Republican Lawmakers Lament SEC Chair Approach Over Crypto Regulations; China Economy Bounces Back From Covid, Growing At The Fastest Pace In A Year

19 Apr 2023, Wednesday

3:28 AM

Republican Lawmakers Lament SEC Chair Approach Over Crypto Regulations; China Economy Bounces Back From Covid, Growing At The Fastest Pace In A Year



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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Our Daily View

What We Are Covering Today

  • China records a better-than-expected Q1 GDP growth, led by a significant increase in consumer spending (more in Macro & TradFi)
  • Liquid staking protocols, Lido and Rocket Pool, find new ways to drive adoption; Republicans criticize SEC Chair Gensler's approach to digital asset regulation (more in DeFi & CeFi)
  • Bitcoin on-chain indicators suggest that the worst of the bear market conditions are over (more in On-Chain)
  • ETH returns to contango; ETH risk premium continues to plummet (more in Crypto Derivatives)
  • BTC continues to move towards the end of the triangle as ETH trades sideways (more in Crypto Technical Analysis)

Macro & TradFi

According to the new data from Beijing’s National Bureau of Statistics, China's economy has reported 4.5% growth in Q1 2023 compared to the previous year. This is the fastest rate of growth since the first quarter of 2022 and a significant improvement from the previous quarterly figure of 2.9% growth. Consumer spending is playing a bigger role than expected in driving the country's recovery since its strict Covid measures were lifted. Retail sales, in specific, have increased by more than 10% year on year. This is a change from the previous model of investment-led growth, which China's economy relied on pre-pandemic. However, the long-term sustainabilities of such a recovery trend are debated by economists on whether consumer spending is "revenge spending" or a more lasting shift towards consumers driving overall growth.

Meanwhile, Fox Corp has agreed to pay $787.5m to settle its legal battle with Dominion Voting Systems just before the start of a trial on the voting-machine company’s allegations that it was defamed by network broadcasts after the 2020 presidential election. Dominion alleged that Fox hosts and guests amplified false claims that its voting technology helped rig the election for Joe Biden. The company sought $1.6 billion in damages. Fox argued that it was covering newsworthy claims by associates of then-President Donald Trump and that its broadcasts should be protected by the First Amendment.

Lastly, the major US indices remained flat yesterday with S&P 500, DJIA, and NASDAQ closed at 0.08%, -0.04%, and -0.04%, respectively. 2-year and 10-year Treasury yields have gone further up, with the former currently at 4.207% and the latter at 3.586%.

DeFi & CeFi

  • Republican lawmakers blast SEC Chairman Gensler's approach to crypto regulation
  • GMX integrates with cross-chain protocol Socket, enabling users to buy GLP outside its native chains
  • Coinbase CEO says that Coinbase could leave US if regulatory ambiguity remains
  • Core DAO launches $200M ecosystem fund
  • Distributed validators network Obol announces Alpha Release and mainnet deployment timeline
  • Web3 identity platform SPACE ID launches DAO and its token burn and buyback mechanism
  • Gala Gamers to launch upgraded token $GALA(v2) on 15 May
  • Merit Circle launches its Avalanche gaming subnet, Beam
  • Decentralized wireless project Helium starts to migrate to Solana
  • Uniswap V3 to launch on Polygon zkEVM
  • DeFi infrastructure Maverick Protocol goes live on zkSync Era
  • Lido to vote on new proposal to use $ARB airdrop as rewards for LPs
  • Rocket Pool deploys its Atlas upgrade, granting access to staking rewards and lowering barrier of entry to become an Ethereum validator

The Republicans on the U.S. House Financial Services Committee has sent out a letter criticizing Securities and Exchange Commission (SEC) Chair Gary Gensler's approach to digital asset regulation, stating that the current national securities exchange (NSE) framework is not compatible with crypto. The Republicans argue that Gensler has forced crypto exchanges to register under the NSE framework despite its incompatibility with digital assets. The letter urges Gensler to work with Congress to develop clear rules of the road for digital assets that foster innovation and protect investors.

The Republicans claim that the current regulatory frameworks are not suitable for the unique features of digital assets, and as a result, the digital asset ecosystem's ability to realize the unique benefits of the technology is being hampered. The letter states that existing regulations under the NSE framework do not contemplate the unique features of digital assets, such as their ability to be used in non-securities transactions and consumed within a developing system.

The letter also argues that the lack of clarity provided by the SEC as to what digital assets are considered securities limits what an NSE can list. The Republicans suggest that the SEC should work with Congress to develop clear rules of the road that provide regulatory clarity and protections for innovators and investors. Coinbase CEO Brian Armstrong suggested that his exchange may need to move away from the US if the regulatory landscape does not improve.

Elsewhere, a week after Shanghai went live, liquid staking protocols are finding new ways to drive new user adoptions. Lido DAO is proposing to use the ARB tokens it received as an airdrop from Arbitrum as emission rewards to incentivize the use of wrapped staked ether (wstETH) throughout the Arbitrum ecosystem. The proposal suggests rewarding ARB tokens to users who provide liquidity for wstETH pools on Arbitrum, which would work in the same way as current incentives for LDO rewards. Lido is eligible to claim over 772,000 ARB tokens worth over $1.2 million at current prices. The proposal could go to a vote later this week. Meanwhile, Rocket Pool has deployed its Atlas upgrade, making the protocol compatible with Ethereum’s Shapella hard fork upgrade. The upgrade lowers the barrier of entry to spin up an Ethereum validator, as node operators can now supply just eight ETH plus some RPL to form a minipool, decreasing the amount of capital required to participate in Ethereum’s staking process. Minipools with only 8 ETH bonded by their owning node operator are matched with 24 ETH from the staking pool, provided by rETH holders, to make a validator.


According to recent on-chain indicators by @glassnode, Bitcoin investors have demonstrated consistent market behavior and activity in past cycles. These indicators suggest that the worst of the bear market conditions may be over. The on-chain data shows increased momentum in network utilization, which means more on-chain activity, higher network congestion, and greater fee revenue. Additionally, the data indicates that longer-term HODLers hold the majority of the coin supply, implying strong conviction. Glassnode's chart shows that all eight indicators point towards a healthy and robust market recovery. When multiple indicators align, it indicates a high probability of a relatively strong market period for Bitcoin.

Turning to Ethereum, data from OKLink reveals that, for the first time since the Ethereum Shanghai upgrade on 12 April 2023, the amount of new ETH deposits into staking has surpassed withdrawals; a net of 59,411 ETH was staked on the network yesterday). Since the Shanghai Upgrade, more than 1,065,400 ETH have been withdrawn, with 260,000 ETH (24.47%) coming from the liquid staking platform, Lido. The current ETH staking ratio is 14.48%.

Crypto Derivatives

  • BTC and ETH funding rates remain positive
  • 30-day ATM IVs for BTC and ETH fell to 52.01% and 57.04% respectively
  • 30-day 25 delta call skew for BTC and ETH tightens to 1.78% and 1.46% 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

The futures market experienced $103.73M in liquidations over the past 24 hours, with shorts accounting for the majority at $60.27M.

In the options market, the term structure remains in contango for BTC, while ETH has also reverted back to contango as the near-term IV dips. The 7-day RV for ETH continues to rise to 50.34%, likely due to the post-Shapella price spike, while the 7-day IV continues to fall and currently sits at 53.78%. As a result, the risk premium for ETH is low at 3.44%, while the BTC risk premium sits at 15.21%.

On the flow side, ETH option volume remains low, as the hype around Shapella has eased. Both BTC and ETH volume appear very bullish on the end-of-week with large volume on the 21 Apr calls.

Some traders are making a play on volatility and spot rally by selling 600 BTC contracts of 20 Apr 30.75K/21 Apr 31.5K call calendar and 500 contracts of 20 Apr 30.5K/28 Apr 32K call calendar (@tradeparadigm).

Finally, the VIX continues its descent and hits 16.83.

Crypto Technical Analysis

On the TA front, BTC’s breakout from the lower trendline seemed to be a fake-out which was corrected back last night through a 1.61% green candlestick. As such, price continues to move towards the end of the triangle and the long-term resistance at roughly $31K, which could indicate large price swings in the short-term future. RSI, on the other hand, remains elevated on the 1D level at 63.5 which normalizes at the 4H timeframe at 56.2.

On the other hand, ETH continues to move sideways within the parallel channel that we have observed previously. Together with the BTC pump last night, ETH will likely test the channel’s upper bound at roughly $2.13K. However, given that BTC is reaching the strong resistance zone at 31K, it is possible that ETH will remain trading sideways or move to the downside. If ETH breaks through the lower bound, the previous analysis remains that ETH will likely test the 1D resistance at $1.98K to $2K for support.

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