Cumberland is commenting on the recent volatility and potential opportunities to take advantage of it.
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This was a second consecutive extremely slow weekend, with BTC trading in a 1% range for a meager 12% vol.
For the past few weeks, the market has seemed to be in recovery mode, with most traders fairly exhausted from a turbulent November and many already looking to turn the calendar to Dec. On our end, we’ve typically seen higher-than-expected (given the volatility) volumes so far this month, as we’re starting to see volumes transition from exchanges to OTC. (This will mostly be a lagging indicator, given the weeks needed for KYC for onboarding).
As for the weekend narrative, it largely resolved around trust in crypto institutions. The weekend started with the revelation that The Block’s CEO had received several loans from Alameda Research, an event which will (rightly or wrongly) undermine the trust the market places in The Block’s coverage. The CEO stepped down, but still remains the company’s majority shareholder, placing some uncertainty around one of the primary newsrooms in the space.
The other story catching attention this weekend was Binance’s efforts at completing an audit which included proof of reserves. Most POR attempts by major exchanges have been viewed as lacking by the market; then again, it’s only been a month since FTX collapsed. Exchange POR should be considered a requirement going forward, and should have been a requirement going back, but the industry didn’t demand them. Instead of the exchanges continuing to put forward audit attempts and being shot down by the market, it would be worthwhile to see industry groups propose reporting standards for exchanges to comply with.
Gas on Ethereum was expensive this weekend, at one point spiking to 200 gwei and pushing ETH towards back towards net deflationary (currently 0.005%/year inflation since the Merge). The high gas was partially driven by NFT volumes, but nearly 50% of the gas was used by the USDT contract. This appears to have been driven by Binance moving assets to prepare for the POR.
And for something more fun: Sotheby’s is auctioning a second copy of the Constitution this week, and the spiritual successors to ConstitutionDAO are going for it. (I honestly do not know anyone in crypto who is not rooting for these guys to win it).
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