ሰላም!
Bitcoin’s price keeps zooming. Echo bubble? I just posted an article about that.
A few commentators have commented on the lack of “spot buying,” meaning they don’t see a lot of people buying from the open market, e.g., exchanges or peer-to-peer platforms.
Did they look at what miners are doing and recognize private brokers' role in matching buyers and sellers (including but not exclusively OTC desks). Once you dig a little deeper, you’ll see at least $2 billion worth of extra bitcoin switched hands behind the scenes last week.
Was that part of a large private deal? An insolvent exchange urgently buying bitcoin to fulfill customer redemptions or a paper shortfall? Mere coincidence? Something else?
Whatever it is, it’s significant buying pressure that never gets captured on trading charts and order books. I talk about this, other key metrics and behaviors, and five more altcoins in my update from January 18, 2023. If you missed that update, get it now.
Make sure you’re on the paid plan so you get these sorts of insights and the rest of the analysis I provide.
Also, make sure you got my BUY/SELL/HODL alert from two weeks ago.
Scroll down from some articles, a meme, a video, and job listings that you may enjoy.
Poll results
In last week’s poll, I asked:
Survey respondents voted evenly for each squiggle, with a slight preference for squiggle B, the most bearish option.
What do I think?
I’m happy to see how it goes and prepared for all outcomes. What do you think?
I’ll have another poll next week.
Bitzlato
This week, US authorities arrested the Russian head of an obscure Chinese crypto firm, Bitzlato. They made a big deal about it, with a press conference, announcements to news outlets, and credit to French authorities, Europol, and partners in Spain, Portugal, and Cyprus.
Why all the fuss about this tiny exchange?
According to multiple on-chain Twitter sleuths, most Bitzlato funds went to Binance. Binance was not mentioned at the press conference or in any press releases, but it begs the question:
Was Binance a money mule for Bitzlato’s criminal entities?
Conspiracy theorists, please advise:
December 12, 2022: “Sources” say US prosecutors may charge Binance officials with money laundering and sanctions evasion.
January 7, 2023: Binance says it’s cooperating with US investigators and “working with virtually every regulator across the globe.”
January 18, 2023: US authorities take down a tiny crypto exchange that transacts extensively with Binance. In doing so, the agencies say that they’re going to clean up the crypto markets, specifically, the exchanges.
Some of you might look at that and conclude: “after pressure from US agents, Binance rolled on Bitzlato and probably spilled the beans on other ‘bad’ exchanges. US authorities are about to crush smaller exchanges while Binance gets off easy in return for their cooperation.”
I would say that’s a fictional account of events we don’t know anything about. It’s fun to make things up, right?
Also, one more reason to get your crypto off of exchanges. Learn how to do it safely first! Start with the free advice and tutorials from DAN Teaches Crypto.
If you ever want to consult with me, schedule time with me on Superpeer.
Going along with those observations, CoinDesk shared a chart of OTC balances. Highest since June 2022, and all from a big spike that’s not particularly large, but very sudden and noticeable.
Note, the buyers are not necessarily institutions, they’re just too big or well-known to source their deal from the open market. Last week, there was simply not enough bitcoin available for sale at a price they wanted to pay, so they needed to arrange for a private deal.
Olympic legend Usain Bolt lost $12 million in savings to a scam
Seems the internet algorithms discovered that I write about crypto, because they keep feeding me “scam/fraud” stories in my feeds.
This one involves a retirement fund, not crypto.
Usain Bolt got scammed out of the retirement savings he deposited with a fraudulent investment firm.
The lesson, children?
Never put money into a retirement account.
They’re all scams. The only way to make money with a retirement fund is to sell your holdings for more than you bought them for. Massive Ponzi, even when you include the staking rewards. Stay away!
(Note—I hold a substantial portion of my investments in retirement funds.)
Real World Assets Poised to Be DeFi Growth Engine: Coinbase
Bottom line: Coinbase thinks DeFi will split into permissioned and permissionless realms, with permissioned DeFi platforms servicing the tokenization of real-world assets (RWAs).
My take: one more way for Wall Street to make money off of crypto. They can’t do business on non-KYC, non-AML platforms that don’t have leaders or fit US legal standards. There might be some money in having a subsidiary or some other regulated platform to give their clients new ways to sell financial products, services, and assets, right? If Coinbase can serve as the bridge between the real world and crypto, similar to AOL in the 1990s, it could see a lot of growth in the coming years.
Why we care: regulatory capture does not necessarily mean bad things for crypto. We may end up with a system where you have a legacy framework for institutions while common people like us continue to interface directly with protocols and tokens through our private wallets.
Jobs Corner
CoW Protocol | Data Analytics Team Lead | Link to position
WalletConnect | Kotlin / Android Engineer | Link to position
Subspace Labs | Quality Assurance Engineer | Link to position
Aurora | Legal Counsel | Link to position
Monad Labs | Developer Relations Engineer | Link to position
DXdao | Treasury Manager | Link to position
Offchain Labs | Blockchain Developer | Link to position
prePO | UX Engineer | Link to position
Safe | Senior Data Analyst | Link to position
These jobs come from the ToolsForCrypto newsletter. If you’d like to post a vacancy here (for free), email mark@markhelfman.com.
Relax and enjoy the ride!
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