ROLLUP: Crypto Rallies | Gemini vs Barry Silbert | Game of Thrones NFT | Ethereum Liquid Staking

The Winklevi escalate their fight against Barry Silbert and Digital Currency Group, causing Barry Silbert to have to release uh in letter to investors. Uh Sam Bankman-Fried, our favorite three-letter acronym dude, is doing more Sam Bankman-Free things, so get ready to face palm. And Coinbase lays off 20% of its staff while Binance is looking to increase its staff by 30%.

Bankless Nation, it is the second Friday of January. We're in 2023. I hope you're ready for. What are we about to give him, David?

The Bankless Friday weekly roll up, Brian, where we cover the entire weekly news in crypto, which is always an ambitious endeavor, yet we persevere nonetheless into 2023, which so far has been bullish.

So far, bullish numbers are

12 days of green. Yeah.

we got some double digit green too. We're gonna get to that in the markets. Uh also gonna talk about digital currency group versus the Winkelvoss twins. The fight has escalated even further. On Twitter, of course, because where else do modern people fight? Gotta be in public, gotta be on Twitter. We'll cover that. We'll we'll tell you what's going on there, and uh we'll see if we can draw any conclusions from that. What else are we talking about today?

Meanwhile, FTX discovers $5 billion under the couch cushions. Wow. That's pretty sweet. SBF requests access to his Robin Hood shares in order to pay for his legal defense. You'll never guess what happens next. And then sadly, Coinbase has to uh lay off 20% of the staff ahead of CryptoWinter. But Binance is hiring. Uh and then Ryan's also going to walk us through some CPI numbers as well because we got that literally this morning just a few hours.

Inflation's deflating. Inflation down. So that's that's good news.

Deflation deflation.

Let's get to markets. We got the happy music. I hope it's happy because

Very happy.

Bitcoin is up. Tell me about it.

Oh, it's uh it's up bigly, it's up uh eight point seven percent. Starting the week at sixteen thousand eight hundred dollars, ending where it is right now at a whopping eighteen thousand two hundred and fifty dollars. Eight point seven percent on the week.

Is this uh up on CPI? Is this up on macro? Is what why are we up?

Well, okay, so so if you look in the far right on the screen, you see that big red candle that goes from like eighteen thousand dollars down, like eighteen three hundred down to below eighteen. That was right after the CPI print. So CPI print came out and then it jumped two hundred dollars, down down two or three hundred dollars, and then immediately jumped right back up to where it is now at eighteen thousand two hundred and fifty dollars. But it's been running up all throughout the last week or so, and especially yesterday, uh this also happened to Ether too. Seventeen is it w it went from seventeen thousand four hundred dollars and just zoomed straight up to eighteen thousand four hundred dollars inside of like half a day.

It's um crypto's kind of following the market a little bit, I think. I wonder what the correlation looks like right now.

Bad market.

Yeah, trad market stocks and such. Um I guess just just more so. Um well maybe this was a disproportionately good week for crypto though, even even though uh trad markets went up. Okay, what happened with ETH price? That's a big story too.

Yeah, Ether started the week at twelve hundred fifty dollars, where it's been hovering around, being just like the twelve hundred dollar stable coin for the past like two months. Uh up 12.5%, all the way up to $1,400. It hit a high of $1,420, which was the high, exact high of 2017, by the way. There's that number again. Yeah. Fell down, did the same thing at Bitcoin. As soon as the CPI print came out, it dropped down to $1350, but is since recovered in that moment, back up to $1,400 where we are now. So up 12.5% on the uh on the week.

The question David and I are about to discuss in a little bit is uh have we bottomed yet? Think about that, listener, as we get to the next section. But first we'll talk about the ETH to Bitcoin ratio, an important ratio in this market. What's that showing?

Uh we are up three and a half percent on the week. It's been a very good week for the ratio. Uh it's harder, so like uh moving it the ratio is harder than the dollar. Like crypto prices move uh very m a lot versus the dollar, but ether and bitcoin they don't move as much in relation to each other. So three point five percent is actually like a decent move. Uh we are currently clocking in at point zero seven six. Uh we hit a high of point zero seven eight. David, this is

It's not the ETH of the last bull market of the last bear market, is it? This is a totally different ETH and

I think we can see it here. Here's ultrasound money. Um, a number you and I were looking at uh earlier in the week was the supply change since the down a thousand

Yeah, so over the last 120 days, guys, ETH has only increased in its total issuance, total supply, and this is of course selling pressure by two thousand ETH. All right, it's not ultrasound, it's not deflationary at this point, but only two thousand ETH versus what it would normally be and what it was in the previous bear market, we would have added one point four million ETH supply. And what does that equate to? David, run some numbers for me. What does that equate to in terms of uh dollar terms?

Rounding up slightly to two billion dollars.

Two billion dollars of sell pressure just eliminated.

Not half.

And that was in last bear market. No wonder ETH went all the way down ninety-four percent and uh way underperformed Bitcoin. Uh different ETH, different asset completely. And so I'm actually not surprised to see the gains on the ratio here.

Zoom out on this chart really quick if you don't mind. Let's go out. Let's go out really.

These cracking charts can do anything, so we can uh

Yeah, if if uh listeners are wondering, these this sexy new interface is the Kraken Pro new interface. Uh Kraken Pro has really got a cosmetic upgrade lately, so thank you for Kraken for serving us these ever important prices. I mean so we have a lot of time left to start filling out these this bear market candles. Uh there's probably I'm if this follows that like last bear market, we just a lot more volatility still has to leave. We're just gonna like find a bottom. Yeah, look at this over here.

right

Yeah,

chop back in twenty eighteen.

but I mean if you compare those two peaks, like you can kind of tell we're at the tail end of uh just like the the depression of the the peaks. Uh they're

Here

There was this maybe like there was that one moment uh back in like June, July of 2018 where like Ether and Bitcoin started to flatten out. Like I think Bitcoin was flattening out at 6,000, Ether was flattening out at like 300, and they're like, okay, fine, we established a bottom. And then the bottom fell out, and we went down like another 50%. Um so if we are trying to say that this is the same as last cycle, then that would still be ahead of us. But I don't necessarily think that that's ahead of us.

I do think that ETH is a different asset this cycle, and it might be more apt to compare ETH to Bitcoin of previous cycle than ETH to ETH of previous cycle. I d I don't know if that uh draws any insight, but like I was just looking earlier, so ETH is down seventy one percent from all time high. Bitcoin is down seventy three percent more than ETH.

Yeah.

That's certainly not the case last bear market, where uh Bitcoin was surviving and doing okay when Bitcoin was or and ETH was completely getting destroyed.

Uh very interesting. Okay, what about total crypto market cap? Uh we're gotta be below trend.

Above nine hundred billion. So we were at finally back above nine hundred billion. We were at nine hundred and nineteen billion dollars.

Okay. Well

I think we've seen a nine there.

it is. Uh let's talk about the inflation numbers. They uh came out earlier this week. They were good. December inflation report. The headline is consumer price gains continue to cool. Here's the chart for you. Um, David, you see this kind of spike for inflation. This is a fully zoomed out chart all the way from 1965 all the way to 2023, where we are now. And uh we're down to six point five percent inflation for December. And that of course is

Number of six point five percent.

Well it it peaked in June, nine point one percent.

And uh ever since we've been going down, down, down uh last month that we saw a report, November was seven point one percent, now it's six point five percent. The reason the market reacted favorably-ish to that uh was because it was just exactly at what was predicted by the market. The street was saying six point five percent, we came in at six point five percent. This, of course, is still well above the Fed's uh mission, which is a two percent inflation rate. Maybe they'll increase that to three percent. That's what some are saying. Powell's holding firm that the target is two percent. Uh, and then of note, of course, before the pandemic, before all of this chaos that you see from 2020 onwards, inflation used to be 2.1%. It used to be the most boring number in all of finance because for the last like decade or two, it's always been like 2%, never changed, uh, quite volatile these days. What do you think? Are we are we done with inflation?

So we just recorded our podcast with Tyler Cowan, which comes out on Monday, and he mentioned that uh we really need to see three months in a row of decreasing inflation to really uh feel okay-ish in confidence about the trend here. And he was and we recorded with him a few days ago, and this was the print that we were looking for to see if it would continue to trend down for three months in a row, and it is. Uh I think, and so he said three months is what you need to start having some amount of confidence. So I think we are in the earliest stages of being able to have some amount of confidence about a downwards trend. And I think every single month after that, where we continue to print lower, we're just gonna start stacking on the confidence and the confidence and the confidence, and that's really what it takes uh for risk appetite to come back. Uh and so we are on to the first of many boxes that are checked, but it is the right step in the right direction.

Well, let's switch back to the uh the crypto cycles again. So some people are saying there was a lot of leverage in the system, quite obvious, built up in 2021 and 2022. Uh and now that leverage is gone. It's been washed out. It's been flushed down the toilet. Bye bye Three Arrows Capital and all of the margin traders that got completely wrecked. This is a tweet from Jack. Do you want to uh tell us what he's saying?

Yeah, Jack is saying overleverage was the theme of the year. It was really the theme of the entire bull market being overleveraged. But how much leverage remains in the system this year? He asks. Despite major blows from incumbents like FTX, Bitcoin liquidations are down significant significantly in the second half of 2022, suggesting that the more majority of leverage has been washed out. And that's probably also why we're seeing a lot more less volatility in crypto asset prices, is that leverage is volatile. Leverage adds to volatility. And now that like things are uh stable, there's less incentive to take leverage because you can't really trade as much in this market. Uh, but you're just seeing a lot lower liquidations both on the long and short side, meaning that we are in a much more healthy, much more grounded phase in the market, which implies that we are closer to a bottom than we otherwise would be if we had a lot of leverage.

Well, let's just flat out ask the question. Uh I I did on Twitter. Has crypto bottomed? This was a results poll. Forty four percent said yes, fifty five percent point three said no. So kind of split. Pretty even

pretty even. I call that even. A little more saying no. What's your answer to that? Have we bottomed yet, David? Have we seen the all time lows of this cycle?

Yeah, I I well I mean I when we b hit below eight hundred dollars Ether and like below sixteen thousand dollars for Bitcoin, that I don't think we're going back there. Like Bitcoin got or Ether got down to eight hundred and seventy dollars or something. Like that was the

Question.

I think we bottomed.

I th I don't think we're going below that.

I think that was uh in your predictions.

I think I think you're still like cautiously worried about a three digit ether and I still don't think that's gonna happen.

I don't I don't necessarily think we'll go below the 800. Was it like 800 something? I can't believe remember what the bottom tick was for ETH. But um I mean I I that that's something really bad would have to happen. Yeah, it would have to be case.