Bloomberg

Bitcoin options data shows whales betting big — Will $50K BTC come in January?

Institutional investor interest soars as Bitcoin options open interest hits record high.

Bitcoin (BTC) options open interest reached an unprecedented milestone, surging to a staggering $20.5 billion on Dec. 7. This signifies the active involvement of institutional investors in the cryptocurrency space. Unlike futures contracts, BTC options have predetermined expiration prices, offering valuable insights into traders’ expectations and market sentiment.

At the forefront of the Bitcoin options market stands Deribit, boasting a 90% market share. The exchange currently holds a substantial $2.05 billion open interest for options expiring on Jan. 26. However, many of these bets may lose their value as the deadline approaches.

Nonetheless, with the prospect of a spot exchange-traded fund (ETF) gaining regulatory approval, previously sidelined bullish bets are reentering the playing field.

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Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s

Research from Bloomberg Intelligence argues that liquidity conditions still do not favor a continuation of the Bitcoin rally.

Bitcoin (BTC) and crypto may yet see a long-term correction thanks to central banks keeping liquidity tight, Bloomberg warned.

In its latest research, Bloomberg Intelligence revealed a cool stance on the ongoing 2023 crypto market rally.

Bloomberg: Expecting BTC price to hold “may be illogical”

Despite gaining 70% in Q1, Bitcoin is not convincing everyone that it will continue to climb or even maintain current levels near $30,000.

Examining the macroeconomic climate, Bloomberg Intelligence became the latest voice to note the close relationship between crypto performance and global central bank liquidity levels.

As inflation bites, banks have been withdrawing liquidity from the economy, with risk assets declining as a result — including crypto. The United States Federal Reserve’s quantitative tightening (QT), which began in late 2021, coincided with the current all-time high for Bitcoin.

Despite the recent banking crisis, Bloomberg noted that plunging M2 money supply and bank deposits mean that liquidity continues to be squeezed.

“Risk assets typically rise and fall on the back of liquidity and plunging US money supply, and bank deposits indicate headwinds for cryptos,” it stated in an analysis uploaded to Twitter by Bloomberg Intelligence senior macro strategist Mike McGlone.

“It may be illogical to expect that stock market, crude oil, copper and the Bloomberg Galaxy Crypto Index (BGCI) to sustain recent bounces with year-over-year measures of money supply and commercial bank deposits falling around 2% — the most in our database since 1959.”

The misgivings come as Bitcoin faces a battle to flip historical resistance back to support, with bulls as yet unable to effect major change.

When it comes to liquidity, meanwhile, others have already noted that crypto now responds to the actions of central banks other than the Fed, and both China and Japan have enacted liquidity injections this year.

“A top question at the start of April is what stops the contracting liquidity?” Bloomberg, meanwhile, continued.

“Most central banks still tightening may portend a lower plateau for the BGCI. Our take is Bitcoin faces headwinds but will eventually transition to trade more like gold and Treasury bonds.”

U.S. dollars gives Bitcoin heat

BTC/USD traded around $28,100 at the time of writing on April 6, according to data from Cointelegraph Markets Pro and TradingView.

Related: Latest Bitcoin price data suggests double top above $200K in 2025

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

In a potential short-term tailwind for risk assets, the U.S. Dollar Index (DXY) saw fresh losses, abandoning a modest comeback to drop back below 102.

Analyzing the situation, popular Crypto Twitter account Cold Blooded Shiller remained tentatively optimistic about the outcome of BTC’s price.

Analyst Justin Bennett nonetheless flagged a distinct range still intact for the DXY, predicting a rebound to come.

“All the ‘dollar is dead’ chants are about to be silenced by what is still the global reserve,” he warned.

U.S. dollar index (DXY) annotated chart. Source: Justin Bennett/Twitter

Related: Crypto winter can take a toll on hodlers’ mental health

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin ‘untouchable’ amid regulatory pressures, says analyst

Bitcoin is “untouchable” because it’s more decentralized than other cryptocurrencies in the space, such as Ether, according to senior commodity strategist Mike McGlone.

Bitcoin (BTC) is “untouchable” despite ongoing regulatory pressures in the crypto sector, and those who don’t have some crypto exposure are “seriously silly” according to Bloomberg senior commodity strategist Mike McGlone. 

During an April 3 stream with crypto podcaster Scott Melker, McGlone argued that unlike other cryptocurrencies such as Ether (ETH), Bitcoin couldn’t be killed by regulators because it’s more decentralized.

“There’s so much disdain about regulators pushing back on the whole space, and that’s the key thing where Bitcoin sticks out,” McGlone said.

“You can’t do anything to this, and you can’t kill it and it’s just unprecedented; it is untouchable.”

“You could make a case that Ethereum is a security when you hear about all these upgrades and people doing this and people doing that to make it better, I’m like okay, well that’s kind of scary, can’t do that to Bitcoin, it’s why it’s fine and impressive,” McGlone added.

The crypto sector has faced a wave of crackdowns in the United States recently, with the U.S. Securities and Exchange Commission filing charges against crypto exchange Kraken for its staking services, then suing stablecoin issuer Paxos over Binance USD (BUSD). The regulator also proposed rule changes targeted at crypto firms operating as custodians.

McGlone stated he is still bullish on BTC but expects the price to go down again in step with other assets if a recession hits.

Back in January, he warned BTC might not see the surge being predicted just yet, as there are challenging macroeconomic conditions and pressure from interest-rate hikes.

According to McGlone, the April 2 decision by the Organization of the Petroleum Exporting Countries (OPEC) to reduce daily oil output makes a recession more likely, as does interest rate hikes from the Federal Reserve to clamp down on inflation.

“We had our morning call this morning and our economist Anna Wong said, Yeah, their base case is for that recession to kick in Q3,” he said.

“OPEC is helping that. Fed tightening is helping that. So all assets have to go down. That means Bitcoin too. It’s the fastest horse in the race. So I’m overall, certainly relatively bullish.”

Related: Bitcoin likely to outperform all crypto assets following banking crisis, analyst explains

In McGlone’s opinion, it’s “seriously silly” to risk not having some exposure to crypto or trying to stand in its way.

“The key thing I look at simplistically for Bitcoin is, if you’re a money manager, why take the risk of not having some of this revolutionary asset, particularly because it’s so controversial you want to have at least some in it because you don’t want to look like an idiot over history,” he said.

“The smart guys get it; we’re not gonna be a Blockbuster or Sears, and we’re going to be part of this technology.”

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

Hong Kong crypto firms seeing interest from Chinese banks: Report

Several Chinese banks have been seeking to offer services to crypto firms in Hong Kong, despite a ban on crypto on the Chinese mainland.

Crypto firms setting up in Hong Kong ahead of a new licensing regime for crypto exchanges in June have reportedly found some unexpected allies in the region — Chinese state-owned banks.

According to a March 27 report from Bloomberg, Chinese banks, including Shanghai Pudong Development Bank, the Bank of Communications Co. and Bank of China Ltd., have either started offering banking services to crypto firms in Hong Kong or made inquiries with crypto firms, according to “people with knowledge of the matter.”

One source claims that a Chinese bank sales representative even visited a crypto firm’s main office to pitch banking services. This is all despite an ongoing crypto ban in China.

Cointelegraph reached out to Shanghai Pudong Development Bank, the Bank of Communications Co., and Bank of China Ltd for further comment, but did not receive a reply before publication.

Asked for comment, Julia Pang, head of banking relations at Hong Kong-based crypto trading platform OSL, told Cointelegraph that her firm welcomed “growing interest from Chinese banks in engaging with the regulated crypto industry.”

“This development is encouraging for both the industry and the broader ecosystem, as it demonstrates a maturing understanding of the crypto sector by traditional financial institutions,” she said.

A spokesperson for the firm said they couldn’t currently provide a comment on whether the firm had been approached by any state-owned Chinese banks. 

Related: Hong Kong wants to become crypto hub despite industry crisis

In October last year, the government of Hong Kong floated the idea of introducing its own bill to regulate crypto, and Hong Kong’s Securities and Futures Commission on Feb. 20 released a proposal for a regime for cryptocurrency exchanges, set to take effect in June.

According to a Feb. 20 report, it is also understood that representatives from the China Liaison Office have been frequenting Hong Kong crypto gatherings.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

US midsize banks seek FDIC Insurance on ‘all deposits’ for 2 years: Report

The banking coalition reportedly argued that it would bring stability to the banking industry and reduce the chances of “more bank failures,” in a letter to federal regulators.

The Mid-Size Bank Coalition of America (MBCA) has reportedly asked United States federal regulators to extend insurance on all deposits for the next two years.

According to a March 18 Bloomberg report, the MBCA – a coalition of mid-size U.S. banks – sent a letter to the U.S. Federal Deposit Insurance Corporation (FDIC), asserting that extending insurance on “all deposits” would “immediately halt the exodus” of deposits from smaller banks.

The MBCA also reportedly noted that this action would “stabilize” the banking industry and significantly decrease the chances of “more bank failures.”

It was added that the MBCA proposed the insurance program be funded by the banks themselves, by raising the deposit-insurance assessment on lenders who opt to participate in the increased coverage.

Related: Marathon Digital: Deposits held at Signature Bank are secure and available

John Deaton, founder of legal news outlet Crypto Law Lawyer, predicted in a March 19 tweet to his 250,000 followers that up to 300 banks could go under if the FDIC fails to provide a guarantee.

This comes after a recent analysis by economists, published on March 13, revealed a large number of banks are at risk from uninsured deposit withdrawals.

The report revealed that “even if only half of uninsured depositors” decided to withdraw, “almost 190 banks are at a potential risk” of impairment to insured depositors, with “potentially $300 billion of insured depositors at risk.”

Meanwhile, Tom Emmer, the majority whip of the United States House of Representatives, questioned reports that the FDIC is “weaponizing recent instability” in the banking sector to “purge legal crypto activity” from the U.S., in a March 15 letter to FDIC chair Martin Gruenberg, 

Emmer warned that these actions are “deeply inappropriate” and could lead to “broader financial instability.”

Furthermore, the U.S. Federal Reserve announced on March 13 that the Vice Chair for Supervision, Michael Barr, is “leading a review of the supervision and regulation” of Silicon Valley Bank, in “light of its failure,” with a review set for public release by May 1.

US midsize banks seek FDIC Insurance on ‘all deposits’ for 2 years: Report

The banking coalition reportedly argued in a letter to federal regulators that it would bring stability to the banking industry and reduce the chances of “more bank failures.”

The Mid-Size Bank Coalition of America (MBCA) has reportedly asked United States federal regulators to extend insurance on all deposits for the next two years.

According to a March 18 Bloomberg report, the MBCA — a coalition of mid-size U.S. banks — sent a letter to the U.S. Federal Deposit Insurance Corporation (FDIC), asserting that extending insurance on “all deposits” would “immediately halt the exodus” of deposits from smaller banks.

The MBCA also reportedly noted that this action would “stabilize” the banking industry and significantly decrease the chances of “more bank failures.”

The MBCA proposed that the banks themselves fund the insurance program by raising the deposit-insurance assessment on lenders who opt to participate in the increased coverage.

Related: Marathon Digital: Deposits held at Signature Bank are secure and available

John Deaton, the founder of legal news outlet Crypto Law Lawyer, predicted in a March 19 tweet to his 250,000 followers that up to 300 banks could go under if the FDIC fails to provide “some guarantee.“

This comes after a recent analysis by economists, published on March 13, revealed a large number of banks are at risk from uninsured deposit withdrawals.

The report revealed that “even if only half of uninsured depositors” decided to withdraw, “almost 190 banks are at a potential risk” of impairment to insured depositors, with “potentially $300 billion of insured depositors at risk.”

Meanwhile, Representative Tom Emmer, the majority whip in the United States House of Representatives, questioned reports that the FDIC is “weaponizing recent instability” in the banking sector to “purge legal crypto activity” from the U.S. in a March 15 letter to FDIC chair Martin Gruenberg,

Emmer warned that these actions are “deeply inappropriate” and could lead to “broader financial instability.”

Furthermore, the U.S. Federal Reserve announced on March 13 that the vice chair for Supervision, Michael Barr, is “leading a review of the supervision and regulation” of Silicon Valley Bank in “light of its failure,” with the review set for public release by May 1.

Moody’s to build scoring system for stablecoins: Report

Moody’s is allegedly developing a scoring system for stablecoins, with analysis of up to 20 digital assets.

Risk assessment firm Moody’s Corporation is allegedly developing a scoring system for stablecoins, with analysis for up to 20 digital assets, Bloomberg reported on Jan. 26, citing unnamed sources. 

The system, which appears to be in the early stages of development, will evaluate and rate the quality of the attestations of stablecoin reserves, although it will not be considered an official credit rating. Generally speaking, third parties attest that a company’s claims are accurate and validate that stablecoins are backed 1:1 by their reserves.

A stablecoin is a type of cryptocurrency whose value is pegged to a fiat currency, such as the United States dollar, or another financial instrument. The concept was developed to offer an alternative to the volatility of other cryptocurrencies by tying the stablecoin’s value to another asset. This does not imply, however, that stablecoins are risk-free.

For instance, Tether, the largest stablecoin issuer, settled with the New York Attorney General’s office in 2021 after allegedly misrepresenting the amount of fiat collateral backing its USDT (USDT) stablecoin. In addition to paying $18.5 million in damages to the state of New York, the company was required to submit periodic disclosures of its reserves, Cointelegraph reported at the time.

Related: SBF tried to destabilize crypto market to save FTX: Report

Stablecoin reserves have come under further scrutiny in recent months as a consequence of the bear market and crypto firms’ collapse in 2022. In May, the Terra ecosystem imploded when its algorithmic stablecoin, TerraUSD (UST), lost its dollar peg, crashing to a low of around $0.30.

Recently, Tether disclosed plans to stop lending funds from its reserves amid rumors concerning its secured loans. The company reiterated that its loans were overcollateralized by “extremely liquid assets” but decided to discontinue the service throughout 2023.

Moody’s provides credit ratings for publicly traded companies, delivering analyses regarding credit risk through its rates. On Jan. 19, the agency released a note on Coinbase discussing the crypto exchange’s downgraded senior debt and corporate family rating, which indicates a company’s ability to meet its financial obligations.

Daring drive-by at SBF’s: 3 men drove into barricade and fled: Lawyers

The lawyers didn’t specify the date or time when the incident took place, and claimed that security personnel was unable to get the license plate details.

Three men drove their car into the metal barricade outside Sam Bankman-Fried’s parent’s home where he is under house arrest, SBF’s lawyers claim.

In a filing to the federal court, the lawyers for the former FTX CEO said the three men got out of the car after hitting the barricade and told a security guard guarding the home: “You won’t be able to stop us.”

The unidentified trio were then able to drive away before security guards could record the car’s license plate.

According to a Reuters report, the incident was described in a Jan. 19 court filing that said it underscored the security risks faced by the FTX founder and those linked to him, including the two individuals who secured Bankman-Fried’s $250 million bond.:

“Given the notoriety of this case and the extraordinary media attention it is receiving, it is reasonable to assume that the non-parent sureties will also face significant privacy and safety concerns if their identities are disclosed.”

The lawyers didn’t specify the date or time they claim forwhen the incident took place.

On Jan. 12, lawyers representing some of the largest English-language media outlets — including Bloomberg, CNBC, Reuters and the Financial Times — wrote a letter to U.S. District Court judge Lewis Kaplan requesting the names of the guarantors.

The media lawyers argued the public’s right to know Bankman-Fried’s guarantors significantly outweighed their privacy and safety rights.

Given that Bankman-Fried shares close ties to some of the wealthiest and most politically connected individuals on the planet, the lawyers argued that such non-disclosure could undermine public confidence in U.S. government institutions.

Related: FTX profited from Sam Bankman-Fried’s inflated coins: Report

Bankman-Fried was extradited to the U.S. in December and pleaded not guilty to all eight fraud and conspiracy-based charges laid against him on Jan. 3.

All charges relate to his alleged involvement in FTX’s catastrophic collapse in November. The controversial figure remains under house arrest at his parent’s California home until his trial date, which is set for Oct. 2.

CoinDesk could be up for grabs as parent company DCG scrambles for funds

DCG has reportedly received offers for CoinDesk exceeding $200 million in recent weeks, which at a purchase price of $500,000 would be a 39,900% return on its initial investment.

Crypto media outlet CoinDesk is reportedly considering a potential sale as its parent company Digital Currency Group (DCG) looks to strengthen its balance sheet.

According to The Wall Street Journal, CoinDesk has sought the help of investment bankers from the financial advisory firm Lazard, who are helping the firm weigh options including a full or partial sale.

DCG has purportedly received multiple offers exceeding $200 million for the media firm over the last few months, which would result in a phenomenal return on investment given that DCG supposedly acquired the company for just $500,000 in 2016.

Barry Silbert’s DCG appears to be in serious financial strife recently, and announced to shareholders on Jan. 17 that it would be halting dividends in an effort to strengthen its balance sheet and “preserve liquidity.”

On Jan. 18, Bloomberg reported that another DCG subsidiary, crypto lending firm Genesis Global, was planning to file for bankruptcy after revealing it owed creditors over $3 billion — likely a leading factor contributing to DCG’s financial woes.

CoinDesk and Genesis are among some 200 crypto-related businesses in DCG’s venture capital portfolio, according to its website. Other companies that DCG owns include asset management firm Grayscale Investments, crypto exchange Luno and advisory firm Foundry.

Related: Gemini and Genesis’ legal troubles stand to shake up industry further

Some believe that CoinDesk’s article in November exposing the irregularities in Alameda Research’s balance sheet was the first domino that eventually led to the fall of crypto exchange FTX and the liquidity issues now being faced by Genesis and its parent company DCG and the wider crypto market.

Cointelegraph has reached out to CoinDesk for confirmation that a potential sale was being considered, but was yet to receive an answer at the time of publishing.

BTC forming bottom akin to 2018 with one key difference: Bloomberg analyst

Bloomberg analyst Mike McGlone says Bitcoin is forming a bottom similar to how it looked prior to the 2019 bull run — but with one big difference.

Mike McGlone, Bloomberg’s senior commodity strategist, believes Bitcoin (BTC) could be developing a  “bottom” in the same way it did prior to 2019’s bull run but said there is a major difference this time around.

During a Jan. 16 interview with crypto podcaster Scott Melker, McGlone argued unlike in 2018 when financial institutions such as the Federal Reserve were easing interest rates, this time they’re still tightening, along with “every central bank.”

“Back then the Fed already started easing and we held the bottom and broke out higher and then we had that issue in 2019,” he said.

“Right now they’re tightening aggressively, so you look at that and you can’t be too excited about any markets. Give it some time. Big picture, yes, really bullish Bitcoin,” McGlone added.

Graph showing Bitcoin market prices. Image: Mike McGlone

McGlone also warned BTC might not see the surge being predicted just yet, as there are challenging macroeconomic conditions and pressure from interest-rate hikes. 

He believes the Nasdaq is likely to dip below its 200-week moving average, which he claims is another indication BTC’s price rally may not happen soon.

“Liquidity is being pulled away still and if the Nasdaq breaks down, everything breaks down, Bitcoin is going to be part of it.”

“I still think it’s going to come out ahead so to me that’s where we stand,” he added.

Related: Arthur Hayes: Bitcoin bottomed as ‘everyone who could go bankrupt has gone bankrupt’

McGlone also said the market has entered an “unprecedented” environment, “where we’re having bounces in what we know are bear markets and the Fed just says, sorry we’re taking the punchbowl away, we’re not giving it get back to you.”

“I still think we’re in the midst of the biggest macroeconomic reset of our lifetimes, we just had a 100-year event in terms of the pandemic, we’re having a historic war in Europe and we’re having a historic shift in political leadership in China,” he added.

“I mean it’s going back to the days of the Soviet Union when you have one leader and are expecting to be economically viable.”