Connect with us

Bitcoin

These Entities Are Buying the Bitcoin Collapse, According to On-Chain Analyst Will Clemente

Published

on

An analyst who continues to build his following with his timely on-chain signals is unveiling the group of investors who are buying the big Bitcoin correction.

In the latest installment of The Pomp Letter, Will Clemente says that a significant portion of the BTC that was sold during Wednesday’s collapse that saw Bitcoin crash from $43,500 to $30,000 came from short-term holders.

“By age, the cohort I saw that had the largest uptick in selling was from coins aged one week to one month old.”

Advertisement
Source: Will Clemente

The on-chain analyst adds that the entities that did the most selling on that day were large Bitcoin whales who unloaded tens of thousands of BTC.

“By size, the cohort I saw the most selling from was entities with at or over 100,000 BTC. This cohort was reduced by 89,000 BTC on Wednesday.”

Source: Will Clemente

As for the buyers of the massive BTC supply, Clemente highlights that a new breed of whales absorbed most of the selling pressure.

“The cohort that did the most buying throughout the dip was entities holding 10,000 -100,000 BTC. This cohort added 122,588 BTC to their holdings in aggregate on Wednesday. One interesting note: a lot of buying was coming from the west (US). I say this because at one point during the bounce, Coinbase was trading at a $3,000 premium to other exchanges. This means western buyers on Coinbase were spamming the green button.

Since Wednesday, exchange flows have normalized and are no longer bearish. OTC (over-the-counter) desk outflows spiked during the dip, showing strong buying from high net worths/institutions.”

Advertisement
Source: Will Clemente

Clemente is also looking at the volume distribution of Bitcoin prior to the correction. According to the on-chain analyst, the heavy volume distribution above $40,000 suggests that BTC is in the mid-cycle accumulation of the bull market.

“Over the last two to three months, there was a ton of volume in the $40,000-$60,000 range, especially between $53,000-$58,000. Over 25% of supply has moved above $40,000 in total… This is what current on-chain volume distribution looks like.” 

Source: Will Clemente

To compare with the previous boom cycles, the on-chain analyst shows the weak volume distribution of BTC when the leading cryptocurrency topped out in 2017.

“This is what distribution looked like at the top in 2017.”

Source: Will Clemente

The on-chain analyst also highlights that when Bitcoin topped out in 2013, the volume distribution looked weak as well.

“This is what distribution at the top of 2013 looked like.”

Advertisement
Source: Will Clemente

According to Clemente, the current volume distribution does not remotely resemble the previous bull market tops. He goes on to conclude that while the dip was unexpected, it was necessary to keep the bull market sustainable.

“We have a large leverage reset and wipeout of weak hands. At this point, it’s just going to take some time for those young coins recently sold to find a new home. Still bullish for the remainder of the bull run.”

News Source

Advertisement

Bitcoin

This ransomware gang moved $6.8 million in Bitcoin amid regulatory overhaul

Published

on


Ransomware groups, Darkside and BlackMatter recently moved multi-million dollars worth of Bitcoin upon getting the news of REvil’s servers getting hacked by a global coalition of law enforcement agencies. According to the authorities, 107 BTC, which amounts to $6.8 million were moved earlier today by splitting the amount into several different wallets.

Furthermore, officials revealed that the gangs were already aware of regulators’ oversight and therefore had prepared the mentioned balance to be laundered or cashed out. According to The Record, officials noted that the breakdown of funds into smaller portions is usually used for money laundering operations as the regulators directly transfer the entire amount of confiscated funds instead of splitting them up.

“Basically, since 2AM UTC whoever controlled the wallet started to break the BTC into small chunks… At the time of this writing, the attackers split the funds into 7 wallets of 7-8 BTC and the rest (38BTC) is stored in the following wallet: bc1q9jy4pq5su9slh56gryydwkk0qjnqxvfwzm7xl6”, Omri Segev Moyal, CEO and co-founder of security firm Profero shared this data with The Record.

It is obvious that the Darkside and BlackMatter were next on the regulatory hitlist as Darkside was the ransomware strain developed by REvil associates that were used earlier this year in the infamous Colonial Pipeline incident of May. This attack indirectly led to fuel supply outages across the US East Coast.

Advertisement

REvil ransomware group’s website went offline

Yesterday, the Reuters’ report about REvil’s servers being hijacked by the regulators went viral and threw other ransomware groups in a fit of panic. A multi-nation operation against cybercrime group, REvil was implemented and took down the group’s “Happy Blog” website, which was formerly used to leak victim data and extort companies.

“The FBI, in conjunction with Cyber Command, the Secret Service and like-minded countries, have truly engaged in significant disruptive actions against these groups,” said Tom Kellermann, an adviser to the U.S. Secret Service on cybercrime investigations and VMWare head of cybersecurity strategy. “REvil was top of the list.”, he added.

News Source

Advertisement
Continue Reading

Bitcoin

First Bitcoin ETF in Immediate Danger of Hitting Cap on Contracts Held

Published

on

The first bitcoin (BTC) futures-backed exchange-traded fund (ETF), ProShares’ BITO, is reportedly already in danger of breaching a limit on the number of futures contracts it is allowed to hold under current Chicago Mercantile Exchange (CME) rules.

BITO already owns nearly 1,900 bitcoin futures contracts expiring in October, according to Bloomberg data. The number is close to CME’s current rule that a single entity cannot own more than 2,000 front-month futures contracts, Bloomberg reported on Thursday, when BITO had only been live for two full days. 

To get around the limit, the ETF has reportedly started buying futures contracts expiring in November in addition to the October contracts it holds, with 1,400 November contracts amassed so far. At the current pace, however, the fund could also soon reach CME’s cap on holdings for next-month contracts of 5,000 contracts, per the report.

Advertisement

And while the CME has already said it will increase the limits to 4,000 front-month contracts starting in November, this is also likely to be reached soon by BITO, which already has more than USD 1bn under management.

A major issue faced by ProShares’ ETF is that futures contracts tend to trade at a higher premium over spot prices the further away their expiry date is – a phenomenon known as contango in the futures market.

As such, choosing to get around the maximum limits by buying longer-dated contracts will mean the ETF has to get its bitcoin exposure at prices that are increasingly higher than spot. This could result in high costs when contracts are rolled over at expiry that will eventually be paid by the ETFs investors in the form of lower returns.

Advertisement

According to Bloomberg’s own ETF expert, Eric Balchunas, some of the pressure on the first ETF to be launched could be alleviated by competing ETFs coming to the market over the next few days and weeks. However, the first-mover advantage that BITO has gotten will still be difficult to challenge, he said.

“The unprecedented early volume in BITO makes it like a snowball rolling downhill, as liquidity and assets begets more liquidity and assets,” Balchunas said, adding that it will be “nearly impossible” for other ETFs to steal significant volume from BITO in the short or medium-term.

Commenting on the possibility of the ETF running into the ceiling, some speculated that the extreme popularity of the futures ETF could eventually pressure the US Securities and Exchange Commission (SEC) to allow a “physically” backed spot bitcoin to launch. 

Advertisement

That scenario was suggested by Zhu Su, CEO of crypto hedge fund Three Arrows Capital, saying that it could lead to the ETF rising to a “hilarious premium,” leading the SEC to “approve a spot ETF because of public outrage.” 

In a tweet, he also shared a comment from Max Boonen, Founder of electronic market maker B2C2, saying that it is “doubtful” that clearing houses will be comfortable with a single entity holding more than 4,000 front-month contracts.

“What happens when BITO surpasses 4k [contracts] as it surely will?”, Boonen asked.

Advertisement

A similar idea was also suggested by Eric Balchunas, saying in the Bloomberg report that BITO hitting the limits on how many futures contracts it is allowed to hold could pressure the SEC to allow a spot-based bitcoin ETF.

“That certainly would do the trick in slowing down BITO and providing a release valve for futures demand,” the senior ETF analyst said.

Advertisement

Meanwhile, the second bitcoin ETF to be approved by the SEC, the Valkyrie Bitcoin Strategy ETF with the ticker BTF, is scheduled to go live on the market today, October 22. BTF will also be backed by bitcoin futures contracts traded on the CME rather than by “physical” bitcoins.

BTF should go live on the Nasdaq exchange when the market opens at 09:30 ET (13:30 UTC).

Following the launch of Valkyrie’s fund today, a third bitcoin futures ETF, the VanEck Bitcoin Strategy ETF (XBTF), is set to go live on Monday on the Cboe BZX Exchange, according to a recent SEC filing.

Advertisement

News Source

Continue Reading

Bitcoin

Second US Bitcoin Futures ETF Launching Today – Here Are the Details

Published

on

A new Bitcoin (BTC) futures exchange-traded fund (ETFs) rolls out today.

Valkyrie Investments, an alternative asset management firm, is launching the country’s second Bitcoin futures ETF, according to CEO Leah Wald.

The new product is called the Valkyrie Bitcoin Strategy ETF and will trade on the Nasdaq under the ticker symbol BTF.

Advertisement

The launch comes on the heels of ProShares’ Bitcoin futures exchange-traded fund, which exploded onto the market on Tuesday with the second-biggest ETF launch of all time.

Like ProShares’ Bitcoin Strategy ETF (BITO), the Valkyrie ETF doesn’t invest directly in BTC but provides price exposure to Bitcoin futures contracts.

Per the ETF’s prospectus,

Advertisement

“Under normal circumstances, the fund will seek to purchase a number of Bitcoin futures contracts so that the total notional value… of the Bitcoin underlying the futures contracts held by the fund is as close to 100% of the net assets of the fund as possible.”

Bitcoin is trading at $62,793, up nearly 10% on the week but down from its Wednesday all-time high of $67,276, according to CoinGecko.

News Source

Advertisement
Continue Reading