Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[Toxic2040]

fallout in the banking sector continues with SVB being shut down by the fed

ties to the USDC and Circle sent the stablecoin plummeting yesterday, de-pegging to $0.91 at one point and setting up a short squeeze on the btc pair,  which spiked over $26k on Kraken in late session trading.



https://cointelegraph.com/news/bitcoin-price-spikes-to-26k-in-usdc-terms-how-high-can-the-btc-short-squeeze-go

huh...weekend..banks closed...go figure....monday should be interesting



what a shitshow


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the caturday morning wall report

plenty of volatility for all you knife catchers and throwers out there..

cannon fire appears effective... and on target....prepare to come about and load another volley
all ahead full

dyor


4h


D

stronghands

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[OgNasty]

I’ve started getting calls from friends, asking me how worried they should be about the current situation in crypto. I don’t know if that is a good thing as people are scared, and that signals the bottom, or if it is a horrible thing that we’re about to witness a global 2008 style collapse in all assets. My hope is that this is the time to buy when there’s blood in the streets but we will see.

[Paashaas]

[Biodom]

I’ve started getting calls from friends, asking me how worried they should be about the current situation in crypto. I don’t know if that is a good thing as people are scared, and that signals the bottom, or if it is a horrible thing that we’re about to witness a global 2008 style collapse in all assets. My hope is that this is the time to buy when there’s blood in the streets but we will see.

Apart from the Circle, the area most affected is the venture capital, which is mostly nothing to do with "crypto".
So, you can tell them that reckless FED just shut down the world's engine of innovation, but yes, pizza and Coca-Cola are unaffected.
IMHO, collapse in all assets is more likely than not (or at least 50:50 chance), unless they manage to sell SVB to someone this weekend.

[ChartBuddy]

Explanation

[Gachapin]

I’ve started getting calls from friends, asking me how worried they should be about the current situation in crypto. I don’t know if that is a good thing as people are scared, and that signals the bottom, or if it is a horrible thing that we’re about to witness a global 2008 style collapse in all assets. My hope is that this is the time to buy when there’s blood in the streets but we will see.

same here. met a family member today (newcoiner).  recognized that confidence in Bitcoin is very low. I was asked if it would ever go up again...  
Usually most people don't see global collapses coming, so I guess we're somewhere near the bottom... at least for BTC ... I hope

[JayJuanGee]

Please don't be mad at me guys
I feel like BTC should go down further

and give me a chance to buy at more dip.

You surely deserve a batslappening for expressing that kind of a wish.

I don't feel bad when BTC goes down. I am holding a small portion now and trying to accumulate more Sats at a low price.

Yes.. no coiners and low coiners tend to feel like that.. but your feewings doesn't necessarily mean that all of us HODLers should have to suffer merely because you did not have enough time to pick up an additional 0.00062139 BTC in the past 8 months.

According to Bitcoin experts Bitcoin will go between 35k to 40k very soon.

Name those "experts"

Are those purported "bitcoin experts" in the room with us now?

Elon's tweet: https://twitter.com/elonmusk/status/1634343907827019776?s=19

What is "crypto?"  how would I know if I have put my money in "crypto" if I don't know what it be is?

I’ve started getting calls from friends, asking me how worried they should be about the current situation in crypto. I don’t know if that is a good thing as people are scared, and that signals the bottom, or if it is a horrible thing that we’re about to witness a global 2008 style collapse in all assets. My hope is that this is the time to buy when there’s blood in the streets but we will see.

Were you able to 'splainie 'splainie to those supposed "friends" what the fuck is "crypto?"

Is "crypto" in the room with us now?

[Gachapin]

fallout in the banking sector continues with SVB being shut down by the fed

ties to the USDC and Circle sent the stablecoin plummeting yesterday, de-pegging to $0.91 at one point and setting up a short squeeze on the btc pair,  which spiked over $26k on Kraken in late session trading.



https://cointelegraph.com/news/bitcoin-price-spikes-to-26k-in-usdc-terms-how-high-can-the-btc-short-squeeze-go

I never understood why people say that the collapse of stable coins would hurt Bitcoin in the short term.

For me it seems just logical that Bitcoin would go up in price.  I mean where else should the money from a collapsing stablecoin market go?
A part into fiat but the rest would go into the next stable and most secure coin, which is Bitcoin.

[vapourminer]

According to Bitcoin experts

"experts"

The only "Bitcoin expert" is (or was) Satoshi.

i thought he was referring to proudhon

[Biodom]

fallout in the banking sector continues with SVB being shut down by the fed

ties to the USDC and Circle sent the stablecoin plummeting yesterday, de-pegging to $0.91 at one point and setting up a short squeeze on the btc pair,  which spiked over $26k on Kraken in late session trading.



https://cointelegraph.com/news/bitcoin-price-spikes-to-26k-in-usdc-terms-how-high-can-the-btc-short-squeeze-go

I never understood why people say that the collapse of stable coins would hurt Bitcoin in the short term.

For me it seems just logical that Bitcoin would go up in price.  I mean where else should the money from a collapsing stablecoin market go?
A part into fiat but the rest would go into the next stable and most secure coin, which is Bitcoin.

right now, it mostly went to tether, which is erroneus, IMHO.

[Torque]

Lol. Of course they did. 


https://twitter.com/GRDecter/status/1634281801739915282

[Torque]

Oh the money printer is still open for business, it's just that no one wants to borrow at 5+% rates.

A return on nothing is still nothing.

[dragonvslinux]

fallout in the banking sector continues with SVB being shut down by the fed

ties to the USDC and Circle sent the stablecoin plummeting yesterday, de-pegging to $0.91 at one point and setting up a short squeeze on the btc pair,  which spiked over $26k on Kraken in late session trading.



https://cointelegraph.com/news/bitcoin-price-spikes-to-26k-in-usdc-terms-how-high-can-the-btc-short-squeeze-go

I never understood why people say that the collapse of stable coins would hurt Bitcoin in the short term.

Because quite frankly people after daft. And they have short-term memory. That of UST de-pegging in 2022, not of USDT de-pegging in 2018 for example, and the clear difference of consequence.

For me it seems just logical that Bitcoin would go up in price.  I mean where else should the money from a collapsing stablecoin market go?

At the moment it's flowing more into USDT (ironic I know) than Bitcoin, or even USD, although there was an initial spike in price due to USDC dumping for Bitcoin with high volume. Stop buys I imagine.

A part into fiat but the rest would go into the next stable and most secure coin, which is Bitcoin.

Not convinced it's as simple as that. When UST de-pegged, there was significant reserves in Bitcoin at the time - 40K if not mistaken. So when the reserves were liquidated, it did cause price to dump, as there was selling pressure (direct affect). Whereas when USDT de-pegged in October 2018, price spiked to the upside by 15% - it was a positive for Bitcoin - mainly as at the time there wasn't an alternative stablecoin.

So really I'd say it depends on the situation, mainly based on the collateral of stablecoin reserves and whether it's in Bitcoin or fiat. In this case, it's fiat reserves. So in summary, despite the short-term spike to the upside today, price is so far up +1%. What does this mean? Nothing happened basically, just another day of consolidation around $20K. Bitcoin remains unaffected.

To say this is positive for Bitcoin because price is up +1% is nonsense, likewise if price was down -1%. It's just completely irrelevant imo, at least at present with current situation. The irony being that USDC is short 8% on reserves due to SVB, and USDC price was down around 8% (now 5% I see) before buyers stepped in (some big funds notably), so pretty much the "reserve loss" was priced in quite quickly.

Monday will end up being a dumb day if USDC price is <$1. Coinbase are planning to resume redemption 1:1 of USDC for USD, once banks are open again, so arbitrage will play out of buying USDC under $1 and selling 1:1 for dollar until the price returns to parity. Despite all the doom and gloomers out there expecting USDC to go to zero, the likelihood hood (right now) of that happening is very low.

TL:DR: USDC de-pegging in this scenario isn't good or bad for Bitcoin, it's simply irrelevant.

But sure, we can always claim that the SVB is bearish for Bitcoin when price is so far completely unaffected by news. Then if price drops in the coming days, we can blame it on SVB 

[Biodom]

Oh the money printer is still open for business, it's just that no one wants to borrow at 5+% rates.

A return on nothing is still nothing.

I describe it like this: "F-k around....and find out".

[Toxic2040]

TL:DR: USDC de-pegging in this scenario isn't good or bad for Bitcoin, it's simply irrelevant.

+1 WOsMerit

nothing wrong with bitcoin thats for sure....just fucktards circling around rehypothecation

carry on

[ChartBuddy]

Explanation

[Biodom]

Coinbase are planning to resume redemption 1:1 of USDC for USD, once banks are open again, so arbitrage will play out of buying USDC under $1 and selling 1:1 for dollar until the price returns to parity. Despite all the doom and gloomers out there expecting USDC to go to zero, the likelihood hood (right now) of that happening is very low.

TL:DR: USDC de-pegging in this scenario isn't good or bad for Bitcoin, it's simply irrelevant.

Coinbase is just being optimistic. i would be surprised if they do so, although some people have said that even in the WORST case scenario (no buyer for SVB), FEDs would immediately issue a 62% 'dividend' with eventual recovery up to 94%.
So, it that case Circle gets 0.62X3.3=2.05 bil, with the shortfall "just" 1.254bil, which is about 3%, which later (1-2 years) becomes only about $200mil (6% of 3.3 bil).
Since Circle is earning about 1.56 bil/year on it's Treasuries, it is a situation that theoretically should resolve positively.

TL;DR If numbers are similar to what I posted, USDC might recover to about 0.97 by Monday.

[dragonvslinux]

Coinbase are planning to resume redemption 1:1 of USDC for USD, once banks are open again, so arbitrage will play out of buying USDC under $1 and selling 1:1 for dollar until the price returns to parity. Despite all the doom and gloomers out there expecting USDC to go to zero, the likelihood hood (right now) of that happening is very low.

TL:DR: USDC de-pegging in this scenario isn't good or bad for Bitcoin, it's simply irrelevant.

Coinbase is just being optimistic. i would be surprised if they do so, although some people have said that even in the WORST case scenario (no buyer for SVB), FEDs would immediately issue a 62% 'dividend' with eventual recovery up to 94%.

Coinbase doesn't care about SVB. They'll take the L imo and deal with it overtime. They have 5 other banks and fortunately only had 8% exposure ($3.3b) out of $40b in SVB.
You could say they got lucky... I would. Could have been more like 13% if it was split equally between the 6 banks they use. Or 50% if only two banks!
Then they would have been completely f**ked...

So, it that case Circle gets 0.62X3.3=2.05 bil, with the shortfall "just" 1.254bil, which is about 3%, which later (1-2 years) becomes about $200mil (6% of 3.3 bil).
Since Circle is earning about 1.56 bil/year on it's Treasuries, it is a situation sthat theoretically should resolve positively.

In this case, at worst, they lost 2 year of income then? I think they'll deal with it. Take the L and move on, maybe hope for the 62% compensation. After all Circle = Coinbase, so still lots of income.

The only real imminent concern would be USDC circulating supply dropping below $3.3 billion (-92%), as presumably that's what they can''t cover (at least not yet without a loan). That's why there will be selling from customers, but it'd take 90%+ redeeming for dollar for there to be a significant liquidity issue it seems. Meanwhile, I personally think they'd manage to secure a loan if that was happening.

Also, there are big VCs who stepped in to buy at $0.92 - almost as short-term loan - looking to redeem their USDC 1:1 for dollars on Monday. Ie they don't need USDC to go back to $1, they will just redeem 1:1. Then buy again presumably if USDC is still below $1, and recycle arbitrage... Maybe I'm being too optimistic, but I don't see this as an FTX-style enormous hole in bank balances. We're talking about a 8% liquidity loss.

TL;DR If numbers are similar to what I posted, USDC might recover to about 0.97 by Monday.

I know you said Monday, but the past hour it's already back to $0.98 !
Sure it could be below $0.97 by Monday, but even so...
Discount evaporating fast.
FUD is passing.

[Gachapin]

...

Oh yes... thanks.  You are absolutely right,  Bitcoin would very well be negatively effected by a stablecoin crash, if it was held as collateral by the stablecoin company.  
How did I miss that thought, when we just had the Luna debacle...

Would be interesting to know how many Bitcoins are used as collateral for the different stablecoins.  Just to get a feeling for the direct risk involved for the Bitcoin market.

Intersting thing is, a certain part of that stablecoin collateral BTC would be bought up by the very customers fleeing the collapsing stablecoin...  
So if that buying outweighed the selling of the BTC collateral, price would technically not be negatively affected from that side ...maybe

[ChartBuddy]

Explanation