Artemis Big Fundamentals in Crypto

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Artemis Weekly Wrap-up (3/17/2023)

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Artemis Weekly Wrap-up (3/17/2023)

your go-to source for weekly fundamental updates

Jimmy Zheng
Mar 18
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Artemis Weekly Wrap-up (3/17/2023)

research.artemis.xyz

gm folks, congrats on making it through another week.

here’s what happened in crypto 👇

👼 Silicon Valley Bank depositors are bailed out while fears of a broader bank crisis emerge

🤔 Balaji sends out the “BitSignal” wagering that bitcoin will reach $1mm in 90 days

🤯 Arbitrum launches a token!!

Thanks for reading Artemis Big Fundamentals in Crypto! Subscribe for free to receive new posts and support my work.

The crypto markets saw a huge rise in prices throughout the week with average and median WoW price increases of 21.6% and 19.1%, respectively. This week saw Silicon Valley Bank depositors get bailed out by the US government along with the Swiss government launching $54bn backstop for Credit Suisse, another (much larger) beleaguered bank.

🪦 Silicon Valley Bank depositors are bailed out while fears of a broader bank crisis emerge

Silicon Valley Bank depositors received joyous news last Sunday when the FDIC announced that they would be insuring all depositors after a $42bn single day bank-run caused the bank to be taken over by the FDIC early Friday morning (3/10/2023).

Twitter avatar for @FDICgov
FDIC @FDICgov
This morning, we acted to protect all depositors of the former #SiliconValleyBank of Santa Clara, California. This action will help preserve franchise value for marketing and sale of the closed institution without cost to the taxpayer. fdic.gov/news/press-rel…
Image of the FDIC with text: Press Release - FDIC Acts to Protect All Depositors of Former Silicon Valley Bank
10:08 AM ∙ Mar 13, 2023
125Likes60Retweets

Couple of takes from around the wall street table:

Ken Griffin is unhappy with capitalism

“It would have been a great lesson in moral hazard,” he said. “Losses to depositors would have been immaterial, and it would have driven home the point that risk management is essential.” “We’re at full employment, credit losses have been minimal, and bank balance sheets are at their strongest ever. We can address the issue of moral hazard from a position of strength.”

Twitter avatar for @FinancialTimes
Financial Times @FinancialTimes
US capitalism is ‘breaking down before our eyes’, says Ken Griffin
on.ft.comSubscribe to read | Financial TimesNews, analysis and comment from the Financial Times, the worldʼs leading global business publication
10:10 PM ∙ Mar 13, 2023
178Likes65Retweets

Bill Ackman rejoices

“Our gov’t did the right thing. This was not a bailout in any form. The people who screwed up will bear the consequences. The investors who didn’t adequately oversee their banks will be zeroed out and the bondholders will suffer a similar fate.”

Twitter avatar for @BillAckman
Bill Ackman @BillAckman
This was not a bailout. During the GFC, the gov’t injected taxpayer money in the form of preferred stock into banks. Bondholders were protected and shareholders were diluted to varying degrees. Taxpayer money was put at great risk. Many people who screwed up suffered minimal to… https://t.co/mjwcnVRV9X
2:45 AM ∙ Mar 13, 2023
13,894Likes2,232Retweets

Meanwhile, Credit Suisse received a $54bn loan from the Swiss National Bank on Wednesday that would serve as a liquidity backstop for the troubled lender. This news came after a number of potential investors including the Saudi National Bank (a major CS shareholder) ultimately declined to make any further investments. The Saudi National Bank previously bought a 10% stake in Credit Suisse last year, and stated that owning a large share of the bank would result in “unwanted regulatory requirements.”

Twitter avatar for @FT
Financial Times @FT
Credit Suisse to borrow up to $54bn from Swiss central bank
on.ft.comSubscribe to read | Financial TimesNews, analysis and comment from the Financial Times, the worldʼs leading global business publication
1:40 AM ∙ Mar 16, 2023
51Likes25Retweets

While Credit Suisse is one of the largest international banks facing immense pressure from the rapid rise of interest rates, this week saw trading halt due to precipitous price drops for a wide swath of major regional banks including First Republic, Western Alliance Bancorp and PacWest Bancorp.

Twitter avatar for @NBCNews
NBC News @NBCNews
Trading has been halted in multiple bank stocks, including First Republic Bank and Western Alliance Bancorp. nbcnews.com/news/us-news/l…
2:42 PM ∙ Mar 13, 2023
217Likes109Retweets

The existential risk of the US banking system is now front and center for the mainstream media, and this article from the FT walks through a quick assessment of the US Banks asset exposure given recent rises in interest rates.

TLDR: The US banking system’s current market value of assets is ~$2.2tn lower than their book value of assets (accounting for loan portfolios). Furthermore, after the recent decrease in the value of bank assets, FT notes that “2,315 banks accounting for $11tn of aggregate assets have negative capitalization.”

Twitter avatar for @FTAlphaville
FT Alphaville @FTAlphaville
The US bank system is more fragile than you’d think
on.ft.comRegister to read | Financial TimesNews, analysis and comment from the Financial Times, the worldʼs leading global business publication
8:41 AM ∙ Mar 14, 2023
41Likes17Retweets

🤔 Balaji sends out the “BitSignal” wagering that bitcoin will reach $1mm in 90 days

Elsewhere, Balaji, famed twitterer and former CTO of Coinbase and former GP at a16z put up the “BitSignal” and bet that bitcoin would reach $1mm a pop in 90 days.

He states that “the central banks, the banks, and the bank regulators have bankrupted all of us… they’re about to print $2T to hyperinflate the dollar.”

Twitter avatar for @balajis
Balaji @balajis
Making BTC moon is the way we send the fire alarm to the rest of the world that the Fed is hyperinflating the dollar. And moon means memes! @thenetworkstate will be replying to the 1000 winners on my behalf to send payments. Submit tweet here:
forms.gleGoogle Forms: Sign-inAccess Google Forms with a personal Google account or Google Workspace account (for business use).
6:34 PM ∙ Mar 16, 2023
1,203Likes90Retweets

He goes on to message that the “banks are insolvent” and refers to a paper from the FDIC bank in November 2022 that details how the FDIC was concerned about unrealized losses growing in US banks’ bond portfolios and the possibility that those losses would have to be realized.

The “Bitcoin is a hedge against the collapse of traditional financial institutions” narrative appears to be back in full force, with heavy twitter hitters sounding the alarm.

🤯 Arbitrum launches a token!!

The long awaited Ethereum L2 scaling solutions Arbitrum (that currently boasts ~2x the daily active users of its competitor Optimism) is finally launching a token! The Artemis team broke down the airdrop dynamics and put together an airdrop calculator walking through how the market might react to the token 🫡

Twitter avatar for @Artemis__xyz
Artemis 🏹 @Artemis__xyz
🔵 ARB Token Supply Schedule 1) dApps (via airdrop) - immediately vested 2) Users (via airdrop) - immediately vested 3) Investors - 4 year unlock, 1st unlock next year 4) Team + Advisors - same as Investors 5) DAO Treasury - immediately unlocked, but not circulating
Image
Twitter avatar for @Artemis__xyz
Artemis 🏹 @Artemis__xyz
Distribution of the 10bn tokens: - 43% to the Arbitrum DAO Treasury - 27% to the Arbitrum team + Advisors - 18% to Investors - 12% to Users of Arbitrum (via Airdrop) - 1% to DAOs building dApps on Arbitrum (via Airdrop) https://t.co/xoz1qEGh45
9:22 PM ∙ Mar 16, 2023
19Likes3Retweets
Twitter avatar for @Artemis__xyz
Artemis 🏹 @Artemis__xyz
Yesterday, we published an airdrop calculator that prices your Arbitrum 🔵 Airdrop based on the fully diluted valuation (FDV) of Optimism 🔴 But is that a fair comparison? Let's build a comp ✍️ and see what the numbers say 🔢 (NFA)
Image
Twitter avatar for @Artemis__xyz
Artemis 🏹 @Artemis__xyz
If you received 2,000 tokens, this means you will receive $2,121 of airdropped tokens. Template below (make a copy and derive your own assumptions!): https://t.co/1V1JOXwPWu
9:50 PM ∙ Mar 17, 2023
8Likes3Retweets

Arbitrum has been one of the most active DeFi chains with applications such as GMX, Gains and Camelot capturing market share over the past few months. In the last 24 hours, the top applications on Arbitrum by gas usage have been:

  • Gains Networks (decentralized perps trading)

  • SushiSwap (decentralized exchange)

  • UniSwap (decentralized exchange)

  • Camelot (decentralized exchange / launchpad)

You can directly view the Arbitrum Comps Table here (powered by Artemis Sheets)

Arbitrum Comps Table

that’s all folks

Detailed L1 dashboard for people who love more numbers in smaller font:

Note: Revenue represents fees that go to the protocol’s treasury or are returned to tokenholders via a burn mechanism (source: Token Terminal). Weekly commits and weekly dev activity as of 3/10/23.

The content is for informational purposes. None of the content is meant to be investment advice. Use your own discretion and independent decision regarding investments.

Thanks for reading Artemis Big Fundamentals in Crypto! Subscribe for free to receive new posts and support my work.

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Artemis Weekly Wrap-up (3/17/2023)

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