Bitcoin Dips Below $63K in Early Turmoil

The Breakdown First Five - Tuesday, March 19, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. SEC Sanctioned

A judge has ordered sanctions against the SEC for what he called a “gross abuse of power.” A scathing 40-page order was delivered in the Debt Box case, cataloging every step of the regulator’s “deliberate and intentional choice” to mislead the court. This is the strongest rebuke of the Gensler SEC we’ve seen to date and leaves no question that their “bad faith is inextricable from the abusive conduct”.

4. Fidelity Wants To Stake

Fidelity have added staking to their spot Ethereum ETF application. With a little two months to the May deadline and no movement at the SEC, experts suggest a denial is on the cards. Opinions varied on why Fidelity would add staking now. Some suggested it could hand an easy win for the SEC, giving them something to put up a visible fight on before approval. Others were more glib, thinking that Fidelity is crafting a list of demands for the inevitable lawsuit. 

3. Bitmex’s Wild Wicks

In a throwback to the bad old days, Bitmex recorded a wick down to $8,900 on their Tether/Bitcoin pair. Bitmex has pretty thin volumes these days but is still relevant for the inner workings of Bitcoin markets. It appears the issue was largely on the Tether side with a massive depeg triggered by 400 Bitcoin dumped onto the spot market over two hours. Bitmex says that derivatives markets were not affected and they are investigating the incident. Claim funds are safe. 

2. Flows Turn Negative

Monday featured the first day of negative ETF flows in over two weeks. Fidelity massively underperformed their short term average, registering just $5.9M in inflows rather than hundreds of millions. Grayscale shed $642.5M in assets, its largest day of outflows yet. Blackrock put up a strong fight but couldn’t save the day, ending with $451.5M in inflows. All told there was $154.3M, just a few million dollars shy of the worst day for ETF flows. 

1. Early Morning Puke

The red days continued this morning with a massive drawdown below $63,000. A negative 7% day before you’ve even had your coffee. $134M worth of Bitcoin longs were incinerated in perps markets, not the worst day of liquidations in recent weeks but certainly not mild either. Explanations range from icy cold ETF flows to hesitation ahead of Wednesday’s Fed meeting but for now risk is off and the dip keeps dipping.