DeFi’s total value locked (TVL) was valued at $700 million at the start of 2020 and surged to $250 billion by the end of 2021. This week DeFi TVL sits at $110 billion, 56% down from all-time highs and at similar levels to July 2021. The nascent DeFi space has never experienced a full-on crypto winter and with declining yields on stablecoins and other assets, the spaces’ most active users are starting to question the…
Famous stock investor Warren Buffet once said: ‘When the Tide Goes Out, You Find Out Who Was Swimming Naked’. Only a few weeks back under the title ‘Ponzi Or DeFi’ we spoke about the popular stable coin UST, part of the LUNA ecosystem, that was receiving significant attention due to its 20% APY on a stablecoin. This week, UST’s peg to the Dollar came under attack and collapsed. The LUNA token, 1-1 redeemable vs UST,…
Another market cycle with little market movement and another movie reference: in Director Jonathan Demme’s famous ‘The Silence of the Lambs’, the main character is shocked to discover that the ‘silent’ lambs are brought to the slaughterhouse. Markets remain in an unusually quiet ‘wait-and-see’ mode. Bitcoin dominance has failed to break out from a narrow range for nearly a year. Crypto total market cap has barely flinched in 2022. Yet, in the background, dark clouds…
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If you are used to fast-moving Crypto markets, 2022 must feel to you like a never-ending groundhog day. After significant moves all the way up to $69k and back down to $30k in 2021, Bitcoin has been trading inside what seems to be a fairly ‘boring’ range between $36k and $48k since the start of 2022. This range-trading could also be observed in the summer of 2021, when markets were experiencing a rather dull period.…
The last two weeks have seen a much welcomed rebound in Crypto markets. Just when total doom and gloom was threatening to take over, no additional rate tightening news from the Federal Reserve and the possibility of a coming resolution of the Russia-Ukraine war seem to have lifted market spirits. The recent announcement by the Luna Foundation that it has purchased more than $1bn of Bitcoin since January to strengthen its reserves has certainly helped as well.…
Technological breakthroughs are all about timing. Dropbox famously benefited from launching at the time when the first Smartphones started emerging and suddenly file-syncing between devices started to matter. Virtual Reality is slowly grinding its way towards adoption with new devices coming out. Similarly, Cryptocurrencies emerged at just the right time. In the aftermath of the Financial Crisis of 2008, the trust in traditional financial institutions was damaged whilst loose monetary policies encouraged a generational run-up…
To casual observers, much of today’s Decentralized Finance (DeFi) might look like a collection of Ponzi Schemes. Projects bootstrap by offering high APYs for their token and design complex systems around them to attract DeFi power users who are rushing in to capture short-term high returns. The high APY leads to more and more tokens being released which in turn destroys the price of the project’s coin and leads to a long decline. This sounds…
Bear markets are normally the time when traders overreact to any piece of bad news. Events that would barely cause a flinch in a bullish market can drive markets down significantly in a bear. It is therefore somewhat unexpected to watch the resilience of crypto prices over the past days. Despite an ongoing war, the confirmed spectre of incoming Federal Reserve rate hikes and increasing regulatory pressure coming from the US and elsewhere, BTC, ETH…
When the world is on fire, it is not a good time to talk about prices. There are more important things in the world. Those things however go beyond the scope of this newsletter and markets do not sleep. Global markets, whether crypto or equities, have seen major drops over the past 24h as Russia’s invasion of Ukraine kicked off. Crypto’s Market Cap dropped more than 10% within minutes when events first started to unfold.…