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ft

Binance Research: The market's concerns about AI disrupting software may be overstated, Bitcoin is approaching a structural bottom

According to the latest weekly report from Binance Research, the U.S. Supreme Court's tariff ruling initially increased uncertainty, but quantitative analysis suggests that the direct impact may be quite limited, and the market may have exaggerated the downside risks of inflation and economic fundamentals.Concerns about AI disrupting software may be overstated. Once software stocks form a durable bottom, the mechanical correlation between tech stocks and Bitcoin will fade. This week's Nvidia earnings report and updates on the Anthropic corporate partnership may be early signals in this direction.Currently, Bitcoin is experiencing the longest and most significant divergence from global M2 money supply in history, stemming from three major structural distortions: a weak dollar mechanically inflates the nominal value of M2 through exchange rate conversion; the approval of spot ETFs has led institutions to classify Bitcoin alongside software stocks as part of the same high-volatility tech factor; and high real interest rates have made money market funds a competitive alternative to risk assets.The convergence of this divergence requires three conditions to be met: stabilization of tech stocks, a decline in real interest rates, and stability of the dollar, which may be achieved between the second half of 2026 and early 2027.Multiple technical indicators point to the market being close to a structural bottom: the realized profit-loss ratio has fallen below 1 for the first time since 2023, leverage has risen to November highs, and defensive positions in options have reached the most extreme levels since the FTX collapse.Fourth-quarter 13F holdings data shows that price-sensitive capital (investment advisors, banks, hedge funds) has net sold about 34,000 BTC, while long-term institutional capital (governments, holding companies, private equity) continues to accumulate.

Jane Street's questioning escalates: After being sued, the "10-point crash" of Bitcoin disappears

According to the WSJ, on February 24, the court-appointed bankruptcy administrator of Terraform Labs has sued Jane Street in the federal court in New York, accusing it of engaging in front-running trades and profiting from non-public insider information provided by Terra insiders during the Terra collapse. The lawsuit reveals that Jane Street established a secret communication channel with Terraform Labs employees through former intern Bryce Pratt to obtain non-public confidential information. On May 7, 2022, Terraform Labs withdrew 150 million TerraUSD (UST) from the Curve liquidity pool without prior announcement, and Jane Street followed suit by withdrawing approximately 85 million UST through affiliated wallets in less than 10 minutes, completing the "front-running" trade before a massive market panic and the complete de-pegging of UST, which not only resulted in illegal profits but also accelerated the collapse of Terraform Labs and the Terra ecosystem.A spokesperson for Jane Street responded to the accusations from the Terraform Labs bankruptcy administrator, stating that the lawsuit is an attempt to extract money from Jane Street, and that Jane Street will vigorously defend its rights against "baseless and opportunistic allegations." In addition to the Terraform lawsuit, Jane Street was accused of market manipulation in India last year, resulting in the freezing of assets worth approximately 4.843 billion rupees (about 565 million dollars) and a ban on trading in the Indian securities market. There are also rumors that Chinese regulators are reviewing Jane Street's trading patterns in the Chinese ETF market.The crypto community has noted that since Jane Street was sued, the daily "10 AM crash" of Bitcoin (Eastern Time) has suddenly disappeared, with Bitcoin rising by 10% and its market capitalization increasing by approximately 120 billion dollars, marking the first green weekly candle for BTC after five consecutive red ones. During the same period, the total market capitalization of the cryptocurrency market also increased by nearly 200 billion dollars. Bloomberg ETF analyst Eric Balchunas stated, "This 'threat' has disappeared, which is the atmosphere felt today in CT and price movements. I also understand that the previous significant intraday drops nearly destroyed every rebound and undermined everyone's confidence. But is simply eliminating it enough to support a sustained rebound? We shall see."Speculation surrounding Jane Street has reignited discussions about the trading mechanism of Bitcoin spot ETFs. Analysts point out that the share creation and redemption of spot ETFs can be completed by authorized participants (APs) under a regulatory exemption framework, and does not necessarily require immediate buying and selling of Bitcoin in the public market; in cases of futures contango, APs may also hedge and protect through derivatives such as futures, leading to a time lag between ETF fund inflows and spot buying and short-term price performance.As a leading global quantitative trading giant, Jane Street has a broad presence in the cryptocurrency sector, primarily focused on infrastructure, DeFi, and crypto mining. Public information shows that Jane Street has invested in several crypto-native projects, including: ZetaChain, Arbitrum, 1inch, Euler Finance, Membrane Labs, Kaito, Vest Exchange, and others.In terms of equity, Jane Street significantly increased its holdings in several crypto mining companies through the secondary market between 2024 and 2026, including: approximately 5.4% of Bitfarms (BITF); approximately 5% of Cipher Mining (CIFR); and approximately 5% of Hut 8 (HUT). Additionally, Jane Street participated in multiple rounds of Kraken financing last year. Jane Street is also one of the main liquidity providers and stockholders of Coinbase.
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