Day: February 2, 2021

Market Wrap: Bitcoin Rises to $35.8K, Ether Hits New High and DeFi Crosses $28B Locked

by Coindesk

Bitcoin reversed several days of sideways trading to head higher, ether broke $1,500 for the first time and DeFi’s ecosystem has a record amount of value locked in dollar terms.

  • Bitcoin (BTC) trading around $35,824 as of 21:00 UTC (4 p.m. ET). Gaining 6% over the previous 24 hours.

  • Bitcoin’s 24-hour range: $33,459-$35,824 (CoinDesk 20)

  • BTC above the 10-hour but below the 50-hour moving average on the hourly chart, a sideways signal for market technicians.

Bitcoin trading on Bitstamp since Jan. 30.

Source: TradingView

Bitcoin’s price is gaining Tuesday, going as high as $35,645 around 10:00 UTC (5 a.m. ET) before dipping somewhat.

“I think we’ll see more interest in bitcoin again if we move solidly above $35,000,” said Chris Thomas, head of digital assets for Swissquote Bank. “On the support side for bitcoin is institutional buying in the low $30,000s.”


Read More: MicroStrategy Adds to Bitcoin Trove With Another $10M Purchase

Some exhaustion recently in the bitcoin market may have been caused by speculative activity in the stock market. 

“So much attention has been on U.S. equities markets as of late, a lot of the mainstream and crypto outlets have been much less focused on driving the formation of opinions of traders and hodlers,” said John Willock, chief executive officer of crypto custody provider Tritum. 


Equities on major indexes were all up Tuesday.


In addition to the bullish sentiment keeping stocks buoyant, it should be noted the price per 1 BTC has been able to stay above $30,000 for quite a while. 

The last time bitcoin’s closing price was under $30,000, according to CoinDesk 20 data, was on New Year’s Day, when it closed at $29,333. It hasn’t looked back since.

Bitcoin’s historical price the past three months.

Source: CoinDesk 20

“More than anything else, we should all take the long-term sustained price levels above the 2017 high of $20,000 now over a month as the best possible endorsement of bitcoin being a long-term bullish asset,” added Tritum’s Willock.

Read More: Bullish Bitcoin Fundamentals Point to Renewed Price Rally Ahead

“Generally speaking, I think that the market is accepting higher prices while trying to digest the volatility,” noted Neil Van Huis, director of institutional trading at crypto liquidity provider Blockfills. 

Bitcoin’s gyrations seem to have subsided somewhat, helped by a very flat weekend into Monday. As of Feb. 1, bitcoin’s 30-day volatility has trended downward; but it is still above 100%, which is quite high. The S&P 500, by comparison, has a 30-day volatility below 20%.

Bitcoin versus S&P 500 30-day volatility the past three months.
(Shuai Hao/CoinDesk Research)

Source: CoinDesk Research, St. Louis Fed, Yahoo Finance

In the options market, traders are expecting a 62% chance of BTC over $32,000, based on their positions for February expirations. They seem to expect a 53% chance of trading over $34,000 and a 44% probability of bitcoin moving higher than $36,000, according to data collected by Skew.

Bitcoin price probabilities for February options expiration.

Source: Skew

“We have seen good signs in the option markets that participants are still valuing and pricing the market for higher in the near term,” added Blockfills’ Van Huis.

Ether hits new price zenith, crypto locked in DeFi at all-time high

Ether (ETH), the second-largest cryptocurrency by market capitalization, jumped Tuesday, trading around $1,526 and climbing 14.4% in 24 hours as of 21:00 UTC (4:00 p.m. ET) – a fresh all-time high, according to CoinDesk 20 data.

Read More: Ether Cryptocurrency Reaches Record High, Briefly Tops $1.5K 


The total value locked, or TVL, of crypto in U.S. dollar terms within decentralized finance (DeFi) is also hitting a brand-new high, going over $28 billion locked and at $28.8 billion as of press time, according to data aggregator DeFi Pulse.

Total value locked in DeFi, in dollar terms, the past three months.

Source: DeFi Pulse

The amount of ether locked in DeFI is up, at over 7.3 million ETH as of press time. The rise in the price of ether locked in DeFi doesn’t hurt.

Total ETH locked in DeFi, in dollar terms, the past three months.

Source: DeFi Pulse

Meanwhile, the amount of bitcoin locked is heading upward, with the TVL at 45,632 BTC as of press time.

Total BTC locked in DeFi the past three months.

Source: DeFi Pulse

Jun Dam, a smart-contract developer who has written code on the Ethereum and Tron platforms, noted that many decentralized exchanges have numerous pairs with ETH, and speculates traders may be selling some of their stash for DeFi tokens. “It seems like total DEX volume has increased significantly in 2021,” Dam told CoinDesk. 

“DeFi is definitely the flavor,” concurred Swissquote’s Thomas. “There’s still good value out there if you consider the possibility that more people will move to DEXs in the next 12 months [and that] arguably the DEXs are still undervalued.”

Other markets

Digital assets on the CoinDesk 20 are mostly green Tuesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):


Notable losers:


Commodities:

  • Oil was up 2.5%. Price per barrel of West Texas Intermediate crude: $54.85.

  • Gold was in the red 1.3% and at $1,835 as of press time.

  • Silver is dropping, down 8.3% and changing hands at $26.48.

Treasurys:

  • The 10-year U.S. Treasury bond yield climbed Tuesday to 1.100 and in the green by 0.47%.

The CoinDesk 20: The Assets That Matter Most to the Market




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Yearn Finance Mints YFI Tokens Worth $200 Million

by Cryptobriefing

Key Takeaways

  • Yearn Finance will mint 6,666 YFI tokens, reaching a total of 36,666 YFI tokens in total.

  • 2,222 YFI tokens will be given to the leading contributors, while 4,444 YFI tokens will be handed over to the treasury.

  • This proposal was introduced to attract contributors, retain existing talent and grow the Yearn ecosystem.


The DeFi news category was brought to you by Ampleforth, our preferred DeFi partner


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Yearn Finance has passed a proposal to increase the maximum supply of its YFI token, according to the project’s governance pages.

Yearn Finance Breaks Its Supply Cap

Yearn Finance‘s proposal to increase the maximum supply of YFI by 22% and mint 6,666 YFI has passed successfully. The vote attracted roughly 1,670 YFI in favor and 331 YFI against.

The authors of the proposal chose to increase the cap by 22% as it was the minimum viable amount to meet the project’s needs. Funds in the Yearn Treasury can be used to incentivize new contributors, fund liquidity mining and staking rewards, acquire talent, and provide new cross-protocol incentives.


Now that the proposal has passed successfully, the 6,666 YFI tokens should be minted in 3 days.

Allocation of Funds

Of the newly created funds, 2,222 YFI ($69.32 million) will be given to leading contributors. There will be a vesting period on these tokens.

Those funds will be allocated and distributed through a multi-signature setup, which will be coordinated by the members of a new Compensation Working Group.


Another 4,444 YFI, amounting to $138.64 million, will be given to the Yearn Treasury. The operations fund will hold these tokens. These tokens cannot be used to vote on governance proposals.

In Dec, 2020, Yearn Finance released a report which revealed that the protocol holds $581,000 in assets without any liabilities.

At the time of writing this author held Ethereum (ETH).



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OKEx Rolls Out Bitcoin Lightning Support for Scalable Payments

by Btcmanager

Crypto exchange giant OKEx is the latest to integrate Bitcoin (BTC) scaling solution — Lightning Network (LN) — on its platform. The move comes following a significant resurgence in LN interest especially as BTC is experiencing massive adoption across the globe.

OKEx Announces Lightning Network Support

OKEx announced the news of the LN integration via a press release issued on Tuesday (Feb. 2, 2021). According to the press statement, the actual Lightning Network deployment will happen before the end of the Summer.

For OKEx, adopting LN will boost user experience on the exchange with the accompanying faster and cheaper transactions offer by the Layer-2 (L2) Bitcoin solution. The platform also revealed that the move was in line with its efforts to contribute its quota to the advancement of BTC payment technology across the globe.

LN is the often-touted response for critics who say Bitcoin payments cannot be achieved at scale especially for microtransactions like buying coffee. The system uses a network of nodes that handle transactions off-chain before relaying same to the main blockchain.


Commenting on the planned LN integration, OKEX CEO Jay Hao remarked:

“OKEx is extremely proud to be one of the first major exchanges to integrate the Lightning Network. We are always looking for new ways of decreasing user transaction fees and times. By integrating Layer 2 payment protocols like the Lightning Network, we can offer more competitive products to our users and, at the same time, openly demonstrate our support for the Bitcoin network by increasing the number of participant nodes in the Lightning Network.”

LN is also seen as a solution to the issue of high fees that can occur during periods of network congestion. OKEx even alluded to this issue their communique bemoaning the prevalence of transaction costs as high as $10 on some occasions.

For Lightning Labs CEO Elizabeth Stark, OKEx’s LN adoption is a major milestone for Lightning Network development as the presence of such a major crypto exchange lends credence to the viability of the L2 network. According to CoinMarketCap data, OKEx is ranked 14th in terms of daily exchange volume which is north of $8 billion on both the spot and derivatives marketplaces as of the time of writing this article.

OKEx adopting LN is the latest major Lightning Network-related news to emerge in the last few weeks. As previously reported by BTCManager, U.S. payment API platform Strike partnered with Bittrex to upscale LN capabilities to over 200 countries back in January.

LN adoption sentiment has been on the rise since November following the positive price action trajectory for Bitcoin. Before then, critics had pointed to the overwhelming adoption of Bitcoin on the Ethereum (ETH) as a repudiation of the sentiments espoused by LN proponents.


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‘Buy crypto’ Google searches hit record high: The Tie

by Cointelegraph

“Buy crypto” searches on Google surged to all-time highs in January, far exceeding the previous peak of early 2018, according to cryptocurrency analytics company The Tie.

The keyword received a perfect Google Trends score of 100, which indicates maximum relative interest.

A similar spike was also observed for Ethereum, which achieved a perfect score of 100 before falling back down to a still-strong 65.

Bitcoin (BTC) searches also spiked, but remain well below the 2017 bull market high.

The Tie also shared the following chart with Cointelegraph, which highlights a sharp rise in searches for “best crypto app” and “best crypto exchange.”

“Relative search interest for popular crypto terms is at an all-time high on Google Trends,” Treyce Dahlem, research analyst at The Tie, to Cointelegraph.

He continued:

“Whether this is due to the recent price rallies that we’ve seen, speculative traders from Reddit looking to leave their mark on more assets, or even a macro shift in the way investors are searching for a hedge against inflation, one thing is clear: There is a rapidly growing interest in crypto and new investors are looking for the best way to get into the ecosystem.”

The explosive search trends seem to coincide with growing retail interest in both Ethereum and altcoins. Ether’s (ETH) price has doubled since the start of the year, having just reached a new all-time high above $1,500.

Meanwhile, the overall cryptocurrency market in January reached $1 trillion for the first time. While the initial spike was largely due to Bitcoin, altcoins have supported the trillion-dollar valuation with greater intensity over the past month. In the process, Bitcoin’s dominance rate has fallen to 62% from a high of 72% in early January.

Google search trends are sometimes correlated with movements in the overall cryptocurrency market. Higher relative searches signal growing retail awareness of digital assets, which is often a precursor to wider speculative adoption.

The Tie revealed to Cointelegraph that social media engagement surrounding crypto has also skyrocketed. On Twitter, aggregate tweet volumes devoted to cryptocurrency reached 3.3 million in January, up from 1.3 million in September 2020. January’s aggregate tweet volume was 181% higher than a year earlier.

If Google search trends are anything to go by,