Global Sell-Off Accelerates, Genesis Initiates $4 Billion in Distributions
Crypto Market Update
Global markets are experiencing a sell-off amid the Yen carry trade unwinding, Middle East tensions, and U.S. recession fears. The Japanese Nikkei index fell 12.4%, its worst day since 1987’s Black Monday. U.S. equity futures and crypto followed suit, with the SPY 0.42% and QQQ 0.47% opening down over 4% and Bitcoin and Ethereum falling to lows of about $49k and $2,100. Bitcoin and Ether have since pared losses, with BTC -0.66% trading just under $55k and ETH 2.81% bouncing to $2,450. The crypto market has seen over $1.2 billion in liquidations over the past 24 hours, with total open interest getting wiped by over 20%. Altcoins showing the most strength on this morning’s bounce include TIA -7.24% , ONDO -0.69% , and TAO -1.77% , which have gained 9.21%, 4.42%, and 3.23%, respectively, while the total crypto market cap is down over 5.75%.
Jump Crypto Liquidates ETH Holdings
As crypto assets sold off during the weekend, the selling pressure was exacerbated by Jump Crypto seemingly liquidating a large portion of their Ethereum holdings. Ethereum dropped more than 20% last night, partially attributed to the aggressive selling from Jump. Wallet trackers linked about $500 million in ETH outflows from Jump to centralized exchanges, with total ETH balance dropping from 24k to about 3k as of this morning. Jump Trading is reportedly being investigated by the CFTC with the firm’s president stepping down in June and some have speculated that Jump is exiting the crypto market altogether.
Figure: Jump Crypto ETH Balance
Source: Arkham Intelligence
Genesis Completes Bankruptcy Restructuring
Bankrupt crypto lender Genesis has completed its restructuring process after filing for Chapter 11 in January 2023. Genesis has initiated the distribution of approximately $4 billion in digital assets and USD to its creditors. The repayment amount varies by type of debt, with the average repayment equaling approximately 64% of claims. All dollar and stablecoin creditors are expected to receive 100% of claims, while Bitcoin, Ethereum, and altcoin creditors will receive varying amounts, with all distributions paid in-kind. Bitcoin creditors are set to receive 51.28% of their claims, and Ethereum creditors will receive 65.87%. Solana creditors are only expected to receive 29.58% of claims, while all other altcoin creditors will receive 87.65%. Creditors will be eligible to receive further distributions depending on ongoing claims, reconciliations, and litigation.
Technical Strategy
For those wondering if this recent deterioration in cryptocurrencies might offer opportunities for Dip-buyers and question whether it’s right to buy Bitcoin, vs. other Cryptocurrencies, it’s important to note that the Dominance chart for Bitcoin remains trending up sharply over the last two years, with no break in this two-year uptrend. Until this shows some evidence of trend deterioration that might suggest a possible rotation towards other Cryptocurrencies, it still looks right to favor BTC -0.66% expecting further outperformance. At present, it remains hard not to own Bitcoin, as it continues to show much better relative strength than much of the space.
Daily Important Metrics
All metrics as of 2024-08-05 18:13:49 All Funding rates are in bps Crypto Prices
All prices as of 2024-08-05 18:13:32 Exchange Traded Products (ETPs)
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