David Canellis

Crypto itself may well be all it’s cracked up to be — a new paradigm to devour finance in much the same way that internet software has eaten the world over the past three decades.



Crypto markets meanwhile can be a hot mess. Rarely <a href="https://blockworks.co/news/crypto-doesnt-care-about-fundamentals-is-that-sustainable">driven by fundamentals</a> and often by hype, prices for digital assets can swing wildly depending on what’s spread across news and social media day-to-day.



We saw a taste of this earlier this week. A Matrixport analyst note <a href="https://blockworks.co/news/bitcoin-falls-on-anti-etf-news">throwing cold water</a> on the widely-held belief that the SEC would soon approve the US’s first-ever spot bitcoin ETF correlated with a sudden 10% crash in the price of bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>).



The fall triggered a collapse across swathes of crypto markets, alongside $500 million in liquidations across derivatives exchanges, in only a few hours — the worst wipeout in months.&nbsp;



Bitcoin has mostly rebounded since, but not everyone is <a href="https://thedefiant.io/is-matrixport-to-blame-for-the-violent-crypto-flash-crash">sold</a> that the Matrixport post, which spread quickly on X, was directly responsible for the market tanking.&nbsp;



In any case, headlines for news both real and fake have for years amplified crypto’s trademark volatility.&nbsp;



The charts below plot crypto price action around major news events over the past six years or so. Each line represents a different news story and starts one week before the headline dropped and extends until one week after.



Each story’s impact can be seen around the middle of the chart at day zero. The charts start out relatively calm but they noticeably spread out after each headline hit the internet.



<h2 class="wp-block-heading">The real news</h2>



Our sample size is relatively small but the two positive stories clearly correlated with higher bitcoin prices.&nbsp;



An Amazon job <a href="https://www.theverge.com/2021/7/24/22591754/amazon-hiring-cryptocurrency-aws-payments-jassy">advert</a> for a blockchain and crypto lead in July 2021 preceded a 5% bitcoin pump over the following day. That rally maxed out at nearly 27% over the next week.



Granted, the entire market was in the midst of a major bull cycle at the time, so the power of Amazon’s job posting is hard to pin down, despite how many outlets picked up the news.



A CoinDesk <a href="https://www.coindesk.com/business/2023/06/15/blackrock-close-to-filing-bitcoin-etf-source/">report</a> last year detailing how close the world&#8217;s largest asset manager, BlackRock, was to filing for a spot bitcoin ETF caused a similar stir at the tail end of the last bear market. 



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16353201/embed#?secret=iCw4CFvNYc" data-secret="iCw4CFvNYc" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Good news is good, bad news is bad</figcaption></figure>



Bitcoin only rose up to 3% in the day after the news broke but had surged up to 23% in the following week, although much of that could be attributed to BlackRock’s actual filing one day after the CoinDesk article.



The analyzed negative news articles were similarly correlated with declines in the price of bitcoin.&nbsp;



BTC’s price fell nearly 11% in the 24 hours following a <a href="https://www.theblock.co/post/47922/binances-shanghai-office-shut-down-following-police-raid-sources-say">report</a> from The Block indicating that Binance’s Shanghai office was shut down after a visit by local authorities in 2019 (for which former Binance CEO Changpeng Zhao <a href="https://fortune.com/crypto/2019/11/27/crypto-needs-journalists-more-than-it-wants-to-admit/">threatened</a> to sue the outlet).



Bitcoin fell about the same after China <a href="https://finance.caixin.com/2017-09-08/101142797.html">banned</a> crypto exchanges in 2017 and again in apparent response to a Business Insider <a href="https://www.businessinsider.com/goldman-sachs-retreats-from-launching-crypto-trading-desk-2018-9?international=true&amp;r=US&amp;IR=T">report</a> the following year revealing that Goldman Sachs had shelved plans to open a bitcoin trading desk.&nbsp;



Goldman Sachs would <a href="https://www.coindesk.com/markets/2021/03/01/goldman-sachs-relaunching-crypto-trading-desk-after-3-year-pause/">reopen</a> the desk three years later.



<h2 class="wp-block-heading">The fake news</h2>



Crypto is at times plagued by phony headlines and rumors. Sadly, they also seem to wield power over prices.



The positive fake news stories analyzed were correlated with higher prices. Bitcoin rallied up to 9% in the week after a podcast interviewee claimed in August 2021 that oil giant Saudi Aramco would soon be mining bitcoin through flaring. Saudi Aramco quickly <a href="https://cointelegraph.com/news/saudi-aramco-dismisses-false-and-inaccurate-rumors-on-bitcoin-mining">denied</a> the story.



A <a href="https://www.cityam.com/amazon-plans-to-accept-bitcoin-payments-while-institutional-investors-show-interest/">report</a> from London outlet CityAM a week earlier suggested Jeff Bezos had directed Amazon execs to adopt bitcoin and even launch their own token.&nbsp;



Bitcoin jumped up to 15% in the day after that post and Amazon <a href="https://www.zdnet.com/article/amazon-denies-plans-to-accept-bitcoin-cryptocurrency-as-a-payment-option/">rejected</a> the report shortly after, leading bitcoin to temporarily give up those gains.&nbsp;



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16352484/embed#?secret=9m4F4xptm7" data-secret="9m4F4xptm7" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Good fake news is also good. Bad fake news can be really bad.</figcaption></figure>



But again, both fake news items dropped during the heat of the 2021 bull market. Any relationship between those headlines and bitcoin’s price was short-lived.



Last year, though, at the tail end of crypto winter in October, Cointelegraph tweeted an unfounded claim pointing to SEC approval of BlackRock’s bitcoin ETF.&nbsp;



Bitcoin immediately jumped up to 8% but quickly retraced once onlookers figured out the tweet was incorrect. Markets surprisingly held onto most of the rally, and then some, despite the awkward scenario for which Cointelegraph <a href="https://cointelegraph.com/news/clarification-sharing-false-spot-bitcoin-etf-news">apologized</a> later that day.



Out of the dozen or so headlines studied, perhaps the most impactful of all was a 2017 rumor borne of a 4chan post asserting that Ethereum co-founder Vitalik Buterin had <a href="https://qz.com/1014559/vitalik-buterin-dead-a-hoax-on-4chan-crashed-ethereums-price">died</a> in a car crash in British Columbia. This supposedly led to project insiders dumping their ETH.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16354419/embed#?secret=KqBsRnkp72" data-secret="KqBsRnkp72" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Zooming out to one month after still shows some correlation but in most cases any relationship would likely diminish.</figcaption></figure>



Ether collapsed up to 16% in the six hours after the car crash rumor first broke, and up to 21% in the following week.&nbsp;



Buterin eventually proved he was still alive by <a href="https://twitter.com/VitalikButerin/status/879127496024772610?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E879127496024772610%7Ctwgr%5E34c4b5d6a9e6dcad6ded5b7f18940d18b186f4d3%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fcointelegraph.com%2Fnews%2Fproof-of-vitalik-ethereums-buterin-immutably-counters-death-rumors">posting</a> a picture of himself holding up the hash of a recent Ethereum block — a novel blockchain use-case at the time.&nbsp;



These charts reinforce how critical it is to stay wise to current events in the crypto space, especially for those interested in taking short-term positions in crypto.&nbsp;



Although over a longer period, individual stories seem to have less effect. So, it seems you can either ignore the noise and hold long-term or focus on the never-ending hum of news feeds for quick trades. The latter is surely far more stressful.



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bitcoin etf

Bitcoin ETF tweets and Vitalik’s car crash: How news real and fake moves crypto prices

Katherine Ross

A Matrixport report claiming that the US Securities and Exchange Commission will “reject” spot bitcoin ETFs shocked the crypto world on Wednesday, preceding an 8% drop in the price of bitcoin.



“From a political perspective, there is no reason to approve a bitcoin spot ETF that would legitimize bitcoin as an alternative store of value,” the report claimed. Bitcoin has since rebounded slightly to sit 5% down over the past day, now at $42,500.



Bloomberg Intelligence analyst Eric Balchunas told Blockworks that, without any sourcing, this report does not line up with what Bloomberg Intelligence has been reporting.&nbsp;



“I’m not saying it’s impossible,” he said. “But it would overturn a lot.”



However, if there’s sourcing backing up the report, then it’s “a whole different ballgame.”



Read more: <a href="https://blockworks.co/news/bitcoin-falls-on-anti-etf-news">Bitcoin falls 8% on anti-ETF news, analysts remain confident</a>



Matrixport didn’t immediately return requests for comment on the sourcing of the report. However, in a post on X, head of research Markus Thielen <a href="https://twitter.com/thielen10x/status/1742562367597416732">wrote</a>, “My report is not based on issuer, nor on SEC insider comments. Obviously this is massively out of consensus.”



“And yes, after being the biggest bull all year…I turned bearish today but the arguments were ready.”



In his own post on X, Matrixport co-founder Jihan Wu said, “As intended, this recent report was prepared for Matrixport&#8217;s clients. However, its wide spread by the media was not planned by Matrixport and is beyond our control.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Matrixport&#39;s analysts operate independently, expressing their opinions without any influence or interference from management. They are employed for their superior analytical skills compared to mine and other management team. I have only briefly glanced at the title of the report,…&mdash; Jihan Wu (@JihanWu) <a href="https://twitter.com/JihanWu/status/1742577001633026365?ref_src=twsrc%5Etfw">January 3, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The <a href="https://blockworks.co/tag/matrixport">Matrixport</a> report claims that the current leadership panel that would vote on a spot bitcoin ETF approval is “dominated by Democrats.”



“SEC Chair <a href="https://blockworks.co/tag/gary-gensler">Gensler</a> is not embracing crypto in the US, and it might even be a very long shot to expect that he would vote to approve Bitcoin Spot <a href="https://blockworks.co/tag/etfs">ETFs</a>,” head of research Markus Thielen wrote. “An ETF would certainly enable crypto overall to take off, and based on Gensler’s comments in December 2023, he still sees this industry in need of more stringent compliance.”



Read more: <a href="https://blockworks.co/news/planned-bitcoin-etf-updates">Fees, seeds and APs: What we know — and don’t know — about the planned bitcoin ETFs</a>



The call, which comes ahead of the window of opportunity predicted by both Balchunas and fellow Bloomberg Intelligence analyst James Seyffart, would have made more sense in the fall, Balchunas added.



<h2 class="wp-block-heading">Cash creates a must for Bitcoin ETFs</h2>



The analysts believe there’s a 90% chance that the SEC approves some of the spot bitcoin ETFs in the days leading up to Jan. 10, which is Ark’s deadline. <a href="https://blockworks.co/news/spot-bitcoin-etf-timeline">Ark initially filed for its own bitcoin spot ETF in 2021</a>, but was rejected. It refiled late last year.&nbsp;



“Is there some remote possibility that upper, upper echelons of government step in and pull the plug on [the spot bitcoin ETFs]? I guess. But it would overturn a lot. It would…overturn a lot of reporting, a lot of effort, a lot of work and a lot of signaling from the staff.”



Putting aside the amendments that the potential issuers have filed in recent weeks, “the big deal here is the Grayscale court ruling,” Balchunas said. Pairing that with the work that the <a href="https://blockworks.co/tag/sec">SEC</a> and the firms have put into the proposals makes the likelihood of rejection small in his opinion.&nbsp;



Back in August, a panel of judges <a href="https://blockworks.co/news/judges-grayscale-sec-ruling">handed Grayscale a court win</a> over its application to convert Graycale Bitcoin Trust (GBTC) to an ETF. While the judges only ordered the SEC to re-examine the application, the <a href="https://blockworks.co/news/sec-grayscale-spot-bitcoin-etf">SEC notably didn’t file an appeal to the ruling</a>.



Last week, Balchunas said that the “<a href="https://blockworks.co/news/analysts-weigh-potential-bitcoin-etf-approval">SEC is ready to approve spot bitcoin ETFs</a> but only if they have clear language around cash-only creations and have a signed agreement with an authorized participant.”



<a href="https://blockworks.co/news/valkyrie-blackrock-authorized-participants">BlackRock was the first of a handful</a> of proposals on Friday to file amendments to their S-1s listing authorized participants.



“While we have seen <a href="https://blockworks.co/news/blackrock-etf-team-meetings-sec">frequent meetings between the ETF applicants and staff from the SEC</a>, which resulted in the applicants refiling their applications, we believe all applications fall short of a critical requirement that must be met before the SEC approves. This might be fulfilled by Q2 2024, but we expect the SEC to reject all proposals in January,” the Matrixport report said.



However, <a href="https://blockworks.co/tag/eric-balchunas">Balchunas</a> said that in a scenario where the SEC says that there’s still one issue holding up approval, then he would “call that more of a delay.”



“There was a scenario where, if Ark were to withdraw at the SEC’s request, then the next deadline is March,” he said. However, Balchunas pegs this delay situation “a long shot.”



Ark Invest CEO Cathie Wood said that the “probabilities” of an approval from the SEC “have gone up,” <a href="https://blockworks.co/news/ark-invest-exits-gbtc">though she also cautioned</a> that “this is the SEC and we never know what might happen along the way.”



Updated Jan. 3, 2023 at 11:29 am ET: Added comments from Markus Thielen and Jihan Wu.



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Eric Balchunas

SEC delaying spot bitcoin ETFs ‘not impossible,’ but unlikely: Balchunas

Shalini Nagarajan

Standard Chartered expects the profitability of bitcoin miners will play a crucial role in driving the price of bitcoin (<a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">BTC</a>) to $50,000 by the end of this year, and to $100,000 by the end of 2024.



In a Monday note, Geoffrey Kendrick, StanChart’s head of FX and digital assets research, highlighted the role played by miners in determining the overall supply of newly mined bitcoin.



This reduction in selling leads to a decrease in the overall supply of bitcoin, which ultimately drives up the price.



StanChart’s prediction aligns with an <a href="https://www.reuters.com/markets/us/bitcoin-could-hit-100000-by-end-2024-standard-chartered-says-2023-04-24/" target="_blank" rel="noreferrer noopener">earlier forecast</a> in April<a href="https://www.reuters.com/markets/us/bitcoin-could-hit-100000-by-end-2024-standard-chartered-says-2023-04-24/" target="_blank" rel="noreferrer noopener">,</a> when Kendrick said several factors would propel bitcoin toward $100,000 by the end of next year. 



However, this time he emphasized the significance of miner profitability as the key contributing factor, considering it to be more impactful than earlier believed.



<h2 class="wp-block-heading">Q2 showed drop in miner sales, boosting prices</h2>



StanChart noted that during the first quarter of 2023, the 12 largest listed miners, representing 20% of global bitcoin mining, sold 106% of the bitcoin they mined.&nbsp;



This selling percentage appears to have slightly decreased to below 100% in the second quarter, reducing the supply and contributing to higher prices.



By adjusting their selling strategy, miners have the potential to benefit from the anticipated price increase in bitcoin.



StanChart expects bitcoin to rise to about $50,000 by the end of 2023 as the share of newly mined bitcoin sold is projected to decrease to around 20% to 30%.



This adjustment translates to miners reducing the number of bitcoin they sell per day from the current 900 to between 180 and 270.



<h2 class="wp-block-heading">Increased cash profits set to drive decreased selling</h2>



The bank highlighted that after speaking with bitcoin miners directly, it became evident that miners have three sources of cash: selling bitcoin, selling equity or borrowing.&nbsp;



Miners indicated that selling equity was unlikely due to low equity prices, and borrowing money was unfavorable due to high interest rates.&nbsp;



Consequently, selling bitcoin remains the most feasible option for miners to raise cash in the current cycle.



However, with higher bitcoin prices and increased cash profits, selling is expected to decrease significantly over time, supporting further price increases.



“We reiterate our end-2024 BTC price target of around USD 100,000, with potential upside from reduced miner selling,” Kendrick said.



<h2 class="wp-block-heading">Newcomers shine in cost efficiency</h2>



The bank evaluated miner profitability based on three factors: the direct cash cost of mining one Bitcoin (mostly electricity costs), the total cash costs per Bitcoin mined and whether mined bitcoins are sold or held.



They found that cash costs varied among companies, with Cipher Mining and TeraWulf as relative newcomers having the lowest costs.&nbsp;



On the measure of all-cash costs, Cipher Mining performed well, while larger-scale operations like Riot and Core Scientific also demonstrated favorable results.



<h2 class="wp-block-heading">Goldman Sachs earlier predicted a $100,000 target for bitcoin</h2>



Various analysts have weighed in on bitcoin&#8217;s potential trajectory. At the start of last year, Goldman Sachs said bitcoin could <a href="https://www.barrons.com/articles/bitcoin-could-hit-100-000-if-investors-treat-it-like-gold-goldman-sachs-says-51641407311" target="_blank" rel="noreferrer noopener">hit $100,000</a> in the next five years if investors treat it like gold.



More recently, Matrixport’s head of research <a href="https://www.matrixport.com/institutions/research/matrix-on-target/531" target="_blank" rel="noreferrer noopener">predicted</a> the cryptoasset would hit $125,000 by the end of next year.



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Bitcoin mining

Miner profitability will push bitcoin to $50K this year: StanChart

<div id="highlights-block_63185147d614a" class="highlights">
 <ul>
 <li>Matrixport is a British Virgin Islands registered cryptoasset financial services provider</li>
 <li>Three Arrows Capital owed $3.5 billion to 27 crypto companies at the time of its bankruptcy</li>
 </ul>
 
</div>



Cryptocurrency hedge fund <a href="https://cms.blockworks.co/tag/3ac/" target="_blank" rel="noreferrer noopener">Three Arrows Capital</a> (3AC) declared <a href="https://cms.blockworks.co/3ac-files-for-bankruptcy-as-co-founders-location-unknown/" target="_blank" rel="noreferrer noopener">bankruptcy</a> two months ago, so it was eyebrow-raising when on-chain analytics firms reported Tuesday it was still executing relatively hefty transactions. Those initial reports turn out to be wrong.



On-chain data showed a <a href="https://etherscan.io/address/0x23237b849d0e6f392573ee6ae9e3b1256f058143" target="_blank" rel="noreferrer noopener">wallet</a> identified by on-chain analytics firm Nansen as belonging to 3AC withdrew a total of $45 million from deposits previously staked on Curve Finance and Convex Finance.&nbsp;



More specifically, the wallet removed about 20,945 staked ether ($33.3 million) from Curve. From Convex, it retrieved 2,421 wrapped ether ($4 million), 202.7 wrapped bitcoin ($4 million) and 4 million USDT, according to data from security firm PeckShield.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/PeckShieldAlert?src=hash&amp;ref_src=twsrc%5Etfw">#PeckShieldAlert</a> The address labeled as 3AC withdrew ~20,945 <a href="https://twitter.com/search?q=%24stETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$stETH</a> (~$33.3M) from Curve Finance and ~2,421 <a href="https://twitter.com/search?q=%24WETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$WETH</a> (~$4M), ~ 202.7 <a href="https://twitter.com/search?q=%24WBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$WBTC</a> (~$4M) and ~4M <a href="https://twitter.com/search?q=%24USDT&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$USDT</a> from Convex Finance. <a href="https://t.co/8R3J0IFtP1">https://t.co/8R3J0IFtP1</a> <a href="https://t.co/WSZI1iR05X">pic.twitter.com/WSZI1iR05X</a>&mdash; PeckShieldAlert (@PeckShieldAlert) <a href="https://twitter.com/PeckShieldAlert/status/1567179464370712577?ref_src=twsrc%5Etfw">September 6, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The labeling of 3AC’s wallet by Nansen did not make it a certainty. In response to skepticism over the firm’s labelling in the past, Nansen CEO Alex Svanevik remarked in June, “we can (but rarely) make mistakes — no-one is perfect.”



Blockworks contacted Nansen to gauge the reliability of the labeling in this case and learned this was one of those times. According to a Nansen spokesperson:



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;This wallet was labelled Three Arrows Capital (3AC) due to it receiving large amounts of crypto from another known 3AC wallet. After investigating further, we’ve confirmed it was a 3AC counterparty managing this wallet: Matrixport. We’ve updated the label to reflect this.&#8221;</blockquote>



Matrixport is a financial services platform for cryptoassets that includes trading, borrowing and lending, and staking products.



The purpose behind Tuesday’s withdrawals isn’t clear, but <a href="https://www.matrixport.com/about" target="_blank" rel="noreferrer noopener">the company</a> did confirm the wallet is theirs.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;The Matrixport wallet activity is part of our routine operations and not related to 3AC,&#8221; Ross Gan, head of public relations told Blockworks.</blockquote>



One reason behind the move may be that stETH holders will be unable to redeem their tokens for ether until <a href="https://twitter.com/lidofinance/status/1536756940419784704?lang=en" target="_blank" rel="noreferrer noopener">at least six months</a> after the Merge, which is slated for <a href="https://cms.blockworks.co/ethereum-merge-countdown-at-t-20-days/" target="_blank" rel="noreferrer noopener">Sept. 15</a>.



A Twitter speculator <a href="https://twitter.com/jadid/status/1567163416795844616" target="_blank" rel="noreferrer noopener">suggested</a> that the withdrawal move shows big wallet holders plan to liquidate their ether in the period of heightened focus on Ethereum around the Merge. Crypto markets are broadly down, but ether has shown strength relative to bitcoin, remaining in a daily uptrend since Aug. 29.



3AC owed 27 crypto companies <a href="https://cms.blockworks.co/3ac-co-founders-used-funds-assets-for-50m-yacht-bungalows/" target="_blank" rel="noreferrer noopener">$3.5 billion</a> at the time of its bankruptcy, with its biggest creditor being crypto brokerage Genesis. Founders Su Zhu and Kyle Davies have mostly laid low in the months following their fund’s collapse, allegedly refusing to cooperate with the <a href="https://cms.blockworks.co/three-arrows-capital-ordered-into-liquidation-by-bvi-court-report/" target="_blank" rel="noreferrer noopener">court-appointed liquidator</a> Teneo that’s overseeing its liquidation.&nbsp;



Blockworks had reached out to restructuring firm Teneo, who declined to comment on the alleged withdrawals, saying that the restructuring firm is focused on advancing the liquidation process “in order to maximize asset recoveries on behalf of all creditors.”



“During this time, it would be inappropriate to comment on speculation surrounding transactions that may or may not relate to Three Arrows or the investigations that are underway,” a spokesperson told Blockworks.



3AC didn’t return a request for comment by press time.



This story was updated on Sept. 7 at 9:15 am ET with new information about the funds&#8217; origin, and on Sept. 8 at 3:12 am ET with comment from Matrixport.



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Withdrawal of $45M from Curve Finance, Convex, Was Not From 3AC, Nansen Says

Sebastian Sinclair

<div id="highlights-block_62b3e405c391e" class="highlights">
 <ul>
 <li>An approval in principle typically lays the groundwork for licensure in the island city-state</li>
 <li>The exchange had been operating under an exemption in the Payment Services Act</li>
 </ul>
 
</div>



Major exchange platform Crypto.com said it has received approval in principle from Singapore&#8217;s main financial regulator to offer a range of payment services under the island city-state&#8217;s Payment Services Act.



The approval for a Major Payment Institution License, issued by the Monetary Authority of&nbsp;Singapore (MAS), is the final step in the exchange&#8217;s regulatory process, according to a statement on Wednesday. 



Typically, approval in principle refers to a process in which financial institutions are provisionally selected to fulfill certain obligations within a predetermined time frame.



Crypto.com, headquartered in the city-state, had been operating under an exemption while awaiting approval, a spokesperson confirmed to Blockworks. Crypto.com declined to comment on the length of the process.



Others, like the digital asset exchange Matrixport whose offices are based in Hong Kong and Singapore, have chartered similar paths, Matrixport co-founder Cynthia Wu confirmed during Blockworks&#8217; Permissionless event in May.



Under Singaporean law, crypto firms intending to offer services, including digital payment tokens, must register and apply for licensure under the Payment Services Act. Singapore offers well-rounded legislation to crypto according to <a href="https://cms.blockworks.co/gibraltar-minister-balanced-regulation-key-to-restoring-trust-in-crypto/" target="_blank" rel="noreferrer noopener">regulators</a> worldwide, and its approach is often emulated.



In general, a license issued by MAS enables an operator to provide payment services without being subject to <a href="https://www.mas.gov.sg/regulation/payments/major-payment-institution-licence" target="_blank" rel="noreferrer noopener">specific thresholds,</a> including limits on monthly transactions.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The Monetary Authority of Singapore sets a high regulatory bar that cultivates innovation while&nbsp;protecting consumers,&#8221; Crypto.com CEO Kris Marszalek said in the statement. &#8220;We look forward to continuing to collaborate with the MAS and deepening our&nbsp;roots in Singapore — a flourishing market for fintech innovation, renowned for its well-regulated business environment.&#8221;</blockquote>



Crypto.com, which has been busy expanding its services to countries abroad, announced earlier this month it obtained provisional approval for its <a href="https://cms.blockworks.co/crypto-com-secures-provisional-approval-to-open-crypto-exchange-in-dubai/" target="_blank" rel="noreferrer noopener">Virtual Asset MVP License</a> from the Dubai Virtual Assets Regulatory Authority with plans to establish its exchange platform there.



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Crypto.com

Crypto.com Receives Approval in Principle To Offer Services in Singapore

Michael Bodley

<div id="highlights-block_62ad3a116bb7a" class="highlights">
 <ul>
 <li>The splashy appointment comes as a number of crypto companies are cutting staff in an effort to maintain their margins in a turbulent market</li>
 <li>One source dubbed his departure a “big blow” for Coinbase</li>
 </ul>
 
</div>



Matrixport has landed a prized former Coinbase executive to lead the cryptocurrency investment platform’s US business, according to two sources familiar with the matter.&nbsp;



Anthony DeMartino, a Wall Street <a href="https://www.linkedin.com/in/anthony-demartino-8086a81/" target="_blank" rel="noreferrer noopener">veteran</a>, was most recently head of risk strategies, institutional decentralized finance and derivatives trading at Coinbase. The lengthy title, one source who has done business with the exchange said, indicates DeMartino’s departure deals a “big blow.”



Matrixport representatives confirmed the hire. A Coinbase spokesperson did not respond to multiple requests for comment. DeMartino declined to comment.



Cynthia Wu, Matrixport’s chief operating officer, told Blockworks that company executives are convinced DeMartino’s “experience, passion and style fits Matrixport very well.&#8221;



Having previously spent time at traditional finance institutions — including managing director-level positions overseeing aspects of emerging-market trading for Barclays and HSBC — DeMartino is known by industry participants to keep strict tabs on a deep rolodex of Wall Street contacts.&nbsp;



That, sources said, was especially important to Coinbase’s yearslong push to develop something similar to a traditional prime brokerage — including lending, trading and clearing, as well as capital introduction. Though exchanges and other crypto financial firms have worked to develop such an all-in-one, plug-and-play product, most traders say it’s still a pipe dream, leading to a hodgepodge of different service providers based in different time zones investing in different corners of crypto markets.



Coinbase recently <a href="https://cms.blockworks.co/coinbase-cut-workforce-ceo-wary-of-potential-recession/" target="_blank" rel="noreferrer noopener">announced</a> steep layoffs in response to a market downturn that has eroded once-lucrative trading fees. Although exchanges have tried for years to diversify their revenue streams to reduce reliance on such fees, results have been mixed. 



Matrixport, meanwhile, appears to still be on the hiring trail — an outlier in a crypto landscape where most layoffs are measured as better or worse than expected, but expected, nonetheless.

Anthony Demartino

Crypto Platform Matrixport Hires Big-name Coinbase Exec To Build US Business

Casey Wagner

<div id="highlights-block_61f185413ee39" class="highlights">
 <ul>
 <li>Matrixport is leaning into institutional products with the launch of the “DeFi Connector” feature </li>
 <li>Cactus Custody, Matrixport’s institutional custodian service, is integrating with MetaMask Institutional</li>
 </ul>
 
</div>



The institutional arm of decentralized finance wallet MetaMask now has its first built-in custodial solution that supports multi-chain compatibility.



Crypto financial services company Matrixport’s institutional custodian, Cactus Custody, supports a slew of Ethereum-based chains via its “Decentralized Finance Connector.”&nbsp;



Clients of MetaMask Institutional (MMI) can now access the same multi-chain connectivity across all Ethereum Virtual Machine (EVM) chains that MetaMask provides retail traders. Compatible chains include Ethereum, Binance Smart Chain, Polygon and Avalanche.&nbsp;



The offering delivers “the highest level of security and usability” to institutional investors “seeking to tap into the vast opportunities within DeFi,” according to Cynthia Wu, head of sales and business development at Matrixport.



“We are fully committed towards enabling multi-chain capabilities that provide even broader access to DeFi, whilst adhering to world-class standards of security and compliance,” Wu said in a statement.&nbsp;



MMI, MetaMask’s institutional-grade service, offers additional security and compliance services institutional clients require, MetaMask <a href="https://metamask.io/institutions/faq/" target="_blank" rel="noreferrer noopener">said</a>. 



“EVM chain support is one of the most important institutional needs,” said Johann Bornman, product lead for MMI, in a statement. “With our latest custodial account multichain feature, Cactus Custody not only supports multiple EVM chains, but also allows institutions to freely bridge digital assets across these networks.”



According to DeFi research platform <a href="https://www.institutionalassetmanager.co.uk/2022/01/25/311516/research-reveals-institutional-investors-relying-web-browser-wallets-defi" target="_blank" rel="noreferrer noopener">VALK</a>, 43% of institutional investors engaging with DeFi currently use a custodian service. Institutional infrastructure for DeFi is lagging, researchers said. 



“Investors questioned in the UK, US, France, Germany, Hong Kong, Singapore, Australia, and Brazil would welcome the launch of an institutional aggregator for DeFi as long as it met regulatory and security requirements,” VALK said. “Around a fifth (22%) would be very likely to use it while 72% say they would be quite likely to use it.”&nbsp;



Due to varying regulatory requirements, Matrixport is currently unavailable in over 40 countries, including the United States and Canada.&nbsp;



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crypto exchanges

Matrixport Brings Institutional Crypto Custody to MetaMask Wallet

Liz Coyne

In this video, Blockworks’ “Forward Guidance” podcast host Jack Farley sat down with Omid Zadeh, head of business development, EMEA, at Matrixport, at Blockworks&#8217; <a href="https://cms.blockworks.co/events/das-london/" target="_blank" rel="noreferrer noopener">Digital Asset Summit in London</a> to talk about the increasing demand for borrowing and lending in digital assets, and the evolving spot and derivatives markets.



<meta charset="utf-8">Zadeh leads business development for Matrixport across Europe. He was previously sales director at the London Stock Exchange Group within the capital markets trading division covering hedge funds and proprietary trading houses. Prior to that, he was vice president within ICAP&#8217;s electronic broking division, covering banks and the buy-side.



Zadeh holds a BSc in Economics and Finance from the University of London and an MBA from Cass Business School.



Watch the full interview below.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="The Evolution of the Spot and Derivatives Markets | Omid Zadeh, Matrixport" width="1024" height="576" src="https://www.youtube.com/embed/sh6bt0W1s10?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator"/>

Borrowing

Matrixport: the Evolution of the Spot and Derivatives Markets

Morgan Chittum

<div id="highlights-block_615b161b23f7f" class="highlights">
 <ul>
 <li>The Matrixport exec has seen many clients who mine bitcoin move to North America following regulatory clampdowns</li>
 <li>However, there has been an influx of larger institutions getting involved in the space this year, according to Wu </li>
 </ul>
 
</div>



Cynthia Wu, founding partner at Matrixport, joined Blockworks for an interview at the Digital Asset Summit (DAS) in New York last month after she spoke on the “Institutional Lending and Yield Generation in Digital Assets” panel.&nbsp;



Wu, who previously served as investment director at Bitmain, shared insights from the conference and talked about topics including:



<ul class="wp-block-list"><li>Industry-wide challenges to accelerating mainstream adoption in crypto</li><li>Regulatory crackdown on bitcoin in China</li><li>Differences in user demands on Matrixport&#8217;s platform since its inception</li><li>Crypto as an “emerging asset class”</li></ul>



Watch the full interview below and all of the panel videos from DAS <a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/#videoslider0" target="_blank" rel="noreferrer noopener">here</a>. 



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="DAS New York 2021: Matrixport’s Cynthia Wu on China&#039;s Crackdown on Bitcoin Mining and More" width="1024" height="576" src="https://www.youtube.com/embed/ZE0dZn-u-f8?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a> in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



<hr class="wp-block-separator"/>

Bitcoin

Matrixport’s Cynthia Wu on China’s Crackdown on Bitcoin Mining and More

Jacquelyn Melinek

<div id="highlights-block_610818d0d41c5" class="highlights">
 <ul>
 <li>As of March 2021, the company had over $10 billion in assets under management and custody and over $5 billion in average monthly trading volumes across its products, it said.</li>
 <li>The number of crypto-deals in the second quarter of this year has increased over 64% from the year-ago quarter, with blockchain funding crossing the $4 billion mark during this quarter for the first time ever, according to data from CB Insights. </li>
 </ul>
 
</div>



Singapore-based crypto financial service platform Matrixport announced it closed its $100 million Series C funding round with a valuation over $1 billion, the company said in a statement.&nbsp;



The two-year-old <a href="https://cms.blockworks.co/empowering-new-crypto-users-with-innovative-financial-products/" target="_blank" rel="noreferrer noopener">company</a> was launched in 2019 by Bitmain co-founders Jihan Wu and Ge Yuesheng and has raised $129 million to date. Its products include institutional custody, trading, lending, structured products and asset management to institutional investors and retail customers.



As of March 2021, the company had over $10 billion in assets under management and custody and over $5 billion in average monthly trading volumes across its products, it said.&nbsp;



The company reached unicorn status with its latest funding round, adding it to a list of <a href="https://www.crunchbase.com/lists/crunchbase-private-unicorn-company-list/f406c855-fff9-419b-9b44-324e1bfe3081/organization.companies" target="_blank" rel="noreferrer noopener">over 900 companies</a> with valuations of $1 billion or greater, according to data on the Crunchbase Unicorn Board. In late July, the first non-fungible token (NFT) marketplace OpenSea also reached unicorn status after raising $100 million in a Series B funding round led by a16z, which brought its valuation to $1.5 billion, Blockworks previously <a href="https://cms.blockworks.co/a16z-leads-100m-round-for-nft-unicorn-opensea/" target="_blank" rel="noreferrer noopener">reported</a>. These two crypto-companies are some of the latest organizations to join the growing list of unicorns in the global marketplace.



“I always believe an open and permissionless blockchain ecosystem is the bedrock of a new financial network that will benefit a large part of the world’s population,” Wu said. “As a result, there will be hundreds of trillions of value created, stored and transferred on this new financial network,” he added.&nbsp;



This investment round was led by partners of DST Global, C Ventures and K3 Ventures. Other participants include Qiming Venture Partners, CE Innovation Capital, Tiger Global, Cachet Group, Palm Drive Capital, Foresight Ventures and A&amp;T Capital, along with earlier investors Lightspeed, Polychain, Dragonfly Capital, CMT Digital and IDG Capital.



The funding will be used to further invest in research and development to improve its product offerings and security for a better user experience, it said. The funds will also be used to support global expansion and secure licenses to operate in more jurisdictions to allow more users globally to use its platform. Although the company is based in Singapore, it currently has licenses in Hong Kong and Switzerland and serves institutions and retail investors in Asia and Europe.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="498" height="418" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg" alt="Blockchain funding" class="wp-image-6070" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=498 498w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=306 306w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=311 311w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/unnamed-7.jpg?w=80 80w" sizes="auto, (max-width: 498px) 100vw, 498px" /></figure>



In general, there has been a large influx of investments and deals being closed in the crypto space. The number of crypto-deals in the second quarter of this year has increased over 64% from the year-ago quarter, with blockchain funding crossing the $4 billion mark during this quarter for the first time ever, according to data from CB Insights.&nbsp;



“As blockchain based digital assets gain wider adoption and acceptance, new pathways are needed to capture yield, source liquidity and manage crypto assets as an emerging asset class,” said Adrian Cheng, an investor in the round and founder of C Ventures and CEO of New World Group.&nbsp;



In 2020, Bloomberg <a href="https://www.bnnbloomberg.ca/singapore-crypto-startup-seeks-to-triple-value-to-300-million-1.1399864" target="_blank" rel="noreferrer noopener">reported</a> that the company was seeking to raise $40 million in a funding round with a valuation of $300 million. In 2019, the startup took in around $8 million in revenue and expected to more than double that in 2020, according to a slide deck shared with investors and viewed by Bloomberg.

Matrixport Raises $100M and Hits Unicorn Status with $1B Valuation

Brian Nibley

<div id="highlights-block_60f605fe2ccf6" class="highlights">
 <ul>
 <li>Matrixport offers spot OTC trading, fixed income products, structured products, lending and borrowing and asset management services.</li>
 <li>The company boasts $10 billion in assets under management and custody, with $5 billion in average monthly trading volumes.</li>
 </ul>
 
</div>



Founded in February 2019 by Bitmain co-founders Jihan Wu and Ge Yuesheng, Matrixport is a one-stop shop for digital asset financial services. The company boasts $10 billion in assets under management and custody, with $5 billion in average monthly trading volumes. <a href="https://app.adjust.com/8pxuv5c?redirect=https%3A%2F%2Fwww.matrixport.com%2Fhome" target="_blank" rel="noreferrer noopener">Matrixport offers</a> spot OTC trading, fixed income products, structured products, lending and borrowing and asset management services.



<h3 class="wp-block-heading">The history of Matrixport</h3>



As the bitcoin mining industry grew, so too did the need for financial services in the sector. Miners needed downside protection, collateralized loans for working capital, and other means to manage their business. In a manner similar to farmers who use agricultural commodity futures to hedge their market risk, bitcoin miners needed services to help them manage the intricacies of running a mining farm.&nbsp;&nbsp;



“Back in 2018, the main financial platforms available in the industry were exchanges and wallets. We felt that exchanges cannot meet all customer needs,” says John Ge, CEO, <a href="https://app.adjust.com/8pxuv5c?redirect=https%3A%2F%2Fwww.matrixport.com%2Fhome" target="_blank" rel="noreferrer noopener">Matrixport</a>.



“Matrixport was established as we believe that everyone should have the opportunity to get more out of crypto beyond just buying, holding, or selling. This next-generation digital financial services platform plans to serve the next one billion crypto users, not just early adopters.”



<h3 class="wp-block-heading">“Ce-DeFi”</h3>



Creating an account on a decentralized exchange is rather simple. With no identification required, just sign up and you’re good to go.



But using the services, searching for yield, moving funds, and figuring out how to get the most out of all available DeFi protocols…that’s another story.



Matrixport has come up with an ingenious solution. They call it “Ce-DeFi,” or centralized <a href="https://cms.blockworks.co/the-investors-guide-to-defi/" target="_blank" rel="noreferrer noopener">DeFi</a>. This type of service is simply “a centralized way to earn yield, but the yields come from DeFi,” according to Ge.



Ce-DeFi services make it easy for the average user to get the most out of their crypto without having to navigate through a vast array of decentralized finance protocols.



As anyone who has tried yield farming might be aware of, trying to figure out where the maximum yields can be found is “very time consuming, or even impossible,” he noted.



Fortunately, those using Matrixport can eliminate much of the hassle. “You don’t need to deal with MetaMask, interact with various DeFi protocols, handle any operations…you just click and leave the rest to us…As a user, you’re delegating all these tasks…we call this DeFi intelligence because it’s an intelligent way to help users maximize their yield across many DeFi protocols.”



The service delivers all of the benefits of DeFi without the hassle.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg" alt="Matrixport financial services" class="wp-image-5673" width="840" height="472" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/matrixport-1024x576.jpeg?w=1200 1200w" sizes="auto, (max-width: 840px) 100vw, 840px" /></figure>



<h3 class="wp-block-heading">Innovation in crypto finance</h3>



One of the most innovative products offered by Matrixport, and perhaps by anyone in the industry, is the “Dual Currency” investment product. Launched in October 2019, this is the first structured product that provides an attractive yield to investors in this manner.&nbsp;&nbsp;



Here’s an example:



<ul class="wp-block-list"><li>Someone writes a covered call on bitcoin that expires in eight days. The strike price might be $40,000 per bitcoin vs. the current price of $35,000 per bitcoin.</li><li>If the price stays below $40,000 upon expiry, then the call writer would continue to hold their bitcoin and receive interest in bitcoin (much like they might collect a premium with traditional options).</li><li>If the price rises above $40,000 on or before expiry, then the call writer would have their bitcoin called away from them (they’d be obliged to sell) but would still receive interest, settled in USDC.</li></ul>



This kind of option is standard in the world of traditional finance. In the world of crypto finance, however, the ability to write a covered call in this automated manner is revolutionary.



Note that writing a covered call of any kind requires owning the underlying asset. And in the case of this Dual Currency product offered by Matrixport, the premium earned on the option will be paid in either BTC or USDC, depending on the outcome of the option.



<h3 class="wp-block-heading">What’s next?</h3>



Matrixport recently introduced its new “Lite” version interface on its App aimed at enhancing the customer experience for those who have recently embarked on their crypto investing journey. The launch reflects the company’s ongoing commitment to making crypto easy for everyone as part of its global roll-out.



According to Ge, “Digital assets have enjoyed an incredible growth to date but without easy-to-use tools, many would-be investors are left out of the action. Through customer-centric product design, we are lowering entry barriers to welcome the next billion users.”