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- 💰 Bitcoin Crashed. Here's Why:
💰 Bitcoin Crashed. Here's Why:
PLUS: Everyone HATES OpenSea
Gm, this is the doodhwala, the only crypto newsletter that gives you the same feeling as opening the McDonald’s Happy Meal and finding TWO toys. 😍
Here’s what we got for you today:
💩 Bitcoin At $26,000: Why Did Crypto Crash
⛴️ We Hate It: Why Everyone (including Mark Cuban) Hates Opensea
📈 Cheese and Charts: Biggest DeFi Sector FLEX
🛠️ Resourcewala: WTF Is DPOS Anyway?
🍼 Doodhshots: For Once, Binance Is Doing The Suing
💩 Why Did Bitcoin Crash Over The Weekend?
Bitcoin crashed over the weekend. You either know this (and are crying rn) or you’re in denial.
We’re in between both – grief and avoidance. 🫠
So, we decided to rationalize Bitcoin’s latest crash with proper reasons. Not like saying Bitcoin crashed because of the position of the moon and the stars. 🌕 🪐
For context, the latest crash was BIG:
Bitcoin’s 2-month gains were wiped off
The crypto market lost $100 billion in market cap
McDonald’s received 1000+ applications from crypto bros
Well the last one we can’t confirm, but we’ve already sent a job application to the corner sandwich shop.
And this ☝️ crash happened after major wins like:
🏆 BlackRock files for a spot Bitcoin (Source: FREE MILK)
🏆 Ripple [partially] wins case against SEC (Source: FREE MILK)
🏆 Coinbase launches its L2-chain BASE (Source: FREE MILK)
🏆 Your parents finally think you’re not a failure (Source: Just ask them!)
(maybe that last one was just for me 😭)
So, what are the reasons for this decline? We’ve got 3 of them.
1️⃣ News
Crypto is very sensitive to news. That’s why we try to make it easier for you!
In the past week, two pieces of news severely impacted market prices:
👉 SpaceX Dumping BTC
Elon Musk’s fourth favourite company (after X, Tesla, and doodhwala of course) dumped some of its BTC reserves.
How much?
No one knows.
But a Wall Street Journal report said:
“The documents also show SpaceX wrote down the value of bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency.”
SpaceX, unlike Tesla and X, is NOT a public company. And hence does not need to disclose how many BTC (or other rando assets) it holds.
But this report ☝️ and especially this AMOUNT of crypto held sent bearish shockwaves into the market.
👉 China’s Poor Economy
News also broke out that China is going through deflation. 🐡
Deflation is not when you’re sad that you’re girlfriend dumped you or your boss fired you. Here’s the TLDR on Deflation:
“Deflation is a decline in prices for stuff. This happens when there is a decrease in the supply of money and cheap credit in the economy.”
With China (a big crypto OTC market) going through deflation, the purchasing power of commodities (and Bitcoin) goes down. 📉 📉 📉
This also led to bearish sentiments. 😢
2️⃣ Correlation
Bitcoin’s price is heavily tied to big stock market indices like – the S&P500 (a market index tracking the prices of the top 500 companies in the US)
We can measure this by – the correlation between BTC and the S&P500.
➕ Positive correlation = 📈 BTC 📈 S&P500 or 📉 BTC 📉 S&P500
➕ Negative correlation = 📉 BTC 📈 S&P500 or 📈 BTC 📉 S&P500
In the past few weeks, the correlation between BTC 🤝 the S&P500 increases from -0.7 to +0.9, its highest in 2023. Check it 👇
So, last week when the S&P500 went down, so did BTC. 😞
3️⃣ Leverage
Finally – leverage.
Crypto is unlike any other market because the volume of derivatives traded is 5x the volume of spot crypto traded.
Just see how exchanges push their derivatives market MORE than other markets. 🤯
So, because of the bearish sentiments → Bitcoin’s price fell → This affected the derivatives market → And led to massive liquidations.
Check it 👇
When Bitcoin fell below $27k, nearly $800 million worth of longs (people betting on the price going up) got liquidated in the market.
Doodhwala’s Take:
Bitcoin crashed. It happens. Don’t worry about it. 😌
At least now you know THE WHY.
I still don’t know why my girlfriend broke up with me or why my boss fired me. Wish there was an explainer for that. 😢
💔 Why Everyone Hates OpenSea
Mark Cuban.
That billionaire tech entrepreneur, Dallas Mavericks' owner, and the guy who really knows his crypto.
Yes, that Shark Tank Guy. 🦈
Well, he had some spicy things to say about OpenSea - the online NFT trading platform we all know and love...or do WE? 😕
Cuban tweeted, "Not collecting and paying royalties on NFT sales is a HUGE mistake by OpenSea." 👇
Not collecting and paying royalties on NFT sales is a HUGE mistake by @opensea. It diminished trust in the platform and hurts the industry. And I say this as an @opensea investor @DevinFinzer
— Mark Cuban (@mcuban)
Aug 18, 2023
Wait wait wait!
Isn't Cuban an investor in OpenSea? That's right!
He joined in during their $23 million Series A funding round back in 2021.
And now, OpenSea is valued at $13.3 billion after its Series C funding last year.
So, wtf is Mark upset about?
OpenSea just announced that they're scrapping the extra little bit artists get when their NFTs are sold on, AKA creator royalties. 📉
Wtf are creator royalties?
They are those little extra charges, usually between 2.5% to 10%, added to secondary sales of NFTs that go directly to the artists. 🎨💸
But didn't their CEO, Devin Finzer, once say that these royalties were crucial for the artists? Yes, he did.
But he’s changed now (like my girlfriend changed to my es).
It’s → Creators vs OpenSea!
🙈 Enter Yuga Labs aka The creators of the Bored Ape Yacht Club (those lovable, wealthy ape avatars).
They're super unhappy with OpenSea's decision, and they're not just tweeting about it.
Yuga Labs is planning to cut ties with OpenSea by February 2024 → means no more trading of new Yuga projects or any that have upgradeable smart contracts on OpenSea. 🛑 🦍
On @opensea's decision to sunset their Operator Filter.
— Yuga Labs (@yugalabs)
Aug 18, 2023
The drama continues…
Betty, the pseudonymous founder of the NFT project – Deadfellaz, called for an industry-wide boycott of OpenSea.
Betty was all about supporting underrepresented artists, and she felt that OpenSea was failing them by ditching the crypto-native principle of supporting decentralization through profit-sharing.
What’s the Community Saying?
With OpenSea being the heavyweight in the NFT space, many see this move as potentially ending the royalty practice for good. 😢
Now that sounds a bit scary. For us and for the industry. And OpenSea too.
Doodhwala’s Take:
Don’t only HODL to your crypto but also HODL to your principles! 🌚
You there, OpenSea?
📈 Cheese and Charts: Perp DEXs Flexing
Okay, so volatility hit the block this week. 😬
Tho it’s a great time for those who BELIEVE in crypto, (all those maxis too).
And when any big thing happens, someone always makes some cash.
This week? The Perpetual DEXs.
Wtf are those?
Imagine you're at a casino playing poker, but instead of playing one round and then cashing out, the game keeps going on forever until you decide to leave. That's kind of how Perpetual DEXs work!
A "Perpetual DEX" is a decentralized exchange (that's the DEX part) where you can trade cryptocurrency contracts that don’t have an expiration date (that's the Perpetual part).
So, instead of buying or selling an asset outright, you're making a bet on its future price without an end date in sight.
Got it? Great! Now let’s break it down:
Why the sudden rise though? 🧐
Volatility means → more trades → Perpetual DEXs get more users.
Now, you're probably wondering, who’s topping the leaderboard? Here’s the rundown 👇
🥇 Synthetix - $1.5M
🥈 dYdX - $997K
🥉 GMX - $621K
🎗 Honorable Mentions:
4️⃣ Level Finance - $192K
5️⃣ Vertex - $184K
According to a report, these platforms are the real MVPs this week. 🌟
So what do you think? - Is volatility good for business or just a double-edged sword? 🤔
(REPLY and let us know 👇)
🛠 Resourcewala: WTF Is DPOS Anyway?
The crypto-world is always on the hunt for the perfect consensus mechanism.
And bro, there HAVE been debates! From PoW to PoS, every nerd’s got an opinion.🤓
But the latest thing? DPOS, or Delegated Proof of Stake.
Sound complicated? Nah, just decentralized democracy with a twist. 🌀
Today's resource? It’s all about:
What on Earth is DPOS?
How does it plan to solve the Two Generals' Problem? 🤔
The Pros and Cons of DPOS.
Plus: Is DPOS the future or just another fad?
LFG! 🔥🔥🔥
🍼 Doodhshots: For Once, Binance Is Doing The Suing
💰 $50 Million Gone: Recur, an NFT startup, which raised $50 million and launched the Nickelodeon NFTs shuts down. No recurring expenses huh?
💨 Crypto Dot Gone: The founder of Glow Token files a lawsuit against crypto exchange Crypto Com for damages worth $250k. Crypto Com needs a Glow Up!
🥊 Check This Binance: After Checkout dot com severed ties with Binance, the exchange wants to take legal action against the payment service. Don’t mess with CZ huh?
👌 $40 Billion Bought: Tokenization firm Securitize acquires Onramp Invest, a platform for financial professions with $40 billion in assets. Securitize is securing the bag!
🌪️ Tornado Down Bad: A US court agrees with the decision to impose sanctions on crypto mixer Tornado Cash. Calm before the storm?
🤣 Milky Meme Of The Day
Even a bot can answer this right.
— Doodhwala 🥛 (@DoodhwalaDaily)
Aug 18, 2023
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That’s all for today folks! See ya tomorrow!
Yo! Our legal and financial advisors (aka our good ol’ conscience) have asked us to add this boring disclaimer. None of what you read here is financial advice. We aren’t here to get you to buy or sell crypto. We’re only here to tell you what’s up in crypto today and make you laugh. So, if you screwed up on a trade, that’s on you G. Stay safe in the markets.