The Breakdown First Five - Friday, March 22, 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. Stablecoin Bill Struggles

This year was supposed to be the year that Congress acts, but it seems like momentum for crypto legislation is slowing down. Patrick McHenry said there is a “workable frame” for the stablecoin bill but that negotiations are stuck in a “loop”. Sources say that drafting meetings are now being held weekly, but time could be running out to get stablecoin regulations done before the election. 

4. OKX Exits India

OKX is ceasing operations in India giving customers until April 30 to withdraw their funds. The decision comes shortly after the Indian government blocked the websites for multiple offshore exchanges, although OKX was not on that list. The government claimed that the exchanges were not in compliance with local money laundering regulations. At the time, Binance said it would continue working with Indian regulators to address the regulatory issue. 

3. No Redemption Arcs

Kyle Davies recent interview has been controversial, with some claiming he shouldn’t be platformed at all and allowed to tell his side of the story. One of the biggest moments was a refusal to apologize for “blowing up”. He tried to paint the multi-billion dollar collapse as a normal part of fund management, suggesting that creditors took informed risk when lending to 3AC. The crypto community begs to differ, claiming that 3AC lied to their portfolio companies.

2. Tokenization Boom

Tokenized US Treasuries grew by 640% over the past year according to a CoinGecko report. The data shows that on-chain yield is another killer app, allowing crypto dollar enjoyers to get paid for waiting. Growth has stalled so far this year, likely because of the wild bull market. The data comes as Blackrock confirms that their tokenization project is indeed an on-chain money market fund. It’s institutional only, but retail pass throughs are already being built. 

1. Record ETF Outflows

The Bitcoin ETFs have seen their worst week of outflows with one day still to come. There was a combined $835M in net redemptions, driven by $1.8B being sucked out of GBTC this week. On chain flows suggest we’re watching the Genesis liquidation take place, with $1.1B worth of Bitcoin bought and transferred to fresh wallets in anticipation of in kind distribution to creditors. This would explain why markets haven’t collapsed. Genesis had ~$4B to sell, so this could continue.