News Round-Up for the Week

FTX Account Drainer Swap ETH for BTC

After days of swapping funds withdrawn from FTX to ETH, the purported “FTX Account Drainer” is now swapping for BTC holdings with its ETH stack, exerting selling pressure on the price of ETH. Find out more here.

Genesis Warns of Possible Bankruptcy

After suspending the services of its lending arm last week, Genesis Global Capital saw its fund-raising efforts rendered moot as one of the companies it approached decided not to invest on the grounds of a potential conflict of interest, according to WSJ’s report. Find out more here.

El Salvador Paves the Way for Full Crypto Adoption

BTC’s recent abysmal spot price actions did not put a dent in the resolution of the El Salvadoran government to continue its foray into digital currencies. Find out more here.

New Proposal to Cover Debt on AAVE

DeFi management platforms Llama and Gauntlet have submitted a governance proposal on Aave to cover a $1.6 million bad debt brought on by a publicized short attempt on Tuesday. Find out more here.

Ethereum Core Developers Back EIP-4844

Ethereum developers are working towards including EIP-4844, a highly-anticipated scaling proposal, in a future mainnet upgrade, according to the latest Ethereum core developer meeting. Find out more here.

Bybit x NGC: DeFi Meets TradFi — The Integration and Challenges Faced

This week, we explore the integration between DeFi and TradFi.

As DeFi reels in from an extended bear market, TVL and user activities have plunged remarkably from their peaks. There are voices that DeFi’s real-world usage may help drag DeFi out of the woods. 

Read more details here as we look into the state of integration, challenges faced, and possible forms of integration in the future.

On-Chain Round-Up for the Week

The market-moving narrative that captures the spotlight this week still revolves around whether the Federal Reserve could slow down the tempo of rate hikes after weighing existing economic and financial conditions against the impact of inflation. The FOMC minutes released on Wednesday signaled that many officials back a moderation in the near term, as they lean towards a 50-bps raise in December. US stocks entered the Thanksgiving holiday after notching gains for the third straight day, while the dollar weakened.  

The broader crypto market had a turbulent start this week, with a weekend sell-off extending to Monday following the FTX drainer’s massive ETH dump. However, major cryptocurrencies bounced back after RSI reached oversold zones and have since been largely range-bound, with BTC holding a stronger footing above the $16k handle and ETH struggling to defend the $1,100 threshold. 

On-chain metrics indicate that BTC long-term holders are losing convictions as they grapple with the FTX collapse. This is evidenced by a series of notable and sustained upticks in old coins (aged 6 months and above). A total of 254k old coins, accounting for 1.3% of the circulating supply, has been spent since the start of the FTX debacle. This represents the steepest decline in the supply of older coins since the last bull run in January 2021. That said, part of the coins spent may be related to the sales of BTC from the 2014 hack of the exchange Mt. Gox.

The whale cohort (those with more than 1k BTC holdings) is also submerged underwater. The average withdrawal price since 2017, indicated by the yellow line, is now above the current spot price, suggesting that this cohort of smart money and seasoned investors are also at an unrealized loss. 

Meanwhile, the short-term holder MVRV has surpassed that of the long-term holders for the first time in the current cycle, hinting that direction traders are beginning to do better than holders, whose convictions have started to wane. If history is any indication, the crossover usually marks a potential bottom formation in past cycles. Of course, the current market conditions are a lot more volatile, and the signal warrants further scrutiny. 

Macro events to look out for in the coming week 

Three coins to watch