Prices Down; Hacks Up

December 6, 2021       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

• BitMart, a centralized cryptocurrency exchange, lost at least $150 million to a hack this weekend; CoinDesk puts the number at $196 million.

• Last week’s $115 million BadgerDAO hack affected the centralized crypto lender Celsius.

• JPMorgan gave away NFTs at an event last week.

• Ritholtz Wealth Management and WisdomTree launched a new crypto index fund.

• Nexus Mutual’s insurance will most likely not cover the BadgerDAO attack.

• A Solana bug was patched before attackers could steal $27 million an hour.

• FTX is reportedly seeking $1.5 billion in funding at a $32 billion valuation; FTX released a regulatory wishlist outlining ten key principles for crypto market regulation.

• LUNA hit an ATH over $70 on Saturday.

• Coinbase voted in favor of airdropping more tokens in the latest ENS governance vote.

What Do You Meme?

What’s Poppin’?

Let’s Talk About the Dip

At 5:00 am UTC on Friday, the total crypto market cap traded at $2.63 trillion. A few hours later, at 23:34 UTC, the market crashed to $2.12 trillion — marking a 19% dip in less than 24 hours. Since the initial dive, the total market cap has inched upwards to $2.28 trillion.

Bitcoin fell over $10,000 on Friday to a low of $45,032, according to data from CoinMarketCap. Ethereum fell nearly $1,000 on Friday, too, hitting $3,632. Almost every token in the top 25 by market cap is down over the seven days spanning 11/28-12/5, with many, like Polkadot (DOT), Avalanche (AVAX), and Crypto.com (CRO; and, disclosure, a sponsor of my shows), falling more than 20%.

The two exceptions to the brutal market performance are Terra (LUNA), which is up 33.7% over the time period above, and Polygon (MATIC), which is up 21.2%.

Data from Coinglass shows that over $2.5 billion worth of positions were liquidated on December 3. According to The Block’s Larry Cermak, the market crash saw over $1 billion in long positions liquidated just due to Bitcoin’s move from $51,000 to $42,000. Total open interest in derivatives also crashed roughly $5 billion in less than a single hour, said Cermak.

The Block’s Frank Chaparro reports that trading executives believe large institutional selling triggered the crash. Chaparro cites one executive saying that a single institution sold more than $500 million in BTC on Friday morning, which resulted in the “aggressive liquidations” discussed above.

In addition to the significant selling, Alex Kruger, economist and crypto trader, pointed to low liquidity conditions due to it being a “weekend night,” in addition to the mass of crypto natives partying at Art Basel in Miami, as reasons for the crash. Kruger went on to predict that Friday’s dip should soon “mean revert” after Friday’s FOMC meeting on the 15th.

Alameda’s Sam Trabucco seconded Kruger’s opinion that low liquidity was the main culprit for the dip. He wrote on Twitter, “on various exchanges, BTC got sub-$30k for a moment! And that was because of how little liquidity sits on the book during super-off-hours. The initial liquidations were the same size as usual but the bids they were getting market-ordered into were thinner, causing: 1) more price impact and 2) more liquidations, since the prices got REALLY low in many cases (these two effects feed off of each other).”

While the dip was bad news for those liquidated, it also left the opportunity to buy the dip — as El Salvador did, scooping up 150 extra coins at a sub $50K price.

Recommended Reads

• Kinjal Shah on web3 reads:

• The Generalist on MetaMask:

• Grant Tree’s Daniel Tenner on making it:

On The Pod…

How Ryan Zurrer Ended Up Spending the Most on a Single NFT Artwork

Ryan Zurrer, founder of Dialectic, a crypto wealth multi-family office, discusses his recent $29 million purchase of Beeple’s Human One and his experience at Art Basel in Miami, along with his thoughts on the NFT space in general. Show highlights:

• • • what Human One is and why Ryan purchased it

    • how Ryan and Beeple’s personal relationship factored into the purchase of Human One

    • why Human One is important to the metaverse

    • how Ryan defied the odds in purchasing Human One

    • how Miami’s Art Basel conference missed out by not capitalizing enough on NFTs

    • what Ryan thinks about the NFT industry being described as a bubble

    • how Ryan uses “proof-of-artwork” to determine which NFTs to buy

    • Ryan’s experience visiting Beeple’s art studio/campus

    • where Ryan thinks NFTs will go from here, and why he is so bullish on music NFTs in particular

Book Update

You can purchase it here: http://bit.ly/cryptopians