Crypto Recap: ETHER CATCHING UP WITH TESTNETS

Satori Research
7 min readFeb 6, 2023

Summary

The crypto market inched higher following the as-expected interest rate hike (25bps) on Wednesday while slowed down slightly to end the week flat after the surprisingly high number in the jobs report. Given the 54-year low unemployment rate (3.4%), the crypto market cap stayed flat at $1.1T. Bitcoin closed January with a +39.6% return, outperforming Ethereum by 7.2%. (Jan: $ETH +32.4%). While in the last seven days, Ethereum was catching up with a 3% outperformance. This could be explained by the successful launches of Ethereum testnets and the increasing public anticipation of its Shanghai upgrade in March. Nasdaq Crypto Index (NCI) which includes a diverse basket of cryptocurrencies, also rallied +37.2% in January, indicating a positive market sentiment. Some crypto-related listed companies were also shining on the stock market: Coinbase (COIN) was up +65.2% in January and +27.6% in February month-to-date, Silvergate (SI) chasing with a +32.3% mtd rise in February and more (BLOCK, TSLA, MSTR). SR remains a positive sentiment on risk assets in near term after macro-volatility events. SR will also keep an eye on metaverse/AI-related tokens following the global trend of VR development. Two metaverse tokens, $MAGIC and $HIGH were up more than +300% in January. McKinsey reported that the metaverse sector could reach a $5T value by 2030. SR also likes Arbitrum-based tokens due to rising on-chain activities and active users.

  • Outperformers: AGIX (+117.9%), BABYDOGE (+97.1%), RNDR (+41.7%), GRT (+38.3%), IMX (+32.6%), OP (+24.4%), SHIB (+16.7%), LRC (+16.4%)
  • Underperformers: APT (-17.1%), LDO (-10.6%), XMR (-10.5%), FXS (-9.9%), SOL (-9.8%)

Crypto Headlines

- HSBC recruiting web3 roles

HSBC disclosed a negative attitude on digital currencies last September while filed trademarks for digital currency products and services in December. Now the bank is publicly recruiting a Product Director for tokenization and web3 which may offer bitcoin-related services. HSBC also showed interest in the metaverse space before through a partnership with the virtual gaming platform — The Sandbox in March last year.

- Ethereum launching withdrawal testnets

‘Zhejiang’ testnet went live on 1Feb, ‘Shanghai’ and ‘Capella’ testnets will also be triggered on 7Feb. The Shanghai upgrade in March was highly anticipated because it will provide the un-stake function for the staked $ETH on the proof-of-stake network. SR expects more $ETH to be staked after the upgrade as the un-stake function gives stakers more confidence on the platform, and higher flexibility and liquidity of their assets.

- Binance and Mastercard launching prepaid crypto card in Brazil

Qualified holders can make purchases and pay bills with cryptocurrencies. They can also enjoy a seamless transaction between fiat and cryptocurrencies. 14 cryptocurrencies will be acceptable, including Brazilian Real, BNB, BUSD, USDT, BTC, ETH, Santos fan token, ADA, DOT, SOL, SHIB, XRP, MATIC and LINK.

- Readies, the German Bank, offering crypto services for institutional clients

- Hamilton Lane, the Pennsylvania-based investment management firm, launched their first of three tokenized funds with Securitize

On derivatives front, general crypto perpetual contracts’ funding rates (Chart 1) remained strongly above neutral zone, both the average Bitcoin and Ethereum funding rates for the last seven days stayed at 11%. On the option market, implied volatility (IV) dropped in the middle of the week and started rising prior to macro meetings (fomc & job reports). The weekly IV closed at a lower level, especially for Bitcoin. The IV for Bitcoin and Ethereum are now at 49.6% (7d: -21.7%) and 65.2% (-6.6%) respectively. The IV spreads between them are widened. On the liquidation front, major liquidation came from the long side after the surprisingly low unemployment rate on Friday. Bitcoin Long/Short liquidation ratio increased to 1.92 last week, well explained the 3.2% loss in bitcoin price.

Chart 1: The 7-day average funding rates for BTC and ETH
Table 1: Major Crypto KPI (as of 03 Feb 2023)

NFT News

- OpenSea statistics and blue-chip NFTs summary

NFT market recoveries continued in Feb after strong numbers in Jan. According to OpenSea’s data, Feb has picked up $18m in NFT trading volume (Chart 2) in only two days, which implies a forecast number that is 17% higher than Jan’s one, given that there are only 28 days in Feb. The number of transactions (Chart 3) is growing at an even stronger pace, expecting Feb to close with a number (1.6m transactions) 45% higher than Jan’s. Under consistently strong numbers in the NFT market, SR expects the valuable collectibles to climb higher in the near future.

- EBay hiring web3 roles for KnownOrigin; also working with Notable Live for NFT launch

Following Amazon last week, another e-commerce giant is diving deeper by hiring multiple web3 roles for KnownOrigin, the NFT marketplace that they acquired in June. The roles listed include crypto counsel, head of community, a marketing executive and more. EBay has also partnered with Notable Live to immerse NFT features to connect fans and sport stars.

- Japanese PM likes NFTs and DAOs

Fumio Kishida, the Japanese Prime Minster, said the use of web3 aspects including NFTs and DAOs could help revitalize and promote ‘Cool Japan’. He provided examples that NFTs could diversify creators’ income and maintain loyal fans while DAOs could form public community and express their common view on social issues.

- Toei Animation’s NFT — ‘DenDekaDen Genesis Omikuji’

The largest Japanese animation studio collaborated with Strata to explore the blockchain market. The ‘DenDekaDen’ is their first NFT collection, now trading at a floor price of 2.88eth.

- CANTO-based NFTs running hot as CANTO TVL doubled to $185m

Chart 2: OpenSea Monthly Volume ($USD)
Chart 3: OpenSea Monthly NFTs Sold (Transaction Count)
Chart 4: Floor Prices of Blue-Chip NFTs ($ETH)

Defi Updates

Table 2: Total Value Locked (TVL) on major blockchains

Total DeFi TVL added by another 4.1% this week. Total Defi TVL* is now sitting at $77.3b. Fantom Network’s TVL continued its rally with another 23% as the team introduced version 2 of $fUSD stablecoin which potentially assists in ecosystem expansion and attracts institutional adoption. It is worthy to note that $FTM token has increased by 25% after its TVL surged 18% last week. Arbitrum’s TVL also showed a constructive rise of 14%, boosted by the $1.5b trading volume from Gains Network (DEX) over the last 30 days.

- Optimism Bedrock Upgrade in March

The Ethereum-based layer 2 scaling solution proposed its first protocol upgrade which will boost its modularity, simplicity, performance and functionality (7d: $OP +27%).

- BNB Greenfield — ‘a web3 dropbox’

BNB Greenfield is a decentralized storage infrastructure that aims at building utility for data storage and bringing users’ ownership of data. Users who own $BNB tokens and a BNB address are allowed to store data on BNB Greenfield.

- a16z voted against the proposal that would deploy Uniswap V3 to BNB Chain using a wormhole bridge

- TON announced a $20m liquidity incentive programme — ‘The Open Challenge’

Regulation Updates

- Hong Kong Monetary Authority set stablecoin licencing plan which will not allow algorithmic stablecoins

- Deribit, the leading crypto option exchange, seeking Dubai licence under Virtual Asset Regulatory Authority

Fundraising Updates

- Rysk Finance raised $1.4m in a pre-seed funding round

Rysk Finance is a DeFi market maker. The new funding will be used to enhance platform security and accelerate the launch of Rysk Beyond, a market maker protocol for decentralized option trading.

- Vest closed a seed round from Jane Street, QCP Capital and others

Vest is an Arbitrum-based decentralized perpetual future exchange. Vest aimed at providing low-barrier listing, rigid risk management and clear fees for liquidity providers.

- Archimedes, DeFi protocol, raised $4.9m in seed funding

- Sec3, a blockchain security company that serves Solana ecosystem, raised $10m in seed funding, led by Multicoin Capital

- EigenLayer raising $50m in Series A funding round

EigenLayer is an Ethereum restaking protocol, like liquid staking. Instead of giving stakers a token representing their staked $ETH, the restaking function enables them to apply their staked $ETH directly on other protocols to earn extra rewards.

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Author: Calvin Chu, Satori Research Team
Twitter: https://twitter.com/SatoriResearch
Medium: https://researchsatori.medium.com/
Linkedin: https://www.linkedin.com/company/satori-research/
Contact: ops@satoriresearch.io

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