🐳 Weekly Edition: Global Unrest Leads to $800M in Liquidations

The ongoing conflict between Israel and Iran has resulted in Bitcoin falling from highs of over $110k on Wednesday to as low as $102.5k earlier today. We’ve now recovered to $105k, but not without massive liquidations to leverage traders totaling $800M in the last 24 hours alone. With reports continuing to come in of further strikes on both sides, this is sure to be an interesting weekend for the crypto markets. Candidly, Bitcoin’s strength through the last few days has been impressive — the days when it would have lost 15% or more on this news were not so long ago.

Part of this can be attributed to the recent phenomenon of “MicroStrategy copycats” which attempt to replicate Michael Saylor’s success with their own companies. This has generated and continues to generate significant buy-side liquidity on Bitcoin, however the companies that have branched out to other coins haven’t performed quite as well. SharpLink Gaming ($SBET on the NASDAQ) went from $2 to over $120 in a matter of days after announcing their intentions to acquire Ethereum for their treasury by selling shares in the company. Today, just two weeks after this announcement, it trades at $9 after crashing over 70% after hours on Thursday. For the time being it’s unclear if this was driven by insiders or panic selling by retail after realizing how diluted the pool of shares would be, but either way this is a bad look for our industry.

To echo the sentiment in previous Beluga Brief editions, in times like this you’re better off holding onto your positions rather than selling the panic. If you have some dry powder on the side there’s more of a decision to be made about whether to allocate or not, but in the case of the Beluga portfolio I’m adopting the strategy of “spot and chill.” Prior to the mass liquidations this week, we saw the first signs of Ethereum breaking out in a long time, reaching up to $2,900. The recent conflict aside, stablecoins are the talk of the town among TradFi institutions and retail traders alike.

This seems to be the big near-term catalyst for ETH, as the vast majority of stablecoins are on the Ethereum network. Additionally, staking for the ETFs seems to be coming soon based on messaging for regulators, and of course a tweet from ETF issuer VanEck today filled with steak emojis (insinuating staking is coming). This would be a major milestone as Ethereum staking can offer yields in the mid to high single digits, meaning ETF holders will be able to gain a reasonable annual yield on their holdings in addition to price appreciation.

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