HK Implements New Crypto Regulations; Biden Commits Support to Ukraine In His Unannounced Visit

21 Feb 2023, Tuesday

2:58 AM

HK Implements New Crypto Regulations; Biden Commits Support to Ukraine In His Unannounced Visit



S&P Futures 500







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

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What We Are Covering Today

  • Biden pays a surprise visit to Kyiv and promises unwavering support to Ukraine; VC fundings have slowed down according to WSJ (more in Macro & TradFi)
  • Hong Kong implements new crypto regulations for trading platforms; Composable Finance CTO resigns (more in DeFi & CeFi)
  • Ordinals and Inscriptions lifts BTC on-chain activities but transfer volume remains low (more in On-Chain)
  • A large Sep put hedge on BTC at $15K dominate the flow (more in Crypto Derivatives)
  • BTC and ETH to re-test the $25K and $1.7K respectively (more in Crypto Technical Analysis)

Macro & TradFi

As a new development to the Russia - Ukraine conflict, US President Joe Biden paid a surprise visit to Kyiv yesterday to meet Volodymyr Zelenskiy, president of Ukraine. During the meeting, Biden declared that the US would give its “unwavering support” going forward as the invasion approaches the one-year mark. On the other hand, Chinese State Councilor Wang Yi is set to visit Moscow in the coming days after the peace proposal to end the conflict.

According to a new analysis done by WSJ, U.S. venture funding fell to a nine-year low in 2022. According to data from PitchBook and Preqin, venture funds raised $39.8 billion in 2022, down 28% from the previous year and the lowest level since 2013. The decline in fundraising is attributed to a combination of factors, including increasing competition for deals, a shift towards direct listings and SPACs, and rising concerns over a potential market downturn. Despite the decline in fundraising, many startups have continued to raise significant amounts of capital, with some investors suggesting that the focus is shifting towards later-stage companies with proven business models.

Lastly, US markets were closed yesterday due to President’s Day. However, US equity futures inched lower in a sign of further caution among investors. In other markets, stock futures for Australia and Japan fell slightly while those for Hong Kong stocks edged higher.

DeFi & CeFi

  • Hong Kong proposes licensing for crypto trading platform
  • Huobi aims to expand to Hong Kong in the midst of regulatory change
  • Galois Capital shuts down after losing $40M to FTX
  • FTX Japan resumes crypto and fiat withdrawals
  • Composable Finance CTO steps down after directing accusations at the CEO which he denies
  • Stablegains sued for promoting UST as safe investment
  • ZK dark pool startup Renegade raises $3.4M seed round

Hong Kong has proposed new legislation that would require cryptocurrency trading platforms to be licensed and follow certain guidelines, such as accessing customer risk profiles and setting limitations to ensure fair exposure. Only tokens that meet the Securities and Futures Committee's (SFC) definition of a "large-cap virtual asset" and have undergone security-related smart contract audits would be allowed to be offered by these platforms. In the midst of this regulatory change, Huobi announced that it would be expanding to Hong Kong and providing services to high-net-worth individuals and institutions. Justin Sun said in an interview that Hong Kong’s friendlier stance on crypto was the motivation behind the expansion.

The CTO of Composable Finance tweeted that he is resigning due to the community and him not knowing the financial health of Composable Finance. In the same thread, he mentioned that there was a suspicious lack of multisig usage and suspected that there was trading done with the company’s funds. He also added that he believed the CEO, Omar Zaki, was raising a Series A, thereby breaking the cease and desist mandated by SEC. He also suspected that Omar’s involvement in the soft-rug pull project, Bribe, was greater than what was let on. In response to these accusations, Omar started an AMA on Twitter where he denied all accusations.

Renegade raises $3.4M in the seed round led by Dragonfly Capital and former AngelList CEO Naval Ravikant. With the use of ZK-proofs, it aims to improve price execution and significantly reduce MEV in DeFi such as sandwich attacks and front-running.


The emergence of Ordinals and Inscriptions on Bitcoin has led to the highest level of Bitcoin Transaction Count Momentum since January 2021. This rapid ascent in the number of transactions indicates a significant increase in network activity, as more people are using the Bitcoin network to conduct on-chain transactions.

While Bitcoin's price has increased along with the popularity of Inscription transactions, the total volume of Bitcoin being transferred remains very low. In fact, for coins younger than six months, the total transfer volume is less than 115,000 BTC per day, which is an uncommonly low value in the history of Bitcoin.

Crypto Derivatives

  • BTC and ETH funding rates rose slightly
  • 30-day ATM IV climbed to 58.13% for BTC and fell slightly to 63.36% for ETH
  • 30-day 25d skew increased to 2.52% and -1.19% for BTC and ETH respectively

Top 3 CEX USDT perp funding rate arbitrage based on last 24-hour lookback:

Net Annualized APR

Perp (USDT pair)

Long on

Short On













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 over the past 24 hours amounted to $97.95M, split roughly evenly between long and short liquidation.

On the options front, near-dated IVs have recovered and seen a huge lift, especially towards the end of Feb expiry. Meanwhile, far-dated IVs have remained stable. As a result, term structure has flipped back to backwardation till April maturity. RV continues to rise for BTC as it reaches 56.39 while falling to 56.80 for ETH. Variance risk premium widens to 4.69% for BTC and 7.03% for ETH respectively.

On the flow side, the main flow was a large September put hedge at 15K strike for BTC. Beyond that, outright upside calls continue to dominate the tape esp for Feb and Mar maturities centered around $25K-$28K strikes. Lastly, for BTC, the top strategies were the bull diagonal spread (calls) and short ratio call spread. As for ETH, long straddle and long risk reversal were the most dominant strategies for ETH.

Lastly, the VIX was flat at 20.01.

Crypto Technical Analysis

Onto TA, BTC is back on its third attempt to break past the $25K mark as it bounced off the $23.9K level. On the H4, the 100 & 200 MA are closing in again, having last intersected on 13 January, right before BTC jumped from $18.5K to $21K. BTC is now in the $24.8K-$25.2K resistance zone with the 4H RSI pumping up from yesterday’s low of 51 to 61.

As for ETH, it is back to test the $1.7K mark. Similar to BTC, ETH also bounced off the lower end of its trading range at $1.65K and then spiked above its $1.66K-$1.69K resistance zone. The next level to look out for can be its upper bound of the trading range at $1.78K if bullish momentum continues.

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