Category: Markets

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Bitcoin Markets

Bitcoin Falls Below $30K for the First Time Since July 2021

After declining more than 15 percent over the past week, the value of Bitcoin has slipped below US$30,000 for the first time since July 2021 – creating a new market cap of US$588 billion, down from US$900 billion.  

Interest Rate Rise to Blame

The drop, likely a result of the US Federal Reserve’s announcement to increase interest rates by 50 basis points, has undone the brief rebound period Bitcoin experienced after January’s dip.

Bitcoin’s outflow from the week prior has been the highest since June 2021, totalling over US$133 million. This seemed to be the result of institutional investors pulling their assets from the Bitcoin ETF, thus pushing BTC down 50 percent from its 2021 all-time high and causing panic globally:

However, the panic isn’t all doom and gloom, with experts suggesting the industry bubble is finally ready to pop and that there is room for optimism in the reboot. Crypto is prone to macroeconomic shock, and these strong crashes and booms are nothing the industry hasn’t encountered before.

Crypto Market Plunge

Bitcoin isn’t the only player in the industry that’s seen large decreases in value since January’s stock market sell-off. Last month saw US$250 billion wiped from the crypto market as a whole, due to leveraged liquidations and market fear. At the time Bitcoin dropped below US$40,000, and the overall crypto market tumble marked the industry’s worst day of trade since March 2020.

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Crypto News Economics Investing Markets

Crypto Markets Tumble Amid Worst Stock Market Sell-Off Since March 2020

Despite a short-lived rally mid-week, crypto markets have tumbled over the past few days as they follow the lead of the US stock market, which on May 5 recorded its single worst day of trade since March 2020.

According to data from CoinMarketCap, at the time of writing Bitcoin was trading at US$36,421, a 24-hour loss of 8.07 percent, while the overall crypto market cap was down 7.65 percent.


7-Day Total Cryptocurrency Market Cap. Source: CoinMarketCap

Financial Markets Plunge in Response to Rate Rise

The falls on the stock market that sparked the crypto losses were triggered by the US Federal Reserve’s decision to raise interest rates by 50 basis points. 

On May 4 the news was initially welcomed by markets, as it was in line with what many expected, spurring the S&P 500 to its biggest daily rally in two years. The following day, however, traders reconsidered the implications of the rise and the market dumped: the S&P fell 3.56 percent, the Dow Jones was down 3.12 percent and Nasdaq plunged 5.06 percent – its largest single-day percentage drop since 2020.

Crypto Down Across the Board

In line with the traditional financial markets, crypto was down virtually across the board. In addition to Bitcoin’s almost 8 percent drop on May 5, most top 10 coins saw substantial losses: Ethereum fell 6.78 percent, Solana was down 10.75 percent and Cardano lost 12.09 percent.

Given the changed broader economic conditions, Bitcoin and the wider crypto market face an increasingly uncertain period. Rekt Capital suggested on Twitter that US$38,400 may mark the new line of short-term resistance, and the popular crypto market analyst believes that BTC will need to close the month above that figure to have much chance of a rally in the medium term:

So far, 2022 has been an unhappy year for crypto generally – this latest downturn, in addition to several other sharp declines, including major losses in January and again in April, have left the crypto market cap down over 20 percent since January 1.

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Blockchain Crypto News Markets Tokens

New Move-to-Earn Token ‘FITFI’ Explodes Over 243% in Just Seven Days

The move-to-earn project Step App ($FITFI) has bucked the downward trend of crypto markets over the past week, posting gains in excess of 250 percent in the week since April 28. 

According to CoinGecko, the token was trading at US$0.24 on April 28 before starting its upward climb, recording its recent peak of US$0.67 on May 5 – a seven-day increase of approximately 275 percent. At the time of writing FITFI had retraced some of those gains but was still up significantly, trading at US$0.63.

Step App Lets Users Earn From Exercise

Step App allows users to monetise their fitness, compete with other users, collect NFTs and socialise with other crypto-minded exercise enthusiasts. According to the Step App website, it achieves this functionality by taking advantage of “the leading technology in metaverse, augmented reality and blockchain”.

Step App has a somewhat complicated economy, using three separate tokens – FITFI, KCAL and SNEAK: 

  • FITFI is the app’s governance token, which can be used for a variety of purposes including staking, conferring DAO voting rights and providing liquidity incentives; 
  • KCAL is the in-game currency users earn through exercise; and 
  • SNEAK are NFTs users can mint or buy using using either KCAL or FITFI tokens.

Move-To-Earn Is Latest Crypto Investing Trend

Step App is a part of the fitness finance (FitFi) trend to have recently emerged in crypto, where users can earn crypto rewards by exercising. It seems to be following a similar trajectory to the DeFi and GameFi trends before it: a few innovative projects create a new market segment, and then many similar projects emerge to iterate on the theme and capitalise on the hype.

The current leader in the FitFi space is the Australian-based move-to-earn project StepN, whose GMT token has increased in value more than 200x since the start of 2022.

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Algorand Blockchain Markets Sports

ALGO Rallies Amid Blockchain Deal with FIFA for 2022 World Cup

The native cryptocurrency of the US-based proof-of-stake blockchain Algorand (ALGO) has spiked following the announcement of a sponsorship and technical partnership deal with global football governing body FIFA.

According to CoinGecko, in the 24 hours since the announcement the price of ALGO increased from US$0.58 to $0.73, a gain of 25 percent. At the time of writing, ALGO was trading at $0.64, around 10 percent above its pre-announcement price – it’s currently the 31st largest crypto by market capitalisation.

Algorand is Now FIFA’s Official Blockchain Platform

As the official blockchain platform of FIFA, Algorand will provide the body with a “blockchain-supported” wallet, help FIFA implement blockchain technology, and develop its digital assets, including NFTs.

Romy Gai, FIFA’s chief business officer, cited transparency and sustainability as important factors in its decision to partner with Algorand:

At FIFA, we must constantly strive to identify and explore the most cutting-edge, sustainable and transparent means of increasing revenues to continue to support global football development. Algorand is clearly a forward-looking, innovative partner that can help us achieve these goals. 

Romy Gai, chief business officer, FIFA

Deal Provides Valuable Exposure

As part of the sponsorship agreement, Algorand becomes a FIFA World Cup 2022 Regional Supporter in North America and Europe and a FIFA Women’s World Cup Australia and New Zealand 2023 Official Sponsor, providing the blockchain network with valuable exposure and promotional opportunities.

Algorand was founded in 2017 by the Turing Award-winning scientist Silvio Micali, who this week said he was excited about the opportunity this new partnership represents to showcase the capabilities of the blockchain network:

“This partnership with FIFA, the most globally recognised and distinguished organisation in sports, will showcase the potential that the Algorand blockchain has to transform the way we all experience the world’s game.”

Silvio Micali, Founder of Algorand

Algorand is regarded as one of the most efficient and environmentally sustainable blockchains and has been used by over 2000 organisations worldwide, including Blockchain Solutions Australia, who partnered with Algorand in late 2020.

Algorand isn’t the first crypto-related organisation to become a FIFA 2022 World Cup sponsor – in March, leading exchange Crypto.com became an official sponsor for the event.

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Binance Blockchain Crypto News Markets Social media Steem

Social Blockchain Token STEEM Explodes 60% Following Major Exchange Listings

Steem (STEEM), the native cryptocurrency of the social media-focused Steem blockchain, has surged over 60 percent following an announcement from Binance that the exchange would start offering a STEEM/USDT trading pair from April 22.

Immediately following the announcement, before Binance even listed STEEM, its price went virtually vertical, surging from US$0.36 to $US0.56 in just a few hours. Once trading began on Binance, STEEM’s price increased further to $US0.61 – an overall gain of over 60 percent. 

What is the Steem Blockchain?

Steem blockchain was created in 2016 by Ned Scott, co-founder of BitShares, and Daniel Larimar, lead developer of the EOS blockchain. Steem aims to reward people who actively contribute content on social media. It incentivises constructive participation on social platforms by providing a non-censorable monetisation layer that rewards creators of digital content with cryptocurrency.  

The flagship platform running on Steem is Steemit, a Reddit-like social blogging platform that offers users crypto rewards based on participation. There are currently more than 400 social media applications actively using the Steem blockchain.

STEEM Price Action Since Binance Listing

In the days since its Binance listing, STEEM retraced most of its gains, bottoming out at around US$0.40 before again surging in the past two days. At the time of writing the price of STEEM was sitting at US$0.56, around 54 percent higher than its pre-listing price – making it the 254th largest cryptocurrency by market capitalisation.

According to data from CoinGecko, STEEM’s price is still down 93.1 percent from its all-time high of US$8.19, which it hit on January 3, 2018, at the height of the 2017-18 bull run, indicating there may still be considerable room for price growth in the medium to long term.

STEEM’s price surge on the back of a major exchange listing is a familiar story. For example, in December Measurable Data Token (MDT) gained 90 percent in a single day after its Coinbase Pro listing; similarly, IDEX surged over 85 percent in December after it was listed on Huobi.

Categories
Bored Ape Yacht Club Markets Mutant Ape Yacht Club Tokens

APE Token Pumps 55% Following Rumours of Land Drop Going Viral

The price of ApeCoin (APE) has exploded 55 percent following Twitter speculation that holders of the token would be able to purchase land in the Otherside metaverse MMORPG via a Dutch auction land sale.

Since the morning of April 18, APE has surged from its recent low of US$11.05 to a high of US$17.30 on April 21. According to CoinGecko, at the time of writing APE had retraced its gains slightly and was trading at US$15.95.

A Tale of Two Tweets

The APE buying frenzy has been driven by speculation that holders will have access to land in the Otherside metaverse MMORPG, which is currently being developed by the creators of the Bored Ape Yacht Club (BAYC), Yuga Labs.

Rumours had been circulating online since April 18, but two tweets in particular sparked investor interest. The first, tweeted a day later by a user known as ‘WillyTheDegen’, suggested that holders of the Yuga Labs-created NFTs BAYC and Mutant Ape Yacht Club (MAYC) would be airdropped land in Otherside:

The second tweet, posted on April 20 by ‘renegademasterr’, stated that Yuga Labs would be running a Dutch auction – where the starting price is high and bids get gradually lower – to sell Otherside land using APE as the purchasing currency:

This surge illustrates just how fickle the crypto market can sometimes be, driven by social media chatter and a healthy dose of FOMO.

APE Has Had a Turbulent Time

Since launching in March 2022, APE has been quite a volatile asset, even by crypto standards. On its first day of trading the token plunged 80 percent from its all-time high of US$39.40, and early this month it fell 20 percent following a hack on the related BAYC Discord servers.

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Coinbase Ethereum Markets NFTs OpenSea

Coinbase Launches NFT Marketplace to Battle OpenSea Dominance

Leading US crypto exchange Coinbase has announced the imminent launch of its new NFT marketplace, with a social spin to it – like Instagram – to help connect users and creators.

The NFT marketplace is now in beta after Coinbase unveiled its plans in October last year for a “Web3 social marketplace”. It is being built on the Ethereum (ETH) blockchain and reportedly “any NFT that’s for sale on the Ethereum blockchain will be searchable” on its platform.

Users who are interested in the beta and want to have a look at their collections can do it here. At launch, the exchange will allow its 43 million users to easily access NFTs through the platform. The marketplace will also be adding support for other blockchains in the near future.

Coinbase NFT marketplace beta. Source: Coinbase

For a limited time, the platform will incur zero transaction costs, except for Ethereum gas fees to process a transaction on the blockchain. The platform will also require users to use a self-custody wallet such as Metamask or the Coinbase wallet.

Social Platform to Build Engagement

The platform’s beta testers who join through the waitlist are encouraged to make use of all functions, including new social features. Having received over 8 million applications, the platform may well be in a position to compete with market leader OpenSea. This could be done by not only being an NFT marketplace, but also a platform where creators can build and engage with their communities.

According to the Coinbase announcement:

We learned that people don’t just want better tools to buy and sell NFTs – they want better ways to discover them, better ways to find the right communities, and better spaces in which they can feel connected with each other.

Sanchan Saxena, VP of product, ecosystem products, Coinbase

To create more of a community feel, the platform will add social feeds to facilitate browsing of other creators’ portfolios. In an Instagram-like approach, users will have profiles tied to their wallets so users can interact with each other. The marketplace will also incorporate a recommender based on buying history, who the user follows, and other metrics.

We’d like to make Coinbase NFT a little bit more like Instagram, as opposed to, say, an auction like eBay or something like that […] I think having people that you can follow, your favourite artists or creators, and having a feed of content that gets populated from those people you follow, could be really powerful.

Brian Armstrong, Coinbase CEO

NFT Marketplace to Become Decentralised in the Future

At this stage, the platform will operate on Coinbase’s centralised servers, but in time it will be moved to decentralised solutions. In that event, the platform will include functions such as airdrops, minting, and token-gated communities. The platform will also be used to host drops by some of its many launch partners.

Royalties play a very important part in keeping the creator economy alive and are therefore one of the major focus points of the new marketplace:

Categories
DeFi ICHI Markets

ICHI Token Sinks 90% Amid Cascading Liquidations on Rari

One of Ichi Foundation’s pools on Rari has spun itself into a debt crisis due to falling BTC prices and an overzealous tolerance for collateral.

Negative Debt Cycle Hurts ICHI Token

According to a statement tweeted by Ichi, recent volatility seen with the ICHI token was caused by a cascade of liquidations made worse by the fact that the pool was overcollateralised. This then forced the price of the coin down dramatically.

In a tweet from Rari Capital – a lending and borrowing protocol that hosted Ichi’s Fuse pool – the pool was “experiencing bad debt due to cascading liquidations”:

The cascading liquidations were brought on by various events, one of them the allowance of millions of dollars as collateral to be taken and borrowed. When the price began to decline, there wasn’t enough liquidity in the decentralised exchange (DEX) to allow liquidations. This meant that highly leveraged positions couldn’t be closed, causing the pool to fall into debt.

When prices across the crypto market dropped – following the US$250 billion market wipe at the beginning of this week – “there wasn’t enough liquidity to absorb all the ICHI liquidations, causing the price to cascade”, according to Ashwath Balakrishnan, vice-president of research at Delphi Digital. Cascading liquidations can cause the price of an asset to decline rapidly and dry up liquidity, leaving the pool in debt and holders out of pocket.

ICHI/USDT price chart: CoinMarketCap

ICHI was ranging around US$120 before April 11, the pool liquidations started around 12:30 UTC on that date and continued until 2:30 UTC on April 12. Prices have dropped all the way down to US$1.81 and have since stabilised.

Putting in the Proper Checks

The problem arose where some important parameters on the pool weren’t set optimally. As noted by Jack Longarzo – a developer for Rari Capital – the collateral factor was considerably higher than needed:

Longarzo also mentioned that the team could have added supply caps to limit the amount of collateral in the pool to prevent a situation such as this. He added that a red flag for users of Fuse should be to check if the collateral in a pool is significantly more than what can be liquidated.

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Bitcoin Crypto News Ethereum Markets

$250 Billion Wiped from Crypto Market amid Market Fear and Leveraged Liquidations

After staging a recovery following January’s sell-off, the cryptocurrency market has yet again felt the pain of a sharp decline after U$250 billion was erased from the sector’s market capitalisation (market cap).

Cryptocurrency market cap. Source: CoinGecko

A Sea of Red

Initial negative price action started over the weekend, which saw bitcoin drop below US$43,000, accelerated by US$152 million in leveraged long liquidations. In total, the market saw over US$439 million in liquidations within 24 hours.

It is, however, worth noting that these levels remain relatively mild compared to prior episodes, suggesting that further losses may be on the horizon.

Bitcoin then continued its descent on Monday, dropping 15 percent in 24 hours, falling below US$40,000 for the first time since March 15. Meanwhile, Ethereum fell 14 percent, sinking below the US$3,000 mark for the first time since March 23. Across the board, with the exception of Monero (XMR), all major cryptocurrencies are significantly down over the past week:

Crypto market 7-day performance. Source: Quantifycrypto

Fear and Uncertainty

Digital assets form part of the broader investment universe, and due to their speculative nature tend to get hit hardest when sentiment shifts risk-off. Risk-on assets, such as equities and crypto, generally decline when market fear takes hold as investors seek safety in less risky assets.

For these reasons, bitcoin (and other digital assets) tend to mirror the performance of the equity market in the short term, specifically the higher volatility tech sector.

Since March 2020, Bitcoin’s correlation with the tech-heavy Nasdaq 100 has increased significantly:

BTC and Nasdaq correlation. Source: Koyfin

It’s therefore not surprising that all major global equities indices are down amid growing inflation and slower economic growth, resulting in many investors reducing exposure to higher volatility growth assets.

This follows news of the 10-year US Treasury yield rising to a three-year high, making tech stocks significantly less attractive, and cryptocurrencies even less so. In addition, there’s an ongoing war in Ukraine and the Federal Reserve is posturing to aggressively raise interest rates.

For these reasons, macro sentiment is negative and fear is widespread, resulting in a flight to safety away from assets such as cryptocurrencies. With US inflation figures due to be released this week, the market remains on edge, and as Bitcoin analyst Will Clemente recently opined on Twitter:

Categories
Crypto Exchange Crypto News Hydra Markets Russia

World’s Largest Darknet Market Gets Taken Down

A German/US joint operation has seen Hydra Market – the world’s largest darknet marketplace – shut down. At the same time, the US Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned wallets and a Russian cryptocurrency exchange known for money laundering.

The marketplace offered a variety of services, from allegedly arranging drug transactions to money laundering. OFAC sanctioned more than 100 cryptocurrency addresses related to Hydra, adding them to its Specially Designated Nationals and Blocked Persons (SDN) list.

Darknet market share of total market. Source: Chainalysis

The Russian-based Hydra Market has been the largest darknet market for the past few years, even though it only served Russian-speaking countries. In 2021, Hydra received more than US$1.7 billion worth of cryptocurrency, which accounts for over 75 percent of all darknet market revenue globally.

Money Laundering Staunched by Hydra’s Closure

In fact, since 2020, Hydra received US$645 million worth of cryptocurrency from illicit sources, including other darknet markets, wallets holding stolen funds, ransomware operators, and scammers. Chainalysis believes much of this was due to its widely used money-laundering services.

A vendor listing for a money-laundering service on Hydra.

Russian Crypto Exchange Goes Down With Hydra

Garantex is a sizeable crypto exchange based in Russia and, according to the Chainalysis 2022 Crime Report, is also the largest platform for money laundering in Moscow, having received more than US$10 million from known ransomware strains including NetWalker, Phoenix Cryptolocker, and Conti.

Following the closure of Hydra, OFAC has also sanctioned Garantex, which has been previously investigated for its money-laundering indiscretions.

Illicit Activity a Fraction of Total Transaction Volume

As it stands, illicit activity represents only a small portion of total transaction volume as adoption in the crypto space has soared. The level of criminality on the blockchain has lessened considerably, with illicit transactions accounting for a much smaller segment of the total.

Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to US$15.8 trillion in 2021, up 567 per cent on 2020’s totals. Given the massive increase in adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase in illicit transaction volume was nearly an order of magnitude lower than overall adoption shows that illicit activity may be in decline.