Digital Asset Intelligence Weekly | Issue 13
Markets continue to defy bad news
Key headlines this week:
More layoffs at Gemini, more failures uncovered at Binance and more pressure on regulators – none of which held Bitcoin back from chasing its best January in a decade.
Most traded coins this week
After a particularly turbulent year, investors in digital assets may be more than a little unsure of what to expect in the year ahead. At Nuant, we strive to help you navigate these choppy waters with market insights and contextualized data to support your decision making.
In our latest webinar with Blockworks last Thursday, our Chief revenue Officer Stuart Petersen joined Matt Hougan from Bitwise and Michael Hall from Nickel Digital Asset Management in a discussion about how institutions can prepare for the next growth cycle with strategic investment in their technology stack and processes.
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Nuant Research
In our latest research articles, we explore the current market conditions and expectations in 2023; and we take a look at the current state of digital asset index investing around the world.
Inside Crypto
- Binance has acknowledged a failure to maintain proper segregation between customer funds and collateral. The error affects more than US$539 million worth of tokens and has raised concerns in a market newly sensitized to the implications of such failures by the FTX disaster.
- Gemini has announced yet another round of lay-offs, this time cutting around 10% of staff. This is at least the third round since June at the company, which has been hit by the bankruptcy of Genesis, its partner in the Gemini Earn lending program. Both Genesis and Gemini have been charged with securities fraud by the SEC.
- Crypto bank Silvergate, which posted a US$1 billion loss for Q4 2022, has suspended dividends on its preferred stock in an effort to preserve capital.
Digital Assets
- Solana continues to strengthen and may be close to recovering its spot in the top 10 currencies that it lost by association with FTX.
- Bankrupt platform Celsius is working on a reorganization plan to form a new, regulated company, which its attorney says would return more money to customers than liquidation. The plan would involve issuing a new token to repay creditors. Meanwhile, a judge has given permission for certain withdrawals, and allowed Celsius to issue Flare tokens owed to customers.
- APT, the native token for NFT-focused layer-1 network Aptos, has seen a significant bull run in recent weeks since deploying on PancakeSwap. Analysts are however questioning the token’s solidity in view of its excessively high fully diluted value.
DeFi & CeFi
- Algorithmic stablecoins are the biggest losers in the current shrinking of the stablecoin sector. While total stablecoin market capitalization has fallen for the tenth consecutive month, algorithmic coins are down to just 1.7% market share, from 12.4% in April 2022.
- MakerDAO’s DAI stablecoin has bought up US$500 million of short-term bonds as it seeks yield and diversification. MakerDAO has also approved the deployment of US$100 million of USDC on DeFi platform Yearn Finance, for a predicted 2% annual yield.
Infrastructure & Regulation
- The US administration has increased pressure on Congress to regulate the crypto industry. The statement from White House officials calls for greater customer protections and strict limiting of connections between crypto and traditional finance.
Insight of the Week
Bitcoin’s sustained rally probably isn’t just a short-term trend, according to analyst Noelle Acheson. Since BTC functions as a crypto on-ramp, its market preference and the Bitcoin dominance over Altcoins right now suggests that demand is coming from institutional investors rather than volatility-seeking crypto hedge funds. That is an encouraging sign for the broader market.
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