GBTC Flips Positive! Is This Fuel for the BTC Bull?
Gm friends,
The mood in crypto has been a little manic lately as price fluctuations lead to speculation about where we are in the cycle.
But sentiment has improved at the moment, and last week there was some positive news around the Grayscale spot BTC ETF.
So, let’s begin with a look at GBTC and an unexpected change in its performance.
Here’s what’s in today’s issue:
- Sam shares his thoughts on GBTC finally registering inflows, 1,155 BTC stolen, Sui Network’s spam test, Cardano partnering with Bitcoin Cash & MoonPay integrating with PayPal.
- Week 11 update on the 10x portfolio.
- This week on chain.
- This week’s trending coins by Rebecca.
Private “Beta 4” Registration is finally here for the beautiful crypto game Illuvium! AND, they are doing a 25 million dollar airdrop for early players!
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GBTC Registers First Inflows Since spot BTC ETFs Launched
It was quite the ride for crypto last week, with prices crashing before a welcome weekend recovery, and one part of the journey that took everyone by surprise came on Friday, when Grayscale’s spot Bitcoin ETF recorded net inflows for the very first time.
To put that in context, when the nine new spot BTC ETFs launched in January, Grayscale’s already existing bitcoin fund converted to an ETF, but while the newcomers got off to a spectacularly bullish start, Grayscale’s freshly converted product (GBTC) spent the entire time offloading coins.
And that outflow was on a large scale, as daily selling reduced GBTC’s bitcoin holdings by over half–from over 600,000 BTC to around 290,000 BTC.
However, hopes that these outflows might be slowing down were then exceeded last Friday, as GBTC experienced a day of inflows, with $63 million added to its assets.
Coming as it did at the end of a testing week that had seen sentiment dropping, the Grayscale news helped restore a sense of positivity alongside the BTC price climbing back above the 60K mark.
BlackRock Back on Track
Crypto being crypto, the surprise reversal for GBTC came in the exact same week that BlackRock’s ETF, IBIT–which has been far and away the leading new product–registered its first day of negative flows, with Wednesday becoming the worst day since launch for the ETFs as a whole.
However, Friday then saw IBIT back on track, as it recorded a net $13 million of inflows (which was actually behind most of its competitors on the day, including Grayscale), and across all of the ETFs there were inflows of over $378 million, meaning that the week ended on a positive note.
Prices Rally on US Jobs Data
That renewed bullishness was reinforced when US non-farm payrolls data for April showed a weakening labor market.
That sounds (and is) bad, but in relation to the markets it means there is a greater likelihood of interest rate cuts, which equates to a greater appetite for risk-on assets, and in fact, crypto prices then rallied.
Throw in a short squeeze (there were $120 million in liquidations as the BTC price moved up) and, basically, bitcoin being bitcoin in a bull market, and the weekend’s price action suddenly looked greatly improved compared to midweek.
But what do you think about BTC’s recent price action, is a further move up likely soon or are you expecting more chop? And is the macro environment important or will BTC follow its own cycles regardless? Reply to this email and let us know what you’re expecting.
Address Poisoning Attack Grabs 1,155 WBTC
There are regular-size crypto losses due to lapses in security, and then there are $71 million crypto losses due to lapses in security, and the latter occurred at the weekend through what’s being referred to as an address poisoning attack.
This is when an attacker generates a wallet address that looks similar to the victim’s address (particularly at the beginning and end of the address, where users usually check to make sure it’s correct), and sends a small transaction to the victim.
The idea is that if the victim later sends funds to their own wallet, they might copy their own address from their transaction history, and mistakenly copy the attacker’s address instead.
That may sound like a long shot but it appears that it sometimes works, as the victim in this latest case sent 1,155 wrapped BTC–worth around $71 million–across to the scammer’s address.
The victim subsequently sent an on-chain message to the hacker offering 10% of the stolen funds in return for 90% being returned, but it’s doubtful whether that will be of interest to the attacker.
For everyone watching though, one clear security takeaway is that if you’re sending funds to yourself, make sure to copy the receiving address directly from your own receiving wallet, not from a transaction history or anywhere else, and send a small test transaction first if you’re using a new address.
Sui Network Spam Test Under Way
If, like me, you like nothing more than to kick back and monitor blockchain transaction numbers, you may have been startled to clock Sui Network surging to levels that outcompete even the network-of-the-moment Solana.
While this spike in activity might look a little suspicious at first, it actually comes down to an initiative called Spam Sui, which went live on May 2nd and is in the process of stress-testing the network.
What happens is that Sui users can earn a token called SPAM simply by making Sui transactions, and we then get to see how well the blockchain performs under heavy usage.
Participants have been recommended to generate a specialized wallet to automatically perform transactions and earn SPAM (but the wallet needs to be topped up with some SUI to cover gas fees), and so far, it looks like the blockchain is holding up well under the increased pressure.
Cardano to Partner With Bitcoin Cash??
Cardano and Bitcoin Cash might not spring immediately to mind when considering potential crypto partnerships, but there’s been discussion of that possibility after Cardano founder Charles Hoskinson posted a Twitter poll to gauge opinion on Bitcoin Cash becoming a Cardano partner chain.
Right now, 67.8% of respondents have voted yes, but there have also been plenty of replies questioning what benefits this kind of collaboration could possibly bring.
Cardano has been underperforming this cycle amid now-familiar criticisms around its pace of development, while the Bitcoin Cash fork rarely gets a mention in crypto analysis these days, but who knows, maybe the Cardano chief sees potential that others have missed.
MoonPay Integrates With PayPal
Crypto payments infrastructure provider MoonPay last week announced that it would be integrating with payments giant PayPal.
This partnership will allow US PayPal users to purchase crypto directly through their PayPal accounts (using a PayPal balance, bank transfer or debit card), and will provide users with access to over 110 tokens.
Anything that helps make onramping into crypto a more frictionless experience is to be welcomed, PayPal is about as mainstream as it gets (with, globally, over 426 million active accounts), and the timing of the partnership looks good with the markets bullish.
Week 12 Crypto Portfolio Updates
Despite all the big drama in the market recently we are only down 15%. Not awesome, but not terrible. We grind on.
So, updates on all positions:
- Ethereum has surprisingly been a very solid play so far with strong price performance versus a lot of the altcoins.
- USDC not much to report here. Just stables used for farming. Right now via Elixir and deBridge.
- COQ The workhorse of my portfolio which is holding this damn thing together!
- EMC I continue to be surprised that this thing is not getting more attention. It has huge potential as an AI depin play. Only a matter of time before the market figures it out.
- FLIP is starting to get a lot more attention on social media. The narrative and potential is still big as the network starts growing.
- CRETA is still in sleeper mode, but the potential of this gaming studio could be massive.
- MXM is gaining more traction all the time with a major game release coming soon. Gaming coins are not doing much yet, but I still think they will have their moment to shine.
- ELU was always a bit of a risky play. And I have had my butt kicked on this one so far. Hopefully a market recovery combined with a game release can provide some hype to sell this position into.
- BENJI is the good boy for Base. A solid dog coin. So let’s see what happens.
- FOXY is a fox. On linea. Popular in Asia. Both of these memes are still very low market cap.
Airdrops
Got my airdrop for NIM from staking Dymension, it is worth about $15 right now. So not crazy. My DYM is down about $250… but I got a $15 airdrop… so… winning?
Keeping it in cash for now. A few more DYM airdrops are on the way. If one hits big then it will be good for the thesis, but also good exit time for DYM itself as people will buy into the hype.
I claimed my Kamino airdrop, it is currently worth $5-10. LOL. I’m going to hold for a bit, maybe we can get $30 bucks later.
That being said, I did earn yield on the stables in Kamino, plus I got an airdrop. So, not bad overall if we look at it from that lens.
Not many airdrops, especially the points driven ones, have insanely big drops.
Tomorrow, after writing this I will be able to claim my Zero and MODE airdrops. Will report back next week if they were worth anything.
All that being said, let’s farm some new airdrops this week!
Natix is a drive to earn mapping depin protocol. They also have some pretty easy social tasks on Galxe that I will be doing to try and get some sweet sweet airdrop!
Salt Water is a web3 AI gaming studio. Another free social task campaign with a promised airdrop. You can sign up here. ENTER CODE 6844845fa5
Particle is a modular Layer 1 blockchain with abstraction. Pretty easy to earn points, just need to do regular check ins and transactions.
Still Going
For completeness, I have done the usual rounds of transactions on the Ethereum Layer 2s and the Bridges, except for MODE as that snapshot just happened. Also, can’t be bothered doing Aleo tasks anymore.
deBridge is still going so I pushed a few transactions there.
The Hong Kong spot crypto ETFs launched last Tuesday, and although initial reports struck a negative tone, by the end of the week the new funds had taken in a total of 4,218 BTC.
This is a respectable starting performance in a market which is smaller than that in the US.
And over in the US, the week started badly for its BTC ETFs, hitting a low on Wednesday when there were $564 million of outflows, but by the end of the week reversing back to a solid $378 million inflow, a flip that came after seven negative days.
What’s more, GBTC saw its lowest weekly outflows so far, and even–against all expectations–registered an inflow of $63 million on Friday.
Although the last week in Bitcoin may have seemed like an emotional roller coaster, we were actually dropped off on Sunday almost exactly where we had departed from, pricewise, a week prior.
However, the week’s fluctuations in crypto sentiment are reflected in the Fear and Greed Index, as while last month the index went as high as an 80 score, it dipped close to 40 midweek–into fear territory–but ended the week on a score of 69, which represents greed.
And although it might have felt like a bumpy ride, when we put recent activity into a longer context, this year so far is actually not especially volatile, as compared to previous Bitcoin bull runs.
Maybe that means there’s further turbulence in store as the bull has yet to fully heat up, or maybe it means that BTC is a more mature asset now–or maybe both of those things are true–but either way, there have been bigger bumps in previous cycles.
And as for what the whale cohort was up to during the pullback, as you might have guessed, they took the opportunity to accumulate assets, collectively increasing their holdings to 47,000 BTC by the end of the week.
Also, if you’ve been following the story of Mr 100–the unknown buyer who’s this year been snapping up BTC in (usually) 100 coin clips–you may be interested to hear that he’s been buying big since BTC dipped last week, purchasing 4,300 BTC in the space of just 24 hours over the weekend, and prompting renewed speculation as to his identity.
Over in the Ethereum ecosystem, if we take a look at Layer-2s, we can see where the biggest inflow of assets from the Layer-1 are moving to, and up at the top of the pile when it comes to bridged tokens is Arbitrum, with $10.22 billion of deposits.
After that is Optimism, and then we have newcomers Blast and Base, while Starknet also registers above the $1 billion mark.
However, looking at the circulating supply of USDC across various chains, it’s apparent that Base has jumped above Solana and is now the network with the second highest amount of USDC circulating. This puts Base behind Ethereum, which by this metric is way ahead of all competitors.
Meanwhile, Runes Protocol on Bitcoin had, after it launched at the halving, been taking up a huge share of on-chain transactions–around 86% at one point–but we can see that this has now dropped to around 51%, although this is still a lot, especially when considering that the protocol is less than a month old.
And finally, more overall liquidity is a big plus for the crypto markets, and if we take a look at M2 money supply we can see that it has–for the first time since 2022–turned positive, while the global liquidity index is also giving positive cyclical signals.
Here are my key takeaways from the trends this week and it’s Memecoin May!
- Turbo is an AI-powered memecoin that’s suffered a Discord incident in which a phishing scam link was posted. Turbo is also hosting a token burn event in partnership with FuturePlay and has promised to burn its revenue.
- Friend.tech is a decentralized social platform on Base that’s had a wild week of chaos surrounding its delayed V2 launch and token airdrop. The FRIEND token dumped from $169 to $2.50 in 2 hours and suffered liquidity issues.
- Pixels is a Web3 farming and adventure game on Ronin that’s revealed some of the upgraded specs that will be coming soon in its Chapter 2 release. Pixels has also hit the milestone of 3 million lifetime wallets.
- Ethereum has burned 4.3M ETH worth around $12.7 billion since its London hard fork in August 2021. Solana co-founder Anatoly Yakovenko has also spoken out against the Ethereum FUD saying that “Ethereum will be fine!”
- Popcat is a Solana-based memecoin that’s become Solana’s biggest gainer of the week after rising almost 30% to a new all-time high on May 5.
- Ondo is a Real-World Assets (RWA) platform that’s seen BlackRock’s BUIDL become the largest tokenized treasury fund just six weeks after its launch, with much of its growth coming from Ondo.
- Sui is a Layer-1 blockchain that’s just celebrated its first mainnet launch anniversary. Sui has also addressed the recent claims about its token supply calling them “misleading.”
- Solana is a Layer-1 blockchain that’s seen Jito become the largest protocol in the ecosystem with $1.43 billion in total-valued locked (TVL).
- Pepe is a memecoin that’s jumped by double digits in 24 hours as part of a broader memecoin sector rally.
- Degen is a Layer-3 blockchain on top of Base that’s launched its season 3 airdrop 2 rewards. Degen has also shared a link to a dApp for launching simple NFTs on the network with minimal fees.
- Render is an image and video rendering protocol that’s gearing up for the launch of its Long Dragon Launchpad. The RNDR token is up 10% in 24 hours as the hype builds.
- dogwifhat is a Solana-based memecoin and NFT collection that’s risen by more than 20% in 24 hours as part of a broader memecoin sector rally.
- Wormhole is a cross-chain communication bridge that’s made its W token natively multichain using Wormhole Native Token Transfers (NTT) making it available on Solana, Ethereum, Arbitrum, Optimism, and Base.
- Kamino is a Solana-based concentrated liquidity management tool that’s launched its KMNO token and it dumped 70% in less than 10 minutes.
- Bitcoin’s price has rebounded after its dump to $56K to which Arthur Hayes says the bottom is in and will see a “slow grind higher.” Trader Matthew Hyland also forecasts $79K BTC by June.
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.
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Lark and the Wealth Mastery Team
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