Japan Announces CBDC Program, Platypus Finance Loses $8.5 Million
Market Update
- Traditional indices are extending yesterday’s fall on the back of higher terminal rate expectations after a couple of hot economic data points this week. The $SPY (-0.91%) is holding above $400 while the $QQQ (-1.54%) has fallen just below $300. After a violent dump leading into yesterday’s close, $BTC (+3.52%) and $ETH (+3.49%) have rallied back to $24.3k and $1.69k, respectively. Liquid staking derivatives (LSDs) are outperforming today with $LDO (+15.7%), $RPL (+13.6%), and $FXS (+10.1%) all boasting double digit gains. Although alt-coins have shown impressive returns as of late, $BTC.D has risen almost 9% from last month’s lows potentially indicating fresh capital is allocating towards Bitcoin while existing capital is rotating around alt-coins within the crypto ecosystem.
- Japan’s central bank announced today its plans to launch a CBDC pilot program in April to test the efficacy of a digital yen. The program's two goals are to test the technical feasibility of a digital currency and to utilize the experience of existing industry leaders for expertise in designing and implementing the potential new currency. The Bank of Japan (BoJ) has been experimenting with digital yen ideas over the last two years and has watched as China’s digital yuan is beginning to see success. The pilot program will have participation from private companies, but no real transactions will be happening between consumers and retailers. At least three Japanese megabanks and regional banks are expected to participate in the program. Additionally, Japanese officials are considering amending the ban on foreign stablecoins in Japan, opening the doors for potential adoption if coins pass individual checks. The amendments are expected to go into place by summer this year.
- Decentralized finance platform Platypus Finance was exploited in a flash-loan attack Thursday afternoon with losses exceeding $8.5 million. A flash-loan is a type of uncollateralized borrowing mechanism in DeFi that allows traders to quickly borrow large sums and take advantage of arbitrage opportunities. Unfortunately, they can also be used to exploit protocols. The blockchain security company, Certik, outlined how the hacker was able to borrow $44 million USDC and deposit it into Platypus, then leverage the USDC LP position to mint $41.8 million worth of USP (Platypus’ stablecoin). Finally, the hacker exploited an emergency withdraw function, allowing them to evade locks on the collateral and withdraw all the USDC and USP. After they repaid the initial flash-loan and swapped USP for various assets, USP had lost its peg, falling to 48 cents, and Platypus losses totaled around $8.5 million. All operations for Platypus are currently halted, and they have reached out to the hacker and offered them a Whitehat bounty in exchange for returning the lost funds.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Ethereum has now begun to show similar strength which Bitcoin demonstrated earlier this week when it broke back up above recent monthly highs. While $ETHUSD still needs to officially reclaim $1714 which remains intra-day resistance, it's weekly close will still successfully reach the highest levels since last Fall. This is a technical positive, and will make dips buyable into next week. Long positions are preferred between now and April with initial structural resistance found near last August's highs near $2k. Any near-term weakness likely holds at support near $1640, and possibly $1670 before turning back higher to rally and challenge 2k. Intermediate-term resistance above 2k lies at 2400 and then 2850 as possible Spring targets on gains.
Daily Important Metrics
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All metrics as of February 22, 2023 12:40 PM
All Funding rates are on bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $464B | $24,044 | ↓ -2.62% | ↑ 45% | |
 ETH | $200B | $1,636 | ↓ -2.49% | ↑ 37% | ↓ -8.58% |
 ADA | $13B | $0.3854 | ↓ -2.44% | ↑ 56% | ↑ 11% |
 MATIC | $12B | $1.37 | ↓ -2.41% | ↑ 79% | ↑ 34% |
 DOGE | $11B | $0.0853 | ↓ -1.20% | ↑ 22% | ↓ -24% |
 SOL | $8.9B | $23.64 | ↓ -6.35% | ↑ 139% | ↑ 94% |
 DOT | $8.2B | $7.06 | ↓ -3.51% | ↑ 62% | ↑ 17% |
 LINK | $3.8B | $7.48 | ↓ -3.58% | ↑ 35% | ↓ -10% |
 NEAR | $2.1B | $2.45 | ↓ -4.30% | ↑ 93% | ↑ 47% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -47% | $11.58 | ↓ -2.53% | ↑ 40% | ↓ -5.45% |
| BITW | ↓ -58% | $8.97 | ↓ -2.45% | ↑ 67% | ↑ 22% |
| ETHE | ↓ -53% | $7.42 | ↓ -2.83% | ↑ 56% | ↑ 11% |
| BTCC | ↑ 0.98% | $4.38 | ↓ -3.31% | ↑ 45% | ↓ -0.58% |
News
QUICK BITS
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CoinDesk Celsius Failed to Record Some 7,000 Intercompany Transfers Worth Billions Leading Up to Bankruptcy A lack of record-keeping could make it impossible to "fully reconstruct" the bankrupt crypto lender's intercompany claim, court filings show. |
MARKET DATA
The Block TrueFi token clocks triple digit gain as Binance mints TUSD stablecoin TRU popped over 145% after Binance minted $50 million in TUSD. The post TrueFi token clocks triple digit gain as Binance mints TUSD ... |
CryptoPotato Robinhood Crypto Trading Volume Shot Up 95% in January Robinhood's crypto trading volume surged to $3.7 billion in January 2023, 95% more than in December 2022. |
CoinDesk Trader Frontruns Gains Network's Listing on Crypto Exchange Binance to Profit $100K A trader bought $208,000 worth of Gains Network (GNS) tokens less than 30 minutes before the token was listed on Binance, making a profit of $106,000 according ... |
CRYPTO INFRASTRUCTURE
CoinDesk Japan Will Launch Pilot for Issuing Digital Yen In April Japan will launch a pilot programme in April to test the use of its version of the central bank digital currency (CBDC) known as the digital yen, its central ba... |
REGULATION
The Block Compute North’s plan for liquidation of remaining assets approved by court Hosting provider Compute North's plan to liquidate all remaining assets was approved by a judge on Thursday. The post Compute North’... |
Bitcoin.com Terraform Labs and CEO Do Kwon Charged by SEC With Multibillion-Dollar Crypto Fraud The U.S. Securities and Exchange Commission (SEC) has charged Terraform Labs and its CEO, Do Hyeong Kwon, with fraud, alleging that Kwon and his company orchest... |
FUNDRAISING AND M&A
Bitcoin.com GloryFinance and Korean Technology Venture Capital Sign a $3.5m Seed Round Investment Agreement PRESS RELEASE. Early Jan 2023, in GloryFinance’s Development office, the Project’s Core team and representatives from one of the top Korean Technology Venture C... |
MINING
Bitcoin Magazine CleanSpark Acquires 20,000 Bitcoin Miners For New Facilities The new miners will contribute to CleanSpark’s ongoing expansion, just as the Bitcoin market ramps up. |
HACKS, EXPLOITS, AND SCAMS
CoinDesk USP Stablecoin Loses Dollar Peg as DeFi Protocol Platypus Suffers $8.5M Attack The flash loan attack caused Platypus Finance’s native stablecoin to fall to 48 cents from $1. The potential loss is $8.5 million, according to blockchain secur... |
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