🥛 Is Mt. Gox dumping BTC? Here's what happened... 🧐
- Writer Milk Man
- April 28, 2023
- •4 Min Read
GM. This is Milk Road, the take-out of crypto. Fast, fresh and always ready to go.
It’s Friday y’all. Let’s GET it:
- Milkbusters: Did Mt. Gox & U.S. gov wallets dump Bitcoin? 🔨
- Say hello to the CCTP 👋
- Funding Friday! 💰
- Blur goes brrr 🍪
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MILKBUSTERS: DID MT. GOX OR THE US GOV DUMP BITCOIN? 🔨
We’re back with another episode of Milkbusters. Time to answer tough Q’s & debunk crypto myths.
And today we’re tackling 2 myths taking over the Twittersphere…
- The U.S. gov’t & Mt. Gox wallets moving Bitcoin.
- The news sending BTC down 8% in ~1 hour ($29K → $27K)
Let’s dive in…
First, what’s Mt. Gox? It’s a crypto exchange that went under in 2014. In October, it’ll return 142K BTC ($4.2B) to creditors that haven’t seen those funds in ~a decade.
Separately, the U.S. owns 214K BTC ($6.4B.) It seized a good chunk of that from the Silk Road hacker in 2022 & from the 2016 Bitfinex hack.
Ok now that we’re on the same page… what happened? Arkham (analytics firm) sent alerts Wednesday that U.S. gov’t wallets and/or Mt. Gox wallets were moving large amounts of BTC.
~1 hour later, Arkham said swerve, our bad, the alert was wrong. It spread on Twitter though via DB (an account that auto-tweets major news.)
But then Arkham pulled another 180 - it said its alerts were actually accurate. Dun dun duuuuun
Well then, wait…. if the alert was accurate, what triggered it?
The Truth: Part l - It was a total accident, thanks to a weird Arkham bug.
DB had alerts set with Arkham for any $10K+ Bitcoin transaction. DB labeled the alerts “Mt Gox” & “US Gov,” which…kinda feels like naming your dog “fire” & calling for him in a crowd.
But those alerts were never actually active… until Arkham fixed a bug recently. That’s when DB started auto-tweeting any $10K+ BTC move with the random “Mt Gox” & “US Gov” labels attached.
It had nothing to do with wallets linked to Mt. Gox. On-chain data shows that there hasn’t been any activity from them.
So did this whole ordeal send BTC crashing?
The Truth: Part ll - It may not have…
Arkham pointed out that BTC started dipping between 3:17 & 4:01 PM ET. Arkham’s alert/DB’s tweet didn’t go out until 4:07 PM ET.
So why the dip? Well, it could have started with a $150M spot bid placed early Wednesday morning.
That caused $1.5B in derivatives bids that drove BTC’s price up big time. But shortly after, investors exited en masse, and BTC plummeted/~$80M was liquidated Wednesday afternoon. (Traders later bought the dip, sending BTC back up to $29K.)
The Milk Road Take: Take what you see on the internet with a milk carton-sized grain of salt.
Crypto’s like one of those synchronized swim teams - it looks one way on the surface but there’s a lot going on underneath.
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INTRODUCING THE CCTP 👋
You know when that one friend messes up the group chat with their green texts? There’s nothing worse.
Blockchains face similar problems trying to communicate with one another. But we’re getting somewhere…
The latest progress comes from Circle, the creator of USDC. They released the Cross-Chain Transfer Protocol (CCTP).
So what is it? A new and improved way to transfer USDC stablecoins between blockchains.
It works by removing USDC on one chain from circulation, while creating the same amount on another chain all at once. And it’s growing quickly.
It has already been adopted by companies like Metamask, who use it to allow their users to move around USDC within their app. Circle also said that it wants to roll out CCTP to other blockchains like Solana in the future.
So what? CCTP is not the only way for blockchains to interact, but the existing solution, bridges, has flaws.
Bridges have become a major target of hacks and exploits. Token Terminal estimates that half of all DeFi-related hacks occur through bridges:
This is because they use a central storage point to lock up funds that bridge to other chains.
CCTP is also a cheaper process than bridging because you don’t need to rely on liquidity providers who charge a fee. In the end, it’s really all about ease of use and adoption.
More chains → more users → more adoption AND lower fees 💯
FUNDING FRIDAY 💰
It’s Funding Friday! Raise the roof.
This week, $151.4M was raised by crypto companies. Here’s who got that bag:
Izumi Finance got $22M for its multi-chain liquidity protocol. It’ll go toward the startup’s DEX that lives on the zkSync Era network.
DFlow got $5.5M for its protocol bringing order flow payment to DeFi. Would also be a great rapper name, just sayin’
MetaGravity got $9.5M to build out infrastructure for metaverse development. They’re trying to create the technical foundation for a virtual world.
Thetanuts Finances got $17M for its protocol that helps retail investors earn yield on their tokens, among other things.
Check out the full database of companies that have raised money this week, right here.
MILK & COOKIES 🍪
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Binance US pulls out Voyager assets acquisition. Pray for the Voyager creditors. They have been through the wringer.
Blur’s up ~10% after Binance said it’s launching a BLUR perpetual contract Friday. The OpenSea competitor continues to stay in the news after their initial airdrop.
Hong Kong to release digital asset guidance in May. Will the next cycle be driven by the East?
MerlinDex rug pulls for ~$2M. Even after being audited by CertiK. All victims are being reimbursed by the protocol and auditor.
MILKY MEMES 🤣
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DISCLAIMER: None of this is financial 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. Please be careful and do your own research.
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