Weekly Research Report #107: Relief After the Dip

After weeks of suffering, crypto market slightly recovered after the dip caused by several crypto institutions’ failure in May and June ($BTC +5.7%; $ETH +12.3%).
Bitcoin recovered nearly 20% from the lowest level in June ($17.6k) and reclaimed the previous cycle top ($20k).

Alts’ recovery in last seven days were more impressive ($MATIC +50.1%; $SAND +44.7; $AVAX +24.3%; $SOL +17.2%).
The crypto market returned to its previous level before the Celsius incident, with $930b total market cap.

Stablecoin dominance finally slowed down, $USDT : 7.2% (-16.8%); $USDC : 6.0% (-10.0%).

General funding rates recovered with crypto prices but still remained negative (BTC -0.1%; ETH -3.1%)
Alts’ funding rates continued to head south (ADA -14.9%; DOT -16.7%; SOL -7.1%).
For BTC liquidation, both long and short liquidations were relatively insignificant when compared to those in last few weeks. The calm price actions explained the quiet liquidation events well.

Chart 1: 7dma of BTC, ETH Perpetual Futures Funding Rate (Source: FTX)
Chart 2: 4hr BTC liquidation chart (Source: Coinglass)
Major Crypto KPI (Jun 27, 2022)

Altcoins Roundup

Ethereum’s Sepolia Testnet Beacon Chain went live, another step closer towards the final merge. The precise date of the Sepolia Merge has yet to be confirmed ($ETH +12.3%). Solana ($SOL) was whopping up a 17.2% gain this week. Solana introduced the ‘Web-3 Saga android mobile’ to launch in 2023, which will incorporate crypto features, including but not limited to wallets, crypto payment functions and advanced hardware for Web3 gaming. STEPN governance token ($GMT) rallied up by 30.0% after the burning mechanism update, which will allow users synthesizing five same-quality sneakers into one higher- quality sneaker.

Harmony (Ethereum Horizon Bridge) got exploited for $100m. The team offered a $1M bounty to the hacker, with no criminal charge if funds are returned. ($ONE -11.5%)

Crypto Updates

Blockfi received $250m revolving credit facility from FTX after risk of insolvency.
Maple Finance announced that they had insufficient fund in pools for lenders’ withdrawals.

CoinFLEX also suspended clients’ withdrawals under extreme market condition. The trading of its native token ($FLEX) would also be suspended, including spot and perpetual trading.

Tether, the leading stablecoin company, announced the launch of sterling-pegged stablecoin ‘GBPT’. The launch will be in early July and will initially be supported by Ethereum chain. GBPT will be the fifth fiat currency-pegged tether stablecoin, others include USDT (usd-pegged), EURT (euro- pegged), CNHT (yuan-pegged) and MXNT (peso-pegged).

Regulatory Updates

Gary Gensler, the Chairman of the US SEC, proposed ‘one rule book’ for crypto assets’ regulation, which should protect investors against fraud, front-running or manipulation. The ideal rule book will provide crypto investors adequate safeguards and sufficient transparency.

Matt Hancock, the British Parliament Member, called for liberal crypto regulation. He mentioned that if the regulation is set correctly, crypto will make the financial system more transparent and efficient, together with less criminal issues.

Institutional Updates

Goldman Sachs, the TradFi giant, considered to raise $2B to purchase Celsius assets. On the other hand, Chainge Finance, a DeFi lending platform, offered to buy Celsius assets and liabilities.

EBay acquired the entire KnownOrigin NFT marketplace, the platform enables users to create, buy and resell NFTs.

Deloitte partnered with NYDIG to assist institutions in implementing digital assets. Gucci invested $25k worth of RARE tokens in SuperRareDAO to initiate its ‘digital art space’.

On the fundraising front,

Cryptoys, a digital toy platform, partnered with Mattel, the toy manufacturing leader, and raised $23M from Andreessen Horowitz (a16z), Dapper Labs. The platform aims at redefining toys and brining NFT to kids.

Magic Eden, the Solana-based NFT marketplace, raised $130M in Series B funding round led by Electric Capital and Greylock, valued at $1.6B.

Prime Trust, a financial service provider specialized in fintech and digital assets, raised over $100M in Series B funding, led by new and existing investors, including but not limited to Fin Capital, Kraken Ventures, Seven Peaks Ventures and more.

FalconX, the digital asset prime brokerage firm, raised $150M in Series D financing round, valued at $8B. GIC and B Capital took the lead in this round. In Series C, FalconX raised $210M with $3.75B valuation.

Macro Front

Macro concerns continued in the second quarter, with continuous interest rate hikes and inflationary prices on worldwide goods. Equities healed up this week (DJIA +5.4%; S&P500 +6.4%; NQ +8.1%) but a lot of uncertainty upcoming, such as GDP update on June 29 and month-end OPEC meeting. Commodities traded mixed (Gold +0.3%; Oil -1.4%; Wheat -9.1%)

Conclusion

Crypto assets took a breath after several weeks of suffering. Despite recent decline of the entire crypto industry, institutions continued to show massive interests in the digital world including NFTs, DAO ecosystem and DeFi.

Be patient and Good Luck!

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