Crypto Crash: Forced Selling Cooling Down; Correlation with stocks back in focus

Hi! Welcome back to Distributed Ledger, our weekly crypto newsletter, hitting your inbox every Thursday. I will guide you through the current bear markets.

As usual, you can find me on Twitter at @FrancesYue_ to send feedback or let us know what you think we should cover. You can also email me to share your personal stories with Crypto.

Crypto in a snap

Bitcoin BTCUSD
is down 5.8% over the past seven days to trade at around $20,374 on Thursday, according to CoinDesk data. Ether ETHUSD
lost about 5.8% to about $1,095 in seven days. Dogecoin DOGEUSD meme token
gained 7.9% while another dog-themed token, Shiba Inu SHIBUSD,
up about 23.3% from seven days ago.

Crypto Metrics
Biggest Winners


%7 days return




Synthetix network



Celsius network









Source: CoinGecko, as of June 23

Biggest Loser


%7 days return
















Source: CoinGecko, as of June 23

cooling down

Over the past weekend, a steep sell-off sent Bitcoin as low as $17,601 before retracing back to around $20,382 on Thursday. The slump was largely due to forced selling, according to Thomas Dunleavy, a senior research analyst at Messari.

The crypto market was in chaos after Celsius, one of the largest crypto lenders, paused payouts since June 12, while Three Arrows, one of the most active hedge funds in the space, was reportedly unable to Multiple lenders to meet margin calls times. Investors were concerned about contagion risks – I’ve written more about that here.

During recent sell-offs, bitcoin and ether have underperformed some smaller coins, which Dunleavy says is “very unusual.” Bitcoin and ether typically tend to outperform smaller coins during market downturns as investors go into “flight to safety” mode.

The latest trend, according to Dunleavy, is “an indication that people are just selling whatever they need to meet some margin requirement.”

The market has calmed down somewhat since then, while “liquidity in terms of actual volumes jumping during the sell-off has also gone down,” Dunleavy said. “I think the broader question now that the crypto market contagion has kind of slowed down is whether we’re going to pick up the correlation with the stock market.”

“If Macro Trades Down, Will Bitcoin See Another Leg Down? Or are we going to hold the water here somehow?’ said Dunleavy.

The rescue operation of the SBF?

Crypto billionaire Sam Bankman-Fried is injecting funds into two crypto companies that have been in the spotlight after Celsius and Three Arrows showed signs of trouble.

Celsius rival BlockFi announced on Tuesday that it has received a $250 million revolving credit line from crypto exchange FTX to bolster its balance sheet. BlockFi announced last week that it would lay off 20% of its employees as the rapidly changing macroeconomic environment weighs on the company’s growth rate.

Meanwhile, crypto broker Voyager Digital Ltd announced that its subsidiary Voyager Digital Holdings has reached a definitive agreement, a $200 million turret in cash and USDC and a 15,000 BTC turret from Alameda Ventures , the venture capital arm of Bankman-Fried’s quantitative crypto trading firm Alameda, to raise research.

Voyager Digital Ltd. also revealed its subsidiary Voyager Digital LLC’s exposure to Three Arrows, including 15,250 Bitcoin, or about $310 million based on the crypto’s recent price, and $350 million in stablecoin USDC. Voyager may default on Three Arrows for non-repayment of its loan, the company said.

Short Bitcoin ETF

ProShares launched its Short Bitcoin Strategy ETF, or BITI BITI, on Tuesday,
the first inverse exchange traded fund linked to bitcoin in the US. It came at a time when Bitcoin is down about 70% from its all-time high.

BITI tracks the inverse of the daily performance of the S&P CME Bitcoin Futures Index, as per the fund’s factsheet.

“BITI allows investors to conveniently get short exposure to Bitcoin by buying an ETF in a traditional brokerage account,” ProShares chief executive Michael L. Sapir wrote in a statement Monday.

However, like other inverse ETFs, BITI is designed to track the inverse of the underlying index over a single day. Investors who hold the fund for more than one day may receive worse than expected returns, particularly when market volatility is heightened.

Crypto companies, funds

shares of Coinbase Global Inc. COIN
climbed 9.6% to $56.83 on Thursday, and they are up 11% in the last five trading sessions. Michael Saylors MicroStrategy inc
Gained 4.9% on Thursday at $179.20 and is up 11% over the past five days.

mining company Riot Blockchain Inc.
Shares rose 2.9% to $4.74 on Thursday and are up 4.6% over the past five days. shares of Marathon Digital Holdings Inc.
down 0.1% to $6.74 with a 2.8% gain over the past five days. another miner, Ebang International Holdings Inc. ebony,
fell 5.5% to $0.46 on Thursday, contributing to a 15.6% loss over the past five days. Inc.
Shares traded 5.1% lower at $31.19. Shares gained 11.4% over the five-session period.

shares of block inc
Formerly known as Square, it rose 8.6% to $65.89, contributing to a 14.6% weekly gain. Tesla Inc. TSLA
Shares lost 1.7% to $696.48 while up 8.9% over the past five sessions.

PayPal Holdings Inc.
down 0.3% to $72.78 and up 2.2% over the five sessions. Nvidia Corp.
Shares fell 1.9% to $160.46, up 2.8% over the past five trading days.

Advanced Micro Devices Inc.
Shares fell 2.7% on Thursday to $81.46, down 0.7% from five trading days ago.

Under crypto funds, ProShares Bitcoin Strategy ETF
was up 1.3% on Thursday to $12.63, while its Short Bitcoin Strategy ETF fell 1.4% to $40.73. Valkyrie Bitcoin Strategy ETF
up 1.3% to $7.85 during VanEck Bitcoin Strategy ETF
rose 0.7% to $19.75.

Grayscale Bitcoin Trust
rose 1.2% to $13.12.

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