Saylor stocks up on BTC
Saylor nears $5B in BTC holdings, while TradFi continues stretching their tentacles to digital assets with HK pioneering adoption.
Summer has kicked in with full force here in the northern hemisphere, which reminds us of the 2020 DeFi Summer. Where it all began! The space has matured a lot since, but new challenges are awaiting us. We gathered and dissected this week's highlight moments in an easily-readable and quick format: enjoy!
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In today’s issue:
Weekly market performance
Crypto news round-up
Upcoming catalysts
Where is the money flowing?
One tool you should try
Further readings
Hong Kong's largest bank allows you to trade Bitcoin and Ether ETFs
HSBC Hong Kong, the largest bank in Hong Kong, has announced that its customers can now trade bitcoin and ether exchange-traded funds (ETFs) listed on Hong Kong's stock exchange. This move makes HSBC Hong Kong the first bank in China to allow trading in crypto ETFs. The available ETFs on HSBC Hong Kong's platform include CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF, and Samsung Bitcoin Futures Active ETF.
This move by HSBC Hong Kong can be seen as a strategic step by China to potentially anticipate the United States in launching bitcoin ETFs, especially considering the recent requests made by numerous US institutions to the SEC for their listing.
Micheal Saylor now holds 150,000 bitcoins
Microstrategy’s CEO is at it again. Saylor announced the purchase of an additional 12,333 BTC ($350M) at an avg. price of $28,136 — the company now holds 152,333 BTC averaging a price of $29,668. As of writing, they’re up about $150M on their investment; it remains to be seen whether Microstrategy’s bet will prove to be the most effective Dollar-cost Averaging (DCA) strategy. By this time markets have settled on the idea that on the day Saylor’s purchases are announced, BTC drops on average by 2% — the reason being the market pricing in the fact that certain buy-side liquidity has left the charts.
First leveraged Bitcoin ETF in the US
Volatility Shares 2x Bitcoin Strategy (BITX), the first leveraged future-based ETF in the U.S., has recorded approximately $4.2 million in trading volume since its debut. Within 15 minutes of trading, the ETF witnessed trades worth around $500,000. The SEC allowed the ETF to begin trading on Tuesday after it approved it on Friday.
It is important to note that a futures-based ETF, such as BITX, derives its value from future derivatives rather than holding actual spot bitcoins. While various futures-based ETF products are already available in the U.S., the SEC has consistently prevented the launch of spot products, and other leveraged bitcoin futures products have also faced approval challenges.
Don’t trust crypto influencers with your money
They aren’t your friends. Crypto-twitter (known as CT), is a Twitter niche as interesting as it is dangerous: full of information, insights, ideas, and hustlers willing to do anything to make a buck. Many will grind their way up by posting insightful content and fostering an empowering network around them that fuels their success: at some point, they’ll decide it’s time to monetize their internet presence.
Among their options, one of the easiest is sponsoring dApps and NFT collections in exchange for money — which usually turns out ugly: followers lose money due to some of them turning out to be scams, and the so-called influencer loses its reputation and has to start again changing identity. It’s a vicious cycle.
We’re not here to call out someone in particular as it’s a widespread issue, but get an idea here on what they get paid. Barely $2,000 for a project that siphoned away $1M in user funds. Always keep your guard high, and don’t rush decisions just because someone presents you with an opportunity you “can’t turn away”.
zkSync Era embraces a Cosmos-inspired multichain vision
In a move that echoes the core narrative and objectives of Cosmos, zkSync Era is now addressing the multichain narrative by introducing Hyperchains, interconnecting custom blockchains.
zkSync Era has introduced the ZK Stack, a modular framework consisting of Hyperchains, which are ZK-powered custom blockchains that operate as a layer on top of the existing layer-2 protocol. These Hyperchains enable composable and interoperable protocols, facilitating instant transfers of liquidity and flash loans between protocols within the system. The ZK Stack aims to eliminate the need for token bridges, the Achilles heel of crypto, which have been exploited in major crypto hacks.
The ZK Stack will utilize recursive scaling to batch transactions into compressed proofs, allowing the blockchain to “scale infinitely”.
IMF says banning crypto isn’t effective
The International Monetary Fund (IMF) recently published an article in which it outlines the potential of CBDCs in Latin America, portraying them as the potential “fix” for the troubled economies in the region instead of cryptocurrencies. Curiously enough, they end the article outlining how banning crypto (which Argentina and the Dominican Republic formally did) may not be effective in the long run.
DeFi matured a lot since 2020, and is now on track to become a public good that fosters financial inclusion. AAVE’s CEO shares his thoughts — link
The Bank for International Settlements (BIS) is exploring the use of Curve for CBDCs trading and settlements — link
Radiant Capital expanding to Ethereum — link
Fidelity ($4.2T), Valkyrie, and Bitwise funds to file for their own BTC ETFs following BlackRock’s application
German software giant SAP testing USDC as a solution for cross-border payments for its clients — link
In this week's edition, we would like to introduce you to a highly valuable tool for crypto traders: Coinglass' Liquidation Data. It enables you to gather data from major exchanges and observe recent liquidation events. It provides insights into market participants' positions, the extent of leverage involved, and helps ascertain if recent market movements were influenced by liquidation runs. Such information empowers you to comprehend market behavior more effectively and make more-informed decisions.
It's important to note that liquidations play a significant role in market movements, such as short or long squeezes. Particularly with derivatives like futures, it's crucial to remember that closing a short position implies opening a long position in the market, and vice versa. Therefore, liquidations, which involve the forced closing of a trader's position, can substantially impact the market.
AAVE’s CEO is excited about DeFi's future as a public good — link
How does token unlocks affect the price? — link
George Soros’ theory of reflexivity to get an edge on the markets — link
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Thank you for reading and see you on Sunday with a special Dive!
🐳 Feeling generous? Fund this newsletter and the degens behind it:
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Disclosure: Authors may own crypto assets named in this newsletter. Stay on-chain is meant for informational purposes only. It is not meant to serve as investment advice. Please consult your investment, tax, or legal advisor before making investment decisions.