BTC is currently trading around $19,500 and ETH around $1,450. LINK is the only notable gainer in the last 24 hours. The global crypto market cap is ~$1.01T, down ~5.5% over the last day. DeFi Total Value Locked is ~$52b and BTC dominance is around 40%.
Global equities are moving higher, while crypto is diverging downward behind Alameda and FTX contagion concerns (detailed below). US midterm elections are in focus today as the polls close this evening. Five Thirty Eight’s model indicates a Republican sweep is the most likely outcome (~57%), but a split congress w/ Democrats controlling the Senate (~27%) and a Democrat sweep (~15%) are both still on the table. Elsewhere in politics, former President Trump is making a “big announcement” next Tuesday where he’s widely expected to announce his 2024 presidential campaign.
Focusing on crypto, the solvency concerns around FTX and Alameda command the most attention. FTT dropped sharply below $22 last night, the price at which Alameda offered to lift Binance out of their FTT position. Some investors speculated that Alameda has leveraged exposure backed by FTT that necessitated them defending the $22 price level. The downward move sparked some broader market contagion, with Solana falling sharply as it appears Alameda utilized their large Solana balance to defend FTT. The Magic Internet Money (MIM) stablecoin also depegged as fears spread around loans backed by FTT. The founder of the two firms, Sam Bankman-Fried, has been uncharacteristically silent over the past ~24 hours, and FTX has seemingly stopped processing withdrawals. ETH sitting on exchanges has nearly fallen to a six-month low as investors take custody of their assets during the uncertain backdrop.
Notable news includes: The US DOJ seized more than 50,000 BTC stolen from the dark web marketplace Silk Road in 2012, the recovery was the second largest crypto seizure in history; VC behemoth Paradigm launched its Crypto Policy Council featuring former Congressmen Paul Ryan and Steve Israel, among other political figures; the gala token exploit reportedly was caused by a leaked private key on GitHub; the Avalanche Foundation unveiled a $4m incentive program for trading platform GMX; Bitcoin mining difficulty had a modest ~0.2% downward adjustment; the Bank of Korea completed a 10-month long experiment on CBDCs; Gemini expanded to five more European countries; BitMEX revealed it would launch trading of its BMEX token on Friday; and, European crypto venture firm LeadBlock completed the first close of its new fund targeting $150m.
Authors:
Matt Kunke, Junior Strategist | Twitter, Telegram, LinkedIn
Brian Rudick, Senior Strategist | Telegram, LinkedIn
This material is provided by GSR (the “Firm”) solely for informational purposes, is intended only for sophisticated, institutional investors and does not constitute an offer or commitment, a solicitation of an offer or commitment, or any advice or recommendation, to enter into or conclude any transaction (whether on the terms shown or otherwise), or to provide investment services in any state or country where such an offer or solicitation or provision would be illegal. The Firm is not and does not act as an advisor or fiduciary in providing this material.
This material is not a research report, and not subject to any of the independence and disclosure standards applicable to research reports prepared pursuant to FINRA or CFTC research rules. This material is not independent of the Firm’s proprietary interests, which may conflict with the interests of any counterparty of the Firm. The Firm trades instruments discussed in this material for its own account, may trade contrary to the views expressed in this material, and may have positions in other related instruments.
Information contained herein is based on sources considered to be reliable, but is not guaranteed to be accurate or complete. Any opinions or estimates expressed herein reflect a judgment made by the author(s) as of the date of publication, and are subject to change without notice. Trading and investing in digital assets involves significant risks including price volatility and illiquidity and may not be suitable for all investors. The Firm is not liable whatsoever for any direct or consequential loss arising from the use of this material. Copyright of this material belongs to GSR. Neither this material nor any copy thereof may be taken, reproduced or redistributed, directly or indirectly, without prior written permission of GSR.
