CME BTC Futures Signal Worst of FTX-Induced Panic May Be Over

January 11, 2023

The latest moves in crypto markets, in context

By Jamie Crawley, CoinDesk reporter

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Welcome to Wednesday! Here's what's happening in crypto today:

Cathie Wood has made her first investment in Coinbase of the year amidst a rally for the crypto exchange's stock.
WazirX's proof-of-reserves report shows over 90% of its users' assets are in Binance wallets.
Binance.US's bid to purchase the assets of bankrupt crypto lender Voyager gets a boost.

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BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Treasury Yield 10 Years: 3.62% +0.1

Top Stories

Cathie Wood has made her first investment in Coinbase of the year amidst a rally for the crypto exchange's stock. Wood's investment firm ARK added 33,726 COIN shares to its Innovation ETF, worth around $1.45 million. The buy follows much larger ones in December when ARK added more than 450,000 shares across two purchases. COIN lost around 86% of its value in 2022, but it is now showing signs of recovery, up 20% on the week and 7.3% on the month. The Nasdaq-listed Coinbase announced yesterday it was cutting 950 jobs – around 20% of its workforce – in a bid to bring down its operating expenses by 25% by the end of March. The move was welcomed by Wall Street analysts, who viewed it as a sign the firm was showing fiscal discipline.

Leon Neal/Getty Images

According to the Indian crypto exchange WazirX's proof-of-reserves report, over 90% of its users' assets are in Binance wallets. The report showed that $259 million of the exchange's $285 million in assets were held in Binance wallets, with a further $26.5 million in other exchanges. Therefore, the validity of WazirX funds depends on Binance honoring liquidations, highlighting the dangers of the frosty relations between the two firms. Binance announced that it had agreed to acquire WazirX in 2019, but in August last year, WazirX co-founder Nischal Shetty had a Twitter spat with Binance CEO Changpeng "CZ" Zhao over who controls the exchange. Shetty has previously said the two firms have been in talks to clear up the ownership issue.

Binance.US's bid to purchase the assets of bankrupt crypto lender Voyager got a boost yesterday after a judge gave his approval to disclosure statements explaining the proposed deal. Another confirmation hearing will follow in March and the deal will also require approval from Voyager's creditors. Voyager's legal representatives said they had "resolved for the purposes of today" objections raised by the likes of the SEC and state regulators, demonstrating that Binance.US has the dry powder to pay debtors up to $35 million in cash.

Market Insight: CME Bitcoin Futures Draw Premium

Arcane Research/TradingView

Bitcoin futures listed on the Chicago Mercantile Exchange (CME) are drawing a premium on the BTC spot market price for the first time since FTX collapsed in November, suggesting institutional activity is no longer concentrated on the short side.

The three-month CME futures, often regarded as a proxy for institutional activity, traded at an annualized premium of 0.2%, while their Binance counterparts drew a premium of 2.4%.

However, contracts for future months continue to trade at prices lower than near-month contracts, pointing toward a cautious outlook for bitcoin in the medium term among traders.

"While CME's basis has recovered, the term structure remains in backwardation as institutional investors maintain a cautious view on bitcoin and less liquid further dated expiry dates," Arcane Research's Bendik Schei and Vetle Lunde wrote in a note to clients.

Read the full story by Omkar Godbole

Chart of the Day

Bloomberg

The chart shows U.S. financial conditions have eased for the first time since April, contradicting the Federal Reserve's (Fed) restrictive policy stance aimed at controlling inflation.
Financial conditions ease when bond yields drop, credit spreads narrow, the dollar weakness and stock prices rally.
The latest easing shows the markets are not buying the Fed's narrative that interest rates will be raised above 5% and held there for a long time.

– Omkar Godbole

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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.