Crypto’s got the blues

Good morning! Welcome to The Daily Moon. Doxxed on Discord. That’s what happened to over 4,000 users of Tokensoft. The crypto token launch platform published an excel sheet with users’ personal information. When confronted, it called them “bad actors”. Smh.

The markets stayed cautious. Bitcoin was at ~$16,800 while Ethereum moved to $1,260 levels. Nasdaq slid in early trade. Back home, Sensex and Nifty fell due to high volatility.

From Bad To Worse

It's red everywhere. FTX’s bankruptcy has rattled crypto. Bitcoin’s hit a five-month low. Ethereum’s Merge effect on the token price has vanished. Solana’s slide continues. Voyager and BlockFi are on sale, again.

What’s the latest?Nothing’s moved at FTX. The bankruptcy process will begin soon. Sam Bankman-Fried has kept up his cryptic tweets. FTT tokens have edged closer to $1.

The ripple effect led AAX to pause withdrawals. SBF-backed DeFi protocol Serum is the latest to be impacted. Here’s what happened:

1. SBF created Serum as the “trustless” protocol for DeFi.

2. FTX and Alameda may have cross-holdings in Serum.

3. Since FTX is hacked, there are fears of Serum also being affected.

4. Solana-based DeFi projects switched off from Serum.

Since Serum powers the DeFi infrastructure, developers have forked the protocol. To simplify, they’ve created a version that is independent of SBF. But this didn’t save Serum’s token, which crashed to ~$0.19.

Hunt for buyersNow that FTX is bankrupt, its past investees need new buyers. CrossTower has readied a revised offer for Voyager which restarted its sale. Payments company Curve has bid for BlockFi’s credit card customers. It’s far worse for bankrupt lender Celsius which has $1.3 million locked in FTX as well as $13 million in loans to Alameda.

But what about the hack?There is no clarity about the “hack” yet. FTX said it will probe who did it. Reports claim that $473 million worth crypto has been stolen already. SBF has not confirmed anything. The biggest question right now: “Where exactly is SBF?”

Bitcoin Miners Cash Out

High costs and low returns. Bitcoin miners have made a quiet exit because business is tough. Miners have sold more than they have in five years. BTC’s downward spiral has been a signal to selloff.

Pressure buildsA new indicator called Bitcoin Miner Sell Pressure captures the buy/sell sentiment among BTC miners. This data shows that miners are in a rush to sell because hardware costs are up and crypto prices have slid.

Let’s take an example. It takes 1,500 days to get payback on a $9,000 Bitmain S19 ASIC miner machine. This is only if the revenue or average hash price stays at ~ $0.06. If revenue falls, payback takes longer.

What’s next?Inflows to crypto exchanges have surged over the past seven days. This is a sign that miners are out to sell their BTCs. It’s FUD once again.

Lido Leads The ETH Bulls

Lido will pave the way for Ethereum’s revival. A proposal passed by the Lido (LDO) community may attract more stakers to Ethereum and its derivative token stETH.

What’s the proposal?On Sunday, this Lido proposal increased the allowable annualised percentage rate (APR) to 17.5% from 10%. It also led to Lido stETH (staked ETH) APR touching 10.2%. This means, you’ll get more rewards to stake ETH.

FYI APR is an estimate of rewards you will earn in crypto over a fixed period.

What’s the ETH connection?Lido Finance is one of the biggest Ethereum validators. And the number of ETH validators has grown almost 5% over the last month. The total revenue generated also grew over 34%. Ethereum’s transaction volumes also touched a five-month high of $11,970 on Monday.

But Lido DAO’s LDO token is stuck in a bear market. There is sell pressure because over 4 million LDO tokens have flown into exchanges.

Crypto Bill Is Back

The FTX collapse may nudge the US lawmakers to act. While we’ve seen crypto bills on the table, nothing turned into law. Now there is a concrete reason to move.

Why now?Politicians sound serious. At least this statement makes it evident. Two US Senators are ready to publish the final version of the Digital Commodities Consumer Protection Act 2022 (DCCPA). If it passes, the SEC won’t have the power to regulate crypto. Commodity Futures Trading Commission will take over.

How will things change?The Senators think that crypto “desperately” needs safeguards, which DCCPA will ensure. SBF and Alameda just proved it. We hope there's clarity soon.

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Who are we? This newsletter’s ambition is to educate (and to entertain). The world of money is changing everyday and we want to help you decode what’s happening in the world of crypto, public markets in the US and India.