The TIE Weekly Insights (April 6, 2021)

The total cryptocurrency market cap reaches a total of $2T for the first time ever, with 93 out of the top 100 having a market cap over $1B.

Some highlights from last week:

  • Morgan Stanley Adds Bitcoin to 12 Mutual Funds’ Investment Strategies
  • SEC Filing Shows Blackrock Held Bitcoin Futures Contracts Worth $6.15 Million
  • Grayscale Wants to Turn Giant Bitcoin Fund Into an ETF
  • Shopify CEO Takes Interest in DeFi and Ethereum
  • Polkadot-Based DeFi Project Acala Gets Funding from Coinbase Ventures
  • EulerBeats Enigma NFT Auction Raises $3.1 Million
  • Microstrategy Acquires Additional $15M in BTC

Market Overview

The total cryptocurrency market cap has increased by 9.5% on the week to reach a total of $2T for the first time in history. This is 150% higher than the previous all time high set in the last major bull run in 2017. The major difference from 2017 to the current uptrend is that there are many more working products. 2017 was filled with promises, roadmaps, and hype. Sure the hype is still a driving factor in 2021, but we now have actual working products to use and experiment with. At the time of writing, 93 out of the top 100 cryptocurrencies have a market cap of over $1B.

BTC dominance currently sits at 55.8%, a decrease from last week as altcoins continue to surge. Every major asset saw positive returns over the course of the week, with a median return of +14.4%. XRP (+63.6%), BNB (+34%), and DOT (+32.3%) led the market. Long term sentiment remains very high for the majors, except for LINK which has a median long term sentiment score of 59. Trading activity (+26.2%) and Tweet Volume (+28.2%) were up big this week as most assets experienced double digit increases in volume. 

Weekly Performance of the Crypto Market

Despite a rather choppy and uneventful end to March, the market has picked up steam since the beginning of April. Each sector performed positively throughout the week, with the ALT Index (+26.7%) finishing in the lead.

Bitcoin

The price of BTC has been stuck within a 6.5% range for the past week, from the low of $57,600 to the high of $60,000. Short term investor sentiment has flip flopped with price, as Bitcoin has been on stand still. On a bright note, Grayscale Investments announced it is “100% committed to converting the bitcoin trust into an ETF,” noting that “the timing will be driven by the regulatory environment.” Additionally, Morgan Stanley has filed with the U.S. Securities and Exchange Commission (SEC) to add bitcoin exposure to 12 of its mutual funds’ investment strategies. These mutual funds may invest in bitcoin futures as well as obtain indirect exposure to the cryptocurrency through investments in Grayscale Bitcoin Trust, the filing details.

Solana

One of the hottest up and coming projects that has shown a ton of strength is Solana, a Smart Contract protocol that aims to be a fast, secure, and censorship resistant blockchain providing the open infrastructure required for global adoption. The price of SOL has grown from $1.8 to $23.8, an increase of +460% year-to-date. This price surge has led to community growth, as we’ve seen the number of Twitter users talking about SOL on a daily basis increase from 41 to over 230 (+1,223%).

XRP

Despite uncertainty around a SEC lawsuit, the price of XRP has been flying. XRP has reached $1 for the first time in 3 years, and has increased by over 340% so far in 2021. 

Derivatives Overview

Futures Curve

If you checked in with us last week, we talked about the bowed structure in the Binance premium. The front and back end contracts have since leveled out, with all the exchanges showing similar pricing except for a slight bump in the Deribit’s April 30th contract. The current volatility contraction is reflected in the premiums falling in line, we should see more dislocations in the premiums once Bitcoin makes a decisive move.

Image courtesy of @btc_status

Funding

Aggregated funding peaked at 0.144% as price briefly poked $60,000 on Friday and took a slight hit as Bitcoin retraced through the week. Funding currently sits at 0.1% as traders show a bullish preference in anticipation of the Coinbase IPO and Walmart accumulation rumours.

Image courtesy of CryptoQuant

Premiums

Coinbase premiums traded in a narrow range except for a steep -$102 discount as price tapped $60k and an extreme +$300 spike as price dipped below $57k. Premiums leaned negative going into Monday, picking up a bit as price touched $57.5k today.

Grayscale continues to stay in the negative at -5.29% with a slight gain over the last week off the back of news that Grayscale will turn the fund into an ETF, creating some speculation that the move is an attempt to erase the deficit.

Image courtesy of bybt.com

The Korean BTC premium continues to grow to 16.72% as speculation continues that the Korean retail market is heating up.

Open Interest and Liquidations

Total open interest has grown only slightly during the week, with Bybit recovering the most open interest in 4 million.

Liquidations have leaned on the long side for the last two weeks, with almost $1 billion in liquidations over the last 24 hours. It is likely that short liquidations are living higher in the range above $60k, it remains to be seen if longs will experience more pain if this is the flush that was needed before expanding the range.

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Notable News

Fidelity, Square, Coinbase Launch Bitcoin Trade Group

Morgan Stanley Adds Bitcoin to 12 Mutual Funds’ Investment Strategies

Contact us for a demo of our SigDev platform to view all market-moving events in real-time.

This Week’s Podcast Episodes

Deep Dive into DeFi with Hassan Bassiri (Arca)
Hassan Bassiri (VP Portfolio Management at Arca) joins The TIE’s Fundamental Value Podcast to discuss Binance Smart Chain, Solana, AVAX, and the heating up L1 race, trading DeFi at scale, and managing risk in a bull market. Listen here