This week, bitcoin awoke from its slumber, springing out of bed. Going in, bitcoin volatility was as compressed as it has been in a decade, with BVOL 7D at 2.82, the sixth-lowest reading in ten years, described at the time as a “historically stretched elastic band.”
The band snapped on Thursday morning. Bitcoin added roughly $4,400 in fifty minutes, touching $69,500 and liquidating about $1.1 billion of shorts inside an hour. It might’ve been the largest single-day short liquidation in bitcoin’s history.
By Thursday morning, bitcoin was near $72,000, up more than 7% on the day and roughly 12% on the week. Ethereum did better still, opening Thursday up 17.5%, with XRP up 13%.
Spare a thought for Jim Cramer, who sold all of his bitcoin immediately beforehand, and for everyone who insisted they were waiting for a Saylor liquidation to buy. “Everyone buys bitcoin at the prices they deserve.”
Obviously, Hyperliquid was one of the week’s biggest single beneficiaries. Ryan Watkins argued that everyone’s forward revenue estimates are now badly wrong and that this, plus volumes likely bottoming, warrants a large repricing. He calmly called it the mother of all catalysts for HYPE. More calmly, it might be the removal of a tail risk, Hyperliquid’s legality in the U.S. has been a pressing concern over the past year or more.
Apparently, one week before “Hyperliquid” left the President’s lips, Stan Druckenmiller longed HYPE via the Spot HYPE ETF called PURR. Fantastic timing! Binance’s CZ posted “We are so back!” in response to the U.S. President mentioning Hyperliquid, presumably grinning through a mouthful of broken glass.
U.S. institutions probably felt similarly to CZ. The CME’s CEO named Trade.xyz and Hyperliquid as reasons US markets need 24/7 trading, and Nasdaq will launch overnight trading from 9 p.m. to 4 a.m. ET on Dec. 6, taking it to nearly 23 hours a day.
Michael Green, who outlined this exact program back in March, called it an incredibly bullish development: buying 30-year paper shrinks net debt substantially through coupon mechanics, which should compress real rates and lift equities.
Not everyone was impressed by Secretary Bessent. In 2024, Secretary Bessent attacked then Treasury Secretary Janet Yellen for financing at the front end and betting on the carry trade, and for altering issuance to juice the economy before an election. Elsewhere in bond land, Japan’s 2-year yield jumped to 1.69%, a 31-year high, so the yen story has not gone anywhere. Ray Dalio is doom-posting about debt again, though it was pointed out that he said much the same in 1982, and the world kept on spinning. Regardless of your views on the Treasury’s actions, there was broad consensus that it was good for hard assets.
Putting the positive pro-crypto news and the price action together, it is hard not to just go ahead and be a permabull again. Eric Trump kept it simpler: what an amazing week for BTC and ETH.
The time for bottom signals is probably past, but just before everything pumped this week, Mark Cuban declared that chips as an asset class will be the new crypto.
Setting aside the price and bull market vibes, there were some quality stories within crypto this week. Let’s start with a story that got buried under all the excitement. FASB is moving to let stablecoins count as cash equivalents. Austin Campbell noted this codifies that corporations can hold them just like cash, at least the GENIUS-compliant ones. Quietly one of the more consequential items of the week.
The token value accrual debate continued. Mippo wrote that the buyback problem stems from the fact that, “right now investors do not trust tokens.” Crypto natives don’t trust projects to be capable stewards of their treasuries because the industry is riddled with dead or dying projects like EOS, which famously raised a $4 billion war chest. It then piddled away the opportunity to build EOS into anything relevant.
Buybacks are the current show of faith, and that show is costing Hyperliquid more than 93% of its cash flows. Lorenzo Valente proposed a better use of the money: acquire Gemini and become the regulated HIP-3/4 deployer in the US. Grow the still young business rather than buy your own coin.
Every couple of months, there is a post about memecoins, conceivably the opposite of tokenized equities since they’re explicitly worthless, showing how few memecoin traders are profitable. A public Dune query using FOMO’s fee router showed that roughly 6% are profitable, and collectively, traders are down $1.26 billion. Put another way, “only 25 out of 292,531 wallets made more than $10K.”
On the Chopping Block, Haseeb Qureshi argued that the past couple of weeks of memecoin trading activity is the trenches attempting to front-run new Robinhood demand they believe is coming. It might never come, at least like it was before. Tangentially, aside from HYPE and a handful of high-quality projects, altcoins might continue to circle the drain despite a bull market.
A few quick hits. Coinbase will stop reporting trading volume on the grounds that it doesn’t fully represent the business, which is a curious thing to decide right now. Fidelity’s parent increased its BitMine position by 1,281% in Q2 to 7.7 million shares, and VanEck added 49%. Chainalysis sued the US government over a contract awarded to TRM Labs. Justin Sun appears to be dusting Coinbase, Binance and Hyperliquid users with USDT from HTX, which is under EU and UK sanctions, to see what their AML systems do about it. While the aforementioned projects are tussling with their respective governments, World Liberty Financial received preliminary OCC approval to become a bank.
Finally, security. Safepal disclosed a flaw in an order-tracking plug-in that exposed names, emails, shipping addresses, phone numbers and purchase details for a subset of customers — the second hardware wallet supply-chain leak in as many weeks. Buy in person, pay cash.
Stay safe out there.
-David Sencil
