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Crypto Week: ApeFest Blinding Lights, Buffett's First Crypto Touchdown and Miners Exodus from BTC

Crypto market has a positive shine this week. Bitcoin (BTC) added 1.9% to $35,000 per coin. Altcoins are doing much better. Some altcoins like Ripple (XRP), VeChain (VET) are rising by 5-7% this week. 

There are no reasonable explanations to this phenomenon. It could be a mix of fear of missing out, a pursuit of Bitcoin huge upside and general excitement over the crypto market in the last four weeks. USDC and Tether lending rates at Aave, the largest decentralised lending system, rapidly jumped above 10%. This is a bold sign of elevated demand for crypto assets, and for increasing position in cryptos.

Meanwhile, ex-Cantor Fitzgerald executive are launching a new crypto-lending platform on the threshold of first spot Bitcoin-ETF launch and expectations of an influx of institutional clients. The crypto-lending segment collapsed in 2022 – beginning of 2023. Even Warren Buffett’s Berkshire Hathaway had a collateral involvement in the crypto frenzy as the company reported 93% or $250 million paper profit from the investment in South African Nu Holdings, the parent company of crypto-friendly Brazilian bank Nubank. This is the best-performing stock in Berkshire Hathaway’s portfolio in 2023. The initial investment was $750 million in 2021. So, the first accidental crypto touchdown could be considered truly successful.

However, one should be not blinded by this crypto frenzy. Many ApeFest 2023 attendees reported ‘severe eye burn’ and skin injuries caused by unprotected exposure to the UV lights during the event in Hong Kong last Sunday. Several people complained on eye pain, vision problems, and sunburnt skin. Some of them received a snow blindness as their unprotected eyes were exposed to these blinding lights. Fortunately, it is a temporary blindness that will go away, and the normal vision should be completely restored. 

The same can’t be said for other crypto market participants. Net sales of Bitcoin and altcoins by largest miners in October hit 105% of reserves. Thirteen largest crypto miners were accumulating cryptocurrencies during the last three months starting July 2023. They were selling 64% of their cryptocurrencies monthly mint in July, 77% - in August and September. This could be a technical correction, but it could also demonstrate fears of a possible downturn ahead of the launch of the first spot Bitcoin-ETF. 

According to capital flows into ProShares Bitcoin Strategy ETF (BITO) even large investors are vulnerable to the current frenzy. The fund reported $140.7 million inflows last week, the highest since October 2021.