8th May 2024 > > ENA & USDe.

tl;dr

13F filings for the SEC. USDe imperils the very existence of Bybit.

Market Snap

Market Wrap

A small net outflow yesterday from the ETFs, the withdrawal of Grayscale’s ETH ETF application, and geo-political issues do not make a conducive backdrop for crypto gains.

Curious Cryptos’ Commentary – 13F SEC filing

I may have inadvertently and slightly misled you yesterday. I said that 15th May was the deadline for 13F filings, which was true. What I didn’t realise was that the results would be made public before that date.

The first one is in, and it comes from Hightower which manages $130 bn of funds. Its disclosure shows $68mm of spot BTC ETFs spread across six of the ten available options. At just 0.5% of total AUM, I expect we will see further investments by HIghtower going forward.

Curious Cryptos’ Commentary – ENA (Ethana) & Bybit

If you have been paying attention, you already know that the launch of a new algorithmic stablecoin USDe by Ethena Labs will one day implode, taking down the whole Ethena ecosystem. It will implode not because the underlying cash and carry trade is theoretically unsound, it is just that in the long-term, at some stage, markets will stay irrational longer than you can stay solvent. That’s what did for Long-Term Capital Management, amongst others. More information here:

https://www.curiouscryptos.com/post/12th-april-2024-london-ena

Bybit, a centralised cryptocurrency exchange, has announced it will accept USDe as collateral against perpetual futures trades.

I struggle to think of a more stupid decision in recent years, other than giving Bankman-Fried the time of day.

USDe, with its fake 20% plus APY, will likely prove popular with crypto investors and crypto speculators alike. If it takes a material share of the market for stablecoins, its use as collateral on Bybit – or any other exchange – puts the very livelihood of that exchange at risk. That risk is not immediate, but you should take mitigatory action today.

If you use Bybit, stop. If you have assets held at Bybit, remove them now.