🌳 Russia Threatens to Destroy Kyiv; Coinbase to Suspend Rewards for USDC Holders

GM 🌳

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Our Daily View

What We Are Covering Today

• Russia threatens to destroy Kyiv; South Korea lowers interest rates in fear of Trump’s return to presidency (More in Macro & TradFi)
• Coinbase to suspend rewards for USDC holders; Celsius initiates second payout of $127M (More in DeFi & CeFi)
• BTC’s age metric drop signals a bullish trend; ETH exchange supply declines (More in On-Chain)
• BTC sees another decline in IV and increase in skew, indicating potential market optimism towards the end of the year (More in Crypto Derivatives)
• BTC and ETH consolidating above key support levels (More in Crypto Technical Analysis)

Macro & TradFi

Russia has escalated its aggression against Ukraine, with President Vladimir Putin threatening to use the newly deployed Oreshnik ballistic missile to destroy underground and political targets in Kyiv, following Ukraine’s use of Western long-range missiles within Russian territory. Putin hinted that future targets could include key military and decision-making sites in Ukraine’s capital. These developments reflect a significant escalation in the conflict, with Ukraine’s energy grid under persistent threat and the Kremlin signaling its willingness to intensify its military campaign.

In other news, the Bank of Korea (BoK) surprised everyone on Thursday by cutting its benchmark interest rate by 0.25 percentage points to 3%, marking a rare back-to-back rate reduction amid growing concerns about economic risks tied to Donald Trump’s return to the US presidency. The BoK also downgraded its growth forecasts for South Korea, lowering this year’s estimate from 2.4% to 2.2% and next year’s from 2.1% to 1.9%. BoK Governor Rhee Chang-yong cited heightened economic risks, including Trump’s election and Republican control of Congress, as key factors influencing the move. With 12 of 17 industrial sectors reporting declining profits in Q3, Korean businesses face additional challenges from surging Chinese exports and weakening domestic demand. A weaker South Korean Won could exacerbate inflation in South Korea due to its reliance on oil imports, limiting the BoK’s ability to cut rates further without risking higher domestic inflation. While the BoK’s rate cut is aimed at mitigating these challenges, persistent export weakness and economic uncertainty stemming from US trade policies could weigh heavily on South Korea’s growth outlook.

On Thursday, US markets are closed for Thanksgiving, with shortened trading hours on Black Friday. Investors' focus is now on JOLTs job opening news on December 3 at 23:00 SGT and Non-Farm Payrolls and Unemployment Rate data on December 6 at 21:30 SGT. Additionally, the Tokyo CPI data is due this Friday, 07:30 SGT. 

DeFi & CeFi

• Coinbase to suspend rewards for USDC holders
• Celsius initiates a second payout of $127M
• SecondLane shops Pump.fun equity stake at $1.5B FDV
• Ex-Binance executive alleges retaliatory firing over bribery whistleblowing
• Swiss canton passes legislation to explore Bitcoin mining with surplus energy
• Russia formalizes taxation framework for crypto, mining

Coinbase will suspend rewards for USD Coin (USDC) holders in the European Economic Area (EEA) starting December 1, 2024, due to the upcoming implementation of the Markets in Crypto-Assets (MiCA) regulation. The decision follows MiCA's new requirements for e-money tokens, which stablecoins like USDC fall under. Users in the EEA will continue to earn rewards on their USDC balances until November 30, with payments issued within the first 10 business days of December. The move reflects broader regulatory shifts in the EEA, as crypto firms adjust to MiCA’s evolving rules for stablecoins. Coinbase had previously announced plans to remove non-compliant stablecoins in jurisdictions where MiCA applies. Other platforms, such as Bitstamp and Binance, have also taken steps to align with MiCA, while stablecoin issuer Tether announced it would halt support for its euro-pegged stablecoin EURt in the EEA, focusing on MiCA-compliant initiatives. 

Elsewhere, Bankrupt crypto lender Celsius has announced the second round of payments to creditors, involving the distribution of $127M in assets, which will cover 2.75% of total creditor claims. This follows an earlier payout in August, where $2.53B was returned to 251,000 creditors, covering 57.65% of claims. With this new distribution, the total payout to creditors now stands at 60.4% of eligible claims. Creditors who received crypto payments in the first round will continue to receive BTC, while others will get cash. To receive BTC, creditors must have a verified Coinbase account linked to their Celsius records. If the market value of BTC falls below $95,836, creditors may receive less than 2.75% of their claims, while a higher price would result in increased payouts. For creditors who cannot accept crypto, their Bitcoin equivalent will be sold at market rates, and the proceeds will be delivered in US dollars through various payment methods like wire transfers, PayPal, or Venmo. The second distribution is part of Celsius's ongoing bankruptcy proceedings, as former CEO Alex Mashinsky is scheduled for trial in January 2025 on fraud charges related to the company’s collapse.

On-Chain

In an on-chain analysis by Santiment, Bitcoin's Mean Dollar Invested Age has dropped significantly, validating the ongoing bull market phase. This metric, which tracks the average age of BTC held in wallets, has declined from a peak of 637 days in October 2023 to 466 days currently, reflecting a 27% reduction. The sharp decrease indicates that previously stagnant coins are re-entering circulation, increasing liquidity and utility. Notably, the metric has dropped by 9% in the last three weeks alone, following the "Trump Pump", signaling heightened network activity and reduced stagnation. Historically, rising Mean Dollar Invested Age correlates with bearish and unpredictable markets, while a declining trend, as seen now, is a bullish indicator.

Meanwhile, an on-chain analysis of Ethereum’s Exchange Supply Ratio reveals a significant decline to levels last seen in 2016, despite an increase in its circulating supply and relatively low price. This trend suggests that investors are actively withdrawing ETH from exchanges, likely accumulating it for long-term holding. Such behavior indicates strong confidence in Ethereum as a safe haven asset, reinforcing its role as a key investment in the cryptocurrency market.

Derivatives

• The funding rate for BTC and ETH remained positive.
• Deribit Implied Volatility Index (DVOL) for BTC and ETH dipped slightly to 57.64 and 71.49, respectively.
• The 30-day 25-delta skew (C-P) for BTC rose to 3.65 while that of ETH declined again to 3.08.
• The futures market witnessed $204.47M in liquidations, with longs representing 63.75%.

Bitcoin's at-the-money IV for 30-day contracts has remained relatively stable, while the 7-day IV continues to decline. This drop may be driven by the upcoming holiday season, with the market anticipating a period of relative quiet in both the crypto and stock markets.

BTC's term structure remains in a contango state, with notable drops in IV across the curve. Short-dated contracts have been the most affected, likely due to the expectation of lower trading volumes during the Thanksgiving holiday in the U.S.

Despite a stable spot price, BTC has seen a notable increase in the 30-day C-P skew over the last 24 hours. However, the 7-day skew has remained in negative territory and stayed relatively constant throughout the day, indicating that the market expects bullish momentum to materialize closer to the new year.

For ETH, however, there has been a convergence in the skews between the 7-day and 30-day contracts, with both now showing definitively positive skews. This suggests the market expects ETH to outperform towards the end of the year, particularly given its relatively lackluster performance compared to BTC in recent months.

Crypto Technical Analysis

On the 1-hour chart, BTC is consolidating near the $95.5K level. The Bollinger Bands are narrowing, suggesting reduced volatility and a possible breakout in either direction. The price is currently testing the middle band (20-SMA), hinting at a potential continuation of the upward trend if it sustains above this level. The RSI is at 53.71, slightly in the bullish territory, indicating mild buying momentum but still leaving room for further upward movement. If BTC breaks above $95.9K, the next target could be the $98.1K resistance, a significant psychological level. Conversely, a break below $94.8K could lead to a retest of $91.9K, a critical support level.

On the 1-hour chart, ETH is consolidating near $3.57K after failing to maintain momentum above $3.6K. The immediate support lies at $3.53K, with the next strong support level at $3.38K. On the upside, resistance is seen at $3.63K, which coincides with the upper Bollinger Band. A breakout above this level could represent a continuation of the bullish trend. The Bollinger Bands are slightly tightening, indicating reduced volatility. The RSI is at 50.58, suggesting neutral momentum, with neither strong buying nor selling pressure currently dominating. Overall, ETH appears to be in a consolidation phase after its recent rally. 

Access institutional-grade commentary on TradFi × Crypto markets

By TRHX Research

Daily Readings

TradFi

• Donald Trump rounds out economic team after tariff threats

• Asia markets fall as traders assess Tokyo inflation print and South Korea manufacturing data.

• Lebanon had 'no say in the decision to go to war,' foreign minister says

• France's political chaos drives borrowing costs to the same level as Greece's for the first time

• Shares of key chip suppliers jump as U.S. reportedly considers toned-down China curbs

• South Korea unexpectedly reduces benchmark lending rates in first back-to-back cuts since 2009

• Australia enacts ‘world leading’ children’s social media ban

• Putin threatens to turn Kyiv targets ‘to dust’

• Canada to strengthen border after Trump tariff threat

• Japan Wobbles on Tax Hikes to Pay for Historic Defense Build-Up

• Chinese yuan to hit record lows as U.S. tariff threat mounts, investment banks forecast

Crypto

• Coinbase to halt USDC earn program on MiCA compliant regions

• Crypto user convinces AI bot Freysa to transfer $47K prize pool

• SecondLane shops Pump.fun equity stake at $1.5B FDV

• Scroll refutes allegations of ‘predatory’ airdrop

• Ex-Binance executive alleges retaliatory firing over bribery whistleblowing

• Hong Kong proposes crypto tax exemptions to rival Singapore as financial hub

• Swiss canton passes legislation to explore Bitcoin mining with surplus energy

• Ethereum co-founder moves $72 million in ETH to Kraken

• Russia formalizes taxation framework for crypto, mining

• Ethereum DeFi TVL hits 2-year high as activity on platforms like Uniswap, Aave soars

• Celo’s token drops as Coinbase skips Layer-2 migration support

• Metaplanet continues to emulate MicroStrategy with planned $62M Bitcoin expansion

• XT Exchange assures users after $1.7 million asset theft disrupts services

• Celsius initiates second payout of $127 million, enhancing creditor returns to 60.4%

• Gitfo's Founders Mint Billions of GFT After Binance Delists Web3 Wallet's Token

• UltraShort Bitcoin ETF Offering 2x Inverse Returns Sees Record Volume as BTC Holds Above $90K

Deal Flow

• Partior Series B funding reaches $80M on Deutsche Bank investment

Yours sincerely,
TRHX Research (Formerly Treehouse Research) 🌳