First Mover Americas: No Recession for Bitcoin as U.S. GDP Shrinks, Zipmex Files for Bankruptcy

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Bitcoin (BTC) was mostly holding steady early Thursday amid a classic risk-off move in traditional markets after data reported by the U.S. Bureau of Economic Analysis showed the world’s largest economy unexpectedly contracted in the second quarter.

While bitcoin declined from $23,200 to $22,600 in a knee-jerk reaction to the U.S. data, the cryptocurrency was still up 7% on a 24-hour basis – and back over $23,000 by press time.

In traditional markets, the U.S. Dollar Index, which tracks the greenback’s value against major fiat currencies, fell 0.3% to 106.60 and the 10-year Treasury yield slipped by five basis points (0.05 percentage point) to 2.74%.

Ether (ETH) traded near $1,360, representing an 11% gain. Per data from Coinalyze, bearish futures positions worth $200 million have been liquidated in the past 24 hours. The forced closure may have added to bullish pressures around ether.

Meanwhile, the number of open positions in ether options market rose to a new life time high of nearly 4 million as traders piled into call options or bullish bets on optimism the impending “Merge” would bring the bitcoin-like store of value appeal to the second-largest cryptocurrency. (Read more on this below in Market Moves.)

The troubled crypto exchange Zipmex filed applications in Singapore seeking protection against bankruptcy amidst the threat of legal actions from creditors. Such filings in Singapore grant relief for 30 days or until the Singapore Court makes a decision on the application. Last week, the Singapore-based exchange blocked users from taking direct custody of their coins, sparking fears of an eventual bankruptcy.

Nirvana Finance, a Solana-based yield protocol, suffered a $3.5 million exploit, with attackers using flash loans to drain its liquidity pools. Nirvana’s native token crashed on the news and its NIRV stablecoin lost the dollar peg, falling to 8 cents.

Bipartisan legislation that could establish U.S. regulations for stablecoins has formally been delayed until after the August congressional break. The Treasury Department won’t endorse the bill unless it also ensures the industry exchanges keep their money separate from the companies’ assets, which would protect them if the firms fail, CoinDesk reported.

A study published by the European Central Bank early Thursday said the central bank could set a limit on the number of digital euros in circulation to prevent outflows from traditional banks. Economists put an estimate of optimum amount of digital euros in circulation between 15% and 45% of the gross domestic product.

Elsewhere, the Law Commission of England and Wales – a statutory independent body tasked with reviewing and updating the law – said it wants to apply personal property rules to crypto and non-fungible tokens. That would make it easier for crypto investors to initiate legal action in case of losses suffered due to hacks or scams.

Ether options market abuzz ahead as ‘Merge’ Optimism Drives Demand

The number of open positions in ether’s (ETH) options market has reached a record high as an updated timeline for Ethereum’s long-awaited supposedly bullish “merge” has spurred demand for call options.

Open interest, or the number of options contracts traded but not squared off with an offsetting position stood at a new lifetime peak of near 4 million, according to data from major exchanges, including Deribit, tracked by Swiss-based derivatives analytics firm Laevitas. The previous peak of around 3.5 million was registered in the second quarter.

“The desk has traded an incredible amount of ETH calls this week, over 250,000 ETH notional,” the Singapore-based options trading giant QCP Capital noted in a Telegram chat.

“A few hedge fund names have been large buyers of the ETH calls and the overwhelming demand has brought September volumes up to 100%,” the trading firm said, adding, “We expect this demand to continue as we approach the merge in September.”

Also read: Ether Dominates Futures Trading as Shorts See $200M in Liquidations

Ether tops the Ichimoku cloud