In the early hours of November 9, 2023, Bitcoin surged past $37,000 during U.S. trading, following a similar trend in Asian markets. This sudden increase triggered a “short squeeze,” leading to the liquidation of nearly $50 million in bitcoin shorts (bets against price rise) within a four-hour period. Such short squeezes happen when an asset’s price unexpectedly rises, causing short sellers to cover their positions and further boosting prices.
Major Asian-focused exchanges like BitMEX, OKX, and Binance played a significant role in these market movements. The bullish momentum in Bitcoin was fueled by reports that the U.S. Securities and Exchange Commission (SEC) initiated talks with fund manager Grayscale. The SEC and Grayscale have been in a legal dispute over converting the Grayscale Bitcoin Trust into a spot exchange-traded fund (ETF).
In response to the Bitcoin rally, U.S. companies heavily invested in cryptocurrencies experienced positive shifts in pre-market trading. Coinbase saw an approximately 4% increase, MicroStrategy, holding a substantial amount of BTC, rose almost 5%, and mining companies Marathon and Riot advanced around 9.8% and 6%, respectively. However, Robinhood showed more modest gains of 2.5%, having experienced a 14% drop the previous day due to significant declines in revenue and trading activity.
Noteworthy in the crypto investment landscape, Standard Chartered’s venture arm and SBI Holdings are joining forces to create a $100 million-backed investment company. This venture, established in the UAE, will concentrate on supporting crypto startups in market infrastructure, risk and compliance, DeFi (Decentralized Finance), and tokenization. Standard Chartered has recently shifted its crypto activities towards the UAE, selecting Dubai as the jurisdiction to safeguard digital assets for institutional clients starting in the first quarter of 2024, citing the region’s mature regulatory structure compared to other jurisdictions.