2024-02-28 09:51

Some traders have started buying puts to protect against a potential correction, according to Greeks.Live. Bitcoin crossed above $59,000 Wednesday, registering a 40% rise in four weeks. Some traders have started adding puts to protect against a potential steep drop, according to Greeks.Live. Bitcoin's (BTC) recent near-vertical rise has some traders seeking protection against a potential leverage washout and price pullback. The leading cryptocurrency by market value topped $59,000 on Wednesday, marking a 40% rise in four weeks and outpacing a 31% rally in the CD20, a gauge of the wider crypto market. The advance is consistent with the cryptocurrency's record of chalking out impressive rallies in the weeks leading up to the mining reward halving. The Bitcoin blockchain's fourth halving, due in April, will reduce the per-block emission to 3.125 BTC. While the consensus is that that event, coupled with the strong inflows into the U.S.-based exchange-traded funds (ETFs), implies a supply-demand imbalance and potential for a continued move higher, some traders have started to position for a sharp decline. They have begun snapping up bitcoin puts, or options to sell, at strike prices well below the going market rate because perpetual funding rates point to a market that's overheated and may witness a correction, a drop of more than 10%. A put option gives the purchaser the right, but not the obligation, to sell the underlying asset at a predetermined price on or before a specific date. A put buyer is implicitly bearish on the market or is seeking a downside hedge to a long position in the spot/futures market. A call buyer, who has the right to buy the asset, is implicitly bullish. "The whales are buying a lot of puts under $50,000, likely spot holders to protect profits," crypto block trading service provider Greeks.Live told CoinDesk in a Telegram chat, referring to owners of large amounts of bitcoin. In the past 24 hours, over 50 block orders with a notional value of more than $5 million have crossed the tape on Greeks.Live. Of these, several are active buy positions in the lower strike out-of-the-money puts. "This market phenomenon is relatively rare, occurring only a few times in history in large spot-driven bull markets where spot holders buy puts for protection," Greeks.Live said. "While holding spot to get the most explosive acceleration of the bull market topped out, while a small portion of the profit will be taken out to buy OTM puts." https://www.coindesk.com/markets/2024/02/28/crypto-traders-hedge-bitcoin-rally-after-40-rise-in-4-weeks-options-data-show/

2024-02-28 09:04

The “fear and greed” index reading is now at 87, a sign of “extreme greed.” Bitcoin (BTC) surged above the $59,000 level in European morning hours on Wednesday, adding 5% in the past 24 hours and reaching a $1.2 trillion market capitalization. The price spike came as spot bitcoin exchange-traded funds (ETFs) recorded over $3 billion in cumulative trading volumes on Tuesday, contributing to demand. Some traders also pointed to the bitcoin halving event, expected in April, as a new narrative that causes a pre-halving rally. Meanwhile, the broader CoinDesk 20 index (CD20) jumped nearly 3%. Futures bets on lower bitcoin prices took on $25 million in liquidations since Asian morning hours, Coinglass data shows, which may have contributed to the price spike. Elsewhere, major tokens ether (ETH), Solana’s SOL and XRP gained as much as 3% since Asian morning hours, CoinGecko data shows. Meanwhile, the fear and greed index, a sentiment metric that tracks the rate of change in asset movement against inherent fundamentals, flashed 82 on Wednesday – implying extreme greed and reaching the highest such level in over a year. The index is rated on a scale of 0-100, with 0 being the most fearful and 100 being the most greedy. A greedy environment is considered a sign of euphoria, which “means the market is due for a correction,” the index’s developers say. Traders remain unfazed, however, with some expecting bitcoin to cross its previous highs of $69,000 in March. https://www.coindesk.com/markets/2024/02/28/bitcoin-surges-above-59k-as-bull-rally-continues/

2024-02-28 07:39

An expected pre-halving rally is a good spot to realize short-term profits, one market observer said. Euphoric sentiment, institutional buying demand, and historical gains linked to bitcoin’s (BTC) halving event are putting the asset on track to cross its lifetime highs of $69,000 in March, some traders say. Bitcoin halving has always been associated with bull rallies, with the asset’s prices increasing by several hundred percent in the months following previous events. Halvings happen about every four years and decrease the block rewards to miners. The next halving is expected in mid-April, a countdown clock shows. Prices tend to rise with fewer new bitcoin on the open market as long as demand remains constant or increases. Historical price action may not be repeated in the future, but the anticipation of a rally may push investors to put outsized bets on the asset. “The anticipation always leads to increased buying activity or ‘FOMO’ for lack of a better term,” Bryan Legend, CEO of Hectic Labs, told CoinDesk in a Telegram message. “Investors expect a reduction in supply to drive up prices, and a pre-halving rally which contributes to a new bull market with a refreshed bullish sentiment.” “However, the rally leading up to the actual halving event is a great time to realize short-term gains,” Legend added. Meanwhile, some traders expect bitcoin to top its lifetime peak of $69,000 in March, saying institutional demand and the early success of spot bitcoin exchange-traded funds (ETFs) are likely to push prices. “With 54 days left before the bitcoin halving and the expectation of the Fed’s interest rate cut in the middle of the year, bitcoin prices have a support level at $50,000 and may fluctuate to hit historical highs in March,” Ryan Lee, chief analyst at Bitget Research, told CoinDesk in a message. “The trading volume of nine bitcoin ETFs in the U.S. also reached a new high of $3.2 billion last week, indicating institutions have a strong bullish sentiment,” Lee added. Bitcoin ETFs traded a cumulative $2 billion on Tuesday. BlackRock’s IBIT recorded over $1.3 billion in daily trading volume for the second consecutive day. Bitcoin was trading just above $57,200 in Asian morning hours on Wednesday, adding 1.5% in the past 24 hours. The CD20, a broad-based index, is up nearly 1%. https://www.coindesk.com/markets/2024/02/28/bitcoin-bulls-target-69k-lifetime-highs-ahead-of-halving/

2024-02-28 07:37

The funding rate spread has collapsed, indicating increased appetite by traders to speculate further out on the risk curve. The spread between perpetual funding rates in bitcoin and ether markets recently collapsed, indicating an uptick in investors’ risk appetite. The development suggests continued outperformance of alternative cryptocurrencies ahead. Crypto bulls questioning the sustainability of recent sharp gains in alternative cryptocurrencies (altcoins), including meme coins, may consider the latest trend in the spread between bitcoin and ether perpetual funding rates. Data tracked by Glassnode show that the spread recently collapsed to an annualized level of - 9%, a sign investors are willing to pay more to take leveraged long or bullish bets in the ether perpetual futures market compared to bitcoin (BTC). In other words, risk appetite is rising – investors are willing to pour money into smaller and risky altcoins, expecting to generate a large profit. “The spread between BTC and ETH funding rates is widening. Prior to October-2023, a relatively neutral regime can be observed, where the spread oscillated between positive and negative state,” Glassnode said in the weekly newsletter. "However, since the October rally, funding rates for ETH have been consistently higher than for BTC, inferring an increased appetite by traders to speculate further out on the risk curve,” Glassnode added. Bitcoin is the world’s largest cryptocurrency by market value and the most liquid, with growing mainstream adoption. Ether, meanwhile, is considered a relatively high beta and an altcoin leader. Thus, the price or funding rate differential in bitcoin and ether markets reflects the broader risk sentiment as the AUD/JPY pair does in traditional markets. Perpetuals or futures without expiry include a funding rate mechanism so that prices for perpetuals closely follow spot prices. A positive funding rate means leverage is skewed to the bullish side, and long position holders are willing to pay shorts to keep their bets open. A negative rate suggests otherwise. The bitcoin-ether funding rate spread hovered between -3% (lower bound) and +3% (upper bound) in the first nine months of 2023. Since October, the spread has seen several brief drops below -3%, signaling a bias for ether and the wider altcoin market. The latest decline comes as ether and other altcoins lead the total crypto market capitalization higher. Bitcoin’s share in the total market often called the dominance rate, has remained between 51% and 54% since early January, according to charting platform TradingView. The total crypto market capitalization has increased from roughly $1.7 trillion to $2.2 trillion during that period. https://www.coindesk.com/markets/2024/02/28/falling-bitcoin-ether-spread-is-music-to-altcoin-traders-ears/

2024-02-28 07:12

Warren reiterated her disdain for the industry in an interview. Warren said that crypto would need to fall in line with the rest of the U.S. financial sector. The senator’s anti-money-laundering bill, which would bring the Bank Secrecy Act to crypto, is awaiting approval. U.S. Sen. Elizabeth Warren (D–Mass.) has called out the crypto industry yet again, saying they are reluctant to follow the rules. "I wanna collaborate with the industry, what I don't understand is why the industry seems to be saying that they only way that they can survive is if there's plenty of space for the drug traffickers and the human traffickers, oh and the terrorist, and the ransomware scammer, and the consumer scammers..," said Warren in an interview with Bloomberg Television. Warren said that in the U.S. financial system, everybody follows the same rules and crypto needs to fall in line with those rules. The Democrat referred to her “Digital Asset Anti-Money Laundering Act” bill, which would bring anti-money-laundering requirements to various crypto players, including miners, validators, wallet providers and others. The staunchly anti-crypto senator introduced the bill last year and initially garnered some support. However, the bill has hit a few roadblocks as the Senate Banking Committee has been busy with other matters. https://www.coindesk.com/policy/2024/02/28/senator-warren-hits-out-at-crypto-again-says-industry-needs-to-follow-the-same-rules-as-tradfi/

2024-02-28 06:19

Bankman-Fried's lawyers objected to the Presentence Investigation Report (PSR) which recommends a sentence of 100 years in prison calling it "grotesque." Sam Bankman-Fried’s attorneys requested a prison term of no more than 6.5 years for the FTX founder, who was convicted on seven different fraud and conspiracy charges last November. A Presentence Investigation Report recommended a prison term of 100 years. Former FTX boss Sam Bankman-Fried (SBF), found guilty of fraud last year and due to be sentenced next month, has asked the court for a “just” sentence of 63 to 78 months, according to a court filing submitted Tuesday. Bankman-Fried’s lawyers objected to the Presentence Investigation Report (PSR), which recommends a sentence of 100 years in prison, calling it “grotesque.” Bankman-Fried was convicted on seven charges of fraud and conspiracy last November after a month-long trial probing the 2022 collapse of FTX. “Sam is a 31-year-old, first-time, non-violent offender, who was joined in the conduct at issue by at least four other culpable individuals, in a matter where victims are poised to recover—were always poised to recover—a hundred cents on the dollar,” said the filing, which was signed by Bankman-Fried’s new attorneys Marc Mukasey and Torrey Young. The lawyers argue that “an appropriate method of arriving at a just sentence” would be to consider an adjusted offense level based on “zero loss,” which would lead to “an advisory Guidelines range of 63-78 months.” The filing heavily draws on how “the harm to customers, lenders, and investors is zero” because the FTX bankruptcy estate has stated it expects to fully repay its customers. In some cases, restitution paid to victims can be considered when sentencing, resulting in shorter terms than guidelines suggest for white-collar cases, CoinDesk has previously reported. Read all of CoinDesk’s coverage on Sam Bankman-Fried’s trial here. The attorneys argued that FTX and FTX.US were solvent when the companies filed for bankruptcy, noting that FTX’s bankruptcy estate claims it has north of $10 billion in assets, as opposed to the exchange’s $8 billion hole. When all factors are considered, the lawyers said, “Including Sam’s charitable works and demonstrated commitment to others, a sentence that returns Sam promptly to a productive role in society would be sufficient, but not greater than necessary, to comply with the purposes of sentencing.” Bankman-Fried’s lawyers argue that while he has been described as a “sociopath,” “an ice-cold manipulator, bully and shameless liar,” and “one of history’s most notorious fraudsters, those people don’t know the true Sam Bankman-Fried.” “Those who know Sam see someone who ‘cares deeply about other people.’ Who exhibits ‘kindness and loyalty.’ Whose ‘heart [is] in the right place.’ Someone who ‘has always been dedicated to doing good in the world.’” the filing said. Family and friends Bankman-Fried’s sentencing memo included letters of support from his friends and family, including his parents, Joe Bankman and Barbara Fried; his brother Gabriel Bankman-Fried; former FTX in-house psychiatrist George Lerner; former FTX Head of Communications and executive assistant Natalie Tien; former FTX.US Head of Data Science Daniel Chapsky; someone who said they were an FTX victim; childhood friends; Stanford officials; and over a dozen others. Notably, Bankman-Fried’s fellow inmate and former New York Police Department officer, Carmine Simpson, wrote a letter that brought attention to extortion attempts. “Sam being the least physically intimidating person … has and will lead to him being frequently targeted for hazing, harassment, and assault more so than the average inmate,” the letter said. In addition, Simpson said that the extensive media coverage of Bankman-Fried’s case and his erstwhile net worth has “[led] to multiple extortion attempts.” Another letter was submitted by Jamie Forrest, an adviser to Purpose Africa, a research entity focused on therapeutics. Forrest was part of the group of researchers invited by Bankman-Fried to the Bahamas in early 2022. He wrote that Bankman-Fried’s vision reflected a “man whose values were deeply rooted in global justice, fairness, and human dignity.” A clinical psychiatrist, Hassan Minhas, wrote that he believed Bankman-Fried met the criteria for Autism Spectrum Disorder, which means he could “face an additional set of challenges” in prison and, therefore, “would benefit from ongoing access” to therapy and monitoring. Other supporting documents included snippets of Bankman-Fried’s writings, emails and other communications from FTX and its employees and various documents from the exchange’s bankruptcy. “The letters of support confirm that the public needs no protection from Sam,” the lawyers argued. “Sam, in short, presents the very opposite of the potential recidivist for whom prison is necessary.” Enhancements Bankman-Fried’s attorneys pushed back against various “enhancements” – aspects that might add to a proposed prison term – recommended in the Presentence Investigation Report, saying they were inapplicable or unsupported. Some of the memo argues against details discussed during or before Bankman-Fried’s trial. Bankman-Fried drove “the most basic car that was available,” the memo said (former Alameda Research CEO Caroline Ellison testified that this was a deliberate choice made for appearances’ sake). Campaign finance claims – which ultimately were not tried as a specific charge – should not be considered in sentencing, as the memo said Bankman-Fried did not have a chance to push back against the allegations. The memo also said Bankman-Fried “objects to the assertion that he ‘instructed employees to set messages to auto-delete to evade law enforcement scrutiny,’ and that he ‘tampered’ with witnesses.” The FTX founder’s bond was revoked after Judge Kaplan ruled he had indeed attempted to tamper with witnesses – Ellison being one – a few months before his trial last year. Prosecutors also focused heavily on the auto-deleting message function during the trial. According to Tuesday’s memo, the Presentence Investigation Report alleges Bankman-Fried perjured himself during the trial. “Neither the government nor Probation identifies a single specific line of alleged perjurious testimony, which is enough to reject this enhancement,” the filing said. The memo goes on to detail Bankman-Fried’s life, his philanthropy, his work ethic and his remorse. It also drew contrasts between Bankman-Fried and Bernie Madoff, OneCoin-linked Sebastian Karl Greenwood and Theranos founder Elizabeth Holmes, arguing that the FTX founder’s conviction most closely resembled Holmes’ – except Holmes “put patients at risk.” According to the defense team, “the best comparison” would be the case against Michael Milken, who served two years of a 10-year sentence and “became a tremendous force for good in the world.” Read More: Sam Bankman-Fried’s Sentence Might Be Lighter Than You’d Expect https://www.coindesk.com/policy/2024/02/28/sam-bankman-fried-asks-court-to-cut-prison-time-to-63-78-months/