A weekly newsletter on actionable digital asset market insights and practical observations with a smidgen of green tea 🍵 insights
🎥🔥 My Youtube Content 🎥🔥
📖 Book of the Month 📖
I will be adding recommended reading to my website but readers here can get what I consider to be key books to read first over the holidays and as we enter Q1 2022.
Listen to this book for free with Audible Manias Panics Crash Book
💸 Companies and Deals I am Watching Closely 💸
- Kraken Acquired Staked for an undisclosed sum in what it claims is one of the largest crypto deals to date - Link
- Power & Digital Acquisition Corp. Spac (XPDI) has approved the combination with Core Scientific one of the largest N.A. BTC miners). Keeping a close eye on how this deal proceeds and trades - Link
- Arcade Raises a $15 million Series A to offer NFT backed Loans - Link
💭✍🏼 Food For Thought 💭 ✍🏼
Commissioner Roisman is resigning early and this is definitely not normal - Link
I specifically call out the press releases above as a battle that is atypical - Link
📖 Quote of the Week 📖:
“Life is a shipwreck, but we must not forget to sing in the lifeboats.” ― Voltaire
📰 This Weeks Most Interesting Digital Asset News 📰:
1. Community bank Manasquan Bank, a New Jersey based mutual community bank to offer retail customers cryptocurrency access - Link
2. Monetary Authority of Singapore (MAS) has rejected 100 out of 170 Digital Asset Businesses operating under the 2019 Payment Services Act Exemption - Link
3. Israel leads 10-country simulation of major cyber attack on world markets (one of the least covered stories of 2021) - Link
📈 Top 10 Market Movements by Market Cap over the last 7 days 📉:
📈 Call Out Digital Asset Charts of The Week 📉:
Bitcoin Balance on Exchanges- Huobi (largest Exchange in China)
I trust everyone is having a happy holiday this 2021 as we approach 2022. What a year it has been. I start this section with one of the most important macro charts for Bitcoin of 2021 in my opinion. The chart above is the year to date chart of the total amount of Bitcoin held on Huobi which is the largest Crypto exchange in China.
Huobi is also in the final stages of winding down its operations for Chinese citizens due to the May 19, 2021 Crypto ban in China -- this ban made it illegal to provide any crypto related services (including bitcoin mining which I have addressed previously). This ban meant that Huobi users have been liquidating their Bitcoin holdings since May 19, 2021 as the on chain data supports. You can see above that total Bitcoin held by users on Huobi peaked on May 19, 2021 and has been dropping ever since. A key macro point to call out here is that this chart is showing you what forced selling into the global Bitcoin market looks like. Yes, there are other macro factors in the US and around the world; however, in my opinion, this chart shows you the broader selling pressure that Bitcoin globally has been under regardless of US specific headlines etc.
What does the above statement mean? This means if you live in China and have a Huobi account---you must sell all your crypto including Bitcoin or move it off their exchange by December 31, 2021 or your account will be locked. After December 31, 2021 you will have to contact their support line to get account access.
Remember, all Crypto ownership is now officially illegal in China so your average citizen is just liquidating everything. I anticipate that on the China front at least--the downward pressure on Bitcoin to end by or shortly after December 31, 2021 local time in China. Granted any other global macro factors are still at play--one of the largest macro downward pressure forces will be mostly complete. OkCoin also has a large exchange in China with no public data available but it makes sense to wind down on the mainland into year from an accounting and audit perspective.
Purpose Bitcoin EFT Holdings:
Last week I showed the Purpose Bitcoin ETF chart of AUM for the world's first physically backed Bitcoin ETF in Canada (not available to Americans but Canadians and others can buy in). I call out this physical BTC holdings chart above because this is a traditional ETF product and you can see that despite the negative price moves from Bitcoin the demand for physical Bitcoin from institutional investors remains and has grown throughout December 2021.
Bitcoin: Number of Active Addresses with a Non-Zero Balance
I pulled the above chart starting on November 1, 2021 to date to show you the activity that still continues on the Bitcoin Network.
Bitcoin: Futures Perpetual Funding Rate - All Exchanges
This updated chart from last week represents the premium paid between the perpetual future contract price and the spot price for Bitcoin. Where the rate is highly positive this means traders (that are buying the futures contracts) and paying a premium to be long Bitcoin and are very bullish. Conversely, where the rate is negative it shows that traders are very bearish on Bitcoin and the market will actually pay a trader for being long Bitcoin. Here the level is relatively low still but has moved up from last week and this tells you (in my opinion) that traders are still level headed but getting more bullish on Bitcoin in the short term (into year end) and this also means leverage is ticking up at the moment with Bitcoin currently in the $50k range this holiday period.
Ethereum: Net Unrealized Profit/ Loss Ratio (NUPL)(Updated)
I have updated this chart from last week to show November 2021 to date. We can see that Ethereum is still holding strong and steady as I have noted in prior letters.
Ethereum Burned since the London Hard Fork (EIP 1559)
Updated from last week, the burning of Ethereum is supporting the price. "Burning" means the literal destruction of Ethereum supply which has the effect of decreasing the supply which supports the price in addition to general network demand. You can see above I pulled the data from the week over week and we can see the Burning has actually increased. Note the pace of burning is correlated to network usage broadly. It will be interesting to see how the year end and first few weeks of Q1 2022 play out, based on the on-chain data, it will not take much of a demand increase to really push the Ethereum price and the increase the burning even more.
I hope everyone enjoyed this weeks write up! See you in 2022!
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