The Derivatives Magazine #29
The past week actually began immediately with a renewal of the local total-cap anti-record. Starting at $751.9 billion, the total capitalization index first renewed its low, reaching $734.2 billion (the last time such capitalization values were observed in December 2020), but then there was a rebound and gradual growth to a weekly high of $803.03 billion. Then the news background again became sharply negative in the moment and the total capitalization of the crypto market literally in a couple of hours fell to $769 billion. The observation period ended at $775.2 billion. The final growth was 3.1%.
According to Blockchain.com, the anti-record for daily miners' earnings was also broken last week, amid the collapse of the BTC price. On November 26, that figure amounted to just $11.674 million. This value is the lowest it has been in 2 years. Due to a severe shortage of funds caused by declining mining profitability, the major mining companies continue to sell bitcoins on their balance sheets. In its latest filing with the SEC, Core Scientific reported a net loss of more than $400 million for Q3 2022 and $1.7 billion for the last nine months.
Coinshares data on financial flows in crypto products shows a combined $16.2 million in outflows. $10.1 million was withdrawn from BTC-oriented products, and $6.1 was withdrawn from ETH-oriented products. Outflows continued in altcoins, with XRP, Polygon and Tezos as the primary targets, totaling $0.5 million, $0.3 million and $0.2 million, respectively. Blockchain stocks are also suffering from the aftermath of the FTX crash, with last week's outflows totaling $13 million.
Sentiment recorded the share of BTC held on cryptocurrency exchanges below 7% for the first time since November 24, 2018. The driver of this trend is primarily the sharply increased distrust of users to centralized exchanges amid the collapse of FTX. Withdrawals from exchanges to non-custodial wallets and extremely low exchange balances are generally bullish indicators, but we should not forget about the great pressure from major miners going bankrupt.
$2.8 billion in outstanding debt on Genesis' balance sheet.
The troubled cryptocurrency lender Genesis Global has $2.8 billion in outstanding loans on its balance sheet. An interesting fact is that according to Bloomberg, about 30 percent of the loans are to related parties, including the parent company Digital Currency Group. In a note to shareholders, founder Barry Silbert (CEO of Digital Currency Group) said that "in the normal course of business, DCG borrowed money from Genesis Global Capital in the same manner that hundreds of crypto investment companies do. These loans were always structured on a market basis and priced at prevailing market interest rates."
1inch introduces Rabbithole
1inch Network introduced the RabbitHole feature to protect MetaMask wallet users from "sandwich attacks," one of the most common ways to extract MEVs in DeFi. Manipulations to generate additional income by using advance transactions are not formally classified as illegal activities. Rather, in the community, they are considered unethical. The 1inch RabbitHole feature eliminates the "sandwich attack" problem. The solution works as a proxy between MetaMask and Ethereum-validators – swap transactions bypass the mempool. The developers have aggregated Flashbots, BloXroute, Eden and Manifold products on the platform for this purpose. Initially, RabbitHole will be in free access for the testing period. After receiving feedback from the community, the platform will consider possible payment options for the solution.
TIME’s president to lead MoonPay
TIME magazine president Keith Grossman has decided to leave the media company to head cryptocurrency company MoonPay. According to sources, he announced on Twitter that he would become president of MoonPay after a three-year stint at TIME. During his tenure at TIME, he introduced digital assets: the magazine began accepting cryptocurrencies as a subscription payment method. The company launched the TIMEPieces initiative, a collection of NFTs that showcase original artwork, which generated more than 10 million in revenue. Grossman also acted as distributor for the purchase of NFT by celebrities such as Snoop Dogg and Paris Hilton. These celebrities, as well as Justin Bieber, The Weknd, Drake, Ashton Kutcher and Gal Gadot, teamed up for MoonPay's $555 million Series A funding round in 2021.
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