First Mover Americas: Lots of Bitcoin Futures Traders Cash Out

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Sudden volatility in bitcoin caused traders of both longs and short futures to be affected as $175 million worth of positions was liquidated and $1 billion in open interest was effectively wiped out in the past 24 hours. Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly. Crypto exchange OKX had over $52 million in bitcoin futures liquidations on its platform, followed by counterparts Binance and OKX at $38 million and $29 million, respectively. The largest single liquidation order happened on BitMEX, a bitcoin/tether (USDT) trade valued at $6 million. Bitcoin is up 1% over the past 24 hours to about $29,000.

The former chief technology officer and chief information security officer from Andreessen Horowitz, or a16z, a venture-capital firm that has invested heavily in crypto, are starting an institution-focused cryptocurrency custody firm, according to a person familiar with the plans. Riyaz Faizullabhoy, the former CTO, and Nassim Eddequiouaq, the former chief information security officer, have the blessing and seed backing of a16z, the person said. The two men departed a16z in February.

Grayscale Investments expects to learn by the end of the third quarter whether it will be allowed to turn its $17.5 billion Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund, the asset manager’s CEO, Michael Sonnenshein, said Wednesday at CoinDesk’s Consensus 2023 conference in Austin, Texas. Last year, the U.S. Securities and Exchange Commission turned down Grayscale's request to convert the bitcoin trust into an ETF. The conversion could help Grayscale eliminate the discount for the product; GBTC's market value is far below the actual value of all the bitcoin it holds. GBTC was trading at a 42% discount on Thursday. Grayscale and CoinDesk are both owned by Digital Currency Group.

Chart of the Day

• The chart shows the share of different national currencies in central banks' foreign-exchange reserves since 1999.
• Although the U.S. dollar remains the dominant reserve currency, its share has declined to 58% from 70% two decades ago.
• According to Bank of America's global research team, the declining share of the dollar reflects  multi-polar world and has central banks diversifying into other assets.
• "The remit of monetary authorities to hold different asset classes is usually limited; indeed, beyond bonds, gold tends to be one of the few assets central banks can own, so the yellow metal has been a key beneficiary of a re-weighting in reserves," the bank's research team said in a note sent to clients on Tuesday.

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