Web3 Breakdowns Ep 75 - Dan Matuszewski - A View from the Market
Primer: Dan Matuszewski is the Co-Founder of CMS Holdings. What are his thoughts on the crypto market right now? What does he think of the recent SEC complaints against Coinbase and Binance? Let’s find out in this episode of Web3 Breakdowns.
Crypto Price Performance
Most of the carnage is in longer tail stuff — everything that is not Bitcoin or Ethereum
This is due to the SEC bringing actions against Coinbase and Binance
The market has not gone lower than the FTX sell-off
The Friday Night Sell-Off
Robinhood was giving users the ability to withdraw or sell their assets
They have to do the math of what percentage is going to get sold
Some people will just sell as they do not want to take delivery of their assets or fund another exchange
Potential players hold the same logic — With crypto in the SEC’s crosshairs, they cannot hold crypto structurally
A lot of forced liquidations and deleveraging happened
Liquidity will get worse moving forward
Low Liquidity Over The Weekends
Liquidity is always worse on the weekends
Market makers are exiting, making it much worse
It’s difficult for existing market makers to scale up to fill the void as they cannot get access to capital
The Opportunity To Make Money From Market Dislocation
Agrees with the idea
People will be doing it at a smaller base and trading volume
The Institutional Side
Very quiet on the institutional side
Most shops have some presence overseas
People were expecting the SEC headlines for Binance and Coinbase, so it was not surprising
People were upset about the names that were not mentioned as securities
The bigger thing is whether will a DOJ case be tacked on to the Binance case
Don’t think that Binance US will survive
Tokens Named In The Complaints
The tokens that were named in the complaints fell harder
The forced selling could be due to market makers pulling back as well as people selling to reduce their exposure
What Is He Doing These Days?
Maintaining exchange connectivity
Spending time to get banking done because of the bank failures
Looking at DeFi as a potential-only execution way
Have built a fair amount of infrastructure
Bitcoin Maxis’ Response To The Regulations
The regulatory stance on Bitcoin was pretty clear
The latest thing that Gensler said on CNBC did not even include Bitcoin as being useful
Bitcoin Maxis Being Happy That The Regulations Are Good For Bitcoin
His counter is that there is a tremendous amount of capital inflow into the larger ecosystem
If the inflow is lost, it will be a drag on Bitcoin as well
Any New Technologies That He’s Looking At?
There’s a handful of people trying to raise aggregators
His concern is that they were mentioned in the CFTC complaint against Binance — Not by name, but by their functionality
They have a prime brokerage model where users face the prime brokerage while the latter faces the exchange
Their DeFi Exposure
Has always been involved in DEXes in the derivatives space
They trade a fair amount on them, provide liquidity, and own the underlying
The volume is pretty stable as a percentage of the open interest for the derivatives
Advice For People Experiencing Their First Bear
Always tell his junior guys that there will be certain periods where there’s nothing going on or there are not many opportunities
Advised them to take that time because when there’s a bull market, you would want that free period
Positive Things He Has Seen Across Crypto Globally
Stablecoin issuance for USDT is still going up
Public interest in Hong Kong and potentially larger China towards courting businesses to come to their shores
It’s positive, but he’s still skeptical
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