Bitcoin's Weekend Dip Below $65K

The Breakdown First Five - Monday, March 18, 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. DOJ: 50 Years for SBF

Prosecutors have recommended that Sam Bankman-Fried be locked up for 40-50 years and pay $11B in restitution. They essentially said that he needs to be prevented from defrauding people until he’s past working age. Alongside the recommendation, the DOJ published a list of image rehabilitation from before his arrest. They bizarrely included a right-wing reboot, a confrontation with Matt Levine and spreading the word that “SBF died for our sins.”

4. Vanguard Doubles Down

Vanguard won’t be offering Bitcoin “unless the asset class changes” according to Tim Buckley. The outgoing CEO doubled down on his anti-Bitcoin stance, trotting out all of the time tested institutional FUD. It has no cash flows. Too volatile. I can’t model its value. It’s not a store of value. The take is unremarkable, but it’s amazing Buckley is still talking about this two months out. Let’s see whether Bitcoin changes for Vanguard or Bitcoin changes Vanguard.

3. “Peak Degeneracy”

Solana memecoins ran rampant over the weekend in what one trader called “peak degeneracy.” A successful launch attracted $500M in on-day onchain volume to its pair alone. This quickly snowballed into rare weekend exchange listings and a wildly unsafe presale narrative which launched a million rugs. The volume was even enough to cause infrastructure issues for Solana, banging right up against previously unknown transaction per second limits. 

2. Sour Record For ETF Flows

Last week’s ETF net inflows came in at a record $2.5B, but there was little to celebrate about the end of week slowdown. Friday repeated the previous day’s slow pace, gathering less than $200M in fresh capital. This is slightly lower than the long term average, but absolute levels seem far less important than growth which has completely stalled. Bitcoin might need to find a new narrative to head higher after months of singular attention on ETF flows.

1. Sunday Blues

Bitcoin suffered continuous drawdowns throughout the weekend, driving the price below $65,000. Although the move lacked a big liquidation spike, leveraged traders continued to buy each dip forcing $1.3B in long liquidations stretched out since Friday. Many suggested that the selloff began with a hedge fund blowing up a Microstrategy spread trade, which would be far more bullish than buyers simply running out of enthusiasm.