Last week in the news
A perfect storm are words frequently used to describe what was happening on the financial markets during the previous week. Both the equity and crypto market were traded much lower from previous levels. Major correction occurred, waiting now for dip buyers. Bitcoin is finishing week some 18% lower, Ether dropped to $2K major support.
Wave of sell-offs on financial markets pushed some of the coins to the much lower grounds. Tether has lost its peg to $1, when coin price reached 95 cents. This drop occurred soon after a significant downturn with TerraUSD stablecoin. Market was expecting that the same might happen to USDT, which is pegged to the US dollar. Though the coin swiftly returned to its pegged value, TerraUSD did not as it is pegged to the US dollar through algorithmic economic engineering. On Thursday trading Terra fell down to 23 cents, which is a drop of 70% in value of a stablecoin within one day. Terra token LUKA was halted from trading on Thursday.
Significant drop in crypto prices led to huge activations of margins on futures markets. As per some estimates more than $1.2 billion worth of positions were liquidated, with ETH futures leading the market. On the other hand, BTC`s drop below $30K attracted dip buyers on the stage. As tweeted by El Salvador's President Bukele, the country used this opportunity to add additional 500 bitcoins worth $15.5 million to the country's balance sheet. It has been also announced that the average purchase price was $30.744, while the country holds a total of 2,301 coins.
Companies related to the crypto market also had a tight week. Coinbase previously posted weaker than expected earnings for the first quarter and in combination with market sell-off, price of their shares dipped by 34% during the week. Shares of MicroStrategy were down by 45%. Grayscale Bitcoin Trust, the largest BTC fund, was down by almost 31%. On the opposite side, CEO of FTX, Sam Bankman, confirmed that this company bought a 7.6% stake in Robinhood, which increased the value of HOOD shares by 26%.
One of the largest investment companies from Japan, Nomura, announced that it has started trading bitcoin futures and options with CME Group. This move came as a competitive challenge, considering that its major rivals from the US, Goldman Sachs and JPMorgan are already offering these products to their clients.
Crypto market cap
A perfect storm are words mostly used to describe what was happening on the financial markets during the previous week. It was a painful week for long positions in both equities and cryptos. Luckily, such moves are not so frequent, but from the perspective of the economy, were necessary in order to return the economy back to balance and deplete incredible levels of leverage which central banks have injected into the system since 2008. Crypto market was additionally pushed to the down side through activation of more than $1.2 billion worth of derivative positions through margin calls. During the previous week crypto market capitalization dropped by 25%, losing almost $400 billion during a single week. Market cap was returned to the level from July last year. High volatility also increased daily trading volumes which were moving from $150B up to $210B on a daily basis. Total outflow from the beginning of this year dropped down to 43%, where almost $1 billion was erased from crypto market cap.
TOTAL
General market correction impacted sell-off of crypto currencies, during which 25% of market cap has been wiped from the market within a single week. Most popular coins were the ones to drive significant cash outflow from the market. Bitcoin lost $118B in market cap, which was decrease of 17% within a week. Ether was right behind BTC, with drop of $80 billion or 25%. Significant loss of $15 billion had Binance Coin which is lost of 23%. Loss above $10B also had Solana, which decreased its market cap by 39%. Stablecoin LUNA was one of the highest losers, when coin was halted from trading. On the other side, the collapse of one stablecoin pushed investors toward another stablecoin, Makler, which increased market cap by an incredible 20%. Tether decreased coins in circulation by almost 8%, which is its highest weekly drop.
Crypto futures market
It was a pretty tough week for crypto derivatives markets. Drop in prices of major crypto currencies impacted significant margin calls and liquidation of more than $1.2 billion worth of open positions. Another negative outcome of negative market sentiment was drop in prices for long term futures for both BTC and ETH. BTC futures maturing as of the end of this year were traded above $29K level, ETH futures for same maturity were traded modestly above $2K. Both of these two levels were at the same time current spot levels. This is indication that markets are not expecting some significant recovery of the crypto market at least till the end of this year. At the same time maturities in December 2023 were traded just slightly higher from current spot prices.
A perfect storm are words frequently used to describe what was happening on the financial markets during the previous week. Both the equity and crypto market were traded much lower from previous levels. Major correction occurred, waiting now for dip buyers. Bitcoin is finishing week some 18% lower, Ether dropped to $2K major support.
Wave of sell-offs on financial markets pushed some of the coins to the much lower grounds. Tether has lost its peg to $1, when coin price reached 95 cents. This drop occurred soon after a significant downturn with TerraUSD stablecoin. Market was expecting that the same might happen to USDT, which is pegged to the US dollar. Though the coin swiftly returned to its pegged value, TerraUSD did not as it is pegged to the US dollar through algorithmic economic engineering. On Thursday trading Terra fell down to 23 cents, which is a drop of 70% in value of a stablecoin within one day. Terra token LUKA was halted from trading on Thursday.
Significant drop in crypto prices led to huge activations of margins on futures markets. As per some estimates more than $1.2 billion worth of positions were liquidated, with ETH futures leading the market. On the other hand, BTC`s drop below $30K attracted dip buyers on the stage. As tweeted by El Salvador's President Bukele, the country used this opportunity to add additional 500 bitcoins worth $15.5 million to the country's balance sheet. It has been also announced that the average purchase price was $30.744, while the country holds a total of 2,301 coins.
Companies related to the crypto market also had a tight week. Coinbase previously posted weaker than expected earnings for the first quarter and in combination with market sell-off, price of their shares dipped by 34% during the week. Shares of MicroStrategy were down by 45%. Grayscale Bitcoin Trust, the largest BTC fund, was down by almost 31%. On the opposite side, CEO of FTX, Sam Bankman, confirmed that this company bought a 7.6% stake in Robinhood, which increased the value of HOOD shares by 26%.
One of the largest investment companies from Japan, Nomura, announced that it has started trading bitcoin futures and options with CME Group. This move came as a competitive challenge, considering that its major rivals from the US, Goldman Sachs and JPMorgan are already offering these products to their clients.
Crypto market cap
A perfect storm are words mostly used to describe what was happening on the financial markets during the previous week. It was a painful week for long positions in both equities and cryptos. Luckily, such moves are not so frequent, but from the perspective of the economy, were necessary in order to return the economy back to balance and deplete incredible levels of leverage which central banks have injected into the system since 2008. Crypto market was additionally pushed to the down side through activation of more than $1.2 billion worth of derivative positions through margin calls. During the previous week crypto market capitalization dropped by 25%, losing almost $400 billion during a single week. Market cap was returned to the level from July last year. High volatility also increased daily trading volumes which were moving from $150B up to $210B on a daily basis. Total outflow from the beginning of this year dropped down to 43%, where almost $1 billion was erased from crypto market cap.
TOTAL
General market correction impacted sell-off of crypto currencies, during which 25% of market cap has been wiped from the market within a single week. Most popular coins were the ones to drive significant cash outflow from the market. Bitcoin lost $118B in market cap, which was decrease of 17% within a week. Ether was right behind BTC, with drop of $80 billion or 25%. Significant loss of $15 billion had Binance Coin which is lost of 23%. Loss above $10B also had Solana, which decreased its market cap by 39%. Stablecoin LUNA was one of the highest losers, when coin was halted from trading. On the other side, the collapse of one stablecoin pushed investors toward another stablecoin, Makler, which increased market cap by an incredible 20%. Tether decreased coins in circulation by almost 8%, which is its highest weekly drop.
Crypto futures market
It was a pretty tough week for crypto derivatives markets. Drop in prices of major crypto currencies impacted significant margin calls and liquidation of more than $1.2 billion worth of open positions. Another negative outcome of negative market sentiment was drop in prices for long term futures for both BTC and ETH. BTC futures maturing as of the end of this year were traded above $29K level, ETH futures for same maturity were traded modestly above $2K. Both of these two levels were at the same time current spot levels. This is indication that markets are not expecting some significant recovery of the crypto market at least till the end of this year. At the same time maturities in December 2023 were traded just slightly higher from current spot prices.
