Analytics

First Mover Americas: Bitcoin Holds $21K as BTC Outflows Hit Record High

Good morning, and welcome to First Mover. I’m Lyllah Ledesma, here to take you through the latest in crypto markets, news and insights.

Price point: Bitcoin is trading slightly down on the day but is holding $21,000.

Market Moves: Data from CoinShares shows a record high of bitcoin outflows last week.

Price point

Bitcoin (BTC) is slightly down on the day after a steady weekend of trading in a range of $20,000 – $21,800. This comes as the cryptocurrency has struggled to stabilize over the last few weeks, dropping to lows of $18,001 on June 18.

Bitcoin, is up 3.8% over the last 7 days, but is still down around 27% over the last month.

“BTC is showing some decent support but it’s a bit too early to get excited for any continued upside,” said Matthew Dibb, co-founder of Stack Funds.

Dibb expects price action will continue to follow macro trends which have seen a nice bounce over the last week. “Any additional news around contagion and lender insolvency will likely lead to a swift sell-off.”

In recent weeks, digital-asset markets have been weighed down by reports of financial difficulties at crypto lenders including Celsius, BlockFi and Voyager Digital, and at the hedge fund Three Arrows Capital.

If additional crypto lenders “come out with unhealthy balance sheets, we may see further liquidation of assets across the board,” said Dibb.

“It’s hard to tell right now which lenders and exchanges are safe.” added Dibb. BlockFi announced last week that it has secured a $250 million revolving credit facility from FTX.

Market moves

Digital asset investment products saw a record of $423 million outflows last week, which is the largest of all time, according to data from CoinShares.

The outflows were solely focused on Bitcoin, which saw net outflows for the week totalling $453 million. This erased almost all inflows year-to-date and left total bitcoin assets under management (AuM) at $24.5 billion, the lowest point since the beginning of 2021.

Short-bitcoin funds – set up to bet on price declines – saw inflows totalling $15 million. According to CoinShares, this is due to the launch of the first U.S.-based short exchange-traded fund last week.

Ethereum saw inflows totalling US$11 million, ending a streak of 11 consecutive weeks of outflows.

Latest headlines

Morgan Stanley: GPU Demand Likely to Slow if Ethereum Moves to Proof-of-Stake Moving to PoS will also not solve Ethereum’s scaling problems, the report said.

Ethereum Lending Protocol XCarnival Hit With $3.8M Exploit, Recovers 50% The DeFi protocol persuaded a hacker to return $1.9 million from a smart contract exploit.

Australian Crypto Exchange Banxa Cuts 70 Staff The crypto exchange said the “crypto winter” drove such a decision.

Nexo Sends Cease and Desist Letter to Anonymous Twitter Account Accusing It of Embezzlement The Twitter account “@otteroooo” has claimed that crypto lender Nexo embezzled funds from a charity. Nexo says the the account user is intentionally using the name of someone unrelated to Nexo.

Today’s newsletter was edited by Parikshit Mishra and produced by Stephen Alpher.

   

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