Weekly Research Report: BendDAO At The Edge
Market Recap
Crypto assets had a pullback over the last seven days after the Fed’s minutes from July’s meeting which indicated the Fed would probably continue their aggressive rate-hike approach in near terms. Investors tended to maintain risk-averse under macro uncertainty and trimmed their heavy bags after the recent rally. Crypto market cap returned to $1.1T. Bitcoin ended the week below the 200 weekly-ma ($23.1k) which was historically a solid support in bear markets ($BTC -13.0%). Bitcoin is now trading at $21.4k, about 5% below its 50dma ($22.4k). Ethereum underperformed Bitcoin after the strong rally over the last few weeks ($ETH -18.7%). The rally initiated by Ethereum Merge has recently been covered by the inflation concerns and upcoming interest rate uncertainty, resulting in a downturn in crypto market. Stablecoin dominance increased accordingly (USDT 6.6%, USDC 5.4%).
Derivatives Market
General perpetual funding rates turned negative (annualized 7d funding: BTC -3.5%; ETH -6.8%).
Alts’ funding rates also suffered during crypto pullback (ADA -13.5%, SOL -13.4%, XRP -12.5%).
The September future basis also turned negative for major pairs, only BTC’s remained neutral.
For liquidation, the long side was significant last Friday, with $184m long BTC positions got liquidated only in the afternoon, leading to a sharp decline in price actions.
Altcoins Roundup
Solana Foundation partnered with Jump Crypto to create an additional validator for Solana Blockchain network, increasing its stability and efficiency. Phantom Wallet implemented an ‘NFT burn’ feature to let users burn their strange NFTs received from scammers. ($SOL -20.9%)
Stargate Finance’s token ($STG) has been listed on Binance last Friday, led to a sudden pump with growing exposure. (7d: $STG +102.9%)
Chilliz rallied up recently at the beginning of European football seasons and upcoming World Cup vibe. Several football club FanTokens were created on Chilliz, e.g. Manchester City, Arsenal and Atletico Madrid and more. (30d: $CHZ +74%)
$HUSD stablecoin, previously supported by Huobi Exchange, temporarily de-pegged to a low of $0.82, elevating market fear in the Chinese community.
Crypto Updates
BendDao, an NFT-collateralized lending and borrowing platform, was ready to liquidate many Bored Ape Yacht Clubs (BAYC) as its floor price tumbled over the last few weeks and getting closed to borrowers’ liquidation price. 45 BAYC (~$5.3m worth) are at risk of being liquidated. BendDao may be in danger if NFT owners lost confidence on the platform or lowered their risk appetite during a volatile market. This could also lead to a vicious cycle to the blue-chip nft market with declining utility.
Crypto.com laid off another hundred employees during crypto downturn. On the other hand, Crypto.com signed a pre-registration for operation in Canada.
Eqonex, a Nasdaq-listed digital asset investment firm, will be closing its crypto desk on 22 Aug. Users are allowed to withdraw funds until 14 Sep.
Gordan Ramsay’s well-known “Hell’s Kitchen” is entering the web3 via Sandbox Metaverse.
Ukraine reportedly spent $38m on military equipment with crypto payments.
Regulatory Updates
The US SEC continued to give pressure onto the crypto industry, and sued “Dragonchain” for $16.5m Dragon Token ICO.
The Fed announced new guidelines for crypto banks. American financial institutions can now conduct both crypto and traditional financial services together with “Master Account”.
Institutional Updates
OTR, the largest petrol stations in Australia, started adopting crypto payments for its fuel stations and convenience stores.
Ripple ($XRP) collaborated with Travelex, a Brazilian FX exchange, to expand XRP token utility in Brazil.
SuperLayer, a web3 venture studio, launched a $25m fund led by Polygon. The fund will be used to build web3 products for mass adoption.
MatchboxDAO, a Starkware-based blockchain gaming ecosystem, raised $7.5m funding, led by Starkware, Geometry Research, ReadyPlayerDAO, Neon DAO, Road Capital, Formless Gamma and Bonfire Union, to improve the crypto gaming structure on Ethereum scaler StarkNet.
Tessera (originally named “Fractional”), an NFT ownership platform, secured $20m in Series A funding round, led by Paradigm.
Snackclub Gaming DAO, a blockchain community, is seeking to raise another $7m at $100m valuation in a private token sale. Snackclub has already raised $9m in seed round in early April.
Macro Front
The interest rate hike concerns continued to be the market focus. The probability for 50bps and 75bps rate hike expectation in September meeting were levelled. Equities came to an end of its four consecutive weekly green bars (DJI -0.16%, S&P500 -1.2%, NQ -2.3%). US dollar rallied up with market expectation of more upcoming rate hikes (DXY +2.3%, trading at 108.1). Commodities also suffered (GOLD -3.1%, Oil -1.5%, Wheat -4.3%).
Conclusion
Crypto assets rejected at key resistance levels after several weeks of rising price actions. Despite the positive sentiments created by the upcoming Ethereum Merge, investors and traders offloaded their bags of risk assets ahead of macro uncertainty. Crypto industry has become more correlated to the macro economy, following by more institutional adoptions and entries. SR would continue adding exposure on crypto assets after macro uncertainty is eased.
DYOR, Good Luck!
