Wing Finance, a decentralized lending platform, has successfully launched a non-fungible token (NFT) pool, offering highly competitive APR rates. The new functionality will support the […]
How the Canadian government unintentionally fast-forwarded bitcoin adoption.
Central African Republic’s president Faustin-Archange Touadéra has disclosed the launch date for the country’s upcoming crypto initiative dubbed The Sango Project. This will be CAR’s first-ever Crypto project and it is aimed at reshaping the country’s financial system. CAR believes Sango is the most progressive initiative in Africa In a recent tweet, Faustin-Archange Touadéra mentioned […]
The “delta capitalization” model of Bitcoin may suggest that around $15k could be a possible bottom for the crypto’s price. Past Delta Cap Trend Shows Bitcoin May Still Face More Decline Before A Bottom As explained by an analyst in a CryptoQuant post, the BTC market cap is now below the realized cap, but still above the delta cap. Before taking a look at the data, it’s best to first get a basic grasp of the three major capitalization models for Bitcoin. The normal market cap is calculated by just taking the total number of coins currently in circulation and multiplying it by the price of BTC right now. The “realized cap” works a bit differently; instead of multiplying all the coins by the same price, this model weighs each coin by the price it was last moved at. Related Reading | USDC Exchange Reserves Rise As Investors Escape From Bitcoin For example, if there are 2 BTC in circulation and the current price is $19k, then the normal market cap is simply $38k. However, if one of these coins was last transacted at, say, $15k, and the other at $19k, then the realized cap would be $34k instead. Now, the Bitcoin “delta cap” is defined as the difference between the realized cap and the average of the market cap. The average of the normal market cap here is taken over the entire history of the crypto (and it’s naturally a moving average). The below chart shows the trend in the different market caps for BTC. The normal market cap still seems to be above the delta cap at the moment | Source: CryptoQuant As you can see in the above graph, the Bitcoin market cap has recently dipped below the realized cap. However, it has still not gone down near enough to touch the delta cap. Historically, the value of the crypto has formed bottoms whenever the market cap has been between the other two caps. Related Reading | Fed Announces Inflation Warnings As Bitcoin Whales Remain In Wait Mode In 2020, the coin bottomed out after the market cap went slightly under the realized cap, but in 2018 the metric even dipped a bit below the delta cap before the bottom was in. This past trend may suggest that the point around the delta cap may be the possible lower bound for how deep the coin’s price can sink. And if so, then Bitcoin could potentially sink to or a little under $15k, before the current cap touches the delta cap and the bottom forms. BTC Price At the time of writing, Bitcoin’s price floats around $19.3k, down 9% in the past week. BTC has gone down over the last few days | Source: BTCUSD on TradingView Featured image from Dmitry Demidko on Unsplash.com, charts from TradingView.com, CryptoQuant.com
Changpeng “CZ” Zhao, Chinese-Canadian business executive and CEO of the world’s largest cryptocurrency exchange, Binance, has stated that he believes the value of crypto is increasing. This comment comes amidst the current crypto winter that has seen a lot of digital assets plummet by surprising margins. CZ admits that crypto prices will dwindle along the […]
Coinbase continues to expand its crypto footprint by extending custodial services support to dozens of altcoins for international customers. In a new announcement, the US-based cryptocurrency exchange says it’s adding 70 cryptocurrencies to its roster of 150+ assets that are part of the Coinbase Custody International cold storage trust in Dublin, Ireland. “These new assets […]
The post Coinbase Abruptly Adds Support for 70 New Altcoins to Global Custody Service appeared first on The Daily Hodl.
The popular crypto analyst who accurately called the current market collapse says that the altcoin market still has much further to drop than traders realize. The pseudonymous trader known as Capo tells his 417,000 followers that even though most altcoins are way below their all-time highs, a sizeable haircut is around the corner. “Expecting 45-50% […]
Ethereum has returned to the red as it was rejected as a major area of resistance. The cryptocurrency is bleeding out and records the second-worst performance in the crypto top 10 by market capitalization with a 10% loss in the last 24 hours. Solana (SOL) holds the number one position with a 13% loss. Related Reading | TA: Ethereum Topside Bias Vulnerable If It Continues To Struggle Below $1.2K The general sentiment in the market seems to be at an all-time low, but there is room for it to enter into a capitulation state, according to Daniel Cheung, Co-Founder at Pangea Fund Management. ETH’s price could succumb to macroeconomic conditions. Cheung claims the second crypto by market cap is correlated with traditional equities, in particular with the Nasdaq 100 via the Invesco QQQ Exchange Traded Fund (ETF). In that sense, the crypto market has become susceptible to stock price movement making it “a market regime where it is all just one big Macro trade”. The analysis claims that Ethereum could see a 40% drop from its current levels as the Nasdaq 100 has “a lot of room to fall”. This index has only experienced a 30% crash, and historically it has dropped by as much as 45%. The potential upcoming crash in the Nasdaq 100 (tech stocks), and in Ethereum as a consequence, will be driven by a poor earnings season, Cheung believes. This is one of the conditions that could force ETH’s price to break below $1,000 and into $500 for the first time since 2020. The analysis claims that the traditional market is misreading the U.S. Federal Reserve (Fed). The institution is attempting to slow down inflation, currently at a 40-year-old high as measured by the Consumer Price Index (CPI), by increasing interest rates and unloading its balance sheet into the market. Will Ethereum Follow U.S. Stocks To The Downside? The objective is to reduce consumer demand, and reduce prices across global markets, in hopes that this will bring down inflation. Market participants seem to be underestimating the Fed, and thus could be unprepared for the consequences, Cheung argues: (…) there will likely be more iterations of lower earnings revisions that follow over the coming months especially given this is a market regime that very few investors have experienced This will bring equities lower and crypto to follow with it more downside to come. In fact, the analysis argues that the U.S. could already be in an economic recession. This could bolster the Fed to put more pressure on the market, having an even worse impact on Ethereum and other cryptocurrencies. Related Reading | Bankman-Fried Is Looking At “Secretly insolvent” Small Exchanges & Crypto Miners This could be confirmed today with the report on GDP growth to be posted by U.S. financial entities. If this report spells economic slowdown, adding more downside pressure and further impacting companies’ earnings season, Cheung claims while adding: If the GDP print + CPI print + FOMC commentary all play out according to plan – we will likely be at a triple digit $ETH price once again. However, the land mine that investors would have to overcome would still not be over as 2Q22 company earnings would be just on the horizon.
The CEO of MicroStrategy announced the company has purchased an additional 480 bitcoin, netting a total treasury of 129,699 BTC amid market downturns.
In today’s market, plenty of trading platforms, including mainstream exchanges like Binance, Huobi, Bybit, and KuCoin, have introduced futures contracts. Huobi has extensive experience in futures and provides a wide range of linear/inverse contract markets. However, its market share has fallen sharply, and the platform’s user traffic is also going downhill. Bybit and Binance are both professional futures trading platforms that demand a high threshold. Bad news is that Bybit was chased out of the UK by FCA, while Binance has suffered several security breaches. Futures beginners should avoid professional-focused trading platforms with a high threshold. Instead, they should go with a platform like CoinEx that features a low threshold and simple operations. Today, we will look into the advantages of CoinEx Futures in 5 aspects. I. CoinEx Futures boasts simple, easy–to–use, convenient operations First of all, compared with professional-centered futures trading platforms like Binance and Bybit, CoinEx Futures offers simple, easy-to-use products. It aims to allow all crypto investors to trade futures with ease, moving futures trading out of the realm that’s exclusive to professional traders. With easy operations, convenient order placement, and clear position information, CoinEx users can trade futures through an extremely smooth process. Secondly, before starting to trade futures on CoinEx, users can quickly master the key takeaways through simulated operation tutorials provided by the platform, which helps them avoid the common booby traps in futures trading. In terms of functionality, CoinEx Futures provides all-inclusive, easy-to-use functions like TP & SL, Close All, and Futures Calculator, which helps users manage their positions with greater ease. II. CoinEx boasts a zero-accident record against its peers’ frequent security scandals In 2020, KuCoin suffered a serious hacking incident that incurred an asset loss of about $275 million. Apart from KuCoin, Binance, a top crypto exchange, has also been hacked several times. In 2019, over 7,000 bitcoins were stolen from the exchange. The frequent security breaches Binance has suffered jeopardize the bond of trust between this leading crypto exchange and its users in the long run. CoinEx, on the other hand, has suffered no security scandals in the 5 years since its inception, which indicates the strength of its security system. On CoinEx, all crypto assets are 100% reserved. The exchange does not misuse users’ assets for any reason whatsoever. Moreover, all withdrawals are 100% processed in time. CoinEx has also adopted multiple security strategies and established a well-rounded security system to fully protect its system and users’ assets. For example, the exchange regularly conducts penetration tests to promptly identify security loopholes and monitors any abnormal system changes in real-time. III. CoinEx boasts an all-encompassing product family that spans all crypto categories In addition to futures, CoinEx also provides many other products and services, including margin trading, AMM, mining, financial service, and CoinEx Dock. The exchange features trading sections for BTC, BCH, ETH, and stablecoins, over 500 first-rate, innovative cryptos, and nearly 1,000 trading markets. As an exchange under ViaBTC Group, CoinEx is backed by an all-inclusive ecosystem that brings together a mining pool, an exchange, a wallet, a public chain, and an institutional investor. Today, CoinEx has earned global user recognition with its fast, stable performance and smooth deposits/withdrawals. In the future, the exchange will continue to strive for a comprehensive, stable service ecosystem. IV. Backed by a tech background, CoinEx boasts years of crypto expertise According to its official introduction, CoinEx is backed by a founding team consisting of technical experts who boast rich experience in the security of systems, operations, and wallets. For instance, Haipo Yang, CoinEx’s founder, is a top-notch tech expert in the industry. During the early days, he launched ViaBTC Pool and completed all the coding. In addition, members of CoinEx’s core team all have a background in world-renowned companies that focus on the Internet or finance, including some of the earliest crypto practitioners and investors. The team has expertise in technology R&D and global operations. When it comes to technology, CoinEx independently built the world’s first 10,000-TPS trade matching engine that allows it to carry 10,000 transactions per second, running stably despite the concurrence of massive transactions. In addition, on CoinEx, deposits arrive as fast as five minutes, and small withdrawals are processed in real-time. CoinEx’s system remains steady and solid even when the trading volume surges during a bull market. V. Centering on user experiences, CoinEx keeps pushing for globalization While building a global presence, CoinEx has always prioritized product & service and user experiences. As the exchange explores international markets, it has remained committed to product development and the user-first principle. Right now, CoinEx is providing services in markets around the world 24/7. Available in 16 languages, the exchange continues to venture into new markets. It should be noted that CoinEx’s product design features an interactive experience that combines elements such as aesthetics, simplicity, smoothness, and practicality, which allows users to benefit from simple, elegant operations. This also shows that the CoinEx team has always been committed to product improvement, providing users with one-stop crypto trading services that are more satisfying and considerate. Overall, when choosing a suitable futures trading platform, apart from security, users should consider whether a platform’s products are easy to use and if its operations are convenient. In addition, they should also account for the products and services that are available on a platform to benefit from efficient, satisfying crypto trading experiences.
Data shows the Bitcoin “reserve risk” indicator has recently plunged down and is now reaching all-time lows only seen back in 2015 bear and the March 2020 COVID crash. Bitcoin Reserve Risk Suggests HODLing Relative To Price Is Strong According to the latest weekly report from Glassnode, BTC investors have been holding strong onto their coins despite the large decline in the crypto’s price recently. Before looking at what the “reserve risk” indicator does, it’s best to get an understanding of a couple concepts first. A “coin day” is accumulated in the market for each 1 BTC that stays unmoved for a day. The sum of such coin days in the entire market can tell us about how dormant the long-term holder supply has been. Because of this, the sum of coin days can be an effective way of measuring the conviction of hodlers in the Bitcoin market. However, there is another way to interpret the coin days and hence the LTH conviction; as Glassnode explains: Stronger hands will resist the temptation to sell and this collective action builds up an ‘opportunity cost’. Every day HODLers actively decide NOT to sell increases the cumulative unspent ‘opportunity cost’ (called the HODL bank). The other idea of interest here is the incentive that these LTHs have to sell right now. It is measured through the current price of Bitcoin. Whenever the price goes up, hodlers become increasingly tempted to realize their profits, and hence the incentive to sell goes up. Related Reading | First In History: Bitcoin Mayer Multiple Records Lower Value Than Last Cycle’s Low Now, the reserve risk models the ratio between this “incentive to sell” and the cumulative “opportunity cost” (explained above) of the long-term hodlers. Below is the chart for the indicator. The value of the indicator seems to have sharply declined recently | Source: Glassnde’s The Week Onchain – Week 26, 2022 As you can see in the above graph, the Bitcoin reserve risk has gone down in recent days and is now approaching all-time lows. This suggests that despite the plunging price of the coin during 2022, BTC investors have still been holding strong onto their coins. Related Reading | Bitcoin Monthly Tags Lower Bollinger Band, Tool’s Creator Hints At Bottom The last time such low values of the metric were observed was back in the late 2015 bear market and the March 2020 crash. BTC Price At the time of writing, Bitcoin’s price floats around $20.9k, down 1% in the past week. Over the last month, the coin has lost 27% in value. The below chart shows the trend in the value of the crypto over the past five days. Looks like the price of BTC has been consolidating sideways recently | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com
New Bitcoiners are likely upset with the bitcoin price right now, but we’ve been here before and there are some silver linings.
It has been more than a year since the NFT boom in 2021. According to NFTGO, the market cap of NFTs peaked at $36.8 billion in March 2022. As the market later cooled, the trading volume and market cap of NFTs started to shrink. This crypto novelty expanded its influence beyond the crypto community and fostered a huge market, which also gave rise to the combination of NFTs and DeFi. The market has witnessed the appearance of NFT lending platforms, NFT aggregators, and NFT derivatives markets, which constitutes the second debut of DeFi Lego enabled by NFTs. However, one wonders whether these products were built to meet real market demands and if they have created a false proposition that lacks any value for market participation. Today, we will dive into whether NFT-fi is a feasible trend and if it will earn market recognition. Figure 1: Market Cap & Volume of NFTs | Source: nftgo.com | As of June 1, 2022 There are many NFT liquidity solutions and NFT structured products in today’s market: 1. NFT fragmentation: FT tokens (such as ERC20 tokens) that are issued by dividing the ownership of valuable NFTs. NFT fragmentation projects include Fractional.art, NFTX, etc. 2. NFT lending markets: Holders can borrow short-term loans by collateralizing their NFTs without selling them. Prominent NFT lending markets include BendDAO, NFTfi, and Drops DAO. 3. NFT leasing: Holders earn rents by leasing NFTs to users in need. NFT leasing projects include Double, reNFT, etc. 4. NFT aggregators: These aggregators, such as Gem.xyz, bring together the transaction data of multiple NFT exchanges, obtain the best NFT transaction price in one stop, and provide users with increased liquidity and more options. 5. NFT derivatives: NFT derivatives include NFT options like Putty, as well as NFT perpetual futures contracts such as NFTprep. These projects are early attempts to bring together NFTs and DeFi. In particular, NFT fragmentation projects and NFT aggregators address the problems of poor NFT liquidity and high market threshold. NFT lending markets and NFT leasing projects also focus on improving NFT liquidity and capital utilization. Meanwhile, NFT derivatives are more complex structured products built to improve capital utilization. However, these projects have not been able to achieve large-scale adoption because they face limitations in terms of the underlying NFT logic and the development space. Next, we will explore the real demands and false propositions of NFTs. Real Demands 1. The capital utilization of NFTs needs to be improved, allowing holders to collateralize their NFTs for partial liquidity when running out of cash. 2. The liquidity problem of NFTs should be addressed, enabling holders to quickly buy/sell the NFTs they own. False Propositions Did the capital utilization of NFTs go higher? The problem of NFTs’ capital utilization can be seen in two aspects: 1) Users need to quickly buy and sell NFTs, and the transaction frequency should not be affected by the poor liquidity of NFTs; 2) Users should be able to quickly exchange their NFTs for liquidity and obtain cash for other purposes. When it comes to FT tokens, capital utilization can be improved through staking, leverage, etc. However, in the NFT market, there are only a few ways through which users can improve their capital utilization. In addition, combining finance with NFT significantly increases the learning cost. Right now, most NFT holders still rely on the “buy low and sell high” strategy. Moreover, most such holders are not the target user of NFT lending projects because only blue-chip NFTs with sound liquidity and value consensus are accepted. In terms of the overall market scale, most users are absorbed by secondary markets and aggregators with low operating thresholds, and they have not achieved any major improvement in capital utilization. As shown in Figure 2, the number of new addresses of Genie and Gem, two NFT aggregators, has been on a steady rise, with increasingly frequent daily transactions. However, as the trading volume and transaction frequency of the two have been hit by the sluggish market conditions of NFTs, Genie and Gem have yet to reach their maximum potential for improving the capital utilization of NFTs. Figure 2: New Addresses and Transactions of NFT Aggregators | Source: Dune @sohwak Let’s turn to the capital utilization of mainstream lending projects. BendDAO is a lending market based on the liquidity pool model where holders can borrow ETH from the pool after collateralizing their blue-chip NFTs. Due to recent market fluctuations, a large amount of ETH deposit in BendDAO’s liquidity pool has been withdrawn, which resulted in decreased ETH supply. Yet, the ETH loans have remained at around 19,000 ETH, while the MA14 supply stands at 46,000. As such, we can make the rough estimate that BendDAO’s capital utilization is about 41%. Figure 3: Bend ETH Utilization | Source: Dune@cgq0123 Note: MA14 refers to the moving average in 14 days, while MA7 indicates the moving average in 7 days NFTfi is a lending market following the P2P model. The amount, interest rate, and duration of loans on NFTfi are jointly determined by liquidity providers and NFT lenders, which is more flexible in terms of the loan rate. The number of monthly loans offered via NFTfi increased from 21 in May 2020 to 2,000+ in May 2022, and the maximum monthly loan amount reached $27.52 million (March 2022), but this figure only accounted for 1% of the market cap of blue-chip NFTs (as reported by NSN-BlueCHIP 10). Figure 4: NFTfi Monthly Loan Volume by Count/Value | Source: Dune@gideontay JPEG’d is also a P2P model lending protocol, and it now only provides collateralized lending for Cryptopunks, EtherRocks, BAYC, and MAYC. After staking NFT, holders will receive PUSD, a stablecoin, provided by the protocol from the pool. Additionally, JPEG’d also features a 32% capital utilization limit on lending. Of course, there are also other early-stage NFT derivatives platforms, but they have not introduced any mature products, so we could not analyze their capital utilization. Despite that, it is foreseeable that such NFT derivatives will come with higher learning costs as they are products designed for professional traders with greater risk appetite. As such, their growth potential is limited in today’s NFT market. Asset Pricing and Liquidation Risks？ The pricing of NFTs has been so frequently discussed that it has now become a cliché. People are concerned with the issue because the price swings of NFTs will expose NFT lending or derivatives to liquidation risks. As the NFT prices fell over the recent period, BendDAO has started several liquidation auctions. Although most of the lending protocols out there have adopted over-collateralization, in the face of wild price swings, many NFTs would be liquidated and sold in marketplaces. This, coupled with the poor liquidity of NFTs, might lead to panic selling, which would create downward price spirals, ultimately turning the loans into bad debts. The pricing of NFTs is subject to multiple factors. Plus, it is also easily manipulated. For example, big holders could maliciously raise the floor price and then liquidate the NFTs on purpose, and an NFT could take a price plunge due to hacking or smart contract loopholes. Moreover, NFT pricing could also be affected by many intangible factors. For instance, the price of an NFT could soar if a famous person suddenly buys it in large amounts or if it releases a new airdrop plan. As most lenders cannot accurately estimate the intrinsic value of their NFTs, they are vulnerable to liquidation if they borrowed loans or applied leverage. This is also one of the reasons why NFT lending and derivatives have not gained mass adoption: Blue-chip NFT holders are worried that they might suffer losses in the above scenarios, which is why they are reluctant to collateralize their NFTs. Do blue-chip NFT holders really need NFT loans? All NFT lending markets focus on blue-chip NFTs, but most blue-chip NFT holders are not in great need of loans. To begin with, such holders care more about their ownership of the NFTs, just like billionaires would not use their collectibles as collateral for loans. Secondly, NFT loans come with unknown risks, and many blue-chip NFT holders refuse to apply for such loans after weighing the risks against the benefits. Thirdly, applying for NFT loans comes with high learning costs, and not every user can understand the principle behind such loans. Let’s compare the user base of the major NFT lending projects. As of June 15, there are about 2.4 million holders in the NFT market, of which 27,833 hold blue-chip NFTs (a user will be regarded as a blue-chip NFT holder as long as he owns at least one such NFT), according to NFTGO. There are 771 borrowers on BendDAO, 1,038 on NFTfi, and 51 on Arcade. As users must first deposit/collateralize their NFTs before applying for a loan, we can regard all these borrowers as blue-chip NFT holders. It is therefore clear that most blue-chip NFT holders are not users of NFT lending markets. Figure 5: Bend ETH Borrowers & Depositors | Source: Dune@cgq0123 Could NFT-fi projects retain users with the same old incentive? Lending or derivatives projects also bear the task of improving the protocol’s liquidity. Most such projects offer native tokens as the incentive for recruiting NFT holders and depositors as they go live. In this regard, these projects resemble DeFi liquidity mining platforms that attract speculators with high APYs. However, the problem is that they would not be able to maintain such liquidity if the APYs went down. Attracting users with token incentives is still the same old approach. Though this strategy could create a large user base at the very beginning, no one knows whether the protocol could retain users. For example, when the project was first launched, BendDAO airdropped BEND tokens to users who had deposited blue-chip NFTs and ETH. It also uses BEND as a subsidy when paying interests. However, the interest rate went down when the BEND price dropped, which slowed down the growth rate of new users. As such, attracting users with high APYs is only the first step. To retain new users, they must further explore the lending mechanisms, address the oracle pricing issue, and mitigate the liquidation risks. Projects should develop more flexible products while expanding the scope of NFT lending. Last but not least, they could also provide risk reviews, lower the learning cost, and offer more satisfying user experiences. Conclusion The evolution from NFT to NFT-fi is a process in which a market grows from its infancy to a more mature stage. However, it is also inevitably a process that’s full of doubts, traps, and problems. As NFT-fi projects seek to meet real demands, they will also have to face doubts that they are stating false propositions. Today’s NFT market is like a newborn child who needs to grow up and stick through challenges. Although NFT-fi might be a great attempt, there is still a long way to go, and NFT-fi projects have to keep exploring their underlying logic to earn market recognition.
Data from these indicators reveal a historical pattern that has several times preceded a surging uptrend.
The price of Shiba Inu on Friday July 27th was 0.00095, a change of -1.55% from the 24-hour period before. Shiba Inu prices for the […]