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Bitcoin rose for the second consecutive day, to around $ 10,281, after a quick sell-off earlier in the week.
“In a flash, investors went from rushing for the hills to buying the dip,” Mati Greenspan, founder of cryptocurrency and foreign exchange analysis firm Quantum Economics, told clients in an email. Cryptocurrency firm Stack Funds wrote in a weekly report that prices appear to have found a temporary low around $ 10,000.
Taimur Baig, chief economist at Singapore’s DBS bank, told CoinDesk that the pandemic and the central bank’s associated money press have strengthened the cause of bitcoin. “People are worried about the dollar outflow and are wondering if they should hold cryptocurrencies in addition to gold as a safe haven currency,” he said.
The European Central Bank said earlier Thursday that it will keep monetary policy unchanged for now. European stocks were flat and US stock futures were lower.
Market movements
The phenomenon of decentralized finance, known as DeFi, rose to a surreal new level on Wednesday as semi-automated cryptocurrency trading platform SushiSwap used a technique known as “vampire mining” to suck cash from its industry-leading rival. .
Sam Bankman-Fried, CEO of the FTX exchange, which took over the SushiSwap project after its founder apparently grossed about $ 13 million in tokens and exited, said the “migration” was complete. This is polite for what really happened, namely that the project of the project to steal liquidity from Uniswap seemed to be successful.
Prices for the SUSHI token, which started trading just two weeks ago, jumped 11% to $ 2.69, for a total market value of around $ 260 million, according to the CoinMarketCap website.
Uniswap doesn’t have its own tokens, but the DeFi Pulse website showed that the protocol’s collateral value plummeted about 74% to $ 388 million. It dropped to ninth on the DeFi chart. SushiSwap is not tracked by DeFi Pulse.
DeFi, the fast-growing industry that uses cryptocurrencies and blockchain technology to build semi-automatic lending and trading platforms that could one day replace banks, has seen its total collateral assets jump 10x this year to around $ 7 billion. . It has moved so fast that even the pros can barely keep up.
Eric Ervin, CEO of cryptocurrency-focused hedge fund Blockforce Capital, wrote on Thursday that the safest way to bet on the trend might be to simply buy ether, the native token of the Ethereum blockchain, where many of the DeFi projects are under development. .
“We believe in the long-term potential that DeFi offers to society,” wrote Ervin. “The genius has come out of the bottle now. It will be difficult to imagine innovation taking a step back from here. “
Read more: SushiSwap Migration ushers in the era of “protocol politicians”
BitMEX’s bitcoin-only margin requirements appear to be distorting the futures market
Among cryptocurrency exchanges, Seychelles-based BitMEX has pioneered the now common bitcoin derivatives like perpetual swaps and 100x leverage.
But apparently traders are shy about raising BitMEX futures prices, in part due to the exchange’s practice of requiring initial bitcoin collateral registrations.
As CoinDesk’s Omkar Godbole reported Thursday, the practice exacerbates the rush to margin calls during a price drop and leads to faster liquidations.
A consequence of this, according to Godbole, is that the BitMEX futures base – the difference between spot prices and where the futures are traded – is about 2.7%, about half the level seen on rival exchanges such as Deribit, Binance and FTX. Hence the returns will be lower for traders who use arbitrage strategies to profit from the spread.
“There is residual risk that market makers have if they get ‘too much time’ on BitMEX,” Patrick Heusser, a senior cryptocurrency trader at Zurich-based cryptocurrency broker AG, told CoinDesk in a Twitter chat. “Therefore, the overall price of these futures is slightly lower than on multi collateral platforms.”
Bitcoin Watch
Both bitcoin and ether were consolidating in a tight range, having found strong support near $ 10,000 and $ 320 respectively in the past few days.
“Bitcoin fundamentals remain positive as hashrates are at an all-time high,” said Stack analysts, a cryptocurrency tracker and index fund provider in their weekly research note. “As such, the technical minimum price of the cryptocurrency will move upwards.”
Meanwhile, Ether’s fortunes remain tied to developments in the decentralized finance space. Ether’s put-call volume ratio jumped to a multi-month high on Wednesday, indicating greater demand for put options or bearish bets.
“It shows that traders want coverage [via put options] against activity in DeFi, which has been the main driver of ether pricing, “Vishal Shah, an options trader and founder of Alpha5, the derivatives exchange backed by Polychain Capital, told CoinDesk.
Read More: Ether Traders Could Protect Against DeFi Slowdown
Token Watch
Tether (USDT), Solana (SOL), Ethereum (ETH): Tether says it was launched on the Solana blockchain to help users trade dollar-linked USDT stablecoins at speeds in excess of 50,000 transactions per second.
What’s new
How to watch INX IPO in real time on the Ethereum blockchain (CoinDesk)
Kraken exchange returns to Japan two years after exiting the market (CoinDesk)
Euro will be overtaken by China’s digital yuan if Europe does not have central bank digital currency by 2025 (dGen)
Mastercard releases a “virtual test environment” to help central banks simulate the distribution and use of digital currencies (CoinDesk)
Huobi exchange now offers a “savings product” by paying an annualized return of 3.5% on bitcoin deposits (CoinDesk)
Argo, a publicly traded blockchain company, takes a shot at profit as costs rise faster than crypto-mining (CoinDesk) revenues
Avoiding regulation is counterproductive to bitcoin adoption, says former Visa executive (Forbes)
Analogues
The latest news on traditional economics and finance
Hedge Fund Legend Druckenmiller Says Inflation Could Reach 10% Due to “Fed and Treasury Merger” (CNBC)
Trump’s policies added $ 3.9T to US budget deficits before Covid, $ 2.7T since (Federal Budget Responsible Committee)
Money printing “will probably go ‘brrr’ even after the elections” (CoinShares)
Left-wing Mexican President Lopez Obrador demonstrates deficit hawk, aims for budget surplus despite uncertain recovery (Bloomberg)
The second round of $ 1,200 stimulus checks in the United States had bipartisan support. Now they might be a long shot (CNBC)
China up close: five things Xi pledged to never allow the US to do (Nikkei Asian Review)
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