Weekly report for 03-08 May


Crypto Market Plunges Sharply Again

 

Abstract: The market continues its recent slump over the past week. The Fed raised its benchmark interest rate by 50 basis points, which was in line with market expectations, and is expected to gradually shrink its balance sheet to $95 billion per month over the next three months. UST (algorithmic stablecoin of the Terra ecosystem) has depegged with the US Dollar, setting a crash led by the exodus of giant whales on Anchor Protocol. The crypto fear and greed index fell to 11 (“extreme fear” territory).

  • Total market value declined. The total market value of digital assets declined to around US$1.52 trillion last week. Bitcoin plummeted sharply, falling to its lowest level since July 2021 at around $30,000.
  • Most of the top 100 cryptos fell. The prices of 93 out of the top 100 cryptos fell while only 7 posted gains.
  • Exchanges registered modest changes in turnover. Last week, the total turnover on 10 exchanges tracked by our team dropped by 1.2%. Binance fell by 2.3%, whilst Bitfinex, Bitstamp and Coinbase recorded a change of +30.2%, +8.5% and -4.4% respectively.
  • Turnover of futures increased. Turnover of Bitcoin futures increased by 0.4%, while turnover of Ethereum futures increased by 10%.
  • Turnover on DEXes increased to around US$23 billion. Weekly turnover on DEXes increased by 35% as compared to last week.
  • Turnover on OpenSea decreased to around US$1.27 billion. Turnover on OpenSea decreased by 30% as compared to last week.
  • The market continues its descent, as the total market value of digital assets dropped to around US$1.52 trillion at the time of writing. In terms of market turnover, spot turnover decreased by approximately 5%, while turnover of Bitcoin futures and Ethereum futures increased by 0.4% and 10% respectively. The Fed raised its benchmark interest rate by 50 basis points; this marked the Fed’s first significant 50 basis point rate increase since 2000. The Fed is expected to start shrinking its central bank balance sheet to $95 billion per month over the three months. Fed Chairman Jerome Powell was relatively dovish, saying that a 75 basis point rate hike was not worth considering and that a 50 basis point hike could be imposed over the next few meetings. In crypto-land, Polkadot officially launched its inter-chain messaging format XCM, which can already be used for communication between parachains. The Terra eco-stablecoin UST decoupled from the US Dollar, once falling below 0.7, and the price of LUNA tumbled to around $30 at the time of writing. Panic sentiments were further intensified by a mass exodus of giant whales on Anchor Protocol causing a series of chain reactions. Mainstream altcoins performed relatively weak, as the Fear and Greed Index reached 11; the market is expected to hover at a low level under macro environment factors over the coming weeks.

Digital Currency Market Capitalization Change:

Source: HashKey Capital Research, Coin360

 

Bitcoin Futures Daily Trading Volume:

 

Source: HashKey Capital Research, The Block

 

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