Crypto vehicles pursued

Money management firms seeking to launch exchange-traded funds (ETFs) tied to the spot price of Bitcoin have not yet laid eyes on any regulatory green lights – but optimism runs high. Just look at the inflows that existing crypto products are seeing.

On Monday, CoinShares released weekly data (for the period ended Nov. 24th) showing digital asset investment vehicles experienced net inflows of $346 million, the largest tally across what is now nine straight weeks of influx positivity.

"This is the largest run since the bull market in late 2021," declared James Butterfill, head of research at CoinShares.

Anticipation of a spot-based ETF launch in the U.S. (as opposed to existing exchange-traded products tied to, for example, futures) spurred the latest seven-day deluge, he added.

BTC-related flows ($312M) claimed 90% of the haul. Such products have attracted net deposits of $1.5 billion on a YTD basis. ETH and SOL vehicles were sought out, except to a lesser degree. Products related to SOL had inflows of $3.5 million. As for ETH vehicles, they experienced $34 million of net inflows last week. So, for ETH, that marked four consecutive weeks of positive flows. ETH funds, which not long ago had been enduring outflows, pulled in more than $100 million of net inflows during this period.

It's a “decisive turnaround in sentiment" for the second-largest crypto, CoinShares said (CoinDesk).

Meanwhile, BTC options action on Deribit is in a tizzy. Earlier this month, the notional open interest in active BTC options contracts reached a record high of $15 billion. Open interest had more than doubled since late September. The previous record was set in late '21.

The crypto charts contain a wide range of 24-hour flight paths, including some fairly precipitous declines. A few of these falls seem worthy of attention. Let's start with Terra Luna Classic.

Two days ago, LUNC took off on a bender amidst a sudden surge in a de-pegged, vestigial stablecoin, USTC, formerly known as UST. LUNC got to $0.0001 yesterday. We checked it at 7:40 a.m. (EST). LUNC was $0.00009564, down 15.6%. Notice the four zeros to the right of that decimal point. Little things mean a lot. Nevertheless, LUNC, 91st-largest coin, remains up 27% over the past week.

FX Street said it expects LUNC to make another run at $0.0001 before November ends.

Another low-flying object identified over the past one day is Illuvium, CoinGecko's 78th-largest coin. ILV has soared 120% in the past 30 days. But the hype-ensconced gaming project's native asset last night hit a cloud bank teeming with Canadian geese. ILV began the wee hours of Tuesday at $114. As of 7:48 a.m. (EST), ILV had drifted below $109.

Big Ten coins, meanwhile, are either flat or slightly in retreat. Take out stablecoins, and Tron enters this bulge bracket. Tron’s native TRX has a market capitalization of roughly $9 billion. "Mild retreat" describes its trajectory.

Exactly why TRX has shed 1.9% in 24 hours is unclear. Tron founder Justin Sun is catching heat on various hemispheres of late. Over the past fortnight, TRX is down 3%

Tron’s dollar-pegged stablecoin, TUSD, slipped to $0.996115 over the past day or so. In September, Sun made headlines for minting $800 million worth of TUSD. The stash eventually found its way to the Tron-based lending protocol, JustLend.

Last week, a pair of Sun-linked projects got exploited by hackers, resulting in more than $100M worth of losses.

These incidents marked the fourth time in two months that pies containing Sun's fingers had been attacked. He's vociferously vowed investigations and restitutions.

Now comes a fresh report from Reuters, citing a slew of financial crime experts and blockchain investigators, connecting Tron with terrorist financing.

Hayward Wong, a spokesperson for Tron, told Reuters that all technologies could "in theory be used for questionable activities," citing, as an example, U.S. dollars being used for money laundering. Wong said Tron did not have control over those using its technology.

Sun later released his own statement: “Tron is a decentralized protocol similar to Bitcoin and Ethereum, with nodes operating around the world. While we are committed to combating terrorist financing by integrating various analysis projects and partners, our top priority remains, as always, maintaining decentralized management, ensuring the security of everyone's assets, and ensuring instant, cost-effective and reliable transactions."

Binance founder Changpeng "CZ" Zhao sits in limbo in Seattle while a judge decides whether he has to stay in the U.S. as he awaits sentencing after the mogul pleaded guilty last week to violating the Bank Secrecy Act.

The crypto titan, who would prefer to return to his home in the United Arab Emirates, was released on a $175 million personal recognizance bond. CZ's sentencing is set for early next year. He stepped down as Binance's CEO as part of a settlement that including him personally pleading guilty to the BSA-related charge as well as the company having to shell out $4.3 billion to the U.S. government.

In a blog post yesterday, Binance's new CEO, Richard Teng, pledged to “drive growth and the adoption of Web3."

Last Wednesday, Nansen, an analytics firm, stated there did not appear to be a “mass exodus of funds" post Binance’s massive settlement/leadership shakeup. The exchange has total holdings north of $65 billion, according to Cointelegraph.

Coinbase CEO Brian Armstrong told CNBC the U.S. government’s enforcement action against Binance will allow the crypto industry to “turn the page.”