Bullish Insights – Weekly Market Recap

The Bullish Insights Weekly Market Recap includes curated industry news and analysis from the Bullish team for the week of November 21, 2022.

Bullish Exchange

This week’s peak trade volume (24h): November 22, 2022, 174,940,398 (11,169 BTC)

Crypto market highlights

• Since the start of FTX's collapse, miner’s negative net position in BTC has been exacerbated throughout November compared to outflows seen in May, September, and October. The largest net change seen in the month of November was an outflow of 10,972 BTC on the 10th.
• According to CoinGecko, a measure of the monthly flow of desktop and mobile traffic to the ftx.com website shows that South Korea, Singapore, and Japan are the top three countries with the highest number of monthly unique visitors to the site.
• Last week, digital asset investment total flows saw $43.7mn worth of inflows dominated by short-investments. Bitcoin saw inflows of $14.3mn but was dwarfed by short-Bitcoin inflows of $18.4mn.
• Decentralized derivatives exchanges have seen an uptick in market share from below 2% in October to 4.06% as of November 22. Centralized derivatives exchanges still currently dominate the pie and have a 95.94% share as of November 22.
• The total TVL on the Solana network has plummeted to US$286mn as of November 23, 2022, from an all-time high of US$10.17bn back in November 9, 2021. The last time the layer-1 protocol saw this level of TVL was back in April 2021. By contrast, Ethereum's TVL is at US$23.81bn as of November 23, 2022, a drop from its all-time high of US$110.28bn on November 9, 2021. Keeping in mind the TVL is denominated in USD and there has been a 76% drawdown in price for Ethereum and 95% drawdown in price for Solana.
• In Coinbase's 2022 Institutional Investor Digital Assets Outlook Survey, 140 institutional investors were asked if they anticipate allocating more/less/the same into existing cryptocurrency assets in the next three years, 58% responded with increasing their allocation.
• Implied volatility (IV) is a risk measure used to gauge how much forward risk is being priced into the market. When we look at ETH and BTC IV with an expiry of December 2nd, the market is pricing ETH options at an IV of 81%, towards the end of November, down from 98% in mid-November during the FTX meltdown.

Macro market highlights

• US equity markets closed on a higher note in Friday's trading session with the S&P 500 up by 0.5%, the Dow rose by 0.6% and the Nasdaq Composite saw little change. Investor sentiment began to sour amid concerns China's rise in covid cases could delay reopening expectations. 
• US equity markets closed lower in Monday's trading session with the S&P 500 down by 0.4%, the Dow fell by 0.1%, and the Nasdaq Composite retreated by 1.1%.
• US equity markets rose in Tuesday's trading session pre-holiday season with the S&P 500 up by 1.4%, the Dow rose by 1.2%, and the Nasdaq Composite advanced by 1.4%. US equity markets rose in Wednesday's trading session after the release of the Fed's minutes that indicated most officials preferred the slowing of interest-rate increases soon. The S&P 500 was up by 0.6%, the Dow rose by 0.3%, and the Nasdaq Composite advanced by 1.0%.
• US equity markets were closed in Thursday’s trading session for the holidays.

Other updates

• Court filings revealed that FTX owed its top 50 creditors a total of almost $3.1bn. The top ten creditors were owed $1.45bn with the largest single creditor owed over $226mn. (Source: Kroll)
• The new CEO of FTX exchange, John Ray III who was previously responsible for handling the liquidation of Enron, has stated that the exchange has a “complete failure” of corporate controls and that “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” (Source: Time)
• Genesis warned investors that they may be on the brink of bankruptcy should their fundraising efforts not be met. (Source: The Block)
• Uniswap’s updated privacy policy states that it will collect on-chain and off-chain data of its user’s crypto wallets. (Source: The Block)
• According to the FTX first-day hearing document, FTX customers were mainly distributed through Cayman 22%, BVI 11%, Mainland China 8%, UK 8%.        
• Singaporean police have launched an investigation into Hodlnaut Pte, a Singapore-based cryptocurrency lending and borrowing platform for alleged cheating and fraud claims. (Source: Bloomberg)
• GIC, Singapore’s sovereign wealth fund, has notified investors to brace for volatility as exposure to Digital Currency Group (DCG) raised ties with the troubled broker firm Genesis Trading.  (Source: Straits Times)
• A wallet that has been inactive since August 2017, has recently moved 10,000 BTC ~$167mn. The Bitcoin wallet is linked to the Mt Gox hack back in 2014. (Source: Beincrypto.com)
• Block.one has acquired ~7.6% of Silvergate shares while CEO Brendan Blumer has acquired a ~9.3% stake personally. (Source: COINTELEGRAPH)
• Ethereum developers plan to include EIP-4844, an improvement called “proto-danksharing” anticipated to deploy onto mainnet in 2023. The proposal is aimed to improve scalability on the network outside of L2 options.

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