The Breakdown First Five - Tuesday, April 9, 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. Arthur’s Inferno

A new blog post from Arthur Hayes claims crypto markets could be in for a rough few weeks. A combination of tax season, Fed QT and a flush Treasury general account could make for tightening liquidity conditions over the next few weeks. According to Arthur, all roads still lead to money printing. Once we reach May, Arthur believes the Fed and Treasury will reach back into their ““bag of tricks” to ease liquidity conditions and signal another leg up for risk assets. 

4. Deferred Option

The SEC has once again kicked the can on Bitcoin ETF options. The next deadline is coming up at the end of May. Industry figures have been frustrated at delays, with Grayscale CEO Michael Sonnenshein calling the options “the natural next step” which would “contribute to a robust and healthy market.” Meanwhile, the SEC has approved a 2x short Microstrategy ETF. 

3. Avi Eisenberg Trial Begins

The reckoning continues with the trial of Mango Markets hacker Avi Eisenberg commencing in New York. The trial will put DeFi under the microscope and settle the question of whether a “highly profitable trading strategy” should be illegal. Eisenberg is alleged to have manipulated collateral on the platform to make $116M but only used the smart contract as designed. 

2. Monster GBTC Outflows

Although Genesis is done selling, $303M worth of GBTC was redeemed on Monday. These outflows overpowered a trifling $20M inflow for Blackrock. Bitwise batted above its weight with $40M worth of inflows, but the ETFs still saw $224M in net outflows. Last week was the first strong inflow in a while, with $1B added to the products, but Monday’s data suggests we’re not out of the woods yet.

1. Bitcoin Surges Back