Interpretation of cryptocurrency market on Dec 14 2022
The CPI data was better than expected yesterday, dropping from 7.7 to 7.1. As a result, the market saw a more substantial rally. The market's center of gravity is increasing in line with the previous analysis. Everyone continues to remain optimistic.
Another event that received much attention yesterday came from a Reuters article. The U.S. intends to prosecute Binance regarding money laundering and other crimes and says it already has evidence. This move has caused panic in the market. According to the CZ statement, Binance withdrew a net of $1.14 billion yesterday. After the bankruptcy of FTX, the market is equally worried about Binance facing similar problems.
Let's analyze it rationally. First, the U.S. investigation into Binance began in 2018. This event is not new, and reports about it have never been broken. And only severe litigation cases against companies in the U.S. result in convictions (less than 2%). The vast majority will end in fines and regulatory interventions, among other things. Secondly, yesterday's market panic stemmed mainly from Binance's suspension of USDC withdrawals, which gave the market the false impression that Binance's liquidity had dried up. If we look at the wallet address published by Binance, we will find that the on-chain assets available to Binance are 60 billion (December 2: up to 66.8 billion before the event hit).
Binance asset statistics on December 2, 2022
qr61.cn/ohvxTJ/qoFCBTu
Binance asset statistics on December 14, 2022
qr61.cn/ohvxTJ/q5bhGUk
The amount of outflows is still quite huge recently. But the market did not panic even before yesterday's withdrawal. The most worrying point yesterday was the run on USDC withdrawals. USDC is the smallest stablecoin on the BSC chain, with only $600 million. USDT and BUSD are both in the tens of billions. So yesterday's behavior was more like a targeted attack. Because the exchange between stablecoins is very convenient and equivalent in value, if you're in a hurry to hedge your bets, you can switch to other tokens and then exchange them for USDC on the chain.
qr61.cn/ohvxTJ/qtJpoHb
The targeting of the weakest stablecoin in Binance's reserve has the meaning of giving a shot to CZ.
The other coincidence is that SBF was arrested yesterday, and CZ was the whistle-blower in the FTX incident. SBF also argued in an interview that although it had its problems, CZ pulled the trigger and caused the collapse of FTX. Otherwise, there was room for maneuvering in the incident. And behind FTX was a host of Wall Street capital, and the failure of FTX cost them dearly.
The chain of events seems clear. Public opinion cooperated with the run to give CZ a warning. And the probability is that Binance will follow up by giving up some of its interests and taking money to settle the matter. After all, judging from the situation of Binance's on-chain assets, it is still far from the day when liquidity dries up. The position of Binance in the crypto market is clear to all. Therefore, the probability is that it is seeking money and will not move for real.
Finally, the concern about the market collapsing again is optional.
Another event that received much attention yesterday came from a Reuters article. The U.S. intends to prosecute Binance regarding money laundering and other crimes and says it already has evidence. This move has caused panic in the market. According to the CZ statement, Binance withdrew a net of $1.14 billion yesterday. After the bankruptcy of FTX, the market is equally worried about Binance facing similar problems.
Let's analyze it rationally. First, the U.S. investigation into Binance began in 2018. This event is not new, and reports about it have never been broken. And only severe litigation cases against companies in the U.S. result in convictions (less than 2%). The vast majority will end in fines and regulatory interventions, among other things. Secondly, yesterday's market panic stemmed mainly from Binance's suspension of USDC withdrawals, which gave the market the false impression that Binance's liquidity had dried up. If we look at the wallet address published by Binance, we will find that the on-chain assets available to Binance are 60 billion (December 2: up to 66.8 billion before the event hit).
Binance asset statistics on December 2, 2022
qr61.cn/ohvxTJ/qoFCBTu
Binance asset statistics on December 14, 2022
qr61.cn/ohvxTJ/q5bhGUk
The amount of outflows is still quite huge recently. But the market did not panic even before yesterday's withdrawal. The most worrying point yesterday was the run on USDC withdrawals. USDC is the smallest stablecoin on the BSC chain, with only $600 million. USDT and BUSD are both in the tens of billions. So yesterday's behavior was more like a targeted attack. Because the exchange between stablecoins is very convenient and equivalent in value, if you're in a hurry to hedge your bets, you can switch to other tokens and then exchange them for USDC on the chain.
qr61.cn/ohvxTJ/qtJpoHb
The targeting of the weakest stablecoin in Binance's reserve has the meaning of giving a shot to CZ.
The other coincidence is that SBF was arrested yesterday, and CZ was the whistle-blower in the FTX incident. SBF also argued in an interview that although it had its problems, CZ pulled the trigger and caused the collapse of FTX. Otherwise, there was room for maneuvering in the incident. And behind FTX was a host of Wall Street capital, and the failure of FTX cost them dearly.
The chain of events seems clear. Public opinion cooperated with the run to give CZ a warning. And the probability is that Binance will follow up by giving up some of its interests and taking money to settle the matter. After all, judging from the situation of Binance's on-chain assets, it is still far from the day when liquidity dries up. The position of Binance in the crypto market is clear to all. Therefore, the probability is that it is seeking money and will not move for real.
Finally, the concern about the market collapsing again is optional.
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