Recurring market commentary on what's happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Currently, the overall market is still consolidating and trading in a tight range. It feels to me like the market gets sold off during Asian hours and bought back during American hours. In terms of the bigger picture: bitcoin’s range between 30'000 USD and 40'000 USD is still valid, and is causing implied volatilities to tumble in the front months.
Bitcoin BTC (daily)
Ethereum / Bitcoin ETHBTC (daily)
Decentralized Finance (DeFi) is another sector that is strongly dependent on the Ethereum chain. At the beginning of the week, the DeFi sector mainly rallied on the back of AAVE Pro and COMP Treasury. Both protocols are launching institutional access to DeFi markets. AAVE Pro will use private pools to provide institutional investors with direct access to the decentralised market. These pools will be separate from existing liquidity pools on AAVE. The protocol is a decentralised lending platform that allows users to borrow, lend, and earn interest on cryptocurrencies without a third party.
DeFi Index DEFIPERP (daily)
Compound Labs, the creator of the Compound money market on Ethereum, launched Compound Treasury with the target of getting big firms to reap DeFi yields. Treasury accounts convert USD to USDC (a stablecoin) and supply them to the Compound protocol to generate secure and high yield interest. This enables institutions to access crypto interest rates while abstracting away operational complexities, including cybersecurity, compliance, private key management, fiat-to-crypto conversion, and interest rate volatility.
Apparently, Bloomberg has also launched a new DeFi index with 20 constituents, incl. AAVE, COMP, and other well-known coins, e.g. UNI and MKR being the heavyweights. Taking a look at the most popular and tradeable DeFi Index on FTX exchange, the following has changed:
- The index consisted of 11 index members a year ago and now has 25
- Only 7 coins are still left in the index calculation: 18 are completely new
- The index level has risen approx. 404.40%
- UNI, AAVE, and MKR are top tier; COMP lost in terms of relevance (weight)
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