April 19, 2023

Bitcoin slid more than 3% to below $30,000 on Wednesday morning. While the sell-off didn’t appear to stem from any immediate fundamental reason, an unexpectedly high U.K. March inflation figure of more than 10% may have influenced market sentiment. Liquidations may have also played a role. “Bitcoin saw some decent liquidations on Binance, which dropped as a consequence of long rekts being washed out early this morning,” said Laurent Kssis, a crypto trading adviser at CEC Capital. There was close to $100 million in liquidations, according to Kssis, who added that many investors are buying at under $29,200. “This was clearly an opportunity for many investors who had anticipated the drop to get back in at lower levels," he said.

Bitcoin's 24-hour price chart

U.S. Securities and Exchange Commission Chairman Gary Gensler refused to say whether ether is a security during a nearly five-hour hearing before the House Financial Services Committee Tuesday. Gensler fended off questions about whether his agency was pushing too hard on proposed rules and providing too little time for public feedback on those rules and about how the SEC was approaching crypto companies that want to operate in the U.S. 

Bankrupt crypto exchange FTX's plan to restart its operations has drawn interest from venture-capital firm Tribe Capital, Bloomberg reported on Tuesday. Tribe, whose portfolio included FTX ahead of the exchange's collapse in November, is considering leading a $250 million fundraising round, with a $100 million commitment, according to the report. A source told Bloomberg that Tribe Capital co-founder Arjun Sethi met with FTX’s official committee of unsecured creditors in January to go over an informal proposal. "The committee is working with the debtors to evaluate all options to reboot or sell the FTX exchanges and create value for creditors," FTX creditors' committee tweeted on Tuesday, adding that there isn't a set timeline for a reboot or sale at this time.

Chicago Mercantile Exchange

Ethereum implemented its highly anticipated Shapella hard fork, also known as the Shanghai upgrade, on April 12, reducing the risk of staking the blockchain's native token, ether, by allowing withdrawals of locked coins at will. The pivotal event has galvanized institutional interest in the second-largest cryptocurrency by market value.

Since April 10, the number of active, or open, ether futures contracts trading on the Chicago Mercantile Exchange has risen 39% to 6,248, according to official data. In U.S. dollar terms, open interest has increased by over 70% to $633 million. The tally reached a 12-month high of $675 million on Friday, Coinglass data shows. Each contract has a value of 50 ETH and is quoted in U.S. dollars per 1 ether.

Institutions typically prefer regulated products like CME futures that allow them to take exposure to digital assets without owning them. As such, CME futures tied to ether and bitcoin are widely considered a proxy for institutional activity.

Chart of the Day

– Omkar Godbole

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