Tough Weekend
Good morning. There was a big sale this weekend, 15% off bitcoin and other top of the line cryptocurrencies. Hope you didn't miss out! Today we've got market updates, yuge NFT sales, and more!
What this is:
A "Top 5" of crypto, digital asset, and other blockchain related news sent to your inbox on a daily basis
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Top 5:
- Bitcoin, Altcoins Regain Ground After Early Weekend Spiral; Trading Volume Levels Off After an Intense Saturday
Bitcoin and ether both recovered slightly heading into Sunday evening after a selloff that started on Friday was followed by a large drop early Saturday morning. This decline was bitcoin's biggest price drop early May when bitcoin fell almost 27% over a 24-hour period. Unlike May, however, it appears that many investors may have jumped in to "buy the dip" with trading volumes on centralized exchanges reaching the highest levels. Ether has some shown more resilience over than last week, dropping only 3.7% compared to bitcoin's 14.6% plunge. It's also bounced back more quickly, up 1.4% over the last 24 hours versus bitcoin's 0.2% "recovery".
Prices (as of Sunday 7:35 ET):
Bitcoin: $48,776.50
Ether: $4,119.47
Note on volatility:
A startling statistic from @APompliano in his consistently excellent Pomp Letter: Since 2011, Bitcoin has experienced "three separate bear markets of at least an 80% drawdown....Yes, you read that right. 80% drawdowns have happened THREE TIMES since 2011."
— William Green (@williamgreen72) December 2, 2021
2. Biden and Trump S.E.C. Chiefs Trade Tips on How to Regulate Crypto
Last week at the Digital Asset Compliance and Market Integrity Summit in New York, a rare thing happened. Regulators on the left and right agreed on something. During an interview of Gary Gensler (current SEC Chairman) conducted by Jay Clayton (SEC Chairman under President Trump), the pair expressed the view that cryptocurrency tokens are "largely" used to raise money for the businesses that issue them, and are therefore securities. The question of whether tokens issued by companies constitute a securities offering is at the heart of the case against Ripple Labs (issuer of XRP tokens), who is currently being sued by the SEC for raising $1.3 billion through an unregistered securities offering. The SEC points to the information asymmetry between investors and insiders as one of the key reasons that additional investor protections, like disclosures, are required when companies are raising money through token issuances. The outcome of this case will have wide ranging impacts in the crypto industry as many crypto issuers could be considered as in violation of existing securities law by failing to register with the SEC.
3. Largest ever art sale by a living artist...and it was NFTs
Over the weekend, an NFT sale by artist Pak (@muratpak), achieved the title of largest ever art sale by a living artist. The sale began on Thursday and closed on Saturday at 6:30pm ET. The collection, known as The Merge, consists of 266,855 pieces and sold for over $100 million. Nifty Gateway, an NFT auction platform owned by Gemini, hosted the sale.
Congratulations to @muratpak, who just achieved the largest ever art sale by a living creator with 'The Merge.'
— Nifty Gateway (@niftygateway) December 5, 2021
The entire team at NG is honored to have worked with you on this and incredibly proud of what you achieved!
4. Crypto Exchange Bitmart Hacked With Losses Estimated at $196M
Over the weekend, security firm Peckshield called attention to a hack of centralized crypto exchange, Bitmart. The hackers leveraged a hole in the exchange's hot wallets that allowed them to make off with $196 million in various cryptocurrencies on the Ethereum and Binance Smart Chain blockchains. In their initial response to the Peckshield's tweet identifying the potential breach Bitmart played down the issue as being typical withdrawals and even called the concern "fake news". After syphoning off user's funds, the hackers leveraged decentralized exchange, 1inch, to swap the stolen assets for ETH and then leveraged the privacy mixer Tornado to make it more difficult to track the movement of the funds. Later that evening, the CEO of Bitmart confirmed the breach and theft.
1/3 We have identified a large-scale security breach related to one of our ETH hot wallets and one of our BSC hot wallets. At this moment we are still concluding the possible methods used. The hackers were able to withdraw assets of the value of approximately USD 150 millions.
— Sheldon Xia (@sheldonbitmart) December 5, 2021
5. The deleveraging of the US has begun as #inflation runs much higher than interest rates (=negative real rates)
Record-setting inflation in the US has succeeded in reducing the federal debt load from 135% of GDP to 125%, with inflation running higher than interest rates, resulting in negative real rates. It seems unlikely that this trend of deleveraging will continue with the Fed's attempts to fight inflation by tightening their monetary policy.
The deleveraging of the US has begun as #inflation runs much higher than interest rates (=negative real rates). "Today we find that the US Federal debt load has only been de-levered from 135% of GDP to 125% of GDP by the highest inflation in 31 years." H/T @LukeGromen $SA $SEA pic.twitter.com/BjkxKCImOS
— Seabridge Gold Investor (@GoldSeabridge) December 5, 2021
Top Sharers of the Crypto Top 5:
1. Cameron S. - New York, NY
2. Jake Y. - Greenville, SC
3. Lauren A. - Nashville, TN
Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.