Tuesday, 21 December 2021

Market Summary

Market Summary 21 December 2021

Bitcoin Price: U$46,914.16  (+0.50%)
Ethereum Price: U$3,944.73 (+0.52%)


UST Overtakes DAI, Astroport TVL, USDT Supply on Exchanges

  • Risk assets fell during Asian hours weighed down by rising Omicron cases and tighter restrictions in Europe. Crypto markets were not spared, giving back weekend gains.
  • USDT supply on exchanges is at a 1-year high, indicating that investors have become risk-averse and sold into stable assets. About 31% of the total USDT supply are sitting idle on exchanges, suggesting traders are turning risk-off or locking in end-of-year profits.
  • ETH and BTC assets on exchanges have been declining over the year, standing at 11.8% and 13.7% of total supply on exchanges respectively. One of the main drivers of the trend is the search for higher yields on-chain. Earlier this week Microstrategy announced they are looking to generate yield on their Bitcoin holdings. As more institutions and investors search for yield, we may expect this trend to continue
  • UST and DAI have been neck-and-neck in terms of market capitalization, with UST briefly overtaking DAI as the 4th largest stablecoin last week. Yesterday, UST overtook DAI more decisively as had been trading higher for at least the last 24 hours.
  • Growth of UST has been driven by new capital entering the Terra ecosystem following Columbus-5 and the deployment of dozens of applications in the last few months, as well as Terra exporting UST across other chains such as Solana and Ethereum
  • Over $1bn worth of capital was locked into Astroport since the initiation of its lockdrop launch on the 14th of December.
  • Terraswap LPs ported over their assets, which will soon be part of Astroport’s TVL once liquidity is properly migrated over, making it Terra’s largest DEX
  • The majority of LP tokens locked came from the bLUNA-LUNA and LUNA-UST trading pairs, representing ~80% and ~95%  of Terraswap’s locked capital.
  • LUNA’s price notched another all-time high today before retracing lower. The price increase over the last few days was likely triggered by investors buying spot LUNA to lock up in the Astroport lockdrop, then hedging their position via perpetual futures to remain delta neutral.
  • Negative funding rates across major exchanges further suggest delta-neutral traders played a part. The current 8-hour funding rate on Binance is -0.05%, which translates to shorts paying longs ~65% APR to keep their position open.


Terraform Labs argues SEC lacks jurisdiction to compel cooperation in its investigation

  • A new response from crypto startup Terraform Labs hit the court docket last weekend as part of an ongoing legal spat with the Securities and Exchange Commission (SEC). 
  • As previously reported, SEC served Terraform CEO Do Kwon with a subpoena during the Mainnet conference in New York City. Kwon would go on to file his own lawsuit against the securities watchdog, claiming the agency violated his rights to due process by improperly serving him.
  • In the SEC’s own proceedings against Kwon, the agency is seeking a court order to compel Kwon and Terraform Labs to “comply with investigative subpoenas for documents and testimony.”


JPMorgan’s Onyx blockchain unit is working with German industrial giant Siemens on payments

  • JPMorgan’s dedicated blockchain-centric payments unit is reportedly working with Siemens, the German industrial conglomerate, on a new approach to streamlining how it handles payments internally.
  • The Financial Times reported Monday that the JPM unit, Onyx, is building the system in order to automate payments between Siemens accounts. The system will be denominated in US dollars, though support for the euro could be added in the future.


Adidas Originals reaches second spot on OpenSea rankings with debut NFT collection

  • In its debut weekend, the first NFT from Adidas Originals’ “Into the Metaverse” project has generated 11,391 Ether (ETH), worth over $43 million, on OpeanSea. Ranked by trading volume, this collection has earned the second spot on OpeanSea after RTFKT’s Clone X and Takashi Murakami collection. 
  • In collaboration with Bored Ape Yacht Club, PUNKS Comic and gmoney, Adidas Originals co-created one digital asset and put up 30,000 copies of the same item for sale on Dec. 17. Almost 20,000 copies of the Phase 1 NFT have been sold so far.


DODO Launches on Aurora to Encompass the Features of NEAR Protocol

  • In line with the multi-chain future vision, DODO is expanding the list of networks it is available on. DODO is officially launching on the NEAR Protocol, using Aurora as the Ethereum-compatible scaling solution! Not only that, but DODO has reached an agreement with the NEAR Protocol team to have DODO as the ‘blue chip’ decentralized exchange (DEX) on their platform. This unprecedented deal will ensure that DODO has ‘first mover’ advantage in this new and exciting space.


Chinese companies embark on a metaverse trademark race

  • Even though the People’s Bank of China’s (PBOC) warning on metaverse and nonfungible tokens (NFTs) in November, more than a thousand Chinese companies have submitted thousands of metaverse-related trademark applications.
  • In a summit back in November, Gou Wenjun, the PBOC’s AML and Analysis Center Director, warned about the dangers of digital assets. According to Gou, because virtual assets have no physical basis, they can be used for illegal financial activities. Gou cited activities such as “illegal fundraising, pyramid schemes and fraud.”
  • However, ignoring the PBOC’s warnings, Chinese companies rushed to register metaverse-related trademarks such as “metaverse satellite” and “metaverse exhibition.” According to the South China Morning Post, more than 1,360 Chinese companies submitted 8,534 trademark applications related to the metaverse by Sunday.


Stablecoin supply grew by 388% this year, driven by DeFi and derivatives

  • The market for stablecoins experienced breakneck growth in 2021, with the supply for dollar-backed cryptocurrencies surging by 388%, according to data compiled by The Block Research. 
  • As indicated by The Block Research’s 2022 Digital Asset Outlook report, the aggregate supply of stablecoins has increased from $29 billion at the start of 2021 to more than $140 billion. That growth benefited a swathe of stablecoins, including tether (USDT) and USD coin (USDC), which is managed by a consortium that includes Circle and Coinbase.

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