2024-03-08 16:27

The world's largest crypto briefly rose above $70,000 Friday, but immediately tumbled about 5% to below $67,000. Bitcoin's latest attempt at all-time highs met with large selling pressure on exchanges Friday, capping the rally beyond $70,000. The decline mirrored Tuesday's correction from $69,200, but wasn't as severe. Liquidations of leveraged derivatives trades reached $240 million during the day, less than Tuesday's $1.2 billion wipe out. It's deja vu all over again for bitcoin (BTC) bulls, who for the second time this week barely had a few seconds to celebrate a surge to a new-all time high before prices quickly reversed sharply lower. In the morning hours of U.S. trading, bitcoin took out the Tuesday record of about $69,200 and rose to $70,136, CoinDesk Bitcoin Index (XBX) data shows. But within seconds, selling took hold and less than one hour later, the price had tumbled about 5% to as low as $66,500. At press time, bitcoin was trading at $66,950, down marginally for the day. The broader CoinDesk 20 Index (CD20) was modestly in the green. Friday's decline from all-time highs liquidated $240 million worth of leveraged derivatives trading positions across all digital assets, much less than Tuesday's nearly $1.2 billion, according to CoinGlass. This was likely due to that the market wasn't as frothy with leverage as before the flush earlier this week. Nearly 1,000 BTC of sell orders on Binance and OKX, worth some $70 million, posed an insurmountable resistance for further gains once bitcoin topped $70,000, quickly pushing the price lower. To this point, today's reversal isn't as severe as the action on Tuesday, when bitcoin for the first time this week notched a new record high. Then, the price ended up tumbling as much as 14% before bottoming at around the $59,000 level. https://www.coindesk.com/markets/2024/03/08/groundhog-day-in-crypto-as-bitcoin-again-plunges-following-new-record/

2024-03-08 12:02

Traders have been using meme tokens as a proxy bet on the growth of Ethereum or other blockchains. Meme coins like PEPE, SHIB, and DOGE have surged as much as 26% in the past 24 hours due to a “spillover effect” from the growth of Bitcoin and Ethereum. Traders have been using meme coins as a proxy bet on Ethereum’s growth since late February, and the bullish demand for ETH has been increasing since mid-January due to expectations of a spot ETF approval in the U.S. Pepecoin (PEPE), shiba inu (SHIB) and dogecoin (DOGE) jumped as much as 26% in the past 24 hours as ether (ETH) inched towards $4,000, a level it previously saw in December 2021. PEPE jumped 26% on renewed optimism, while DOGE and SHIB reversed Thursday’s losses to rise 10%. The meme coin category tracked on CoinGecko showed an 8.6% sector growth on average, as CoinDesk 20, a broad-based index of various tokens, rose 2.53%. As reported, traders have used meme coins as a proxy bet on Ethereum’s growth since late February. “As bitcoin and ether rise, a spillover effect is caused where coins deployed on ethereum and solana also surge - including meme coins,” shared Slater Heil, co-founder and COO of DeFi platform Blueberry Protocol, in a message to CoinDesk. “Investors will take advantage of bullish conditions as much as possible, and meme coins are one way for them to do so. In the short-mid term, I expect a transition back to ‘fundamentally driven’ altcoins,” Heil cautioned. Bullish demand for ether started to increase in mid-January amid expectations that it would be the next major token after bitcoin (BTC) to get a spot exchange-traded fund (ETF) in the U.S. Coinbase premiums for Ethereum ecosystem tokens were higher than usual in the past week, suggesting recent demand was led by U.S. investors, as per CryptoQuant. https://www.coindesk.com/markets/2024/03/08/pepe-leads-meme-coins-rally-as-ether-nears-4k/

2024-03-08 11:43

The stablecoin earns yield by shorting ether futures and capturing funding rates - which have surged in the past two weeks. Ethena Labs’ stablecoin has pocketed $4 million for its treasury with high yields derived from ether-future funding rates and staking ether to a validator. The project has seen early success with a controversial concept, increasing its treasury to over $16 million and becoming the third-largest revenue generator in the crypto market. Stablecoin project Ethena Labs has bagged over $4 million for its treasury less than two weeks after going live, showcasing early signs of success with a concept that has divided market participants. The firm’s USDe, a synthetic dollar that aims to be pegged to $1 by shorting ether (ETH) futures, yielded over 68% annualized on deposits as of Friday. It could keep $4 million for its treasury after paying out users, head of growth @MacroMate8 said on X, increasing the treasury amount to over $16 million from nearly $12 million. The earnings have catapulted Ethena to the third-largest revenue generator in the crypto market behind the Tron and Ethereum blockchains. Ethena’s high yields are derived mainly from the high ether-future funding rates, as well as staking ether to a validator, which generates less than 4% yearly as of Friday. Funding rates refer to payouts made to traders who either long, bet on, go short, or bet against the price of any asset. Longs pay short when prices go up, as they borrow capital from the market to place bigger bets, and vice versa. Users can deposit stablecoins, such as tether (USDT), frax (FRAX), dai (DAI), Curve USD (crvUSD) and mkUSD to receive Ethena’s USDe, which can then be staked. Unstaking takes seven days. The staked USDe tokens can be supplied to other DeFi platforms to earn an additional yield. DefiLlama data shows that the total value locked on Ethena has grown to $833 million as of Friday, up from $300 million in mid-February after its public launch. https://www.coindesk.com/markets/2024/03/08/stablecoin-project-ethena-labs-bags-4m-for-usde-treasury/

2024-03-08 10:58

The bitcoin spot ETF market could grow to around $62 billion in the next two to three years, the report said. Bitcoin is 3.7 times more volatile than gold. If the crypto were to match gold in risk capital terms it implies a price of $45,000. The net inflow into spot bitcoin ETFs is about $9 billion. If bitcoin (BTC) were to match gold’s allocation in investor portfolios, its market cap should rise to $3.3 trillion, implying a more than doubling of its price, but that probably won't happen because of the cryptocurrency's risk and heightened volatility, JPMorgan (JPM) said in a research report. Gold is the best comparison for the cryptocurrency given investor perception of bitcoin as a digital version of the metal, the report said. “Most investors take risk and volatility into account when they allocate across asset classes and given the volatility in bitcoin is around 3.7 times the volatility of gold it would be unrealistic to expect bitcoin to match gold within investors’ portfolios in notional amounts,” analysts led by Nikolaos Panigirtzoglou wrote. JPMorgan said that if bitcoin were to match gold in “risk capital terms” the implied allocation drops to $0.9 trillion, implying a price of $45,000, notably lower than its current level of around $67,400. “At $66K currently, the implied allocation to bitcoin within investor’s portfolios has already surpassed that of gold in volatility adjusted terms,” the authors wrote on Thursday. Applying the volatility ratio of 3.7 to estimate the potential magnitude of the bitcoin ETF market implies a size of around $62 billion, the bank said. Net inflow into spot bitcoin ETFs is about $9 billion, some of which could have been a rotational shift from existing products. “This is a realistic target of the potential size of spot bitcoin ETFs over time perhaps within a time period of two to three years, though much of the implied net inflow could represent a continued rotational shift from existing instruments and venues to ETFs,” the report added. https://www.coindesk.com/markets/2024/03/08/bitcoin-is-unlikely-to-match-golds-allocation-in-investors-portfolios-in-nominal-terms-jpmorgan/

2024-03-08 08:53

The tokens were sold to an undisclosed buyer and will be vested for two years. Optimism Foundation sold about 19.5 million OP tokens to an unidentified buyer. The tokens come from the unallocated portion of the OP Token treasury that was set aside for working capital. Optimism Foundation said on Friday that it had entered into a private token sale of approximately 19.5 million OP tokens, worth nearly $90 million at current prices, to an undisclosed buyer. The foundation is one of the maintainers and developers of the Optimism network, a blockchain that runs and settles transactions on Ethereum. The sold tokens are subject to a two-year lockup. However, the buyer can delegate the tokens to unaffiliated third parties for participation in governance decisions, giving the same benefits as an unvested holder. The tokens come from the unallocated portion of the OP Token treasury and are part of the foundation’s original working budget of 30% of the initial OP token supply. As of Friday, OP had a circulating supply of 1 billion tokens and a total supply of 4.29 billion. OP prices were down 0.4% in the past 24 hours, The CoinDesk 20, a broad-based liquid index of various tokens, is up 2.59%. https://www.coindesk.com/business/2024/03/08/optimism-sells-89m-op-tokens-in-private-transaction/

2024-03-08 08:02

Bitcoin traders are having a relook at the $200,000 call option after a gap of nearly three years. Deribit data show activity in the $200,000 strike bitcoin call, which is nearly three times the cryptocurrency’s going market rate. Options open interest has soared to record highs alongside bitcoin’s price rally. Animal spirits seem to have returned to the market, spurring a 2021-like interest in bitcoin (BTC) options that would pay off if the cryptocurrency’s price tripled in the coming months. On Friday, the Deribit-listed bitcoin call option at the $200,000 strike price had a notional open interest of over $20 million. The strike price is almost three times bitcoin’s going market rate of $67,000. Of the total tally, $14.6 million is locked in the $200,000 call expiring on Dec. 27, while the rest is concentrated in June and September expiry strikes, according to data source Deribit Metrics. Theoretically, buying the so-called deep out-of-the-money (OTM) call at the $200,000 strike expiring on Dec. 31 is a bet that the cryptocurrency will end the year above that level. Call options give investors the right to buy the underlying asset at a set price at a later date. A call buyer is implicitly bullish on the market. The notional open interest refers to the U.S. dollar value locked in the active options contracts at a given time. On Deribit, the leading crypto options exchange, one options contract represents one BTC. The $200,000 strike call was quite popular the last time bitcoin traded above $60,000 in 2021. The latest interest in the deep OTM strike is consistent with the consensus that BTC’s impending halving-induced supply reduction will further skew the supply-demand imbalance in favor of the bulls, eventually pushing prices into six figures. The supply-demand balance recently grew to 1:10, thanks to Wall Street’s embrace of the U.S.-based spot bitcoin exchange-traded funds. Bitcoin tapped fresh record highs above $69,000 early this week and last changed hands near $67,000, representing a 59.7% year-to-date gain. The CoinDesk 20 Index, a broader market gauge, has gained 45%. The rally has boosted the overall activity in the options market. On Deribit, total open interest in bitcoin options has soared to a record $20.4 billion, surpassing the previous peak of $14.36 billion in October 2021. Similarly, ether’s (ETH) options open interest has jumped to a lifetime high of $11.66 billion. Deep OTM calls are cheaper than those at strikes closer to and below the going market rate. Thus, outright purchases of deep OTM calls are often considered analogous to lottery tickets. The loss is limited to the extent of the premium paid to purchase the option, but, in theory, profit can be huge if the market exceeds the strike price before expiry. https://www.coindesk.com/markets/2024/03/08/return-of-animal-spirits-bitcoin-traders-lock-20m-in-the-200k-call-option/