Bullish Insights – Weekly Market Recap
Insights • Jan 13, 2023 • 4 min read
The Bullish Insights Weekly Market Recap includes curated industry news and analysis from the Bullish team for the week of January 9, 2023.
This week’s peak trade volume (24h): January 12, 2023, $427,837,362 (23,580 BTC)
Crypto market highlights
- The total number of layer 2 transactions of 1,043,437 exceeded Ethereum's L1 transactions of 957,744 on January 7. Optimism saw a transaction count of 691,414 which set a record high for the L2. Currently, as of January 9, Optimism still leads in the number of transaction counts in the L2 space followed by Arbitrum and Arbitrum Nova.
- The proposal for EIP-5988 was submitted to integrate the Poseidon hash function. The Surge is the second phase in Ethereum's roadmap which focuses on implementing rollups for the platform in order to gain scalability.
- Poseidon is a cryptographic hash function that aims to provide efficiency to ZK Proof systems. It is compatible with the majority of proof systems and is currently used/will be implemented by a number of L2 projects such as StarkWare, Filecoin, Loopring, Polygon etc.
- Realized volatility of BTC has dipped to 24.6% over the holiday season, levels that were last seen back in July 2020. In the past, April 2019, November 2018, crypto winter of 2015, and early bull market of 2012-13, when BTC 1-month realized vol were at these levels preceded an environment later of high vol and with BTC mostly trading higher.
- The below represents the 30-day change in BTC held in miner wallets. Since the end of August 2022, miners have been in distribution mode. Since the beginning of January, miners have been in accumulation mode and are seeing net positive changes of BTC balances in their wallets.
- Bitcoin's correlation with the Nasdaq 100 dipped below 0.5 for most of December 2022, but this decoupling has since reverted. Heading into the new year, the correlation between the two remained above 0.7 throughout the month of January and is currently at 0.75 as of January 13.
Macro market highlights
- US equity markets saw a pull-back in Monday's trading session as Fed officials hinted at interest rates potentially topping 5% by 2Q, 2023. The S&P 500 fell by 0.1%, the Dow dipped by 0.3%, and the Nasdaq Composite advanced by 0.6%.
- US equity markets rebounded in Tuesday's trading session with the S&P 500 up by 0.7%, the Dow rose by 0.6%, and the Nasdaq Composite advanced by 1.0%.
- Investors remain bullish ahead of CPI data on January 12, projecting a 5.7% increase and a case for the Fed to soften rate hikes going into 2023. The S&P 500 was up by 1.3%, the Dow rose by 0.8%, and the Nasdaq Composite advanced by 1.8%.
- US equity markets closed in the green again in Thursday's session as inflation figures were in-line with expectations at 6.5% and 5.7% for core in December. The S&P 500 was up by 0.3%, the Dow rose by 0.6%, and the Nasdaq Composite advanced by 0.6%.
- Our Bullish Insights team developed a 2023 industry outlook for the year ahead.
- A US district judge authorized federal prosecutors to connect with FTX users through a government launched website. Prosecutors noted that it would be “impractical” to individually contact the 1 million victims. (Source: Reuters)
- A transfer made between DCG and Genesis is allegedly being investigated by the DOJ. According to Bloomberg, investigations are still in its early stages (Source: Bloomberg)
- The US DOJ seized over 55mn Robinhood shares worth ~$450mn along with cryptocurrency valued in excess of $20mn. The seizure in assets was noted as part of a criminal charge brought forth to SBF and other FTX executives. (Source: COINTELEGRAPH)
- Despite OFAC sanctions, crypto mixer Tornado Cash could not be completely shut down, proving its decentralization. While inflows saw severe drops, with the front end website being brought down, the smart contract that maintains the list of pools is still functional. (Source: COINTELEGRAPH)
- Binance is now one step closer to closing the Voyager deal as a US judge granted permission for the plan to sell Voyager assets to proceed to the next stage. The next heading is due to take place in March and will require buy-in from Voyager’s creditors for the deal to go ahead. (Source: CoinDesk)
- Group One Trading, a Chicago based prop trading firm has opened a buy option on 1.3mn MicroStrategy shares according to SEC filings. (Source: Bloomberg)
- CEO of DCG, Barry Silbert releases a letter to shareholders addressing FUD around the company and Genesis.
- Cameron Winklevoss issued an open letter to the board of DCG via Twitter.
- El Salvador’s National Bitcoin Office has announced the approval of Volcano Bonds. The initiative will allow the nation to raise capital through a world-first sovereign blockchain bond. (Source: Bloomberg)
- The US SEC has charged both Genesis and Gemini exchange for the unregistered offering of a security through the Gemini Earn program. Citing “liquidity issues” from Genesis, they failed to honor Gemini investor withdrawals which affected 340,000 users and approximately $900mn. (Source: SEC)
- The US DOJ is launching an investigation into Dylan Macalinao and Ian Macalinao for the 11 pseudonymous identities they forged under Saber Labs. Double, triple-counting TVL was constructed by the brothers on the Solana network to boost Solana’s TVL. (Source: CoinDesk)
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