Friday, 25 February 2022

Market Summary

Market Summary 25 February 2022

Bitcoin Price: US$ 38,327.21 (+2.89%)
Ethereum Price: US$ 2,596.20 (+0.64%)


Market-Wide Selloff, NFT Marketplaces, & Web3 Communities

  • At 10AM EST, Putin officially announced the invasion of Ukraine, which led to a market-wide selloff.
  • Asia equity indices like HSI (-3.21%), STI (-3.49%), NI225 (-1.81%), and KOSPI (-2.60%) sold off and SPY currently trades at -1.69% during pre-market hours. BTC and ETH are down -8.6% and -12.1% respectively.
  • The Dollar (+0.47%) and Gold (+2.32%) reacted positively as investors now see them as safer assets.
  • Crypto leveraged traders were caught in the sell-off, which caused over $450M of liquidations in the past 24hr, 73% of which belongs to Longs. In addition, ETH is now at risk of another 7 Siblings liquidation event if ETH hits ~$2.1K.


Crypto could bypass President Biden’s ‘devastating’ sanctions on Russian banks and elites: Report

  • In a Thursday announcement from the White House, Biden said the U.S. and its allies and partners would be enforcing sanctions aimed at imposing “devastating costs” on Russia due to “Putin’s war of choice against Ukraine.” The U.S. president announced that the country would sever its financial system from Russia’s largest bank, Sberbank, as well as impose “full blocking sanctions” on VTB Bank, Bank Otkritie, Sovcombank OJSC, Novikombank, and their subsidiaries. Biden also named several elite nationals who have “enriched themselves at the expense of the Russian state” as part of the penalties levied against Russia.
  • According to a Thursday report from Bloomberg, Russian billionaires could potentially circumvent any U.S. sanctions by using crypto to buy goods and services and continue to make investments outside countries experiencing harsher economic impacts due to the invasion. Individuals in Iran were able to solicit crypto donations for flood victims in 2019 — while under U.S. sanctions — and Venezuela President Nicolás Maduro proposed a bill in 2020 aiming to use crypto to evade different sanctions imposed on the country.


USDT premiums soar on Ukraine’s Kuna exchange

  • Against the backdrop of an ongoing Russian invasion, the price of Tether’s USDT stablecoin soared to as high as 36.97 Ukrainian hryvnia (UAH) ($1.23) on Ukraine’s Kuna exchange on Thursday. The total trading volume of all cryptos on the exchange amounted to about $4.4 million in the past 24 hours.
  • During the same period, mid-market rates from foreign exchange data provider XE indicated that the UAH currency had only surged to a maximum of 29.89 per U.S. dollar. In other words, the conversion rate for USDT was much higher than typical UAH/U.S. dollar transactions.
  • USDT has a theoretical peg of one-to-one with the U.S. dollar. At the time of publication, the UAH/USDT trading pair is valued at 31.89 on Kuna, compared to the UAH/USD exchange rate of 29.80. That indicates an implied premium of 6.55% for USDT. In context, USDT is currently trading at its theoretical peg on other centralized exchanges, such as Binance’s global platform. However, data from Binance Ukraine suggests its USDT listing is trading at a premium of greater than 7% against the Ukrainian hryvnia.


IoTeX co-founder urges crypto investors to hodl amid market conditions

  • As the market dips over escalating tensions in Eastern Europe, Dr. Raullen Chai, the co-founder and CEO of blockchain network IoTeX, is urging crypto investors to hold on to their crypto.
  • The Russian army recently started its advance on Ukraine, firing missiles on the second-largest European country. Following this, crypto markets took a nosedive, with all the top coins dropping between 8% and 18%, according to Cointelegraph Markets Pro. However, despite the current market conditions, Chai tells holders to think twice before selling their digital assets.
  • Chai told Cointelegraph that, while it’s not impossible for Bitcoin (BTC) to fall below $10,000 and Ethereum (ETH) to fall below $800, the market could “easily reach new all-time highs by the end of the year.”


NFT projects thrive even as OpenSea trading volumes take a hit

  • Despite a number of attempted vampire attacks, nonfungible tokens (NFTs) continue to have a strong run on OpenSea, with the number of unique users and transactions increasing. However, the NFT market’s overall volume is falling behind last month’s figure of nearly $3 billion. 
  • While there are NFT projects readying to hit the secondary market, it seems the sector, as a whole, is navigating the next move regarding utility and the integration of NFTs in the metaverse. Adding to this, global political uncertainties are also having a noticeable impact on market environments.


Digital gold narrative valid as long as MicroStrategy holds Bitcoin, says exec

  • As some industry executives have questioned Bitcoin (BTC) as being the digital gold amid a massive market crash on Thursday, other experts continued to support the digital gold narrative for now, or until whale investors like MicroStrategy cash out.
  • Ki Young Ju, CEO of South Korean on-chain analytics resource CryptoQuant, took to Twitter on Thursday to report that his platform has not observed any “significant on-chain activities” as of 11:00 am UTC.
  • Institutional investors who bought Bitcoin via on-chain transactions do not seem to have sold their holdings yet, Ju wrote, adding that “institutions running algorithmic trading bots think BTC is a tech stock.”
  • “I’d rather stay until Michael Saylor sells Bitcoin,” the CryptoQuant CEO stated, adding that he still supports the digital gold narrative for now:
  • “I believe we can detect whale selling activity through on-chain preemptively. My point was that the digital gold narrative is still valid as long as these institutions hold Bitcoins.”


Maple Finance partners with Celsius to launch wETH lending pool

  • Digital asset lending platform Celsius has become the first pool delegate from the centralized finance market to deploy a crypto-centric lending service on Maple Finance, utilizing the latter’s smart contract and blockchain infrastructure to facilitate a $30 million pool to institutional investors.
  • Celsius succeeds existing pool delegates BlockTower, Orthogonal Trading, Maven 11 and Alameda Research in partnering with Maple on such an endeavor.
  • The introduction of wrapped Ether (wETH) is set to complement the existing accessibility to trade Circle’s native stablecoin, USD Coin (USDC), enabling investors to utilize the asset across an array of trading components, including staking, lending and borrowing.


FTX CEO weighs in on Bitcoin market outlook amid Ukraine crisis

  • In a Twitter thread addressing the market scenario, Bankman-Fried said that the war has created a cash crunch in the market leading to the sell-off in both traditional as well as crypto markets. The price decline in BTC is also attributed to its growing correlation with Nasdaq and S&P 500, which has reached a two-year high recently.
  • Bankman-Fried noted the currency destabilization in Eastern Europe, suggesting that investors in Eastern Europe could look for alternatives due to the Ukraine invasion, which could make BTC an obvious choice.


Russia to seize retail deposits if sanctions go too far, official warns

  • In the event of harsh Western sanctions as Russian forces invade Ukraine, retail customers could risk losing their savings.
  • Russians’ savings could be confiscated in response to sanctions against the country, according to Nikolai Arefiev, a member of the country’s Communist Party and vice-chairman of the Duma’s committee on economic policy.
  • The Russian government can potentially seize about 60 trillion rubles ($750 billion) worth of people’s deposits should Western nations decide to block all of Russia’s foreign funds, Arefiev said in an interview with the local news agency on Monday.
  • “If all the foreign funds are blocked, the government will have no other choice but to seize all the deposits of the population, or 60 trillion rubles in order to solve the situation,” the official stated, noting that Russia stores over $640 billion of gold and foreign exchange reserves abroad.
  • He also mentioned that potential sanctions against Russia include a possible disconnection from SWIFT and foreign exchange prohibitions.


BNY Mellon partners with Chainalysis to track users’ crypto transactions

  • The Bank of New York (BNY) Mellon has announced a partnership with blockchain-data platform Chainalysis to help track and analyze cryptocurrency products. BNY Mellon is the world’s largest custodian bank, currently overseeing $46.7 trillion in assets.
  • Chainalysis is a blockchain-data analysis platform that offers services to traditional financial institutions, allowing large firms to manage the legal risks that come with cryptocurrency more easily. As part of the partnership, BNY will utilize Chainalysis software to track, record and make use of the data surrounding crypto assets.
  • The risk management software offered by Chainalysis includes KYT (Know Your Transaction), Reactor and Kryptos, with the most important being the KYT flagging system — which automatically detects whether cryptocurrency transfers are deemed “high risk.”
  • If the KYT software sees crypto being transferred to a sanctioned wallet address it can preemptively block the transaction. Reactor provides firms with further investigative power on the blockchain while Kryptos collects and translates complex data into cogent information for institutions.

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