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Crypto Daybook Americas: Bitcoin Traders Deleverage on Steady Fed Rate Outlook
By Francisco Rodrigues (All times ET unless indicated otherwise)
Crypto traders are deleveraging after Wednesday’s FOMC minutes showed the Fed is looking to hold rates steady until inflation improves and discussed pausing or slowing the balance sheet runoff.
Still, the yield on the 10-year Treasury dropped and the dollar weakened. Cryptocurrencies are higher, with the CoinDesk 20 Index up 1.4% and bitcoin 1.2% over 24 hours. The gains follow remarks by Czech National Bank Governor Ales Michl, who reiterated the case for bitcoin as a reserve asset, and President Donald Trump saying he’d ended “Joe Biden’s war on Bitcoin and crypto.”
Bitcoin traders are taking a wait-and-see approach as waning demand, a lack of blockchain activity and faltering liquidity inflows point to potential pullback to $86,000. It’s currently over $97,000. Their stance is visible not only in declining volatility, but also a significant drop in open interest.
Open interest on bitcoin futures contracts has fallen below $60 billion from nearly $70 billion in late January, Coinglass data shows. The decline comes amid what appears to be an unraveling of the memecoin craze as recent struggles, such as Argentina’s Libra debacle, dampened enthusiasm.
“Right now, the market is in a bit of a cooldown phase,” David Gogel, VP of strategy and operations at the dYdX Foundation, told CoinDesk. “Bitcoin’s been holding up, but after failing to break past $105k in January, we’ve seen capital inflows slow down and speculative assets like Solana and memecoins take a hit.”
That hit is visible in the aggregate open interest for futures contracts for SOL, the Solana blockchain’s native token. OI dropped from around $6 billion late last month to around $4.3 billion now, according to data from TheTie. Solana is one of the leading networks for memecoins.
“The market should stay attuned to broader macro-drivers and geopolitical developments that could trigger moves,” Wintermute OTC trader Jake O told CoinDesk. These geopolitical developments include rising tensions between Trump and Ukrainian President Volodymyr Zelensky that led to a not-so-subtle public exchange.
Declining leverage and a shift away from riskier plays suggest the market may be entering a new phase. What that actually entails remains to be seen. Stay alert!
What to Watch
Crypto:
Feb. 21: TON (The Open Network) becomes the exclusive blockchain infrastructure for messaging platform Telegram’s Mini App ecosystem.
Feb. 24: At epoch 115968, testing of Ethereum’s Pecta upgrade on the Holesky testnet starts.
Feb. 25, 9:00 a.m.: Ethereum Foundation research team Reddit AMA.
Feb. 27: Solana-based L2 Sonic SVM (SONIC) mainnet launch (“Mobius”).
Macro
Feb. 20, 8:30 a.m.: Statistics Canada reports January’s producer price inflation data.
PPI MoM Est. 0.8% vs. Prev. 0.2%
PPI YoY Prev. 4.1%
Feb. 20, 8:30 a.m.: The U.S. Department of Labor releases the Unemployment Insurance Weekly Claims report for the week ended Feb. 15.
Initial Jobless Claims Est. 215K vs. Prev. 213K
Feb. 20, 5:00 p.m.: Fed Governor Adriana D. Kugler gives a speech titled «Navigating Inflation Waves While Riding on the Phillips Curve» in Washington. Livestream link.
Feb. 20, 6:30 p.m.: Japan’s Ministry of Internal Affairs & Communications reports January’s consumer price inflation data.
Core Inflation Rate YoY Est. 3.1% vs. Prev. 3%
Inflation Rate YoY Prev. 3.6%
Inflation Rate MoM Prev. 0.6%
Feb. 21, 9:45 a.m.: S&P Global releases February’s U.S. Purchasing Managers’ Index (Flash) reports.
Composite PMI Prev. 52.7
Manufacturing PMI Est. 51.5 vs. Prev. 51.2
Services PMI Est. 53 vs Prev. 52.9
Earnings
Feb. 20: Block (XYZ), post-market, $0.88
Feb. 24: Riot Platforms (RIOT), post-market, $-0.18
Feb. 25: Bitdeer Technologies Group (BTDR), pre-market, $-0.17
Feb. 25: Cipher Mining (CIFR), pre-market, $-0.09
Feb. 26: MARA Holdings (MARA), post-market, $-0.13
Token Events
Governance votes & calls
Sky DAO is discussing withdrawing a portion of the Smart Burn Engine’s LP tokens to stop malicious actors from acquiring the tokens.
DYdX DAO is discussing increasing the limit on the maximum notional value of liquidations that can occur within a given block on the dYdX protocol to enhance the protocol’s speed and efficiency of risk reduction during liquidations.
Unlocks
Feb. 21: Fast Token (FTN) to unlock 4.66% of circulating supply worth $78.6 million.
Feb. 28: Optimism (OP) to unlock 1.92% of circulating supply worth $34.23 million.
Mar. 1: Sui (SUI) to unlock 0.74% of circulating supply worth $81.07 million.
Token Launches
Feb. 20: Pi Network (PI) to be listed on MEXC, OKX, Bitget, Gate.io, CoinW, DigiFinex and others.
Conferences:
CoinDesk’s Consensus to take place in Hong Kong on Feb. 18-20 and in Toronto on May 14-16. Use code DAYBOOK and save 15% on passes.
Day 3 of 3: Consensus Hong Kong
Feb. 23-March 2: ETHDenver 2025 (Denver)
Feb. 24: RWA London Summit 2025
Feb. 25: HederaCon 2025 (Denver)
March 2-3: Crypto Expo Europe (Bucharest, Romania)
March 8: Bitcoin Alive (Sydney, Australia)
Token Talk
By Oliver Knight
PI, the native token of the Pi Network, debuted at $1.70 and immediately rose to $2.00 before losing 50% of its value in the next two hours.
The network claims to have 60 million users. There are fewer than 1 million active wallets.
Based on a self-reported circulating supply figure of 6.3 billion, PI currently has a market cap of $7.8 billion.
The premise behind Pi Network is a blockchain that allows users to mine tokens on their smartphones. It captured a considerable amount of attention from retail traders and has drawn comparison to viral tokens from previous cycles like SafeMoon.
Token holders face the risk of a lack of liquidity. The token’s most liquid exchange is OKX, but 2% market depth — the amount of capital required to move the price by 2% in either direction — is between $33K and $60K. This means an order of say $100K would shift the market considerably to present volatile trading conditions.
Derivatives Positioning
BTC volatility on derivatives has reached a monthly low, declining from an annualized 36.09% to 28.43%.
That contrasts with ETH, which has seen its annualized volatility rise from 49.43% to 74.72%, according to data published by Deribit.
Roughly $1.5 billion worth of BTC and ETH options are set to expire tomorrow, with almost $5 billion expiring in a week’s time.
The total open interest across all trading pairs on retail centralized exchanges has risen by 2.10% on the day to $80.8 billion.
Market Movements:
BTC is up 1.10% from 4 p.m. ET Wednesday to $97,300.67 (24hrs: +1.09%)
ETH is up 0.60% at $2,738.90 (24hrs: +0.51%)
CoinDesk 20 is up 1.72% to 3,250.68 (24hrs: +1.67%)
Ether CESR Composite Staking Rate is down 6 bps to 2.99%
BTC funding rate is at 0.0037% (4.0920% annualized) on Binance
DXY is down 0.18% at 106.98
Gold is up 0.60% at $2,950,84/oz
Silver is up 1.52% to $33.19/oz
Nikkei 225 closed -1.24% at 38,678.04
Hang Seng closed -1.60% at 22,576.98
FTSE is down 0.24% at 8,690.90
Euro Stoxx 50 is up 0.62% at 5,494.99
DJIA closed Wednesday up 0.16% at 44,627.59
S&P 500 closed +0.24% at 6,144.15
Nasdaq closed +0.07% at 20,056.25
S&P/TSX Composite Index closed unchanged at 25,626.16
S&P 40 Latin America closed -1.35% at 2,463.68
U.S. 10-year Treasury rate was down 1 bps at 4.53%
E-mini S&P 500 futures are down 0.2% to 6,150.50
E-mini Nasdaq-100 futures are down 0.22% at 22,200.75
E-mini Dow Jones Industrial Average Index futures are down 0.15% to 44,643
Bitcoin Stats:
BTC Dominance: 61.10 (0.04%)
Ethereum to bitcoin ratio: 0.02819 (0.28%)
Hashrate (seven-day moving average): 831 EH/s
Hashprice (spot): $54.24
Total Fees: 5.127 BTC / $499,118
CME Futures Open Interest: 172,360 BTC
BTC priced in gold: 32.8 oz
BTC vs gold market cap: 9.32%
Technical Analysis
Bitcoin has rebounded from the yearly open at $93,385, reclaiming the 100-day exponential moving average on the daily timeframe.
Over the last three deep sell-offs, the price has formed higher lows, indicating strong buyer interest at the current range lows.
However, the short-term 20-day and 50-day EMAs on the daily timeframe recently crossed for the first time since August 5th, signalling a need for caution in the near term.
Crypto Equities
MicroStrategy (MSTR): closed on Wednesday at $318.67 (-4.58%), up 2.01% at $325.08 in pre-market
Coinbase Global (COIN): closed at $258.67 (-2.25%), up 1.76% at $263.22
Galaxy Digital Holdings (GLXY): closed at C$25.32 (-3.76%)
MARA Holdings (MARA): closed at $15.78 (-1.68%), up 1.33% at $15.99.
Riot Platforms (RIOT): closed at $11.56 (unchanged), up 1.04% at $11.68
Core Scientific (CORZ): closed at $12.02 (-2.99%), up 1.41% at $12.19
CleanSpark (CLSK): closed at $9.89 (-1.88%), up 1.81% at $10.07
CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $22.78 (-0.26%), unchanged
Semler Scientific (SMLR): closed at $52.22 (+2.96%), up 0.06% at $52.25
Exodus Movement (EXOD): closed at $48.41 (+4.00%), unchanged
ETF Flows
Spot BTC ETFs:
Daily net flow: -$64.1 million
Cumulative net flows: $40.00 billion
Total BTC holdings ~ 1.170 million.
Spot ETH ETFs
Daily net flow: $19 million
Cumulative net flows: $3.18 billion
Total ETH holdings ~ 3.795 million.
Source: Farside Investors
Overnight Flows
Chart of the Day
Month-to-date data for top bridged netflows by network highlights a strong capital inflow into the Base network since the start of the month.
The layer-2 blockchain had a net inflow of $314 million, more than twice the amount of the second-placed Arbitrum, which has seen an inflow of $115 million.
Inflows to Solana slowed amid liquidity drains caused by multiple high-profile celebrity memecoin launches over the past month.
While You Were Sleeping
LIBRA Memecoin Fiasco Destroyed $251M in Investor Wealth, Research Shows (CoinDesk): Nansen’s on-chain analysts say 86% of people who traded the LIBRA token lost money, with the total loss of $251 million. The winners enjoyed a total profit of $180 million.
HK to Expand, Open Up Virtual Assets Market (The Standard): At Consensus Hong Kong, SFC CEO Julia Leung announced ASPIRe — a 12-point roadmap to correct market imbalances with improved licensing, custody, token frameworks, derivatives trading and margin lending for professional investors.
MANTRA Launches Program for Real-World Asset Startups With Google Cloud Support (CoinDesk): Layer-1 blockchain MANTRA’s RWAccelerator backs startups working on tokenizing real-world assets by providing mentorship, with technical support and cloud credits coming from Google.
China Is Likely to Cut Its Benchmark Policy Rate Next Month (CNBC): China’s central bank held its key lending rates steady on Thursday, prompting expectations of a policy easing in March.
Bank of England’s Gold-Diggers Grapple With Trump-Fueled Frenzy (Bloomberg): Speculation over impending U.S. tariffs has forced a small BoE team to extract 12.5 kg gold bars as traders exploit gaps between London spot and U.S. futures prices.
‘Stagflation’ Fears Haunt U.S. Markets Despite Trump’s Pro-Growth Agenda (Reuters): While investors have largely remained bullish on U.S. stocks, some worry that the president’s new tariff measures might drive up prices and stifle economic growth.
In the Ether
Bybit CEO Ben Zhou said Thursday that his exchange will not list the Pi Network’s PI token, which was controversially released on Thursday, citing a Chinese police warning from 2023 that alleged the project was a scam targeting elderly people, leaking their personal information and leading to the loss of their pensions.
«There are multiple other reports out there questioning the project legitimacy,» Zhou posted on X. «Yes, I still think you are a scam, and no, Bybit will not list scam.»
The Pi Network didn’t respond to CoinDesk’s request for comments.
The token went live alongside the project’s mainnet release on Thursday. Users who «mined» tokens by clicking their smartphone screens once a day were finally able to transfer and sell tokens.
Zhou, however, found himself in the middle of a separate issue on Friday, with his exchange Bybit, which was hacked by North Korea’s Lazarus Group for $1.5 billion.
The PI token debuted on OKX at $0.67, rose as high as $2 and then slumped 65% and is currently around $0.69.
One issue that raised concerns was a marketing tactic that rewarded users who recruited other users. Each time a user persuaded someone else to sign up using their code, the first person’s «mining» rewards were increased. The idea had some drawing comparisons to the 2017 Ponzi scheme, Bitconnect.
«Pi Network is the biggest ponzi [scheme],» X user CryptoBeast alleged, posting to their 656K followers.
The project also offers users the option of locking their tokens for as long as three years. In return, they are promised increased rewards. The same technique was at the heart of the Hex project, whose founder, Richard Schueler, known online as Richard Heart, is a fugitive sought by the U.S. Securities and Exchange Commission (SEC) for, among other things, defrauding his investors.
The token has a market cap of $4.18 billion based on a circulating supply of $6.33 billion. However, its inflationary nature means the maximum supply is 100 billion, giving a fully diluted value (FDV) at a staggering $67 billion, assuming it holds the current price. At launch, FDV rose as high as $200 billion, almost double that of Solana.
Some exchanges have been undeterred by the concerns raised. OKX, Bitget and Gate have racked up a total of $620 million in trading volume for PI trading pairs between them, according to CoinMarketCap.
Read more: Pi Network’s Token Debuts at $195B Value Despite Minimal Liquidity
Blockchain analytics firm Arkham Intelligence said North Korea’s Lazarus Group was behind Bybit’s $1.46 billion hack.
In an earlier post on social media platform X, Arkham offered a bounty of 50,000 ARKM tokens for anyone who could identify the attackers for Friday’s hack. Later, the platform said onchain sleuth ZachXBT submitted «definitive proof» that the attackers were the North Korean hacker group.
«His submission included a detailed analysis of test transactions and connected wallets used ahead of the exploit, as well as multiple forensics graphs and timing analyses,» the post said.
Read more: Bybit Loses $1.5B in Hack but Can Cover Loss, CEO Confirms
The hack that rocked the crypto market and saw most prices tumbling was called the «largest crypto theft of all time, by some margin,» by Elliptic’s Tom Robinson, co-founder and chief scientist. «The next largest crypto theft would be the $611 million stolen from Poly Network in 2021. In fact it may even be the largest single theft of all time.»
Blockchain data provider Nansen told CoinDesk that the attackers first withdrew nearly $1.5 billion worth of funds from the exchange into a main wallet and then spread the funds across several others.
«Initially, the stolen funds were transferred to a primary wallet, which then distributed them across more than 40 wallets,» Nansen said. «The attackers converted all stETH, cmETH, and mETH to ETH before systematically transferring ETH in $27 million increments to over 10 additional wallets,» Nansen said.
The attack appeared to have been caused by something called «Blind Signing,» where a smart contract transaction is approved without the comprehensive knowledge of its contents.
«This attack vector is quickly becoming the favorite form of cyber attack used by advanced threat actors, including North Korea,» said blockchain security firm Blockaid’s CEO Ido Ben Natan. «It’s the same type of attack that was used in the Radiant Capital breach and the WazirX incident.»
«The problem is that even with the best key management solutions, today most of the signing process is delegated to software interfaces that interact with dApps. This creates a critical vulnerability — it opens the door for malicious manipulation of the signing process, which is exactly what happened in this attack,» he said.
Bybit CEO Ben Zhou wrote earlier on X that a hacker «took control of the specific ETH cold wallet and transferred all the ETH in the cold wallet to this unidentified address.» He also confirmed that the exchange «is solvent even if this hack loss is not recovered.»
Oliver Knight contributed to the reporting of this story
Read more: Bitcoin, Ether Slump as Crypto Prices Dip on Report of Massive $1.5B Bybit Hack
Only a handful of hours ago crypto markets were buoyed as the Securities and Exchange Commission signaled its intent its dismiss a lawsuit against Coinbase (COIN).
The welcome regulatory news sparked 5% gains for COIN and the likes of increasingly important crypto trading platform Robinhood (HOOD), and sent bitcoin (BTC) breaking out of its recent tight trading range to within sight of the $100,000 level.
The first bomb to break the good vibes came late in the U.S. morning when Bybit was stung by about a $1.5 billion hack — the largest such exploit ever in crypto. That news sent bitcoin and ether (ETH) sliding roughly 2% in a manner of minutes.
Prices quickly seemed to stabilize and — at least in the case for bitcoin — bounce a bit.
Et tu stocks?
Any sort of bounce, however, was quickly snuffed out as modest losses for U.S. stocks began to accelerate in afternoon trading.
Among the excuses for the quick retreat was a poor reading from the Michigan Consumer Sentiment Index, which unexpectedly slipped to 64.7 versus forecasts for 67.8. The same survey’s inflation expectations rose to 3.5% against an expected 3.3%.
An outlier, but perhaps also a reason for selling, was a new coronavirus scare out of China. Discovered by researchers at the Wuhan Institute, HKU5-CoV-2 is «strikingly similar» to the virus that caused the 2020 pandemic, according to the Daily Mail.
Shortly before the close of trading on Friday, the Nasdaq is lower by 2.2% and the S&P 500 by 1.7%. The 10-year U.S. Treasury yield has fallen nine basis points to 4.42%.
As for crypto, bitcoin has more than erased its gains of the past couple of days, trading back to $95,000 and lower by nearly 4% over the past 24 hours. Ether (ETH) has pulled back to $2,650, also lower by about 4%. The broader CoinDesk 20 Index is down 4.4%.
Bybit CEO Labels Pi Network a Scam, Citing Official Police Warning
North Korean Hackers Were Behind Crypto’s Largest ‘Theft of All Time’
Plunging U.S. Stocks Help Add to Crypto’s Bad Day
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