Crypto

• DCG’s subsidiary Genesis is likely to become the next insolvent crypto lender,  market fears its failure will lead to the dissolving of Grayscale, which held 3% of bitcoin’s total supply;
• Grayscale is a profitable business with $200 million annual fee income from the GBTC trust, DCG or any new buyer of Grayscale has no intention to dissolve the cash cow;
• Even if Grayscale dissolve, it won’t cause another crash as only $1 billion value of bitcoin may be dumped into the market, only 3.3% of bitcoin daily trading volume;

• Price Movements: Bullish sentiment has returned to crypto, with BTC up 20% over the past week.
• Market Liquidity: Binance.US’s market share relative to other U.S. exchanges climbed to 15%, a marked increase after dropping to 6% post-FTX.  
• Derivatives: BTC open interest fell sharply after a short squeeze caused millions in liquidations.

• There are many different ways to analyse and understand crypto markets.
• On-chain analysis can be used to both understand a network’s fundamental health and provide some unique insights for potential investment opportunities over different time horizons. 
• On-chain data in 2022 provided an interesting picture and offered a deeper understanding of the bear market that we sat through and hope for the future. 

• As a proof of stake network, Ethereum rewards stakers with block rewards and user fees.
• However, the 32 ETH minimum required to stake your ETH directly on the network prohibits the vast majority of users from doing so. Enter liquid staking derivatives, or LSDs.
• LSDs refer to the tokens created by DeFi protocols or centralized services designed to reward users who stake ETH on their platform.

• Ethereum is the only profitable blockchain, a analysis of revenue and expense of Ethereum;
• Ethereum staking ratio is the lowest among all PoS blockchains and the Shanghai upgrade in March will change this;
• Why will there be a short-term rally ahead of the Shanghai upgrade?

• Price Movements: Most Layer 1 tokens have struggled versus ETH since December, but SOL and ATOM have recently outperformed.
• Market Liquidity: Curve’s 3pool – made up of USDT, USDC, and DAI – has seen its total value locked fall from $5.5bn to just $600mn over the past year.
• Derivatives: Both SOL and LDO experienced a short squeeze as each token unexpectedly rallied.

• The fall of the FTX and Alameda house of cards built atop a seemingly innocuous token – FTT – has raised skepticism about centralized exchanges and the tokens that they issue.
• Attention was first turned to Binance, BNB, and BUSD; as a result, BUSD’s market cap fell from $23.5bn to $16.5bn in just 90 days, though Binance has seemingly passed its stress test.
• Attention has now turned to Gemini, Genesis, and Digital Currency Group (DCG).

• Liquidity is deeply misunderstood in crypto markets. Specifically, the metric “market depth”. 
• Unless you are a trader, it can be hard to wrap your head around the meaning of “2% Bid Depth” and how it relates to the value of an asset.  
• As FTX collapsed, we took a hard look at liquidity for FTT, specifically aggregated market depth across all active markets.

• The crypto safe-haven narrative gained traction in the beginning of the year after the start of the Russia-Ukraine war.
• Both ruble and hryvnia trade volumes surged immediately after Russia’s invasion, boosted by record local currency devaluation and market disruptions.
• Interestingly, the increase was mainly driven by stablecoin volumes rather than BTC, with weekly Tether (USDT) volumes jumping more than five-fold in early March relative to the start of the year.

Is there still hope for Crypto in 2023? In the next webinar, we speak with Insight Provider Edward Wu on just that, as he shares with us the landscape of the Crypto industry in 2023. From the problems with the current crypto industry, to Ethereum Layer 2 solutions, Edward will share with us his thoughts in this next episode of our Webinar Wednesdays. Have any burning questions about Crypto, DeFi trading or Ethereum Layer 2 solutions? Get them answered in the live Q&A that will conclude the session. 

The webinar will be hosted on Wednesday, 4 January 2023, 17:00 SGT/HKT.

Edward Wu is an experienced financial professional with strong research experience in macroeconomics, credit as well as corporate banking. He is a true believer in the future of Crypto/DeFi and foresee widely adoption of tokenization of real-world assets. He is currently actively researching in the crypto field, mainly focused on DeFi, DAO governance, and tokenomic design.

• Some people think of crypto as purely an investment opportunity. A highly volatile asset class that comes with risk, but eventually the returns will be worth it.
• However, this perception is somewhat naive, as it ignores one of crypto’s biggest use cases: financial freedom.
• The concept of financial freedom is hard to grasp for the privileged of us living in Europe or the US – despite record levels of inflation, we are not financially oppressed, and we can bank on our savings being relatively intact next year.

• Price Movements: Binance’s BUSD stablecoin, BNB token, and staking token bETH have had a volatile week amid mass withdrawals.
• Market Liquidity: Throughout December, BTC market depth on Coinbase has increased 46% while on Binance, depth is down 5%.
• Derivatives: Open interest for BTC and ETH perpetual futures has nearly halved since November.