The TIE Weekly Insights (May 03, 2021)

The crypto market surges as ETH climbs to new all time highs. CME Group launches micro Bitcoin futures.

Some highlights from last week:

  • CME Group Launches Micro Bitcoin Futures
  • Turkey Moves to Cover Crypto Service Providers Under its Money Laundering Regulations
  • Secret Network Raises $11.5M to Further Privacy and App Development
  • FTX Hires Former HSBC Exec as it Prepares to Serve Traditional Financial Insitutions
  • Andreessen Horowitz Announces Launch of $1B Cryptocurrency Fund
  • Fidelity Launches Institutional Crypto Data Analytics Platform
  • Staking Giant Lido Looks to Bring Services to Solana
  • CryptoPunks Creator Larva Labs Launches New NFT Project ‘Meebits’
  • Coinbase Acquires Cryptocurrency Market Analysis Tool Skew

Crypto Topics Trending in the Media

Market Overview

What an exciting week in crypto. The total cryptocurrency market cap has increased by +10.3% over the course of the week, climbing from $1.9T to $2.3T. The top 10 major assets all saw positive double digit returns (+24.8% median), with XRP (+51.4%), DOGE (+49.8%), and ETH (+28.8%) leading the way. Long term investor sentiment remains high for all majors. Despite high volatility to the upside, trading volume took a bit hit this week (-34.2%). Tweet volume decreased as well (-6.5%).

Weekly Performance of the Crypto Market

Currencies and NFTs were the sector leaders this past week with both experiencing +28% returns. Every major crypto sector saw positive returns of 20% and above.

Bitcoin

The price of Bitcoin traded within a 20% range, from the low of $52,000 set on Monday all the way up to the high of $58,550 set on Saturday. Short term sentiment was mostly positive throughout the week, with a few announcements that helped spark excitement. To add to its quickly growing product suite, Gemini partnered with Mastercard to launch a crypto credit card with rewards paid out in BTC. 

On Wednesday, CME Group executives discussed the firm’s Bitcoin futures offerings and announced that micro Bitcoin futures will be launching next week. These new micro futures will be 1/50 the size, opening up to a much wider potential customer base. In addition to that, fees will be much lower relative to other exchanges.

Bitcoin Price vs Sentiment

Bitcoin Tweets

2021 has started out hot for Bitcoin’s social conversations, with Tweet volume growing quicker than ever before. There have already been 8.5M Tweets sent out about BTC this year and we are only wrapping up the month of May. When comparing where we are relative to past years, we can see that there have been 2M more Tweets so far in 2021 than in 2018, 5.7M more than 2019, and 5.3M more than in 2020.

Bitcoin Tweets

MATIC

So far this year, we’ve seen Layer-2’s grow in popularity as the search for new solutions that can help the Ethereum blockchain scale to keep up with competition reaches new heights. One stand out project has been Polygon, or formerly known as Matic Network. Polygon has launched a $100M ‘DeFi for all” fund intending to make DeFi accessible to the next million users. The price of MATIC has grown at a tremendous rate of +4350% YTD, climbing from $0.02 all the way up to reaching a new all time high of $0.89 earlier this week. This has caused Tweet volume regarding MATIC to surge 747%, hitting a new yearly high of 3,331.

MATIC Price vs Tweet volume

Aave

Earlier this week, Aave Improvement Proposal 16 went live for Aave governance voting. AIP-16 is a proposal to introduce liquidity incentives for Aave V2. The proposal received overwhelming yes votes from the community, passed on April 26th, and executed on April 27th. As shown on the chart below, investor sentiment was negative up until the point that AIP-16 was proposed. The TIE’s hourly sentiment score steadily increased from there on, even flipping positive and running up +105%. The price of AAVE has surged by +39% since AIP-16 passed.

Aave liquidity mining

Solana

There are now over 1,000 Tweets sent out about Solana on a daily basis. That is an increase of 2100% YTD!

Solana Tweet volume

Futures Curve                                                            

Image courtesy of @btc_status

As Bitcoin pushes $60,000 once again, the futures curve remains bullish. The CME exchange’s curve has smoothened, compared to last week when the back-end contracts showed a $3k premium and the front-end months were flat.

Funding                                                                      .

Image courtesy of CryptoQuant

After starting the week with a sell-off that effectively reset aggregated funding to 0%. As bullish momentum returns to the crypto eco-system, funding has peaked at 0.05% for Bitcoin.



Coinbase, Grayscale and Korean Premiums

Image courtesy of CryptoQuant.com

Coinbase premiums mainly stayed positive throughout the week, peaking at $140 while mostly hovering between $20 and $80. The premium is currently negative, albeit slightly, as bitcoin struggles to tackle all-time highs.

Image courtesy of cryptoquant.com

The Grayscale premium extends its plummet, finishing the week at -14.00%. It remains to be seen if the ETF conversion can close the premium.

The Korean BTC premium did not recover its highs this week, but still retains a healthy 8% premium as rumours that institutional interest is beginning to heat up in the Korean market.


Aggregated Open Interest and Liquidations              .

Image courtesy of bybt.com

SInce taking a 30% haircut from its peak, aggregated open interest has plateaued between $18B and $20B, not showing any outward signs of aggressive margin traders reopening their liquidated positions.