Which Cryptocurrencies Suffered The Worse Collapse Since All-Time Highs?

Cryptocurrencies all across the market have been suffering major downside since the crash. The crypto market saw a couple of hundred billions shaved off its market cap following this. Bitcoin, Ethereum, and others have all seen their value decline significantly in the space of a week. However, in all of this, some digital assets have been hit harder than others. This report takes a look at those cryptocurrencies.

Metaverse Tokens Take A Hit

The crypto market’s recent decline has been characterized by bloody streets. As expected, bitcoin’s 52% decline from its all-time high has dragged down other digital assets with it. Ethereum, the second largest cryptocurrency by market cap, is down 54% from its own all-time high. While these cryptocurrencies have seen major downsides, others have managed even more dips since then.

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Metaverse tokens which made a big splash when social media giant Facebook announced it was rebranding to Meta and entering the metaverse space, have borne some of the largest weight from the crash. These tokens which rallied to multiple all-time highs in the last couple of months have declined as high as 68% from their all-time highs.

Chart showing cryptocurrencies by value lost

Metaverse tokens take some of the biggest hit | Source: Arcane Research

MANA, SAND, and AXIE are some of the most popular metaverse tokens and have grown a lot in price in accordance with their popularity. However, with the market crash, they have not been able to hold up well. All of these tokens have lost over 68% since they hit their all-time highs. All three met averse tokens are down, trading at $2.27, $3.27, and $52.66 respectively.

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What About Layer 1 Cryptocurrencies?

Layer 1 cryptocurrencies also took a major hit but have seen a more varied performance when compared to the metaverse tokens. Heavy hitter like Solana (SOL) and Cardano (ADA) were some of the hardest hit Layer 1 cryptocurrencies, both of them going the way of the metaverse tokens with over 68% losses since their various all-time highs. Other lesser known Layer 1 tokens have a different story though.

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FTM, ONE, ATOM, and Near, popularly referred to as the FOAN, made a splash while others were suffering. Each one of these cryptocurrencies have managed to outperform the market in a time where altcoins are dumping in response to bitcoin’s decline.

A look at decentralized finance (DeFi) paints a sadder story. This space that has brought finance products closer to the average investor saw some of the highest declines. Tokens from this space have recorded as high as 80% decline since their all-time highs.

The crypto market has managed to hold up against the crash but not before losing substantial value. In total, the crypto market is now down 50% from its all-time high. It now sits at $1.686 trillion at the time of this writing.

Crypto total market cap chart from TradingView.com

Crypto market cap crumbles to $1.6 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Bitcoin Magazine, charts from Arcane Research and TradingView.com


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Highlighting Risk: These Crypto Coins Carry The Most Leverage

Crypto leverage has been high across some particular digital assets in the space. Global open Interest in the space still sits at a reasonable point currently, but some assets boast significantly higher open interest to market cap ratios than others. Thus, this report will be examining the leverage for these assets to see which ones carry elevated leverage.

Altcoins Lead In Leverage

Bitcoin and ethereum no doubt still command the largest share of the global crypto open interest but when it comes to the percentage of their market cap which their open interest commands, it falls short when compared to other digital assets in the space.

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A good number of these altcoins have found popularity in recent months, spending less time in the spotlight than their beloved counterparts bitcoin and ethereum. However, these digital assets have shown a far higher open interest to market cap ratio than bitcoin and ethereum.

For perspective, the open interest to market cap ratio for crypto coins such as bitcoin and ethereum sit at 1.97% and 2.19% respectively. Each of these assets has an open interest at $15.5 billion and $8 billion. Other cryptocurrencies with newfound fame boast of a much higher ratio despite only boasting a small percentage of the global open interest in the crypto space.

Chart showing open interest compared to market cap of various crypto coins

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Altcoins lead open interest to market cap ratio | Source: Arcane Research

The highest of these is SUSHI, which leads the charge with a whopping 10.09% open interest to market cap ratio. The relatively new cryptocurrency leads the second-highest by almost 1.5%. YFI placed second at 8.59%, with CRV and EOS at third and fourth position with 8.30% and 5.95% respectively.

Metaverse Crypto Coins On The Come-Up

Metaverse Crypto coins had an incredible come-up in the last quarter of 2021. The boom caused by Facebook’s announcement that it was rebranding to Meta has continued on into the new year, placing the top metaverse tokens in the list for cryptocurrencies with the most elevated leverage.

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Of the 16 coins featured in an Arcane Research report showing elevated leverage in some of the most popular altcoins, four metaverse tokens made the list. SAND, MANA, AXS, and GALA all had an open interest to market cap ratio at 3.29% and higher.

AXS led the pack with a 4.44% ratio, showing the highest and MANA with the lowest. Both of these are indicative of traders using both MANA and AXS to hedge their metaverse exposure.

Layer 1 tokens were not left out of the action though as both FTM and Near recorded open interest to market cap ratios higher than that of the large cap coins. FTM’s ratio sat at 4.02%, while Near recorded a 3.15% OI to market cap ratio.

Crypto total market cap chart from TradingView.com

Crypto total market recovers above $2 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Crypto News, charts from Arcane Research and TradingView.com


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Crypto Market Cap Inches Closer To $2 Trillion, What To Expect From The Market

Crypto market inches closer to a $2 trillion market cap with each rally. The total market cap had crashed following its peak back in May when the entire market saw a crash across prices. Since then, the movement of the market cap has wavered between slight recoveries and dips. The total crypto market cap had crashed to as low as $1.2 trillion at some point in June.

The market cap has now resumed its upward climb, seeing the price of top coins post tremendous gains in the market. Getting back up to $2 trillion remains a big point for the market in general. The total crypto market cap has gained over $500 billion in the past three weeks. Culminating in the present market cap value of over $1.8 trillion.

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Price Surge Following $2 Trillion Market Cap

A price surge is sure to follow the crypto market hitting a $2 trillion market cap. The last time the total market cap hit $2 trillion saw the price of bitcoin pass $60K. With Ethereum shooting past $4,000.

Total crypto market cap chart TradingView.com

Total crypto market cap chart TradingView.com

Total market cap nears $2 trillion mark | Source: Crypto Total Market Cap from TradingView.com

Market cap numbers are calculated by multiplying the current circulating supply of an asset with the current price of that asset. The total crypto market cap is then gotten by adding up all of the market caps of the active cryptocurrencies in the market. This means that the higher the price of an asset goes, the higher the market cap of that asset.

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By extension, this leads to an increase in the total market cap. As coins continue to see increasing prices, the total market cap is going to continue to grow, which, so far, has continued a steady climb towards $2 trillion.

Crypto Getting More Valuable

As inflation rages through countries and wages, interest rates not going up to keep up with the inflation rate, individuals and institutions will continue to look for alternatives that will provide an adequate hedge against growing inflation. Investors have now turned their attention to crypto.

Coins like bitcoin have a deflationary nature which means that they are designed to become more scarce over time. With only 21 million coins programmed to ever go into circulation, bitcoin provides the perfect hedge against inflation. This has sent investors running into the crypto market to own a piece of an asset that will appreciate at a rate faster than the inflation rate.

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The new EIP-1559 release that sees ETH fees being burned instead of being rewarded to miners also puts Ethereum on a track to become deflationary. This has triggered renewed interest in ETH as one of the cryptocurrencies with the potential to help hedge against inflation over time.

Indicators continue to show that the total market cap will continue to rally following increased interest in the market. $2 trillion continues to be the value target for the market.

Featured image from CoinMarketCap, chart from TradingView.com


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U.S. Government Puts Up $10 Million Bounty In Crypto

The U.S. Department of State has put out an offer for a bounty in crypto up to the tune of $10 million in exchange for actionable information on cyberattacks that are carried out by foreign governments. This will be the first time that the U.S. government has embraced the use of cryptocurrencies to pay for services rendered.

The offer was made through the U.S. Department of State’s Rewards for Justice program, administered by the Diplomatic Security Service. Since certain cyber operations targeting United States critical infrastructure might violate the Computer Fraud and Abuse Act (FCAA), the Department of State is trying to get in front of the attacks before they occur.

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These attacks include and are not limited to transmitting extortion threats as part of ransomware attacks, intentional unauthorized access to a computer, or exceeding authorized access. In which case, the attacker would obtain information from a protected computer, which they can use to transmit a program, information, code, or command. And thus, use that access to cause damage to a protected computer.

How Will The Ransom Be Paid

The U.S. Department of State explained that they had set up a tips-reporting channel using the Dark Web (Tor-based) in order to ensure the safety and security of sources and make sure they are protected.

The U.S. Department of State’s Rewards for Justice program is also working with other agency partners in order to ensure the privacy of the information and make sure the information coming in is processed in a timely manner.

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Crypto total market cap chart on TradingView.com

Crypto total market cap chart on TradingView.com

Total crypto market cap trails $1.24T | Source: Crypto Total Market Cap on TradingView.com

To ensure this, the U.S. Department of State has also stated that the reward payments may also include payments in cryptocurrency. This is not a stretch as a good way to ensure the privacy of the reporters would be to pay in digital assets, as this will ensure that the attackers cannot track who the payments were made to.

A report from CoinDesk writes that a State Department spokesperson had confirmed that this would be the first time that the program would offer payment in crypto.

This marks the first time since its establishment in 1984 that the Rewards for Justice program has offered a reward payment in cryptocurrency.

The U.S. Government And Crypto Going Forward

The offer of possible payment in digital assets by the Rewards for Justice program shows that crypto adoption is headed in the right direction in the industry.

One problem that has been in the crypto space is the fact that governments have been so strongly against digital currencies. Crypto trading is banned in a lot of countries.

Recently, China carried out a massive crackdown on mining in the country, which happens to be the mining capital of the world, with over 70% of mining done in the country. And in the same streak, the government had ordered banks and financial institutions to stop enabling trading of crypto in the country.

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But news of El Salvador making bitcoin a legal tender and other countries showing interest in doing the same has shown that crypto adoption is becoming more and more a reality.

Politicians in the U.S. government have also started showing support for the coin. U.S. Mayor Scott Conger posted on his Twitter account that he believed that bitcoin would help to fix inflation.

And with the U.S. Department of State’s Rewards for Justice program offering payment for services in crypto, there is no doubt that the general attitude towards crypto in the government is slowly but surely changing.

Featured image from International Banker, chart from TradingView.com


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India’s central bank ‘very much in the game‘ with digital currency project

Indian authorities continue to express support for a government-backed digital currency to replace privately-issued cryptocurrencies.

According to Bloomberg, RBI governor Shaktikanta Das has expressed the central bank’s determination to create a digital rupee. According to Das, India’s central bank is “very much in the game” and wants to emulate China’s digital currency electronic project, the digital yuan.

The RBI chief also revealed that the digital rupee project is a major focus for the central bank. While there has been no official release date for the proposed CBDC, Das said that the RBI is currently finetuning the technological and procedural protocols of the sovereign digital currency system.

As part of the interview, Das maintained the RBI’s anti-crypto stance expressing concerns that cryptos are a threat to India’s financial stability.

According to Das, the RBI has reported these concerns to the authorities in government and could shape incoming crypto regulations.

As previously reported by Cointelegraph, speculation is rife of an incoming blanket ban on cryptocurrencies with crypto holders given a transition period to liquidate their virtual currency assets.

Promoters of initial public offerings have reportedly begun issuing affidavits stating that they will sell their crypto assets within 24 hours of a government ban.

Crypto stakeholders in India are once again having to make the case for their industry in the face of government opposition. Back in March 2020, the Supreme Court reversed the RBI’s earlier ban on commercial banks servicing crypto exchanges.

Earlier in February, former Coinbase chief technology officer Balaji Srinivasan panned the rumored crypto ban. According to Srinivasan, banning cryptos would be akin to prohibiting the “financial internet.”

However, government authorities are not the only anti-crypto elements in India. Recently, billionaire investor Rakesh Jhunjhunwala, dubbed the “Indian Warren Buffett” called for a cryptocurrency ban adding that the RBI should prioritize the creation of a digital rupee.