Dispatch #93: Did We Find a Bottom?

4 min read

In this patch of your weekly Dispatch:

  • Bottoms up for the price bottom
  • Nexo talks “consolidation” with Wall St banks
  • Bitcoin miners fully offload May harvest

The Big Idea

Was That a Bottom or Is There More Pain Ahead?

Last week our advice was “touch grass” and based on Friday and Saturday’s market action – boy, do we hope you listened… Over this period, Bitcoin crashed by more than 20% to a low of $17,600. Yes, that all-powerful psychological barrier of $20,000 was broken, and how. ETH for its part got into triple digits.

Over the next few days, however, the market saw a relief rally: Bitcoin returned above $21,000 and did not revisit the territory below $20k by publication time. Still, the real question is – have we found a bottom?

There are plenty of good reasons to think we haven’t. Inflation remains at 8.6%, the Fed is finally recognizing the possibility that fighting it is going to cause a recession, and generally speaking, traditional markets don’t feel close to finding their own bottom. What’s more, on a more subjective level, in the past Bitcoin and crypto bottoms have happened not when people are frantically asking “is this the bottom” but when they’ve stopped caring altogether.

On the flip side, some claim that we may be closer to a bottom than you might think. Historically, when the percentage of Bitcoin in profit goes below 50%, a bottom has formed within four months. We’re there.

What’s more, while crypto and other risk assets have been going down at the same time since the Terra crash, crypto prices have tanked 40% more than NASDAQ, so maybe we’re just ahead of the bottoming curve. Lastly, while Bitcoin miners saw heavy selling in May-June, they’ve been in accumulation mode for the last few days (see the Data Story for more).

The takeaway? No one is sure, and probably the best we can offer is last week’s Five Tips for Beating the Bear. Still, we come to you this week with at least a bit more advice that we’re at or near a bottom for this cycle, so that’s something to hold onto.

The Latest In…


For the first few months of the year, NFTs seemed to defy the gravity being experienced by the rest of the industry. These days, however, volume and floor prices have (started to) return to earth. This week saw a major event, NFT.NYC, and from all the reports on Twitter, the mood remained largely optimistic and forward-looking with some mainstreaming announcements. Whether that is because of a belief in the fundamentals or a streak of denial is in the eye of the beholder. Also, however, in good news for Solana NFT fans, Magic Eden raised a big $130M round at a $1.6B valuation, giving them a nice war chest to weather whatever bear market lies in front of us.

The Latest In…

Unhosted Wallets

One of the big global battles for the industry is the right to use a self-hosted wallet, rather than store one’s crypto with a financial intermediary. On that front, this week saw some good news. Last year, a proposal from the UK Treasury was announced that would have required crypto businesses to report and collect information on all transactions involving self-hosted wallets. An updated report has just been published and suggests that only suspicious transactions with elevated risk will need to be reported instead. This victory may seem small, but it is a significant step for those who want crypto to be treated at parity with the traditional system.

The Latest In…

The Great Crypto Consolidation

The dynamic today, although translated into the crypto world, more or less mimics the banks’ Panic of 1907. If we take a page directly from the outcome of the early 1900s, a natural solution to crypto’s current predicament is large-scale consolidation – one which Nexo is prepared to engage in to restore public confidence and aid adversely affected investors. This is why we’re in talks with top-tier financial advisors ​​on strategic acquisitions and liquidity restructuring deals. The process could go a long way towards restoring trust in the system and Nexo’s strong fundamentals and financial position allow us to be committed to doing our part in it.

The Week’s Most Interesting Data Story

Bitcoin Miners Sell Entire May Harvest

Up until recently, Bitcoin miners had been in a two-year accumulation mode. With the price going up, big miners were more likely to borrow against their BTC to expand operations than to sell. As the price fell (to say nothing of exogenous global shocks to energy prices), however, miner profitability has been falling and forcing sales.

As a result, in May public BTC miners sold more than they mined, NYDIG research shows. They offloaded a net 4,411 BTC in May, considerably more than the previous average of 1,115 BTC per month earlier in 2022. Still, more recent numbers suggest that the period of selling might be over and that miners have shifted back into accumulation mode. At least things are pointing in the right direction.

Hot Topics

What the Community Is Discussing

That Apefest FOMO was real.

Tell us how you really feel, Vitalik.

Not everyone has abandoned BTC as a macro indicator.

What to Watch for Next Week:

  • Will meaningful crypto M&A talks take place?
  • What’s next for crypto hardware following Solana’s phone?
  • Ready for ETH’s Gray Glacier network upgrade on Wed?

Let Your Crypto Work For You

The only cryptocurrency account that lets you borrow instantly in 45+ fiat currencies and earns you daily interest on idle assets

All set. Share only with your best friends!