Obi-Wan

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Crypto Winter Comes to US Banks

The recent failure of SVB is explained by rate bets going sour, but did SVB management imagine themselves as great macro traders or did they just incorrectly estimate future deposits by crypto and other venture firms? I think the latter is true, and that shows how crypto and broader venture

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Binance Risk Reshapes Crypto Landscape

The recent Forbes article and a letter by US senators suggest a new attack on Binance. It looks like major crypto exchanges cannot remain unregulated for much longer, and I see Coinbase as a likely winner in a new regulatory landscape. New Attack on Binance Last week there was a

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Will China Fuel a New Crypto Boom?

Low inflation allows China to spur credit creation. It increasingly looks like a consumer credit boom, suggesting an upside potential for global liquidity and crypto prices. Stake Ethereum with lowest fees START STAKING China Credit Boom A new credit boom seemingly starts in China. In January new loans were at

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“Million Dollar for Bitcoin” Call by ARK Invest

ARK Invest manages the largest high-risk tech fund, ARK Innovation ETF. In a recent research report, the company details its famous call that Bitcoin may reach a million-dollar price by 2030. Bitcoin in the Long Term ARK Investment Management LLC (ARK Invest) recently published a new annual research report detailing

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Netflix As a Template to Bitcoin Recovery?

It looks like the market starts differentiating between innovation assets. Netflix shares double from lows, while Zoom and many other high-risk tech stocks remain near lows. Can crypto recover like Netflix? Stake Ethereum with lowest fees START STAKING Innovation Assets Are Different Last year's relentless selling of crypto,

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BOJ to Spoil Crypto Rally?

Bank of Japan is the last major central bank staying with an ultra-easy monetary policy, and there are reasons to expect a policy change. Will it spoil the current crypto rally? Why It Matters Decades of an ultra-easy monetary stance have turned Japanese funds into big investors in the global

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How Will Staking Withdrawals Affect Ethereum?

The recent news suggests that a new Ethereum upgrade will allow the withdrawal of staked coins in March or even earlier. Will it crash the Ethereum price or, conversely, attract new money in Ethereum staking? And how should derivatives be priced around the upgrade? Stake Ethereum with lowest fees START

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Crypto Outlook in 2023

Short-term crypto performance may be dominated by Binance worries, but I see a powerful bullish factor sometime next year. In 2023 the US monetary policy cycle will probably turn, supporting global liquidity, including crypto. Stake Ethereum with lowest fees START STAKING Monetary Policy Turns 2023 is expected to be a

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Bubbles, Fed, and Crypto

The Federal Reserve has a long history of creating bubbles and deflating them. When Bitcoin matured enough, it became significantly correlated with traditional financial assets, being moved by global trends. Therefore, a question arises whether a policy reversal by the Federal Reserve in 2023 would support cryptocurrencies' rebound. Stake

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A Battle of Stablecoins

Last week Coinbase asked its users to switch from USDT to USDC. In September Binance converted most stablecoins held by users into its own one, BUSD. Why did exchanges attack rival stablecoins? And what stablecoin is the safest? Stake Ethereum with lowest fees START STAKING A Rise of Stablecoins Stablecoins

Import 2022-12-09 05:46

Which Exchanges Benefit From FTX’s Insolvency?

FTX's insolvency shatters the crypto market, forcing crypto traders to rethink the credit risk of exchanges. Binance and decentralized exchanges are winners in the spot market, but in futures, Binance loses its market share in favor of both CME and smaller crypto rivals like OKX and Bybit. The

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Bonds May Support Crypto Next Year

This year bear market in bonds has been brutal, but there are signs it may end relatively soon. Given crypto’s historical correlation with real rates, it should provide support for crypto at some point in the future (likely next year). Are bonds bottoming out? It increasingly looks like long-term

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Ethereum’s Resilience

Ethereum is relatively resilient to the recent negativity caused by the FTX news. Ethereum is generally more volatile and riskier than Bitcoin, but unlike Bitcoin, Ethereum did not renew this year's lows and its implied volatility declined relatively to Bitcoin’s one. Bitcoin reaches a new low, but

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Ethereum Spot Disappearance

Spot Ethereum has become increasingly scarce, making derivatives preferred instruments for trading. Reduced availability of the underlying asset may lead to abnormal price moves, which are not priced in the current low-volatility environment. Futures conundrum Ethereum is increasingly traded via futures rather than on the spot market. According to The

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Crypto Becomes Too Cheap to Mine

Recent news suggests widespread stress in the crypto mining industry. Similar stress in commodity markets often indicates that the commodity is too cheap and likely to rise. Will crypto behave in the same way as commodities? Mining stress Last Thursday shares of Bitcoin miner Core Scientific plunged by 78% in

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How to Trade Low Volatility

Despite the crypto market’s wild price swings in past it has been recently trading in a very narrow range. Newfound stability may be good for wider crypto adoption, but it still poses a question of how to trade volatility in the short term. Unusual calm Cryptocurrencies have been trading

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Will Bond Implied Volatility MOVE Crypto?

US Treasuries implied volatility is at the highest level since 2009, while implied volatility of stocks and crypto is relatively muted. Will bond-implied volatility spill over into other assets? Implied volatility is too different between asset classes US Treasuries' implied volatility has skyrocketed this year. ICE BofA MOVE Index,

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Bitcoin in the High-Inflation World

Bitcoin has not behaved like an inflation hedge this year. But is it possible to find a reliable short-term inflation hedge in the current monetary policy regime? And what does Bitcoin really hedge? No refuge This year has been brutal for most assets. Both stocks and bonds are down by

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Bitcoin Is Too Cheap vs Tesla

I spotted that Bitcoin is near 5-year lows compared to Tesla shares. Does it mean that Bitcoin is too cheap? Bitcoin and Tesla At the first glance, Bitcoin and Tesla do not seem to have many common features. Bitcoin provides an alternative to the traditional financial system, and crypto believers

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Crypto In the Hawk Claws

Overtightening of the US monetary policy leads to indiscriminate selling of most assets, particularly high-risk long-duration ones like crypto. However, this trend will reverse in 2023. Too aggressive monetary easing The coronavirus pandemic in 2020 was met with a large-scale monetary and fiscal stimulus. The US Federal Reserve launched unlimited

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Cheaper Bitcoin Volatility on the Stock Market

Arbitrage traders might enjoy the fact that Bitcoin options on Deribit are sometimes priced differently than on the stock market (via BITO ETF), creating trading opportunities. BITO ETF ProShares Bitcoin Strategy ETF (ticker BITO) is traded on the US stock market and provides exposure to Bitcoin. It invests in cash-settled,

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CME Discount

CME crypto futures are priced differently compared to major crypto exchanges. CME Bitcoin futures have discounts to values at Deribit and Binance, but CME Ethereum futures are traded in line with Deribit and Binance. Is it more than a liquidity effect? And why do CME traders have different views on

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Will a Gamma Squeeze eMerge?

The Merge is widely expected to be a "sell the news event", but huge open interest in low-delta call options makes the case for a possible gamma squeeze if the Ethereum price goes up significantly after the Merge. What is a gamma squeeze A gamma squeeze refers to

Import 2022-12-09 05:46

Crypto to Ride a Chinese Deflation Wave

I believe that the next significant macro factor is Chinese yuan devaluation. Short-term, this scenario is likely negative for most risk assets including crypto, but long term, it may drive crypto prices much higher and possibly even turn crypto into a mainstream asset. Macro story According to Bloomberg Intelligence estimates,

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The Merge Conundrum

The Merge is coming The current Ethereum is to merge with the Beacon Chain proof-of-stake system. Beacon is used to test the system ahead of a full migration to Ethereum 2.0 and functions as a live model of Ethereum 2.0. Ethereum 2.0 is an upgrade from the