🤯 Crypto's Flash Crash

^{"The Brain—is wider than the Sky—"}

— Emily Dickinson

👋 Friends, Rallie here. The newsletter giving you the biggest sip of the crypto, finance, and tech tea.

On the menu:

• 🤯 Crypto's Flash Crash

• 🗞️ Headlines That Hit

• 📈 Refresh: Married Put

• ✌️ Trivia Tuesday

• 💯 Top Tweets

The Rallie Recap

😮 One of the biggest and quickest crypto drops happened last week… what’s the fallout?

• 📉 What happened? Bitcoin dropped to lows not seen in two months, shedding 7% of its value in 20 minutes. 

• Over $1B USD worth of crypto was liquidated, hypothesized to be due to the shaky macro environment, including the stall in Bitcoin ETFs being approved and China’s economic struggles. 😬

• 💥 Although bitcoin (BTC) took most of the damage ($472M of long liquidations), ether (ETH) was also hit with $302M in losses.

• What exactly did the liquidations indicate? 🚨 It indicated that exchanges closed a leveraged trading position due to a partial or total loss of the trader’s initial money. Assets kickoff liquidations when the exchange cannot meet margin requirements or do not have the funds to keep the trade open. 💸

• Overall, the crypto market capitalization fell by 8.3% to $1.02 trillion.

• 🔎 Opportunities… While some reeled back from crypto, others took advantage of the discount, with an increase in net inflows for the asset class (including bitcoin and bitcoin futures) despite the drop. 👀

• As always, crypto remains controversially volatile in many investors hearts. 🤔

• Is the gap closing between ether and bitcoin? Another revelation from last week’s slide is a shift in investor perspective, with the ether-bitcoin ratio rising more than 2%. 😳

• 🧐 Usually when the most popular crypto (bitcoin) goes down, the others fall harder. However, ether took smaller losses than its industry leader.

• Many credit the resilience to the ETH futures ETF with growing awareness of these listings with at least 16 applications for ether futures ETFs or ether-bitcoin future ETFs are pending regulatory approval. 🚀

• So why doesn’t the same logic apply to BTC? ⛔ As the most popular cryptocurrency in the market, plans for bitcoin ETFs have been months in the making with warnings a U.S. spot bitcoin ETF will take some time for approval. ⏳

• Although many are disappointed, ⚖️ the fight continues for at least five spot bitcoin ETF bids from asset managers that look after a combined total of $15.5T USD.

• An optimistic future despite the slumps?

• 🤖 Google Bard (its AI) predicts a significantly higher bitcoin price than its current $26K range with the reduction event in April 2024 that splits the supply of BTC by half as a catalyst. 🐮

• Meanwhile, ⛏️ bitcoin and former ether miners are reducing their dependence on crypto by moving into various business areas, including high performance computing (HPC) services for AI. 🧠

• Is the latest crypto flash crash a sign of a questionable future or just the latest turbulence on crypto’s flight to the moon?

Headlines That Hit

• 🏦 Goldman not as golden? Goldman Sachs might sell some of its wealth business, reorganizing itself back to its ultra-rich clientele and away from high-net-worth individuals in mass markets.

• 🚢 Need more water! Major shipping routes are struggling with water shortages, global impacts incoming.

• 🍁 Empty seats… Almost 25% of governor-in-council appointments are vacant or past their appointment dates, that’s hundreds of appointed Canadian positions vacant.

• 🇨🇳 Yuan’s troubles. China’s economy experiencing a worsening property slump, weak consumer spending and tumbling credit growth, leading to speculation of yuan selloffs and capital flight.

Rallie Refresh: Married Put

Ironically not needed for most long-term investors, how can a married put protect investors from huge drops in stock prices?

💍 What is a married put?

• A married put aka protective put is a strategy where an investor whose optimistic of a stock’s value, purchases the current strike price (near or at the current market price) put option on the same stock to protect against depreciation in the stock’s price. 🛡️

• Why? The tactic protects an investor from a plunge in the underlying stock price. ⛑️ It’s extra insurance for potential short-term uncertainties a stock can encounter. ☂️

❗Keep in mind…

• This strategy can get expensive and have significant impacts, especially when it is used often. 🤑

• 📊 Put option prices vary based on volatility of stock, the price that a put or call action can occur compared to the stock price, and the time until expiration.

• It is typically not employed by long-term investors who aren’t concerned with short-term price fluctuations. ❌

• Who usually uses married puts? 🤨 Short-term traders or investors who believes a stock’s price will rise but also want to limit any near-term losses that could arise.

DYOR and keep in mind what type of investor you are before venturing into strategies such as married puts. 😊

Enjoying The Weekly Rallie? Help us grow by sending a referral our way! 🙂

✌️Trivia Tuesday✌️

🦄 The answer for Thursday’s newsletter (A unicorn startup is valued at $__USD or more.) is 1B! Find out today’s answer on next week!

Trending Tweets

Our fav funnies to get you through the day.

Congrats, you made it to the end!

That's all for today. Stay hungry & we'll catch you next time. ✌️

DISCLAIMER: This is not financial or legal advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.