• BlackRock CEO Larry Fink outlined the most urgent and rapidly changing developments in crypto and traditional finance in his annual letter to investors.
• Fink discussed topics such as geopolitical crisis, strategies for long-term growth, digital assets, broader trends in investing and market research.
• He predicted that more bank seizures and shutdowns are coming due to inflation, Fed rates and bank bailouts, placing greater importance on capital markets for financing.
BlackRock CEO Outlines Crypto Developments
BlackRock CEO Larry Fink released his annual letter to investors outlining the most urgent and rapidly changing developments in both cryptocurrency and traditional finance. In the 9,000-word document, he discussed issues such as the geopolitical crisis, strategies for long-term growth, digital assets, broader trends in investing and market research.
Inflation & Federal Rates
Fink predicted that inflation will persist at a rate of 3.5% or 4%. Due to this elevated rate of inflation he believes that the Federal Reserve will continue to raise interest rates in order to fight it.
Bank Bailouts & Seizures
Due to the continued challenges facing regional banking sectors within the US, Fink predicts that more bank seizures will occur leading to potential bailouts from central banks. As these banks become constrained on lending they are likely to turn towards capital markets for financing instead of relying on banks themselves.
Implications Of Digital Assets
Fink also touched upon implications of digital assets being onboarded into financial institutions noting that there remain many challenges with this process but overall remains bullish on emerging economies when it comes to their use cases.
Long Term Growth Strategies
Finally Fink concluded his letter by discussing long term growth strategies noting that while 2020 witnessed one of the most challenging market environments due diligence must be done in order successfully capitalize on opportunities during times of uncertainty.
• The US non-farm payrolls report showed a positive surprise, with the unemployment rate going up to 3.6%, and Bitcoin breaking $20,000 immediately afterward.
• The DXY retreated to 104.8 which caused a surge in major currencies like EUR and GBP.
• Markets are currently favouring 25bps for the upcoming FOMC meeting on 22nd March, with a terminal rate of 5.50%.
US Non-Farm Payrolls Report Surprises
The US non-farm payrolls report showed an unexpected positive surprise, with over 311k jobs created instead of the expected 205k. This led to an increase in the unemployment rate to 3.6%, however this was still lower than the estimated 3.4%.
Bitcoin Breaks $20K
Immediately following these figures being released, Bitcoin broke $20,000 for the first time since December 2020. This comes as no surprise given that investors have been favoring digital assets over traditional ones due to their increased safety and liquidity during uncertain economic times.
DXY Retreats To 104.8
The DXY index retreated to 104.8 following this news, which led to major currencies like EUR and GBP experiencing an uplift in value in comparison to USD. This shows that markets are still not convinced that inflation is going to rise despite higher job numbers being reported by NFP data release today.
FOMC Meeting Favoring 25bps
Markets are currently favouring 25bps for the upcoming FOMC meeting on 22nd March, with a terminal rate of 5.50%, suggesting that it is likely that there will be no further hikes this year even if inflation does rise significantly from hereon out..
Currencies And Probabilities Of Fed Meeting
Currencies reacted positively after NFP data was released (as seen on Trading View) while probabilities of Fed meetings continue to show favoritism towards 25 bps (as seen on CME). This suggests that markets are expecting no further hikes until at least 2022 even if inflation does rise significantly from hereon out..
• Tether, the stablecoin pegged to the U.S. dollar, has no exposure to Silvergate Bank; CTO of Tether, Paolo Ardoino, made this announcement on Twitter.
• Circle’s USDC stablecoin is exposed to Silvergate, but all customer assets remain safe and secure according to a tweet from Circle.
• Silvergate Capital saw a 45% decline in its stock due to the postponement of its annual 10-K report and evaluations of recent events that took place after the end of 2022.
Tether’s No Exposure to Silvergate Bank
Today, on the heels of a significant announcement involving US bank Silvergate – which had ties with cryptocurrency lender FTX and is now facing an increasing consortium of capital flight and scrutiny from regulators – at least two crypto companies took to social media today to announce how this news has affected them.
Tether, the stablecoin pegged to the U.S. dollar and backed “100% by Tether’s reserves” according to its website, took to Twitter today announcing it had no exposure to the California bank. According to Paolo Ardoino, CTO of Tether, there was no exposure between them and Silvergate Bank.
Circle’s USDC Stablecoin Exposure
However, this is not so for another stablecoin: USDC. In a separate tweet released Mar 2nd., Circle reported that despite its exposure to Silvergate Bank, all customer assets remain safe and secure: “We are sensitive to the concerns around Silvergate and are in the process of unwinding certain services with them and notifying customers,“ they posted on Twitter.
Silvergate Capital Stock Drop
Silvergate Capital – holding company for Silvergate Bank – saw a drop in their stocks due March 2nd due tp postponed release of their annual 10-K report as well as evaluation processes taking place after 2022 came about officially closed out.. The company’s stock fell by 45% by end day; earlier it faced losses up 48%. As result year-to-date losses widened 57%.
Market Cap & Reserves
USDT & USDC make up two biggest stablecoins market cap wise; each accounting for $71 billion & $42 billion respectively as per CryptoSlate report published recently Wall Street institution Cantor Fitzgerald reportedly manages $39 Bn USDT reserves include approx $39 billions US Treasury bills listed reserves held back Tether itself
Bitcoin Spent Volume at Historic Lows
• Old and Young Bitcoin spending volumes have hit extremely low levels.
• Younger coins historically represent the majority of day-to-day transaction volume.
• Spikes in Old / Young spent volume ratio generally occur during bullish fervor.
Analysis of Bitcoin Spend Volume
The aggregate spent volume of both the Old (> 6m) and Young coin (< 6m) supply, as well as the Old / Young Spent Volume Ratio (%), are all at historic lows. This indicates a lack of activity in terms of liquidity and investor sentiment.
Younger coins, which typically represent the vast majority of day-to-day transaction volume, are currently spending roughly 167K BTC - the lowest level for five years. Meanwhile, older coins are also not being spent in relation to history - with only 10k BTC spent over seven days.
Old vs Young Coin Spend Volume
The old-to-young spend volume ratio % spiked during the FTX collapse – indicating capitulation – and is currently descending to a rough average of the past five years. This suggests that previously dormant supply is re-entering liquid and active supply, potentially shifting aggregate positioning by longer term holders.
Implications on Crypto Market
The lack of liquidity in terms of both old and young coin spending could ultimately have far reaching implications on the crypto market, depending on how long this situation persists for. It may indicate a lack of confidence from investors or simply that there is no need for them to actively trade or move their funds at present time.
Overall, it appears that Bitcoin’s spend volumes are currently at historic lows across both old and young coins alike, suggesting potential shifts in investor sentiment or simply a general lack of need for traders to be active in moving their funds around at present time.
• Recent enforcement actions by the SEC have raised questions regarding the future of U.S. crypto regulation.
• According to Jeff Zelkowitz, Executive Vice President at APCO Worldwide, there is a desire among U.S. lawmakers to get something done.
• Zelkowitz shared his U.S. regulatory outlook in CoinMarketCap’s 2023 Crypto Playbook and believes that policymakers are making concerted efforts in the right direction.
U.S. Crypto Regulation on Track Despite Recent SEC Enforcement Actions
Regulatory Outlook from Jeff Zelkowitz of APCO Worldwide
Jeff Zelkowitz, Executive Vice President at APCO Worldwide, shared his U.S regulatory outlook in CoinMarketCap’s 2023 Crypto Playbook despite recent enforcement actions by the SEC against Kraken and Paxos raising questions regarding the future of U.S crypto regulation.
U.S Policymakers Aim to Reinforce American Leadership
According to Zelkowitz, there is a desire from both political parties to cement U.S financial dominance using technology while also tackling bad actors who could take advantage of the digital assets ecosystem and its lack of unified regulations across different state and federal financial regulators applying existing legislation with an overlap that creates friction between them, making compliance difficult for legitimate players in the space .
White House Executive Order & Senators Gillibrand & Booker’s Proposal
The White House issued an executive order as well as Senators Gillibrand and Booker proposing a bill aimed at creating uniform regulations for digital assets and clarifying their legal treatment under securities laws which would help address some of these issues related to compliance .
Conclusion: Appetite & Willingness Among US Lawmakers To Get Something Done
While there is still much work needed for this issue to be resolved completely, there remains an appetite and willingness among US lawmakers to get something done that would reinforce American leadership in the global financial system while also protecting it against bad actors who might seek to take advantage of its current state .
• Bitcoin (BTC) has increased by almost 287,000% since 2011 and the British Pound Sterling (GBPUSD) is 11% away from its all-time low.
• Chancellor Jeremy Hunt has proposed a new digital pound as a “trusted and accessible” payment method and hoarding of Bitcoin may be banned due to bank run fears.
• CryptoSlate analyzed on-chain and macro data to present both sides of the argument regarding whether Bitcoin is poised for a new low or if the bottom has been set at $15,500.
The Rise of Bitcoin
Bitcoin (BTC) has increased by almost 287,000% against the US dollar since 2011, making it one of the most lucrative investments of this decade. In comparison, the British Pound Sterling (GBPUSD) has only declined by 50%, with it currently being 11% away from its all-time low of 1.08.
Digital Currency Regulations
Chancellor Jeremy Hunt has recently proposed introducing a new Digital Pound as a “trusted and accessible” payment method in order to increase adoption among consumers. Additionally, according to reports under Sunak’s digital currency regulations, hoarding ‚Bitcoin‘ may be banned due to concerns over potential bank runs further down the line.
Bottom in Cycle?
CryptoSlate conducted an analysis into on-chain and macro data in order to provide readers with both sides of the argument regarding whether Bitcoin is poised for another low or if the bottom had already been set at $15,500. The analysis found that while there are some signs that suggest we could see further declines in BTC prices, there are also indicators that point toward a market bottom having already been reached.
Buying and trading cryptocurrencies should always be considered as high risk activities due to their volatile nature and lack of regulation within this sector. Therefore, it is important for investors to conduct their own research before taking any action related to content within this article or any other cryptocurrency related news source.
In conclusion, while there are still risks involved when investing in cryptocurrencies such as Bitcoin or Ethereum, these risks can be mitigated through careful research prior to making any trades or investments into these digital assets. Furthermore, given BTC’s impressive growth rate over this decade compared to traditional fiat currencies like GBPUSD suggests that cryptocurrencies could have tremendous upside potential when it comes time for mainstream adoption in mainstream finance circles
• Alameda Research, a defunct crypto hedge fund, has sued bankrupt crypto lender Voyager Digital for $445.8 million.
• The lawsuit is to recover loan repayments the hedge fund made to Voyager in the 90 days preceding its own bankruptcy.
• Alameda has alleged in the lawsuit that Voyager „fueled“ the misuse of customer funds either knowingly or recklessly.
Defunct crypto hedge fund Alameda Research recently filed a lawsuit against Voyager Digital, a bankrupt crypto lender, seeking to recover loan repayments worth $445.8 million. The lawsuit was filed in the Bankruptcy Court for the District of Delaware by lawyers of FTX.
Alameda Research had filed for bankruptcy along with its sister company FTX in November 2022. Voyager had filed for bankruptcy in July. According to the court filing, the hedge fund is trying to recover the loan repayments it made to Voyager in the 90 days preceding its own bankruptcy. The lawsuit stated that Voyager lent cryptocurrencies worth „hundreds of millions of dollars“ to Alameda in 2021 and 2022. After the bankruptcy filing, Voyager demanded repayment of all its loans to the hedge fund, even before maturity dates.
The lawsuit also stated that Voyager’s business model was that of a „feeder fund“ which means it solicited retail investors and invested their money with little or no due diligence in cryptocurrency investment funds such as Alameda and Three Arrows Capital. Alameda paid Voyager $3.2 million in interest in August 2022 and $248.7 million and $190.5 million in September and October 2022 respectively as loan repayments and payments of $3.2 million in interest.
Alameda Research has stated in the lawsuit that since the repayment was made in the 90 days preceding its bankruptcy, they are eligible to be clawed back. The hedge fund is now seeking to recover these repayments from Voyager and has accused the crypto lender of „fueling“ the alleged misuse of customer funds either knowingly or recklessly. It remains to be seen how the court rules on the case.
• Australia Financial Minister Stephen Jones said there is a “good argument” to regulate crypto assets as financial products.
• The Australian government is focused on regulating crypto assets that act like financial products.
• Australia’s crypto group Blockchain Australia is at odds with the Australian Securities and Investments Commission and the Commonwealth Bank over broadly classifying all crypto assets as financial products.
The Australian government is considering regulating cryptocurrencies as financial products, according to the country’s Finance Minister Stephen Jones. In a recent statement, Jones said that there is a “good argument” to regulate crypto assets as financial products, since most of them are used as a store of value for investment or speculation.
The Finance Minister’s statement comes in response to the collapse of FTX earlier this month, which highlighted the need for cryptocurrency regulation in the country. Jones further noted that the government is mainly focused on regulating crypto assets that act like financial products, and that there is no need to set up a “completely separate regulatory regime for something that is, for all intents and purposes, a financial product.”
However, not everyone is in agreement with the Finance Minister. Blockchain Australia, a crypto lobby group in the country, has been vocal in its opposition to the broad classification of all crypto assets as financial products. The group has argued that the government should not treat all crypto assets the same way, and that each asset should be evaluated and regulated based on its individual characteristics.
At the same time, the government is also carrying out a “token mapping” exercise, where it will identify which crypto assets it plans to regulate. The results of this exercise are expected to be revealed in the near future.
In conclusion, it is clear that the Australian government is taking steps to regulate cryptocurrencies. While there is some disagreement about the best way to regulate them, it is likely that the government will eventually come to a decision that satisfies both those in favor of regulation, and those opposed to it.
• Alameda Research’s liquidator positions were liquidated twice in less than four days due to forcibly closing leveraged positions.
• The liquidators lost $15,000 of Curve DAO token (CRV) debt in exchange for 0.83 wrapped Bitcoin (WBTC) — or roughly $17,600 of their collateral.
• Alameda Research liquidators were forced to become active on-chain to move assets to safer multi-signature wallets after a loss of roughly $1.7 million in funds.
Alameda Research, one of the top quantitative trading and investment firms in the cryptocurrency industry, has recently been hit with liquidation for the second time in three days. This is due to their leveraged positions being forcibly closed.
The liquidators at Alameda Research lost $15,000 of Curve DAO token (CRV) debt in exchange for 0.83 wrapped Bitcoin (WBTC) — or roughly $17,600 of their collateral. The liquidators attempted to remove assets from a borrow position on the DeFi protocol Aave. Instead of paying back the debt to close out the position, the liquidators opted to remove all extra collateral, which resulted in the position being liquidated. This liquidation cost the liquidators four WBTC, which is worth $72,000.
This is not the first time that Alameda liquidators have been forced to become active on-chain to move assets to safer multi-signature wallets. On December 28, 2022, Alameda lost roughly $1.7 million in funds through mixers often used by hackers. Despite the liquidators‘ best efforts to secure all funds, Arkham analysis revealed that „significant 7- and 8-figure sums of capital“ were left stranded in Alameda wallets.
Alameda Research is still holding a position short of $16,500 of CRV, which is collateralized by $23,000 WBTC. It is unclear whether or not the liquidators will be able to recover the funds.As of now, the market is highly volatile, and the liquidators must remain vigilant in order to protect their positions. It is possible that the liquidators could be hit with another liquidation in the near future if they are unable to close out their positions in time.
Alameda Research is a renowned quantitative trading and investment firm in the cryptocurrency industry. It is unfortunate that they have been hit with liquidation twice in less than four days, but it is a reminder that the market can be unpredictable and highly volatile. The liquidators must remain vigilant and be aware of any changes in the market in order to protect their positions.
• The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have opened investigations into Barry Silbert’s Digital Currency Group (DCG).
• The investigation focuses on internal money transfers and loans between DCG, its investors, and a subsidiary.
• DCG has stated it has „always conducted its businesses lawfully.“
The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have launched an investigation into Barry Silbert’s Digital Currency Group (DCG). The probe will focus on internal money transfers and loans between DCG, its investors, and a subsidiary.
The DOJ and the SEC have asked for documents and interviews in regard to the situation and have declined to comment on the matter. A DCG spokesperson commented on the matter upon Silbert’s request and stated: “DCG has a strong culture of integrity and has always conducted its business lawfully. We have no knowledge of or reason to believe there is any Eastern District of New York investigation into DCG.”
The investigation also includes DCG investors and is intended to discover whether they were informed regarding these transfers and internal loans. At the moment, neither DCG nor Silbert are accused of any wrongdoing. However, the investigation is active and prosecutors are continuing to collect information and documents.
Genesis, a crypto lender and a subsidiary of the DCG, is also involved in the investigations. Genesis has stated it does not comment on specific legal matters, but that it “maintains a regular dialogue and cooperates with relevant regulators.”
The investigations into Silbert’s DCG come as the crypto industry is facing increased scrutiny from the United States government. Recently, the US Treasury Department has been working to implement crypto regulations, with the aim of combating money laundering and terrorist financing.
The investigations into Silbert’s DCG could have serious implications for the crypto industry as a whole, depending on the outcome. As the investigation continues, more information will become available and it will be interesting to see how the situation unfolds.