Here
is the 11th Volare Finance Weekly Overview. In this review, you will
find out about the cryptocurrency market cycles, why many people discuss
Celsius Network, how many Crypto ETPs are there, and much more. We wish
you an enjoyable reading, we hope you will learn something new for
yourself. Enjoy now.
Bitcoin has fallen below $28k, a technical level we were watching, and down 64% from the peak. Crypto derivatives diverge from their underlying assets and a large crypto lender has stopped customer withdrawals. The largest alt-coin ETH is underperforming, similar to the downturn in 2018.
Ethereum (ETH) is weakening faster than bitcoin. USD liquidity is being taken out of markets and expectations of higher Fed interest rates negatively impact crypto prices. Ether, the 2nd largest crypto, is down almost three quarters from its November peak and is underperforming bitcoin. When the ETH/BTC relative cross falls, it is a sign that the broader crypto enthusiasm is waning as investments are being taken out of the more volatile “alternative coins”.
Crypto cycles. The 2017/2018 bitcoin price cycle was like the Nasdaq in the year 2000, just 15x faster. This 2020–2022crypto cycle may start to be compared to the 2017 cycle, in relative performance terms but not in US dollar terms. Today the top 1000 cryptocurrencies by market capitalization are down 88% on average from their peak prices, while the top 100 cryptos are down 82%.
Celsius Network, the centralized crypto lending platform, accounts for 28% (409K ETH) of all stETH deposits onto Aave. Rather than lending out the stETH to earn a small yield, Celsius chose to use the deposits as collateral to borrow $316mn of stablecoins at an average interest rate of 0.021%. Celsius likely lent out the stablecoins on its platform where they are currently charging 12% interest on stable coin.
How many Crypto ETPs are there? At the time of writing, there are around 150 funds available globally, with around$40bn in assets. Around 20 of these are ETFs focused on crypto-related equity securities rather than currency investments. This number is constantly changing as there are frequent new launches and, recently, also some closures (the USD value of the LUNA/Terra pair of currencies fell to zero in May and the ETPs tracking LUNA have halted/suspended trading, though have not yet formally closed).
Tether's USD stable coin USDT is the most traded cryptocurrency every day. Over half of all bitcoin traded on exchanges is versus USDT, making its stability extremely important for the crypto ecosystem. Some of the most liquid cryptocurrency pairs are versus USDT, acting a bit like the US dollar in the crypto world. Traders use USDT as an intermediary in exchanging between two cryptocurrencies when there isn't a direct market between the two.
Most NFTs traded each day are collectibles. Trading volumes are low as crypto prices have fallen — volumes are now only 15% of the August 2021 peak.
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