Bitcoin and ether have shown strong dependence over the past week following the US Department of Justice's settlement with cryptocurrency exchange Binance on November 21, according to the latest research from K33. report.
The Department of Justice established a criminal case with Binance last Tuesday, which had investigated alleged money laundering, fraud and sanctions violations. The crypto exchange will pay a fine of $4.3 billion, marking one of the largest corporate settlements in US history.
While comparisons have been made to the collapse of FTX, "Binance has operated illegally in the US, which they will no longer be able to do, but the deal has nothing to do with mishandling customer funds" and "will not have any contagious effect." effects in the future," said senior analyst Vetle Lunde and vice president Anders Helseth.
The news had little sustained impact on the market, with bitcoin and ether closing the week with flat returns, although altcoins fell slightly and Binance's BNB token took a significant hit, falling 10%, analysts noted.
bitcoin currently trading at $37,857 with ether to $2,038, an increase of about 6% and 5%, respectively, since Nov. 21, when the market absorbed the implications of the deal. BNB It is currently trading at $228, a drop of nearly 14% since November 21, according to price data from The Block.
In contrast, Uniswap UNI The token has risen around 20% over the past week, based on the decentralized exchange being the opposite of a centralized exchange like Binance, the analysts added.
Binance 'not going away'
Despite Binance's Declining Market Share This Year and More Billion dollar outflows recorded within 24 hours of its $4.3 billion fine, Binance won't be going away anytime soon, Lunde and Helseth argued.
Binance's market share among non-dollar exchanges fell below 45% this month from around 70% at the beginning of the year amid regulatory pressure, according to The Block data dashboard.
A similar picture was painted in the derivatives market during 2023, with Binance losing its market share from 32% to 26% throughout the year, the analysts added.
"Nevertheless, Binance's strong user base points to Binance remaining a cornerstone of the cryptocurrency market structure as we move into 2024," Lunde and Helseth said, and Binance remains the largest cryptocurrency exchange by trading volume with a certain margin.
Profit Taking Signs Amid Substantial Long Exposure on the CME
Institutional traders on the Chicago Mercantile Exchange held substantial long exposure this week, K33 analysts said, with exposure to bitcoin and premiums for bitcoin and ether approaching all-time highs.
CME BTC futures have only traded at higher premiums on three occasions: twice during the 2020-2021 bull run and once before the COVID crash, the analysts added. The premium is the difference between the spot price of an asset and the price of its futures.
However, by Monday, premiums had moderated substantially along with a 6% reduction in open interest, indicating that one or a few larger traders were making profits, Lunde and Helseth said.
Native crypto derivatives traders in the offshore market are also not showing a clear directional trend, as funding rates remain neutral and open interest remains stable at relatively low levels, the analysts added.
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