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Bottoming outThis week was our first up-week in a while with Bitcoin and Ethereum recovering 6% and 11%, respectively. BNB is even up 12%. This all sounds great but percentages are a funny thing. If you're down 10% and then up 10%, you're still down 1% (100 -> 90 -> 99). So you should really look at logs. And log-wise we're still not looking great. Here's Bitcoin:
There's a lot of turbulence in the market right now. This is the kind of time where fortunes get made. Or at least everything gets setup to make a fortune down the line. Bitcoin was started during the height of the 2008 financial crisis. Airbnb was started at the very bottom of real estate. There are many other examples, but now is the time some people are getting a team together and putting down the foundation for something that will only be visible years from now.
Or you know, I'm wrong and crypto never recovers. That's certainly a possibility and not even so remote. I don't know what that would mean. Bitcoin and Ethereum below X? Major crypto exchanges shut down? Draconian bans on mining? I don't know but crypto may never deliver anything meaningful again. It looks like we're past the easy money phase, and let's be honest a lot of blockchain shit is a lot better served as a centralized service. No one is clamoring for censorship resistant service. I personally like that I can get my money back if someone steals my credit card.
Stable coins are a failed experiment for the most part since no institution can withstand the pressure of printing money out of nowhere or putting their reserves in increasingly risky investments, hoping to eek out a slightly higher yield. Crypto likes to re-discover a lot of the lessons of traditional finance, and none is more powerful than the principal–agent problem. If you have someone (the principal) managing other people's money (the agent), the principal will put their own interests above those of the agent. Throw in grift and anonymity and its a disaster waiting to happen.
Anyway, Sam Bankman-Fried from FTX, is providing a credit facility for BlockFi, a crypto exchange.
Today @BlockFi signed a term sheet with @FTX_Official to secure a $250M revolving credit facility providing us with access to capital that further bolsters our balance sheet and platform strength.— Zac Prince (@BlockFiZac) June 21, 2022
At this point, pretty much any deal with BlockFi is good news because the alternative is that they go bankrupt and depositors lose all their money. It's also good that the proceeds are subordinate to all other accounts. So if things go belly up, FTX is not a senior creditor to depositors. In return, FTX received an option to buy BlockFi for practically nothing. Additionally, FTX has purchased another troubled exchange, Bitvo.
I think this is the phase of crypto where you're going to see a lot of consolidation. It might still all collapse, but this is the time where you separate the wheat from the chaff. Exchanges that are lean and have their shit together are eating up exchanges that managed to lose money in a historic bull market. It's still not clear what will happen to other players like Coinbase that overextended, but they're shrinking rather than expanding. I imagine they'll be pushed into obscurity. Either way, the space will be exciting to watch in the next few years. I personally welcome the collapse of less reputable fly-by-night crypto operations. It looks like the grownups may finally be taking over.
Volumes are pretty steady, but obviously with lower price levels, they're down considerably in fiat terms.
Winners and Losers
|Place||account||games played||won||won USD||Winnings Even Money||Average bet size|
Same trend is continuing. A few high rollers are doing well. Nothing too our of the ordinary.
Let's look at the losers
|Place||from||games played||won||won USD||Winnings Even Money||Average bet size|
As usual, our biggest losers are considerably bigger than our biggest winners, but that's just the game. That 3% tax really hurts, especially the algo players. And of course the biggest difference is the bet size. Losers bet way too big, but you already knew that ;-)
As always, feel free to reach out with questions or comments or want my to highlight anything different on my weekly market recaps. If you like what you read and want to subscribe to receive an email when a new post is published, click here.
Good luck and bet responsibly!