Sebastian Sinclair


<p>Bitcoin sprung to life Wednesday, pushing the majority of holders into profit — and propelling traders into the green across derivative and spot cryptocurrency plays.</p>



<p>Digital assets’ direction has been pivoting with regulation in the works, digital asset services firm Bit0oda told Blockworks. It&#8217;s not the only factor at play. </p>



<p>“On the long-term path toward realizing crypto’s long-term potential, the crypto ecosystem could see regulatory volatility through 2023,” the firm said in a statement.&nbsp;</p>



<p>Not to mention that earnings season has slowed with the February Federal Reserve meeting fading into the rearview mirror. And then there’s the matter of trader chatter kicking up around Hong Kong’s move to bring crypto service providers into the same regulatory fold as traditional financial players.  </p>



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">On June 1st, 2023, Hong Kong will officially make crypto purchase &amp; sell, trading, fully legal for all of its citizens<br><br>Expect a huge influx of big money from the East<br><br>Asian currency based stablecoin coming out of HK will be a certainty as well</p>&mdash; Crypto熊猫 (@NoodleofBinance) <a href="https://twitter.com/NoodleofBinance/status/1625941125487017989?ref_src=twsrc%5Etfw">February 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>Bullish sentiment related to Hong Kong and spreading appears to be based on publicly available information from December. Hong Kong regulators have <a href="https://www.coindesk.com/policy/2023/01/11/hong-kong-to-propose-approved-set-of-crypto-tokens-for-retail-trading-reuters/" target="_blank" rel="noreferrer noopener">rolled</a> out a <a href="https://www.coindesk.com/consensus-magazine/2023/01/25/asia-crypto-regulation/" target="_blank" rel="noreferrer noopener">number</a> of other crypto initiatives — including a<a href="https://blockworks.co/news/hong-kong-contemplates-ban-on-algorithmic-stablecoins"> proposal to ban algorithmic stablecoins</a>.  <br><br>That centered on the government’s legislative <a href="https://www.info.gov.hk/gia/general/202301/09/P2023010900250.htm" target="_blank" rel="noreferrer noopener">framework</a>, slated to take effect June 1, which seeks to allow certain crypto service providers under the same <a href="https://www.cr.gov.hk/en/publications/docs/es32022262516-e.pdf" target="_blank" rel="noreferrer noopener">regulatory</a> umbrella as banks.&nbsp;&nbsp;</p>



<p>It comes as US-based Interactive Brokers has <a href="https://www.coindesk.com/business/2023/02/15/interactive-brokers-rolls-out-btc-eth-trading-to-professional-investors-in-hong-kong/" target="_blank" rel="noreferrer noopener">moved</a> to team up with crypto exchange OSL Digital Securities in a joint Hong Kong crypto push.&nbsp;<br><br>Regional bitcoin flows from North America to Eastern Asia rose to $7.7 million over a seven-day average, indicating some traders had begun to move assets from region to region, Chanalysis <a href="https://markets.chainalysis.com/?range=30&amp;asset=BTC#demand-exchange-flows" target="_blank" rel="noreferrer noopener">data</a> show.</p>



<p>The industry’s total market cap spiked 6.8% on Wednesday alone, according to <a href="https://www.coingecko.com/en/global-charts" target="_blank" rel="noreferrer noopener">CoinGecko</a> data — from around $1.07 billion to $1.15 billion on the day.</p>



<h3>Options, options</h3>



<p>There’s also been a significant increase in aggregate open interest following the release of the US CPI data this week, according to Toby Chapple, head of trading at Zerocap of Australia.&nbsp;</p>



<p><a href="https://blockworks.co/price/btc">BTC’s</a> open interest alone has risen by over $1 billion from $7.5 billion to $8.5 billion.</p>



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<p>“The most telling market dynamic is the inverted put-call skew in the options market,” Chapple told Blockworks. “The seven-day calls option implied volatility vs put option is showing a very large swing to call buying, implying that the market has swung very hard to a bullish stance by market participants.”</p>



<p>According to data from <a href="https://markets.chainalysis.com/?range=30&amp;asset=BTC#demand-exchange-flows" target="_blank" rel="noreferrer noopener">Chainalysis</a>, BTC&#8217;s total flows recorded its highest one-day increase in over 70 days, surging from 85,800 BTC to around 139,400 BTC.&nbsp;</p>



<p>Data from crypto intelligence firm <a href="https://app.intotheblock.com/coin/DOGE/deep-dive?group=all&amp;chart=all" target="_blank" rel="noreferrer noopener">IntoTheBlock</a> show, of roughly 29.2 million wallet addresses holding the asset, around 66% are in the money. Just 22% of those addresses are posting losses.</p>



<p>A majority bought in at an average of $18,800 — good for an increase of around 30% to bitcoin’s current floor.&nbsp;</p>



<p>Trade volume across all assets rose to $120 billion — the highest point in more than six days — data provided by <a href="https://sigdev.thetie.io/coins" target="_blank" rel="noreferrer noopener">TheTie</a> show.</p>



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As Traders Eye Hong Kong’s Crypto Moves, Bitcoin Breaks Above $24K

John Gilbert


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<h2>Introducing Reserve</h2>



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/JOy0wCVhnwM" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe>



<h2>Series Table of Contents</h2>



<p><strong>Part 1:</strong>&nbsp;<a href="https://blockworks.co/news/how-broken-monetary-policy-fuels-instability">What’s broken</a><br><em>Why unstable money isn’t safe for the world and how to understand monetary policy</em><br><strong>Part 2:</strong>&nbsp;<a href="https://blockworks.co/news/the-investors-guide-to-stablecoins">What are people doing today about it?</a><br><em>A dive deep into the types of monetary policy alternatives that stablecoins offer</em><br><strong>Part 3:</strong>&nbsp;<a href="https://blockworks.co/news/what-is-an-inflation-hedge-finding-stability-in-todays-market">What is the right way forward?</a><br><em>A guide to the various inflation hedging tactics and how they can be used in stablecoins</em><br><strong>Part 4:</strong>&nbsp;<a href="https://blockworks.co/news/what-it-takes-to-tokenize-the-world">What will the future look like?</a><br><em>A look at how tokenization will change the stablecoin ecosystem</em><br><strong>About our sponsor:&nbsp;</strong><a href="https://blockworks.co/news/about-our-sponsor-reserve">Reserve</a><br><em>A video explaining the Reserve Protocol</em></p>



<h2>The protocol and services</h2>
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<p>The <a href="https://reserve.org/">Reserve protocol</a> is a self-service, permissionless factory where anyone can build, deploy and govern their own asset-backed stablecoins (RTokens), which can be integrated within DeFi and real world commerce.</p>



<p>Their long-term goal is to create non-inflationary currencies that remains stable both month-to-month as well as century-to-century. In addition to their protocol, Reserve also launched a pay app called the <a href="https://reserve.org/en/app/about_app/">Reserve App</a>. It is a user-friendly way for ordinary people to buy RTokens with their local currencies and use them in locally. More than $300m a month is transacted on the platform, mainly real people and companies using Reserve to escape inflation.</p>


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