Coinbase Strikes Back at the SEC and Genesis' Restructure Plan Collapses

Apr 25, 2023

Market Update

  • Equity indices are falling today amid an action-packed week of corporate earnings. The SPY (-0.81%) is trading just above $410, while the QQQ (-1.03%) is hovering around $313. After reaching its lowest level since November 2021, the VIX (+8.53%) is beginning to rise again. Crypto is in-line with equities as BTC (-0.49%) is trading at $27,300, and ETH (-1.39%) is trying to stay above $1,800. Arbitrum has completed its distribution of ARB tokens to its ecosystem’s DAOs. Airdrop allocations are providing a large boost to projects’ value as a percentage of their market caps (see below). As a result, smaller Arbitrum tokens such as VSTA and PLS are outperforming amid a broader market selloff, rising 15.86% and 3.52%, respectively, over the last 24 hours.

Source: Twitter

  • Coinbase has filed an action against the SEC to force the agency’s hand in providing answers to an outstanding petition regarding regulation of the crypto industry. The petition includes 50 different questions which are broad in scope and requests that the SEC uses its normal rulemaking process to develop a regulatory framework for the digital asset industry. Coinbase initially filed the petition in July of last year. The SEC has been uncooperative in providing answers despite actively serving Coinbase with a Wells Notice and regulating the industry via enforcement. Following Coinbase’s court action, the Administrative Procedure Act (APA) requires the SEC to respond “within a reasonable time.” It is within the SEC’s right not to answer the petition, but that would enable Coinbase to challenge the decision in Federal Court and present its case on why formal rulemaking is needed. Hopefully, Coinbase’s court action will start productive discussions and lead to a future regulatory framework.
  • After declaring bankruptcy at the beginning of the year, it seemed Genesis Global and its creditors had come to a restructuring agreement in February. Nearly two months since the alleged agreement, multiple creditors have decided to walk away from the deal and have raised additional demands. As a result, Genesis has asked the court to appoint a mediator for its bankruptcy proceedings. Some have speculated on Twitter that Genesis and its parent company DCG have been acting in bad faith, using constant legal maneuvers to stall returning capital to creditors. DCG released a statement claiming they don’t understand the rationale for creditors to renege and acknowledging that mediation will likely prolong the court process for the hundreds of thousands of individual creditors.

Daily Technical Strategy

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Mark L. Newton, CMT

Head of Technical Strategy

Polygon's recent deterioration has just violated the lengthy uptrend from last June's lows which will need to be recouped to help technical trends improve and provide a framework for how its rally can get back on track. Near-term, weakness in MATIC likely finds temporary support near March lows at $0.94, which could help prices stabilize and bounce into the month of May. However, it's imperative that recent April peaks near $1.20 are exceeded to have conviction that a larger rally might be in store. Momentum indicators have turned negative (Per MACD) on a weekly basis for the first time since its rally got underway last Summer. While daily gauges of momentum per RSI are now nearing oversold levels. it's critical that March lows hold and provide some stabilization. Declines that break $0.94 would postpone any rally, making MATIC more vulnerable to larger weakness down to test last December's swing lows near $0.75. At present, it's expected that some support materializes near March 2023 lows by end of week.

Daily Important Metrics

Crypto Size

Bullish signal is tied to the crypto market growing

Market cap $1.15T $-8.5B (-0.73%)
BTC Dominance
46.00% (+0.44%)
Stablecoins

Increase in circulating stablecoins is a Bullish signal

In Circulation $82B(+0.11%)
In Exchanges $13B(-0.17%)
BTC Metrics

A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage

# BTC in Exchanges 2.3M(0.06%)
Funding Rates

Positive funding rates indicate traders are Bullish

Aggregate0.54 (0.11)
Binance0.26 (0.45)
Bitfinex2.88 (2.47)
Bitmex0.43 (-0.14)
ByBit0.65 (-0.32)
Deribit-0.00 (0.02)
Huobi1.00 (0.31)
Kraken-0.49 (-0.38)
Mean0.54 (0.11)
OKex0.87 (1.36)
Sentiment
Coinbase Strikes Back at the SEC and Genesis' Restructure Plan Collapses

BMI : 53 (0.00%)

Futures

A positive spread between Futures Prices and Spot Prices is Bullish

CME BTC Price$27,340 (-0.24%)
Spot Basis
$-44.73 (-0.16%)
Volume1.2M (80%)
Open Interest
301,260 (-0.28%)
Options all exchanges

Higher open interest change in a bull market is bullish for the sector

Volume19,511 (220%)
Open Interest355,205 (0.62%)
Volume Put/Call Ratio1.17 (113%)
Open Interest Put/Call Ratio0.5235 (0.36%)

All metrics as of April 25, 2023 12:23 PM

All Funding rates are in bps

Crypto Prices

Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD
btc imageBTC
$531B $27,408 0.25% 65%
btc imageETH
$219B $1,821 -0.91% 52% -14%
btc imageADA
$13B $0.3821 -1.33% 55% -11%
btc imageDOGE
$11B $0.0782 -0.54% 11% -54%
btc imageMATIC
$8.8B $0.9555 -3.18% 25% -40%
btc imageSOL
$8.2B $20.93 -2.03% 111% 46%
btc imageDOT
$6.8B $5.82 -0.98% 34% -32%
btc imageLINK
$3.6B $7.03 -1.24% 27% -39%
btc imageNEAR
$1.7B $1.87 -1.18% 47% -19%

Exchange Traded Products (ETPs)

Symbol Premium to Nav Last Price Daily Change Year to Date Relative to BTC YTD
GBTC -40% $14.74 -1.69% 78% 12%
BITW -56% $10.58 -1.03% 97% 32%
ETHE -50% $8.80 -1.82% 85% 19%
BTCC 0.19% $5.03 -0.40% 66% 0.56%

News

QUICK BITS

The Block

Genesis creditors reject previously agreed bankruptcy restructuring plan, DCG says

A group of Genesis creditors have rejected the deal agreed in February, parent company Digital Currency Group said.  The post Genesi...

MARKET DATA

Bitcoinist

Ethereum Fees Down 35% In Past Week As Network Activity Cools

On-chain data shows the average Ethereum transaction fees have seen a sharp drop after hitting 11-month highs just last week. Ethereum Transfer Fees Has Decline...

The Block

Cathie Wood’s Ark Invest buys $8.6 million in Coinbase stock as crypto exchange sues SEC

Ark Invest purchased shares in Coinbase Global Inc. yesterday — the same day the United States-based crypto exchange announced that it was suing the SEC. ...

REGULATION

CoinDesk

Terra Co-Founder Daniel Shin Indicted in South Korea: Bloomberg

Shin was indicted with nine others as prosecutors froze $185 million in assets.

The Block

Coinbase sues the SEC for answer on rule specific to digital assets

The suit aims to force the SEC to respond to a petition that the company filed aiming for a rule specific to digital assets.  The po...

PRODUCT UPDATES AND PARTNERSHIPS

Coin Telegraph

Decentralized exchange GMX votes to use Chainlink low-latency oracles

A Chainlink exec said the oracles will improve GMX’s security by providing a more “strong degree of tamper-resistance ...

DAOS

The Block

Arbitrum initiates token distribution to ecosystem DAOs

Arbitrum has initiated the distribution of its initial token allocation to eligible DAOs within its ecosystem. The post Arbitrum ini...

Reports you may have missed

Crypto markets are declining following news that most of the SEC’s lawsuit against Coinbase will proceed (more below). BTC (-1.27%) reached intraday highs of $71.8k before declining to $69k after the news. Rumors have circulated that Morgan Stanley and PNC will soon approve access to Bitcoin ETFs on their wealth management platforms. Together, Morgan Stanley and PNC hold over $1.5 trillion in client assets and likely will provide a tailwind...

Following the worst week of ETF flows since inception, BTC (+3.89%) is rebounding, rising to $69.6k, and ETH (+4.09%) has reclaimed the $3,500 mark. Last week’s outflows totaled $888 million, representing about a fifth of the inflows seen in the previous two weeks. ONDO, an institutional RWA protocol, is one of the top performers today, rising 7.61% as investors remain optimistic about the future of tokenized assets and their ability...

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