Friday, 22 October 2021

Market Summary

Market Summary 22 October 2021

Leverage Watch, ETF Traction, and Relentless L1s

  • Earlier today, ETH did what we’ve all been waiting for: it pushed towards its all-time high price. However, it missed the mark by roughly $10 on Coinbase, and subsequently slid 6% in less than 10 minutes. Traders who opened levered longs in anticipation of the breakout were immediately squeezed. Given price instantaneously recovered, this was an obvious shakeout orchestrated to wipe out over-leveraged apes.
  • As we enter the next phase of the crypto bull market, consider this a lesson: keep your leverage in check and don’t try to get ahead of the market. Crypto can be brutal if your risk management is lax. The vast majority of us shouldn’t even be touching leverage.
  • The ProShares Bitcoin ETF is off to a solid start with over $1.1B of inflows in the first two days. This is the fastest in history an ETF has reached the $1B mark in AUM. Trading volume on secondary markets is also on track to trade over $3B in volume in its first week of launch!
  • BTC is and has been leading the market for a few weeks now. When BTC momentum slows down, L1 tokens often perform better than any category. L1s have been the best performing tokens since the June bottom — and quite frankly, they boast the highest YTD returns too.
  • Since the start of October, L1 tokens in general have been struggling to keep up with BTC’s strength. The outlier here is DOT, on the back of Polkadot’s announcement that Parachains are finally coming to mainnet in mid-November.
  • In other news, BTC options open interest is at an all-time high. This was expected given BTC’s new all-time high and futures markets hitting record open interest levels too. Most activity is centered around short to mid-term call purchases.


Ethereum Rival Solana Rides Bitcoin Wave to 8% Daily Gain

  • Not content to let Bitcoin and Ethereum have all the fun, smart contract-enabled blockchain Solana is joining the party. 
  • SOL, the sixth-largest cryptocurrency by market capitalization, is up 27% over the last week and over 8% in the last 24 hours as it chugs back toward the record territory it broached just last month. It’s now trading at $188.25, 12% off its all-time high of $213.47 set on September 9.


Associated Press partners with Chainlink to put its journalistic information on a blockchain

  • The independent news organization The Associated Press (AP) announced Thursday that it has partnered with the decentralized blockchain oracle network Chainlink to put its journalism on a blockchain. 
  • The move is designed to help developers writing blockchain-based applications implement AP’s data and information through AP’s Chainlink node, which connects the off-blockchain sources to blockchain-based smart contracts. Such information could include financial data, sports data or election race calls integrated into blockchain-based apps.


Bitcoin Flash Crash on Binance US Caused by Algorithm ‘Bug’, Says Exchange

  • After reaching an all-time high this week, the price of Bitcoin is down 5.5% in the last 24 hours.
  • But traders on Binance US watched this morning as the price of the asset plunged quite a bit further: 87%. The American affiliate of the leading international cryptocurrency exchange now says the flash crash was caused by an error in a trading algorithm.
  • Though Bitcoin is trading for over $60,000 on every major exchange, it reached the $8,200 mark on Binance US before quickly heading back to the “right” price.


Pension fund for Texas firefighters reportedly allocates $25M to Bitcoin and Ether

  • The pension fund for firefighters in Houston has allocated part of its $4 billion portfolio towards crypto.
  • According to a Thursday Bloomberg report, the Houston Firefighters’ Relief and Retirement Fund used the New York Digital Investment Group, or NYDIG, to execute the purchase of $25 million in Bitcoin (BTC) and Ether (ETH). Public records through the Texas comptroller’s office show the pension fund held more than $4.1 billion in total net assets as of June 2020, meaning the group has allocated roughly 0.6% of its portfolio towards digital assets.


Valkyrie Bitcoin futures ETF to launch on Nasdaq on Oct. 22

  • Valkyrie’s Bitcoin (BTC) futures-based exchange-traded fund (ETF) is poised to follow the launch of ProShares’ Bitcoin Strategy ETF on Friday.
  • Valkyrie Bitcoin Strategy ETF is finally effective and is set to start trading on Nasdaq under the ticker BTF on Friday, Valkyrie confirmed to Cointelegraph on Thursday.


Alpha Homora Brings Leverage Yield Farming Product to Avalanche

  • Today Alpha Finance Lab has deployed Alpha Homora V2 on Avalanche, DeFi’s first leveraged yield farming product. Since launching Alpha Homora in October 2020, the product has reached significant user adoption and become a go-to protocol for DeFi. Through a number of unique and useful functionalities built-in to Alpha Homora V2, the new product further establishes itself as the go-to leveraged yield farming/leveraged liquidity providing protocol in DeFi.


Crypto Exchange FTX Hits $25 Billion Valuation in Latest Funding Round

  • FTX, the second most popular crypto exchange after Binance, has announced it’s riding on a new valuation of $25 billion after raising $420,690,000 in a funding round of 69 investors, including the Ontario Teachers Pension Plan and asset management giants BlackRock and Tiger Global. 
  • The new funding round comes just three months after FTX raised $900 million in a Series B featuring Sequoia Capital, Paradigm, and Coinbase Ventures. 


Polygon Dodges $850M Hack, Pays Record $2M Bounty

  • Polygon, a scalability solution for Ethereum, has awarded a $2 million bounty to a white hat hacker after they identified a vulnerability that put about $850 million of capital at risk.
  • According to the bug bounty and security services platform Immunefi, which hosts Polygon’s bounty program, this is the highest bounty ever paid in the world of decentralized finance (DeFi).


Digital Currency Group Authorized to Buy $1 Billion Worth Of GBTC Shares

  • Crypto investment firm Digital Currency Group (DCG) has upped its authorization to purchase Grayscale’s Bitcoin Trust’s (GBTC) shares from $750 million to $1 billion. The trust is run by digital asset manager Grayscale Investments, which is itself owned by DCG.
  • In an announcement on Wednesday, DCG said that it “plans to use cash on hand to fund the purchases and will make the purchases on the open market, at management’s discretion.”

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