HashKey Capital Announces New $500M Fund; Equities Struggle to Extend Rally

18 Jan 2023, Wednesday

2:57 AM

HashKey Capital Announces New $500M Fund; Equities Struggle to Extend Rally

BTC

ETH

S&P 500 Futures

$21,233.50

$1,573.25

$4,000.50

(+0.59%)

 (+0.49%)

(-0.33%)

Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)

GM Treehouser 🌳

Welcome to our Treehouse Daily newsletter (previously known as The Canopy Collective), where Treehouse brings you financial news and insights free daily! We believe you’ll find this helpful.

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Treehouse’s 2022 Wrap-Up and 2023 Outlook

Our Daily View

What We Are Covering Today

  • Upside momentum faded in stocks; China’s population decline first time in 60 years (more in Macro & TradFi)
  • Alameda Research was given $65B line of credit; HashKey Capital raise half a billion in new fund (more in DeFi & CeFi)
  • Ethereum network has seen a massive increase in new smart contracts created over the past four months (more in On-Chain)
  • VRP broadly unchanged for BTC and ETH as RV continues to rise (more in Crypto Derivatives)
  • BTC and ETH hold their ground with momentum appearing to ease (more in Crypto Technical Analysis)

Macro & TradFi

Asia markets cooled into Japan’s heavily watched central bank meeting today, which might see tweaks to BOJ’s yield curve control (YCC) program further. Chinese populations showed the first year of negative growth in 60 years, dimming the country’s plan to boost consumption from Gen-Z with more will and cash to spend. China’s large-cap stocks traded onshore, as measured by A50 index, have rallied almost 10% YTD driven by 80bn RMB cumulative inflow from foreign investors, compared to ~90bn annual inflow in the entire 2022.

US stock indices struggled to extend upside momentum coming back from the MLK holiday. NASDAQ outperformed peers, adding 0.54%, while SPX closed 0.14% lower after topping 4000 intraday and DOW 1.14% lower. US Treasury yields widened with 10-year yields adding 4bps. Brent crude rallied over 3% and WTI 2.5%.

DeFi & CeFi

  • FTX court filing reveals Alameda Research was allowed uncollateralized borrowing of up to $65B
  • HashKey Capital raises $500M to push adoption of Web3
  • DCG suspends quarterly dividend
  • Africa Web3 game publisher Carry1st raises $27M
  • Sushiswap announces plans for a DEX aggregator and decentralized incubator
  • Coinbase Venture plans to enter a partnership with Rocket Pool

FTX court filing reveals that 41 market makers were provided a credit limit of between $1M to $150M while Alameda Research was provided a credit limit of $65B. Furthermore, these high-profile entities’ transactions were not recorded as they were provided specific wallets’ private keys which allowed them to do on-chain transactions. These together meant that Alameda Research was allowed up to $65B of unrecorded and uncollateralized borrowing.

Hong-Kong based venture capital firm, HashKey Capital, raises $500M for its Fintech Investment Fund III. The fund would be used to invest in infrastructure, toolings and applications that will help push the mass adoption of blockchain and crypto technologies.

On-Chain

For on-chain, Ethereum has seen a massive increase in new smart contracts over the last four months. This bodes well for the Ethereum ecosystem as development activities pick up on the L1 blockchain.

Elsewhere, there are notable rises in whale activity since the start, where transaction count for above $100K shot up for several altcoins (@santiment). These have led to an outperformance of certain altcoins against $BTC and $ETH in the last 2 weeks.

Crypto Derivatives

  • BTC and ETH funding rate remains positive
  • 30-day ATM IV fell for both BTC & ETH to 60.0% and 70.9% respectively
  • 30-day 25d call skew picked up for both BTC & ETH to 3.47% and 3.12% respectively

Net Annualized APR

Perp (USDT pair)

Long on

Short On

32.71%

SOL

OKX

BYBIT

17.16%

BTC

OKX

BINANCE

13.03%

BNB

BINANCE

OKX

Source: @CexyArbBot Telegram

1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, DOGE vs USDT perps 

2) CEX observed include Binance, Bybit, OKX & DYDX

@CexyArbBot allows you to customize CEX, 100+ pairs & lookback periods combo

For futures, total liquidations for the last 24hrs came in at $86.35M, with the majority coming from longs at $46.49M.

On the options front, near-dated IV for BTC formed a double top pattern, as it jumped aggressively till 24 February, while longer-dated IV remained unfazed as term structure was largely unchanged for both BTC and ETH. RV continues to rise for both BTC at 62.82 and ETH at 71.66. Variance risk premium rose slightly to 2.83% for BTC and fell slightly to 0.81% for ETH.

On the flow front, most of the volume comes from long-dated options expiring on 30 June. On the ETH side, the most popular strategy is the long ratio call spread, as traders look to capture the next leg of the rally.

Lastly, the VIX fell slightly to 19.36.

Crypto Technical Analysis

Looking at TA, BTC held above $21K while RSI on the H4 moved lower pointing to strong buying pressure despite the bearish divergence. However, $21.4K seems to be the level that bulls are unable to reclaim as large wicks form near that area.

ETH shows similar price action, with price holding its ground above $1.5K however, it has been unable to reclaim the $1.6K level. RSI indicates that upside momentum appears to wane.

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Daily Readings

TradFi

Crypto

Deal Flow

Yours sincerely,
Treehouse Research 🌳