To the New World’s New Humans ~ “80% Cold Wallets”
BTC fell below approximately $77,000 and ETH below approximately $2,250, with over $100 million in long positions liquidated within an hour (price and liquidation figures need verification).
The drop itself is nothing unusual. What is unusual is that this time, two kinds of risk are being tested at once: leverage and custody.
Funds are moving in opposite directions: U.S. spot crypto ETFs reportedly saw net outflows of approximately $700 million last week, including about $203 million from BTC ETFs, $432 million from ETH ETFs, and $71 million from SOL ETFs, while XRP ETFs saw a small net inflow (needs verification). During the same period, Strategy said it had purchased an additional 811 BTC and held 849,327 BTC as of November 1 (to be verified against the company’s 8-K filing).
Some are selling; others are buying. What determines the outcome isn’t who is more optimistic, but who can survive the next bout of volatility.
On the custody front, regulators are taking action: under current South Korean rules, exchanges must keep at least 80% of their assets in cold wallets. On November 2, the Financial Services Commission summoned Upbit, Bithumb, and Coinone, urging them to go further and strengthen monitoring, following the Binance hack.
An incident at one exchange is prompting an entire country to tighten its rules.
Rules are also taking shape elsewhere: ICE and Trade[XYZ] are working together to develop regulated perpetual futures based on Hyperliquid technology, subject to CFTC approval. Hyperliquid generated approximately $65 million in protocol revenue over the past 30 days (according to DefiLlama). Perpetual futures are moving from gray-market products toward licensed ones, but a license doesn’t mean low risk.
Cold wallets determine whether a platform can be hacked; your position size determines whether you get liquidated.
Eighty percent in cold wallets is the platform’s baseline. Your own baseline is making sure one liquidation doesn’t take you out of the game.
The above is for sharing information and opinions only and does not constitute investment advice.
Hot money may flee; cold funds remain,
Eighty percent guards the gate.
Leverage cannot ward off a night of snow;
Light positions let you see the dawn.
— Mingdao
BTC fell below approximately $77,000 and ETH below approximately $2,250, with over $100 million in long positions liquidated within an hour (price and liquidation figures need verification).
The drop itself is nothing unusual. What is unusual is that this time, two kinds of risk are being tested at once: leverage and custody.
Funds are moving in opposite directions: U.S. spot crypto ETFs reportedly saw net outflows of approximately $700 million last week, including about $203 million from BTC ETFs, $432 million from ETH ETFs, and $71 million from SOL ETFs, while XRP ETFs saw a small net inflow (needs verification). During the same period, Strategy said it had purchased an additional 811 BTC and held 849,327 BTC as of November 1 (to be verified against the company’s 8-K filing).
Some are selling; others are buying. What determines the outcome isn’t who is more optimistic, but who can survive the next bout of volatility.
On the custody front, regulators are taking action: under current South Korean rules, exchanges must keep at least 80% of their assets in cold wallets. On November 2, the Financial Services Commission summoned Upbit, Bithumb, and Coinone, urging them to go further and strengthen monitoring, following the Binance hack.
An incident at one exchange is prompting an entire country to tighten its rules.
Rules are also taking shape elsewhere: ICE and Trade[XYZ] are working together to develop regulated perpetual futures based on Hyperliquid technology, subject to CFTC approval. Hyperliquid generated approximately $65 million in protocol revenue over the past 30 days (according to DefiLlama). Perpetual futures are moving from gray-market products toward licensed ones, but a license doesn’t mean low risk.
Cold wallets determine whether a platform can be hacked; your position size determines whether you get liquidated.
Eighty percent in cold wallets is the platform’s baseline. Your own baseline is making sure one liquidation doesn’t take you out of the game.
The above is for sharing information and opinions only and does not constitute investment advice.
Hot money may flee; cold funds remain,
Eighty percent guards the gate.
Leverage cannot ward off a night of snow;
Light positions let you see the dawn.
— Mingdao