Monday, 27 February 2023

Market Summary

Market Summary 27 February 2023

Bitcoin Price: US$ 23,554.85 (+1.72%)
Ethereum Price: US$ 1,641.36 (+2.93%)  


The Solana network encountered technical issues resulting in “forking” and conflicting versions of transaction history, leading to a significant decrease in transaction throughput and virtually freezing all on-chain activities. Network engineers suspected a bug in the new version of Solana code, prompting efforts to downgrade to the previous version and restart the chain.

In an effort to make the FLOKI token a serious decentralised finance (DeFi) asset, the Venus Protocol plans to allow it to be used as collateral to borrow a basket of cryptocurrencies. This move will allow FLOKI holders to access liquidity without selling their tokens, and the integration process on Venus is expected to be completed by March.

The PCE Price Index for January rose 5.4% from a year ago, causing risky assets to fall, with bitcoin shedding about $200 to $23,730, and crypto-related stocks, such as Coinbase, MicroStrategy, and Marathon Digital, falling by 5%-8%. Following the report, odds of a 50 basis point rate hike at the Fed’s next policy meeting in March are rising, with traders now nearly evenly split between a 25 basis point move and a 50 basis point move. Meanwhile, US Treasury Secretary Janet Yellen stressed the importance of implementing a strong regulatory framework for cryptocurrencies during a recent G20 meeting, stating that it was critical to do so, but clarified that the US is not proposing to ban crypto activities outright. The IMF’s managing director, Kristalina Georgieva, also suggested that banning crypto should be an option if regulation fails and highlighted the need to distinguish CBDCs from cryptocurrencies and stablecoins issued by private companies.

Bullish investor sentiment was indicated by the highest positive basis level since November 2021 on the Chicago Mercantile Exchange (CME), with Bitcoin futures trading at a higher premium than on Binance. Grayscale Investments’ CEO Michael Sonnenshein believes the United States Securities and Exchange Commission (SEC) should approve the Grayscale Bitcoin Trust (GBTC) as a spot Bitcoin exchange-traded fund (ETF) to return value to investors.

While Bitcoin’s recent rally from $16,500 to $25,000 was attributed to a short squeeze in the futures market and macroeconomic improvements, on-chain data suggests that many interested buyers, including whales, were left on the sidelines.

The Uniswap DAO is considering deploying Uniswap v3 to the BNB Chain, but the discussion of which bridge protocol to use for cross-chain governance has challenged the security of each solution. Over $10 billion of crypto assets are currently locked on bridges as of February 15, making the issue of bridge security an urgent one, according to DefiLlama data.

Coinbase’s new layer-2 network, Base, has been seen as a “massive confidence vote” for Ethereum by the cryptocurrency community. Powered by Optimism, the network is secured on Ethereum and aims to be a platform for building decentralised applications (DApps) on the blockchain. With approximately 110 million verified users, Coinbase’s decision to use Ethereum as the settlement layer of choice could set a precedent for other cryptocurrency companies and financial institutions. Base is currently in its testnet phase, and its open-source nature is expected to generate more block space demand on Ethereum.

In contrast, a report from Blockdata indicates that 2022 was a challenging year for the blockchain and crypto sectors in terms of venture capital (VC) funding. Q4 2022 saw a 34% decline in VC investment compared to Q3, and this downward trend continued throughout the year. The report highlights several factors that contributed to this decline, including the $60 billion collapse of the Terra ecosystem, the implosion of FTX, and global macro conditions. As a result, Q4 2022 saw just $3.7 billion in funding from VCs, a 61% drop from Q4 2021.

In other news, Jump Crypto and have clawed back $225 million worth of digital assets from the Wormhole protocol hacker. The counter exploit was initiated after the hacker exploited roughly $321 million worth of wrapped ETH (wETH) via a vulnerability in the protocol’s token bridge. After moving the stolen funds through various Ethereum-based DApps, the hacker had roughly $78 million in debt in MakerDAO’s Dai stablecoin. The retrieved assets were immediately passed on to a wallet controlled by the authorised third party, as required by the court order.



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