The crypto market has has quite a wild week, TokenInsight dives into what has happened over the last seven days.
BNB Becomes 3rd Largest Crypto, Bitcoin May Be Shorted by Institutions, and Altcoins Fly High: Weekly Market Review by TokenInsight
However, at least for now, the crypto market is still at its peak. Driven by the bull market and the good performance of DEX PancakeSwap on the Binance Smart Chain (BSC), the price of BNB rose by more than seven times this month, becoming the third-largest market cap crypto. Besides, PancakeSwap’s daily trading volume even surpassed Uniswap, the leading DEX in DeFi.
Among the non-Ethereum public chains, Polkadot has been favored in the long-term. With the endorsement of major international institutions, its market cap ranked at the sixth temporarily. Overall, compared with the end of 2020, the crypto market has undergone a shuffle, which has generated more potential investment opportunities but with higher volatility.
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Bitcoin Breaks Through $50,000, but Indicators Hint a Callback
People seem to have become accustomed to the continual jump of Bitcoin since the bull market. From $30,000, $40,000 to $50,000, the market's reaction has been much calmer.
According to the Bloomberg TV interview with Binance Holdings Ltd. CEO Changpeng Zhao, Zhao expressed his confidence and very positive outlook of the crypto market.
“I think we have just seen the tip of the iceberg of the crypto market, $50K is just the beginning. If you look at the last rally, it starts from $1,000 in 2013, after nearly 3 years, to $20,000, then we had the 3-years retrace. Right now we just passed the previous peak of about 2.5 times. The fundamentals are much stronger than 3 years ago, we see a lot of users and institutions come in,” said Changpeng Zhao.
However, this time is obviously different from before. Numerous signs indicate a callback and major volatility may be on the way.
Some signs from the delivery contract and options market also provide clues for a possible callback. The Chicago Mercantile Exchange (CME) Bitcoin futures trading data disclosed this week showed that hedge funds increased additional short positions valued at $1.24B in Bitcoin futures on Feb. 13, but there were also assets managers and other undisclosed investors who increased their long positions in Bitcoin futures, with $1.281B in total value.
It now appears that the market has a fierce long-short game around Bitcoin, and it seems that the bears are relatively more emboldened. On the Deribit options exchanges, on Feb. 11, the largest daily premium volume in the history of the crypto options market was recorded, which reached $77.81M and focused on buying and selling call options mostly. Moreover, on Feb. 20 and 26, a large number of options and futures will expire for delivery. During this period, the market is likely to have violent swings, and the bears’ actions may lead to a short-term significant callback.
“The crypto market should be larger than the fiat market. Because with cryptocurrencies, there are a lot more use-cases, and possibilities now. This is similar to Uber’s market size being bigger than the taxi’s, so I think it is very clear we are just at the very beginning,” said Changpeng Zhao.
Exchanges Tokens and Blue Chip: BNB's Market Value Soars to Third Place, and DOT Takes Fourth
“It started from the centralized platform exchange token, and it has a history that outperforms even better than Bitcoin over the last three years. More reasonably, it is contributed by Binance smart chain, which is a decentralized blockchain that a lot of new DeFi projects are running on. I think the current boom is caused by that. More fundamentally, it is because BNB has a smaller market cap than Bitcoin, making it actually easier to grow. Meanwhile, there are more activities happening on BSC than on Bitcoin. I think Bitcoin acts more like a global reserve in the cryptocurrency space, while BNB has more activities going on.”
It is worth noting that exchanges with their own public chain have great potential in their own exchange tokens. With the daily trading volume of PancakeSwap and MDEX surpassing Uniswap, not only BNB, but also Huobi exchanges token HT also achieved good performance this week.
It is foreseeable that as the status of the exchange's own public chain in DeFi gradually rises, the performance of the public chain in the future will have a significant impact on the performance of the exchange token. Therefore, continuous tracking of different public chain ecology is very necessary.
Highlights Picked by TokenInsight
Coinbase Ventures, Paradigm Invest $12M in Synthetix DeFi Platform
Decentralized trading platform Synthetix has raised $12 million from venture capital firms Coinbase Ventures, Paradigm and IOSG. The raise looks to be a rare occurrence of VCs investing through the purchase of a platform’s native token directly from its treasury rather than wiring funds to its founders.
Collider Ventures Leads a $2.7M Strategic Contribution to Nexus Mutual Blockchain Based Insurance Alternative Products
Collider Ventures announced a joint investment of $2.7 million in DeFi insurance platform Nexus Mutual with other investors. Investors also include some institutional blockchain and digital asset investors, including 1Confirmation, Blockchain Capital, Version One, Dialectic and several angel investors.
KPMG, BitGo, Coin Metrics Launch New Offering to Drive Institutional Adoption
According to Coindesk, KPMG, BitGo, and Coin Metrics announced Thursday a combined offering that seeks to manage and monitor risks on public blockchain networks.