Binance Under Scrutiny, Polygon in Build Mode, and FTX Hearing Confirms Backdoor Rumors

Markets have entered an arguably historical week for crypto, with a few critical events upon us, like the FTX hearing and CPI data of several countries. Bitcoin and Ethereum have barely moved over the past week, with a 0.55% and 0.27% increase in returns, respectively.

The biggest outlier within the Layer 1 subcategory is still Solana, down by almost 7% over the past week, followed by Avalanche and Binance, down by almost 5% each. Within major Layer 2s of scalability solutions, Boba stood out in TVL growth, increasing by almost 4% over the past week. Curve is the most negatively impacted in DeFi applications after being hurt by the depeg of Tron’s algorithmic stablecoin USDD, which makes up nearly 85% of the liquidity on Curve’s USDD/3CRV pool at the time of writing.

Figure 1: Weekly TVL and Price Performance of Major Crypto Categories

Source: 21Shares, Coingecko, DeFi Llama. Data from December 6 to 12, 2022.

Key takeaways

• Ahead of FTX hearing, Sam Bankman-Fried was arrested in the Bahamas and faces several criminal charges alongside an unsealed indictment in the United States.

• Binance faces potential regulatory scrutiny as well as skepticism over its Proof of Reserves

• Ethereum’s Shanghai upgrade is likely to release in March 2023

• Polygon making moves: partners with FlipKart and Warner Music Group

Spot and Derivatives Markets

Figure 2: Total Bitcoin Liquidations

Source: Bloomberg, CoinShares

The graph above shows the total number of Bitcoin liquidations in the futures markets on the likes of Binance, OKX, and Bybit. Over $150M of long positions and $88M of short positions were liquidated last week.

On-chain Indicators

Figure 3

Source: Glassnode

Bitcoins held in miners’ balances have reached a 14-month low, according to data gathered by Glassnode. These levels indicate that Bitcoin miners are increasingly selling their holdings to cover their costs unless they have already filed for bankruptcy.

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