the majority coming from longs at $173.17M.

On the options front, IV rose across the curve as term structure flipped to backwardation for BTC and remained in contango for ETH. Near-dated IV saw a larger drop as compared to longer-dated IV for ETH while near-dated IV slightly rose compared to longer-dated IV for BTC. RV continues its fall, falling to 52.01 for BTC and 59.81 for ETH. Variance risk premium fell to 4.82% for BTC and to 4.85% for ETH.

On the flow front, most of the volume comes from short-dated options expiring on 3 February. On the ETH side, the most popular strategy is the short risk reversal, as traders look to protect their positions and capture the next leg down.

Lastly, the VIX slightly fell to 19.20.

Crypto Technical Analysis

Looking at TA, BTC continued its initial rally over the weekend, as price continued to rise in the rising trend channel. The price trades above its support at 21.3K, standing at $22.5K. Daily RSI remains elevated though its bearish divergence begins to materialize after its meteoric rise in the past 2 weeks.

As for ETH, it had also continued its rally going into the weekend but rejected at its resistance level of 1.67K. The next support level to look out for is at 1.5K as RSI swung lower.

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Daily Readings

TradFi

• U.S. targets Google's online ad business monopoly in latest Big Tech lawsuit

• McConnell: U.S. debt limit solution must come from Biden, McCarthy

• Ukrainian lawmakers draw up defence transparency bill after graft claims

• Drop in business activity flags UK recession risk - flash PMI

• U.S., Germany poised to send tanks to Ukraine, answering Kyiv's pleas

• Egypt signs $1.5 billion financing agreement with ITFC, CNBC Arabia reports

• Asia-Pacific shares trade mixed, tracking Wall Street’s struggle for direction

• Tesla plans to spend $3.6 billion more on battery and truck manufacturing in Nevada

Crypto

• El Salvador Pays Back $800M Maturing Bond, President Nayib Bukele Says

• Date Set for Oral Arguments in Grayscale’s Appeal of SEC’s Bitcoin ETF Decision

• New ‘Celsius token’ may be used to repay creditors: Report

• UK gov't is hiring a central bank digital currency lead for Treasury team

• EU lawmakers vote for more restrictive capital requirements on banks holding crypto

• Uniswap holders propose ditching Ethereum for BNB Chain to deploy v3 protocol

• Terra lending protocol Mars to launch mainnet

• Aave Community Voting to Deploy Version 3 on Ethereum

Deal Flow

• Blockstream raises $125M to finance expanded Bitcoin mining operations

• Blockchain developer QuickNode raises $60M at $800M valuation

Yours sincerely,
Treehouse Research 🌳