Bitcoin’s Dramatic Plunge: A Comedy of Errors in the Crypto World! 😂

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What to know:

By Omkar Godbole (All times ET unless indicated otherwise)

Ah, the eternal dip! Bitcoin, that fickle friend, has once again decided to take a nosedive, plummeting below the $80,000 mark. February’s decline now exceeds 20%, and the crypto market is in a veritable bloodbath, with ether slipping beneath $2,100—a level it clung to like a lifebuoy since August. Who knew digital coins could be so dramatic? 🎭

But wait, it’s not just the crypto world that’s in turmoil! The increased volatility in cryptocurrencies is merely a reflection of the broader market’s existential crisis. The Volmex BVIV, which tracks the 30-day implied volatility in bitcoin, has jumped by 10%, mirroring the MOVE index’s rise, which measures the implied volatility of U.S. Treasury notes. Meanwhile, the VIX, Wall Street’s so-called fear gauge, has risen by 14%. Talk about a party! 🎉

These tumultuous movements, coupled with a sell-off in growth-sensitive currencies like the Australian, New Zealand, and Canadian dollars, are indicative of macroeconomic jitters. The specter of potential Trump tariffs looms large, prompting a mad dash towards less volatile assets. Who needs stability when you can have chaos? 😅

“U.S. domestic policies have become as stable as a house of cards in a windstorm,” quipped Griffin Ardern, head of options trading and research at crypto financial platform BloFin. “Investors, faced with the challenge of deciphering the future, are more inclined to clutch their low-volatility assets like a security blanket.” Traders are liquidating positions faster than you can say “market crash,” leading to a decline across nearly all asset classes, including our beloved cryptocurrencies.

As we brace ourselves for President Trump’s impending speech, volatility seems poised to remain heightened. Those hoping for a miraculous rebound in risk assets based on personal consumption data may find themselves disappointed, as anticipated soft readings could be overshadowed by tariff concerns and rising inflation metrics. What a delightful mess! 😬

Yet, amidst this gloomy outlook, a glimmer of hope shines through the clouds. This week, the SEC dropped charges against Uniswap, one of the leading decentralized exchanges, and is considering similar leniency towards Consensys. Perhaps the regulatory tide is turning? 🌊

As Evgeny Gaevoy, CEO of leading market maker Wintermute, noted at Consensus Hong Kong last week, many are overlooking the SEC’s evolving attitude—a factor the market has yet to fully price in. And let’s not forget the decline in the basis in the CME bitcoin and ether futures, a sign of weakening demand that has stalled. Bitcoin is fast approaching a potential demand zone, so keep your eyes peeled! 👀

Token Talk

By Shaurya Malwa

  • The Lazarus Group, that charming North Korea-backed hacker group, is laundering over $240 million in ether through THORChain, a decentralized cross-chain swap protocol, primarily converting it to bitcoin. Because why not? 💸
  • THORChain allows cross-chain swaps without wrapped assets, maintaining user custody and securing funds on the blockchain. A true marvel of modern technology!

ALERT: LAZARUS LAUNDERING THROUGH THORCHAIN – MINIMUM $240M SO FAR

Over $240M of ETH has been sent through Thorchain by Lazarus-tagged wallets on Arkham.

These funds have mainly been swapped for native BTC.

— Arkham (@arkham) February 27, 2025

Derivatives Positioning

  • TRX and TRON are experiencing negative perpetual funding rates, indicating a dominance of bearish, short positions as the crypto sell-off deepens. Most other major coins still have positive funding rates. How quaint!
  • On decentralized exchange Derive.xyz, ETH’s options skew for both the 7-day and 30-day options has sharply dropped to -15% and -6% respectively, representing a strong bias for protective puts. A wise move, indeed!
  • The pricing of

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2025-02-28 15:21