Data-Driven Analysis of Cryptocurrency Markets, Kaiko

Kaiko

Data-Driven Analysis of Cryptocurrency Markets

Kaiko is the leading cryptocurrency market data provider for institutional investors and enterprises. We empower market participants with accurate, transparent, and actionable financial data to be leveraged for a range of market activities. Kaiko’s mission is to be the foundation of the new digital finance economy by serving as a single source for market information. Our mission is premised on the idea that high-quality data drives market efficiency and greater transparency throughout the industry. For each of our enterprise clients, we build custom data plans designed for a range of use cases.

Crypto

<ul><li>Crypto markets are at their most volatile when liquidity is low.</li><li>Prices have less support to both the downside and the upside, which could explain BTC’s rapid +17% surge since the start of the month.</li><li>Liquidity has also become a hot topic in traditional financial markets as the banking sector reels from several high-profile collapses.</li></ul>

Crypto markets are at their most volatile when liquidity is low.Prices have less support to both the downside and the upside, which could explain BTC’s rapid +17% surge since the start of the month.Liquidity has also become a hot topic in traditional financial markets as the banking sector reels from several high-profile collapses.

<ul>
<li>In the hours following Sillicon Valley Bank's collapse, news emerged that Circle, issuer of the USDC stablecoin, held $3.3bn of reserves in SVB, triggering panic that the stablecoin was no longer fully backed.</li>
<li>As of Sunday night, we know that Circle's reserves are safe, but over the weekend both centralized and decentralized markets descended into chaos.</li>
<li>Today, we'll walk you through what exactly happened.</li>
</ul>


In the hours following Sillicon Valley Bank's collapse, news emerged that Circle, issuer of the USDC stablecoin, held $3.3bn of reserves in SVB, triggering panic that the stablecoin was no longer fully backed.
As of Sunday night, we know that Circle's reserves are safe, but over the weekend both centralized and decentralized markets descended into chaos.
Today, we'll walk you through what exactly happened.


Research from Ocular, Ocular

Ocular

Research from Ocular

Ocular is a crypto fund based in Singapore managed by Openspace Ventures, one of the top VCs in the region. We invest in crypto VC and HF funds as well as crypto projects globally. The Ocular team comprises crypto enthusiasts with venture capital and data science background.

Crypto Fund

<ul><li>2022 was a challenging year for web3. We witnessed the collapse of TerraLUNA, the fall of FTX, and several notable insolvencies including Three Arrows Capital, Voyager, Celsius and BlockFi.</li><li>These events deeply impacted the sector, with the crypto market losing <a href="https://www.cnbc.com/2022/12/23/bitcoin-lost-over-60-percent-of-its-value-in-2022.html#:~:text=Bitcoin%20lost%20over%2060%%20of%20its%20value%20in%202022" target="_blank" rel="noopener">over $2 trillion</a> in market cap in 2022 and public perception of web3 turning sour.</li><li>Many suspect we have yet to feel the full magnitude of the contagion effect of these events, as they are still ongoing (e.g. the FTX trial), and we could reach new lows.</li></ul>

2022 was a challenging year for web3. We witnessed the collapse of TerraLUNA, the fall of FTX, and several notable insolvencies including Three Arrows Capital, Voyager, Celsius and BlockFi.These events deeply impacted the sector, with the crypto market losing over $2 trillion in market cap in 2022 and public perception of web3 turning sour.Many suspect we have yet to feel the full magnitude of the contagion effect of these events, as they are still ongoing (e.g. the FTX trial), and we could reach new lows.

<ul><li>Price Movements: Huobi listed a token representing a claim on FTX's debt, which briefly surged to as high as $100 before crashing to $13. </li><li>Market Liquidity: Coinbase trade volume is increasingly outpacing Uniswap's, suggesting traders still prefer CEXs.</li><li>Derivatives: BTC open interest remains flat despite heavy volatility. </li></ul>

Price Movements: Huobi listed a token representing a claim on FTX's debt, which briefly surged to as high as $100 before crashing to $13. Market Liquidity: Coinbase trade volume is increasingly outpacing Uniswap's, suggesting traders still prefer CEXs.Derivatives: BTC open interest remains flat despite heavy volatility. 

<ul>
<li>The crypto industry was again shaken this week when news came out that the NY Department of Financial Services (NYDFS) had ordered Paxos to stop issuing BUSD, with an NYDFS spokesperson saying Paxos “violated its obligation to conduct tailored, periodic risk assessments and due diligence refreshes of Binance and Paxos-issued BUSD customers to prevent bad actors from using the platform.”</li>
<li>Additionally, it was revealed that the Securities and Exchange Commission (SEC) sent a Wells notice to Paxos, informing the company that the SEC is considering legal action against Paxos, alleging that BUSD is a security. (I’ve offered my thoughts on the regulatory aspect of this here.) </li>
<li>We’ve covered BUSD’s growth and market share extensively in previous Data Debriefs, noting that about 35% of Binance volume is denominated in BUSD and it quickly grew to the third largest stablecoin by market cap</li>
</ul>


The crypto industry was again shaken this week when news came out that the NY Department of Financial Services (NYDFS) had ordered Paxos to stop issuing BUSD, with an NYDFS spokesperson saying Paxos “violated its obligation to conduct tailored, periodic risk assessments and due diligence refreshes of Binance and Paxos-issued BUSD customers to prevent bad actors from using the platform.”
Additionally, it was revealed that the Securities and Exchange Commission (SEC) sent a Wells notice to Paxos, informing the company that the SEC is considering legal action against Paxos, alleging that BUSD is a security. (I’ve offered my thoughts on the regulatory aspect of this here.) 
We’ve covered BUSD’s growth and market share extensively in previous Data Debriefs, noting that about 35% of Binance volume is denominated in BUSD and it quickly grew to the third largest stablecoin by market cap


United States

BNB was launched in 3rd July 2017 as an ERC-20 Token that enabled holders to get discounted trading fees at Binance Exchange. BNB has evolved over time to also be the native token of its own blockchain. BNB can still be used to pay for discounted Binance services though it is also heavily used as payment for gas when confirming transactions on BNB Chain.

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Binance Coin (XBIUSD CURNCY)

The State of Liquidity in Crypto Markets

Prices have less support to both the downside and the upside, which could explain BTC’s rapid +17% surge since the start of the month.

Kaiko

The Aftermath: What Happened to USDC?

As of Sunday night, we know that Circle's reserves are safe, but over the weekend both centralized and decentralized markets descended into chaos.

Kaiko

Ocular: 2023 Thematic Outlook

Many suspect we have yet to feel the full magnitude of the contagion effect of these events, as they are still ongoing (e.g. the FTX trial), and we...

Ocular

BLUR's Big Debut

Price Movements: Huobi listed a token representing a claim on FTX's debt, which briefly surged to as high as $100 before crashing to $13.

Kaiko

The Unwinding of BUSD

We’ve covered BUSD’s growth and market share extensively in previous Data Debriefs, noting that about 35% of Binance volume is denominated in BUSD

Kaiko

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