OVERVIEW

Rudolph’s Nose Is Red, So Is Everything Else 🦌

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total market and altcoin market cap charts:

NEWS
The $40 Billion Fraud That Got A Lighter Sentence Than the $8 Billion One* 😶

Do ‘The Con’ Kwon got sentenced to 15 years yesterday. 👮

Which, if you think about it, seems kind of ‘light’ compared to what SBF got. SBF got 25 years. Do Kwon got 15. The difference between the two besides the dollar amounts and damage rests almost solely on one factor:

Kwon admitted guilt.

SBF didn’t. But that doesn’t mean Kwon is getting a better deal here. That’s where the * in the headline comes from. Don’t forget: he’s facing another possible 40 years in South Korea and has to serve at least half of the 15 in the US before he could/can be transfered to SK. 🫢

The Damage: By The Numbers

Terra/LUNA: The $40B Implosion

•  LUNA crashed from $119 (April 2022) to fractions of a cent in 72 hours

• Token supply hyperinflated from 1 billion to 6 trillion

• UST "stablecoin" lost its peg and wiped out $18B in value

• Anchor Protocol (promising 19.5% yields) held $17B in TVL - 72% of all UST

• Luna Foundation Guard burned through $3.5B in reserves (including 80,000 BTC) trying to save it

• What remained after: 313 BTC (~$9M at the time)

• Estimated victims: Over 1 million people

• Recovery prospects: Essentially zero

FTX: The $8B Heist

• SBF misappropriated $8B in customer funds

• Spent it on: real estate, venture investments, political donations

• At collapse, FTX held 0.1% of the Bitcoin customers thought they owned

• And 1.2% of the Ethereum

• Recovery to date: $14.7-16.5B (including $900M from Anthropic stake)

• Distributions so far: $7B+

• Creditor recovery rate: 119% of claims

On raw numbers alone, Kwon caused 5x the damage. But here's the thing: SBF's fraud involved traceable assets that bankruptcy lawyers could claw back. Kwon's fraud didn't transfer wealth - it deleted it. ❎ 

The FTX, Um, ‘Recovery’. Also Known As: How To Dick Over Victims Who Already Got Dicked Over

FTX CEO John Ray III is out there claiming creditors are being "made whole." Technically, 98% of creditors are receiving 119% of their claims plus interest.

Sounds great until you read the fine print.

The estate values claims at November 2022 prices. You know, when:

• Bitcoin was $16,871ish (now: $95,000+)

• Ethereum was $1,258ish (now: $3,200+)

• Solana was $14ish (now: $170+)

If you were holding crypto on FTX as an investment, you're not being made whole - you're being cashed out at the worst possible moment. 😠 

Terra’s Collapse Was Very, Very Bad - The Domino Effect

Terra's collapse didn't stop at $40 billion. It triggered a contagion that brought down the entire crypto lending ecosystem. The Bank for International Settlements estimates $450 billion in total crypto market value vanished in May-June 2022 alone

As Harvard's Bankruptcy Roundtable documented: most crypto lenders had direct exposure to 3AC, to LUNA/UST, and to each other. When one fell, they all fell.

In A Nutshell

Kwon caused four times the losses, triggered a cascade that destroyed six additional companies, and left over a million victims with no path to recovery - yet received 10 fewer years because he admitted guilt and said sorry. BUT, he’s got another, maybe, four decades he’s facing in South Korea.

For Terra victims, the 15-year sentence provides acknowledgment that what happened was fraud, not merely a failed experiment. But it cannot restore a single dollar.

For FTX creditors receiving their 119% payouts, the question lingers: are you truly "made whole" when your Bitcoin holdings - had they been safe - would now be worth five times what you're receiving?

Anyway, the system worked exactly as designed. Whether that design makes sense is another question entirely. And with Kwon behind bars, all the ‘big’ players responsible for the nightmare in 2022 - 2023 are now facing the consequences of their actions. 🤷

ON-CHAIN ANALYSIS
Pain & Profit: Reading Crypto Sentiment Through MVRV 👀

MVRV (Market Value to Realized Value) measures what the market says an asset is worth versus what holders actually paid for it. 🧠 

Positive deviation means the average holder is in profit. Negative means they're underwater. Simple.

Today we’re going to look at three cohorts (180-day, 90-day, and 30-day) because timing matters.

• Positive MVRV = Holders in profit, potential distribution zone, watch for overheated conditions

• Negative MVRV = Holders underwater, potential accumulation zone, capitulation risk

• 30D flips positive while 180D stays negative = Early recovery, short-term buyers gaining confidence

• All timeframes deep red = Maximum pain, crowd is demoralized, historically better entry points

• All timeframes bright green = Euphoria, late-stage rally, consider taking profits

• Timeframes converging toward zero = Market resetting, building new cost basis

• Divergence between short and long cohorts = Tension building, directional move likely incoming

Here's where each of these tickers stands heading into mid-December:

$BTC ( ▲ 0.55% ) 

The long and medium-term cohorts remain underwater, but the 30d flipping positive is constructive. Recent buyers are starting to show paper profits while longer-term accumulators are still bag-holding - classic early recovery structure. The compression between timeframes (all converging toward zero) suggests the pain trade for late-year buyers may be over. Not screaming buy, but not a warning either. 😶 

$ETH ( ▼ 2.69% ) 

ETH mirrors BTC's structure but with a stronger 30d reading. After absolutely torching holders in November (look at that -0.30 90d print on Nov 20), the short-term cohort is back in the green. The July-August run saw these readings north of +0.4 - there's room to run if momentum sustains. ETH looks like it's trying to find a floor. 🤔 

$XRP ( ▲ 0.83% ) 

All three timeframes underwater with no positive flip on the short end. XRP had a decent July (+0.47 on 180d) but has been bleeding since October with no structural recovery. The 30d is less bad but that's a low bar. Crowd is underwater across the board. Needs to see that 30d go positive before getting constructive here. 😐️ 

$ADA ( ▼ 0.55% ) 

ADA is showing the deepest 180d underwater reading in this group. Holders who accumulated over the past six months are getting destroyed. Had a strong August-September (+0.49 peak) but completely reversed. The 30d is improving toward zero, which is something, but this is a "show me" chart - needs to prove it can hold a bid before leaning in. 🤷 

$TON ( ▼ 2.63% ) 

Worst 180d reading of the bunch. TON never really caught a sustained bid this cycle - the best it managed was briefly positive readings in late July/early August. Since then, it's been a slow grind lower. The 30d is approaching breakeven which offers a glimmer, but this is structurally the weakest of the five. Holders are demoralized across all cohorts. 🥹 

NEWS IN THREE SENTENCES
AI, Stablecoins, & Privacy News 🕵️

💳 Dash Cards Go Live On Zebec And Actually Let You Spend Crypto

Dash now works with Zebec cards so users can load Dash and spend it like regular money. Funds stay self-custodied until seconds before you pay, which is kind of the point. It’s crypto behaving like cash instead of a science project. Dash.

NEWS IN THREE SENTENCES
Real World Asset Tokenization (RWA) News 🪙

🧱 Republic Technologies Doubles Down On ETH And Lets The Balance Sheet Do The Talking

Republic bought another 742 ETH, pushing total holdings to about 1,571 ETH and riding a roughly 23% value bump as ETH moved higher. The company uses ETH as working capital for validators and attestations, not a vanity treasury flex. They earn yield while helping run Ethereum instead of just sitting on coins. Ethereum.

🛢️ Oil And Bitcoin Walk Into An ETF And It’s Legal

USCF launched WTIB, an ETF that gives full exposure to oil futures and bitcoin in one product. The pitch is diversification through two markets that usually ignore each other. One ticker, two wildly different macro bets. USCF.

💸 State Street And Galaxy Tokenize Cash Because 24/7 Liquidity Sounds Nice

State Street and Galaxy are launching a tokenized liquidity fund seeded with about $200M and settling in stablecoins on Solana first. It’s cash management, but on-chain, always open, and built for institutions who hate waiting for banking hours. Think money market fund energy without the banker nap schedule. Ondo Finance.

NEWS IN THREE SENTENCES
Metaverse, NFT, & Gaming News 🎮️

🇮🇳 Algorand’s India Summit Shows Web3 Actually Doing Things In The Real World

Algorand’s India Summit highlighted live use cases across finance, identity, supply chains, climate, and creator payments. Startups showcased on-chain credit scoring, farm finance, carbon credits, and verified credentials already in production. Algorand.

NEWS IN THREE SENTENCES
DeFi, DEX, & Lending News 🏦

🔁 Reactive Brings REACT To Base And Makes Fees Less Annoying

Reactive moved the REACT token to Base to lower costs and make trading easier without changing how the protocol works. Ethereum liquidity stays, Base adds cheaper execution and better access. It’s the same engine, just a smoother on-ramp. Reactive Network.

⚡ dYdX Brings Solana Spot Trading On-Chain And Opens The Door To U.S. Users

dYdX launched Solana spot trading directly in its interface, mixing memes, blue chips, and perps under one roof. U.S. traders can now access decentralized spot markets with zero protocol fees during the pilot. It’s basically dYdX saying fast retail trading belongs on-chain too. dYdX.

💥 Aave V4 Fixes Liquidations So Borrowers Stop Getting Nuked

Aave V4 replaces blunt liquidations with a system that repays only what’s needed and rewards liquidators based on actual risk. The worse a position gets, the bigger the incentive to clean it up fast. Aave.

NEWS IN THREE SENTENCES
Protocol News 🏦

🧠 Cardano Lays Out Its Endgame With Ouroboros Omega And Leios

Cardano researchers detailed how Ouroboros Omega and Leios push the network toward high throughput without breaking decentralization. Leios boosts capacity when conditions are good and safely slows down when they’re not. Think adaptive cruise control for consensus instead of flooring it all the time. Cardano.

Get In Touch 📬

Email me, Jonathan Morgan, feedback; I’d love to hear from you. 📧
Follow me on Stocktwits 🫂 And Sponsor this newsletter 😎 

Terms & Conditions 📝

Securities Disclaimer: STOCKTWITS IS NOT A TAX ADVISOR, BROKER, FINANCIAL ADVISOR OR INVESTMENT ADVISOR. THE SERVICE IS NOT INTENDED TO PROVIDE TAX, LEGAL, FINANCIAL OR INVESTMENT ADVICE, AND NOTHING ON THE SERVICE SHOULD BE CONSTRUED AS AN OFFER TO SELL, A SOLICITATION OF AN OFFER TO BUY, OR A RECOMMENDATION FOR ANY SECURITY. Trading in such securities can result in immediate and substantial losses of the capital invested. You should only invest risk capital, and not capital required for other purposes. You alone are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should also consult an attorney or tax professional regarding your specific legal or tax situation. The Content is to be used for informational and entertainment purposes only and the Service does not provide investment advice for any individual. Stocktwits, its affiliates and partners specifically disclaim any and all liability or loss arising out of any action taken in reliance on Content, including but not limited to market value or other loss on the sale or purchase of any company, property, product, service, security, instrument, or any other matter. You understand that an investment in any security is subject to a number of risks, and that discussions of any security published on the Service will not contain a list or description of relevant risk factors. In addition, please note that some of the stocks about which Content is published on the Service have a low market capitalization and/or insufficient public float. Such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information. Read the full terms & conditions here. 🔍

Author Disclosure: The author of this newsletter holds positions in AVAX, ADA, PUDGY, WLC, IMX, XTZ, NEAR, HBAR, ALGO, INJ, LTC, LINK, ZEC, XLM, and FET. 📋