1. Market Wrap: It’s ‘Doge Day Afternoon’ as Memecoin Jumps 47%; Ether and Bitcoin Rise
Not all industry participants are amused by dogecoin’s tricks.
Dogecoin soared on Friday but the cryptocurrency’s circulation ownership raises questions. Ether pops as its futures market hits a record. Bitcoin faces pressures from its options market and a downward trending dominance percentage.
Dogecoin (DOGE) trading around $0.56 as of 21:00 UTC (4 p.m. ET). Gaining 47% over the previous 24 hours.
Dogecoin’s 24-hour range: $0.39-$0.58
Bitcoin (BTC) trading around $50,263 as of 21:00 UTC (4 p.m. ET). Gaining 3.2% over the previous 24 hours.
Bitcoin’s 24-hour range: $49,009-$51,502
Ether (ETH) trading around $4,055 as of 21:00 UTC (4 p.m. ET). Gaining 10.6% over the previous 24 hours.
Ether’s 24-hour range: $3,641-$4,165
2. Record ‘Grayscale Discount’ Might Mean Bargain Bitcoin for Retail Traders
Anyone with a stock account can now make a savvy, albeit risky, bet on GBTC pricing disparities that were previously exclusive to big players.
A closely tracked ratio in cryptocurrency markets known as the “Grayscale premium” flipped earlier this year to a discount, and it has widened this week to a gaping 21%, which is the highest level on record, according to Skew, a crypto analysis firm.
For retail traders, or anyone with access to a brokerage account, the growing disparity might present an opportunity to buy bitcoin on the cheap, analysts say.
The Grayscale Bitcoin Trust (GBTC), from the crypto asset manager Grayscale, is the largest U.S. investment vehicle for buying bitcoin (BTC) through a stock exchange. The Grayscale discount represents the difference between the price of the underlying bitcoin assets and the value that’s implied from the price of the trust’s shares.
The bet some traders could be making now is that the discount would evaporate if Grayscale receives approval from the U.S. Securities and Exchange Commission (SEC) to convert the trust to an exchage-traded fund. If that happened, according to one analyst, the shares might quickly climb back toward the price of the underlying bitcoin — allowing traders to recapture the discount as a profit while still booking any gains from the cryptocurrency itself.
“Investors looking for long-term passive bitcoin exposure are probably better off buying GBTC over spot bitcoin since you get paid to wait more via the discount than you pay in excess fees,” David Grider, strategist at investment research firm FundStrat, wrote in an email.
In recent years, when GBTC was trading at a premium, the situation looked much different.
3. Crypto Options Market Makers Starting to Influence Bitcoin Price
“Market makers were heavily short puts in the range of $52,000 to $50,000, and I estimate were forced to sell nearly 2,900 bitcoin,” one trader said.
Bitcoin (BTC) tanked on Wednesday, hitting multi-month lows near $46,000 as renewed fears of an early rate hike by the Federal Reserve, the recent dour mood in financial markets and Tesla’s decision to suspend bitcoin payments were all blamed for the slide.
But the downward move was likely aggravated by options market makers selling the cryptocurrency in the spot/futures market to hedge their books (offset bullish exposure), according to Fredrick Collins, a seasoned options trader and researcher at Glassnode.
“Market makers were heavily short puts in the range of $52,000 to $50,000, and I estimate were forced to sell nearly 2,900 bitcoin during the crash to offset the short gamma exposure,” Collins told us. “That likely exacerbated the bearish move.”
4. Bitcoin Wallet Used by DarkSide for Ransom Payments ID’d by Elliptic
Since becoming active, the wallet has received bitcoin transactions totaling $17.5 million, the data analysis firm said.
The wallet used by the DarkSide ransomware group to receive bitcoin (BTC, +1.43%) ransom payments has been identified, according to data analysis firm Elliptic, citing intelligence collection and analysis of blockchain transactions.
The wallet received the 75 BTC payment reportedly made by Colonial Pipeline on May 8, following the cyberattack that led to widespread fuel shortages in the U.S., Elliptic said in its report.
The wallet has been active since early March and has received 57 payments from 21 different wallets, including some matching ransoms known to have been paid to the group in other cases of blackmail, the firm said.
Since becoming active, the wallet has received bitcoin transactions totaling $17.5 million, Elliptic said.
Elliptic also said it has been able to gain intel on how DarkSide laundered prior attacks, potentially allowing authorities to locate the people behind them.
Earlier Friday, KrebsOnSecurity and others reported that the DarkSide group has decided to shut itself down after its own servers were seized and someone drained crypto from an account belonging to the group.
5. Cryptocurrency Custodian Anchorage Adds Five More DeFi Tokens
In a further sign of “institutional DeFi” momentum, the regulated custodian is adding 1INCH, BNT, CRV, REN and SUSHI.
Anchorage is adding five more decentralized finance (DeFi) tokens to its custody vaults, with a focus on decentralized exchanges (DEXs) and automated market makers (AMMs), the beating heart of DeFi.
Announced Friday, Anchorage, the first crypto custodian to win a U.S. federal banking charter, is adding support for DeFi tokens 1INCH, BNT (+6.47%), Curve Finance (CRV), REN (+5.07%) and SushiSwap (SUSHI).
DeFi investment has grown at an explosive rate with the equivalent of more than $85 billion USD currently locked across Ethereum’s DeFi ecosystem at the time of writing. Anchorage pointed out in a blog post that the DeFi universe had grown by more than nine times in value since Anchorage added support for Uniswap, Yearn and others late last year.
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May 15, 2021