Insights, news and analysis for the professional investor February 13, 2022 Supported by Prices as of 2/13/22 @ 14:00 p.m. UTC If you were forwarded this newsletter and would like to receive it, sign up here.
Welcome to Crypto Long & Short.
Prices on bitcoin and ether are where they were last year, but trading volumes are substantially less. What's more, even with cryptocurrencies that have appreciated in value in the past year, volumes relative to market cap have fallen from where they were 12 months ago. That means it won't take as much to push around prices these days, and that could become an issue as more institutional players start playing in crypto, as we see in this week's newsletter.
– Lawrence Lewitinn, managing editor for global capital markets
Buy bitcoin and 100+ cryptocurrencies with 20+ fiat currencies. New users can enjoy 0% credit/debit card fees on all crypto purchases made in their first 30 days. Download the Crypto.com App now.
If it somehow feels as if cryptocurrency markets are relatively quiet, that's because they are. That is, trading volumes as a percentage of market cap in many of the major cryptocurrencies are lower compared with previous months. The end result is that it may take smaller amounts of capital to move the markets wildly.
Just a year ago — Feb. 13, 2021 — bitcoin was trading at around $47,000. The day's trading volume on centralized and decentralized exchanges taken together was nearly $62 billion and the market cap was just shy of $840 billion, according to data from CoinGecko. Thus, volume was about 8% of market cap.
On Wednesday, Feb. 9, 2022, bitcoin changed hands at $44,000, putting market cap at $837 billion. Yet volume was just $29 billion, or 3% of value.
That the market cap now is just about the same as a year ago drives home the point that the relative volume drop isn't necessarily a function of price. The two examples given are representative rather than aberrations; for the month of February 2021, daily bitcoin volumes averaged around 8% of market cap, and over the past 30 days, it's been 3%.
The drop-off for ether is even more dramatic. A year ago, the ratio of volume to value averaged 20% every day in February. Now it's 4%.
Fine, those are the big two in crypto, but surely the same hasn't happened elsewhere, you may say. However, you'd be wrong. Layer 1s may be the talk of the town these days, but trading volumes on exchanges haven't kept up with skyrocketing market caps. A year ago, February daily volumes versus value in BNB, cardano, solana and avalanche averaged 22%, 25%, 9% and 17%, respectively. Over the past 30 days, it's been 2%, 5%, 6% and 4%.
Off-exchange settlement in a trustless trading environment means unleashing maximum capital efficiency and more aggressive investment strategies.
ClearLoop brings Copper's custody and leading digital asset exchanges into one secure trading loop where funds are delegated, not moved. Balances are immediately available for trading and settlement is instant, with capital ready to be redeployed in milliseconds.
ClearLoop is the institutional investor's unfair advantage, offering greater control during high volatility while mitigating counterparty risk.
Takeaways Crypto mergers and acquisitions jumped 5,000% year over year during 2021. TAKEAWAY: Soaring valuations, a crypto bull market and easy access to capital created the perfect environment for blockchain M&A. With the majority of acquisitions happening in the United States, special purpose acquisition companies accounted for a significant part of the billion dollar-plus deals throughout the year.
Crypto exchange Binance plans to invest $200 million into Forbes, making it one of the two largest holders of the media company. TAKEAWAY: Binance is likely the largest company in the crypto industry with rumors that its valuation could be around $300 billion. The exchange plans to use the Forbes investment as a way to push education and understanding of crypto and Web 3.
BlackRock, the world's largest asset manager, is planning to offer crypto trading via Aladdin. TAKEAWAY: Aladdin is BlackRock's portfolio management software, used by 55,000 investment professionals to help manage $21 trillion in assets. The software will likely offer crypto trading and leverage against digital assets to its customer base. BlackRock itself manages over $10 trillion in assets and its CEO Larry Fink has been vocally negative on the crypto industry in the past.
Polygon raised $450 million from SoftBank, Sequoia Capital and Galaxy in an effort to continue building out the Ethereum ecosystem. TAKEAWAY: The funding round allows Polygon to continue to invest in Ethereum scaling tools and further support the ecosystem and projects building on Ethereum's technology. As of today, Polygon's most popular chain has over $5.5 billion in DeFi total value locked (TVL) and often sees more than 3 million transactions per day. Polygon now has support from many of the top venture firms in both the crypto industry and the more traditional venture business.
U.S. officials seized $3.6 billion in bitcoin stolen during the 2016 Bitfinex hack. TAKEAWAY: Nearly six years after the Bitfinex hack, U.S. authorities were able to recover 94,000 bitcoins and arrest a married couple charged with laundering the stolen funds. The Department of Justice never explicitly accuses the couple of being the original hackers, but the private keys holding the stolen funds were found on a Google Drive file belonging to the husband.
– Teddy Oosterbaan, research analyst
CoinDesk presents Crypto State: Southeast Asia. The next dimension of interaction is already here, and it's built on Web 3, blockchain and virtual reality. Businesses like Facebook and Nike, fashion brands and crypto companies alike are investing heavily in this revolution. We dive into how this technology will transform our world, and how you can take part. Register now!
Podcasts Worth Listening To The Breakdown, With NLW
Education and Innovation in DeFi and Web 3 The current state and future of the crypto industry with Jeff Garzik.
Crypto's True Value: Social Good. Featuring Bitcoin OG Francesco Rulli Using NFTs and blockchain technology as tools for social impact.
What's More Important: BlackRock Trading Crypto or 7.5% Inflation? Crypto is being driven in different directions by different market forces.
New Money
Crypto Long & Short A newsletter from CoinDesk Were you forwarded this newsletter? Sign up here. Copyright © 2021 CoinDesk, All rights reserved. 250 Park Avenue South New York, NY 10003, USA Manage your newsletter subscriptions | Unsubscribe from all CoinDesk email |
Donations
BTC: bc1qxv3stg0xha9upurf7h4aqnmg3xjn3h0zk28kpe
ETH: 0x01870296774Fb0A2DbF9b44d2E6a57fb8Ccea070
LTC: LQ44CP6xDDkX5bAiKd3yqmDB4c23U7orrQ
DOGE: DCpu9v1bkTXj8VKUDG97LHdV2qipDPyZsR
ADA: addr1qx4q7348dv2ju5zshee9ru23ssmqhyyjlnxe0xlezjq5we42par2w6c49eg9p0nj28c4rppkpwgf9lxdj7dlj9ypganqtmuu2p
domingo, 13 de fevereiro de 2022
Assinar:
Postar comentários (Atom)
Donations
BTC: bc1qxv3stg0xha9upurf7h4aqnmg3xjn3h0zk28kpe
ETH: 0x01870296774Fb0A2DbF9b44d2E6a57fb8Ccea070
LTC: LQ44CP6xDDkX5bAiKd3yqmDB4c23U7orrQ
DOGE: DCpu9v1bkTXj8VKUDG97LHdV2qipDPyZsR
ADA: addr1qx4q7348dv2ju5zshee9ru23ssmqhyyjlnxe0xlezjq5we42par2w6c49eg9p0nj28c4rppkpwgf9lxdj7dlj9ypganqtmuu2p
Markets Really Are Thinner Now