Today marks a groundbreaking step for decentralized finance (DeFi) on the Solana blockchain as Symmetry launches its highly anticipated User Interface at https://app.symmetry.fi/.
The platform aims to revolutionize the way users manage their portfolios through crypto indices and actively managed funds by providing an all-in-one solution for creating, managing, buying, and selling funds.
Symmetry is a decentralized Crypto Indices and Actively Managed Funds infrastructure layer built on Solana, powered by the Symmetry Engine. This innovative on-chain asset management infrastructure covers everything from on-chain funds, indices, and multi-token liquidity pools, to liquidity routing between indices and decentralized exchange (DEX) aggregators, and public APIs for other DeFi projects to integrate Symmetry products seamlessly.
The platform offers a wide range of opportunities for both fund managers and users. Managers can create and manage funds with multiple tokens that reweigh, rebalance, and refilter according to custom rules defined by the manager, or create a trustless Crypto Index with predefined rules. Users can create their own actively managed funds or indices and buy and sell funds created by other users or protocols.
Symmetry’s liquidity provision feature allows indices and actively managed funds to act as liquidity providers on DeFi aggregators such as PRISM and Jupiter when their token weights deviate from the target weights. This groundbreaking feature not only enables funds to rebalance at zero cost but also generates fees from aggregator users for fund managers and holders, a significant departure from traditional approaches where indices and funds typically pay fees on exchanges to rebalance.
The Symmetry Engine relies on Pyth, a reliable price oracle, to determine true prices for each asset utilized in Symmetry products. This is crucial for funds to accurately determine fund values, rebalancing triggers, and buy/sell values for users.
Example use-cases for Symmetry include decentralized index fund apps, decentralized fund management apps, treasury management tools, retail onboarding apps, copy-trading apps, and investing apps. The platform envisions a future where anyone can create an index fund, manage on-chain funds and portfolio strategies, convert wallet portfolios to funds, and integrate index or actively managed fund tokens for trading.
With the launch of the Symmetry User Interface, the world of decentralized finance on the Solana blockchain is poised to experience a paradigm shift in how users interact with and manage their crypto portfolios. As the platform continues to roll out its full suite of features to all users, the future of Solana DeFi looks brighter than ever.
Contact
PR S. Martin Symmetry operations@symmetry.fi Source
On Friday, WisdomTree, a financial institution with over $76 billion in assets under management, announced it had created four cryptocurrency indices in the United States and Europe to provide diversified portfolio exposure to investors. The move comes in collaboration with Ritholtz Wealth Management, OnRamp, and Gemini.
In the U.S., WisdomTree will launch the RWM WisdomTree Crypto Index. And in Europe, WisdomTree is advancing the WisdomTree Crypto Mega Cap Equal Weight (MEGA), WisdomTree Crypto Market (BLOC), and WisdomTree Crypto Altcoins (WALT) indices.
The RWM WisdomTree Crypto Index will focus on crypto assets, layer one networks, layer two protocols, oracle networks, and decentralized finance protocols, among others. But it will have a heavy emphasis on layer one networks, with 64% of the fund’s assets going into this category.
Meanwhile, MEGA will act as an equal weight index for large-cap cryptocurrencies like Bitcoin (BTC) and Ether (ETH). As for BLOC, it will track the performance of the top 70% of cryptos by market cap. Lastly, WALT is another equally-weighted index that seeks to track the performance of altcoins, and will not hold either BTC or ETH.
Related: Grayscale tells SEC ‘no basis’ to approve Bitcoin futures ETFs and not spot ETFs
Alexis Marinof, head of European operations at WisdomTree, issued the following statement with regards to the development:
As interest in crypto assets remains high and becomes a bigger focus for investors, we will continue investing in our platform and capabilities to support investors in this fast-moving market.
WisdomTree’s application to list a Bitcoin spot ETF in the United States was rejected earlier this week after the Securities and Exchange Commission determined that the proposed fund failed to meet various regulatory requirements, including those found under the Exchange Act. However, the asset manager succeeded in listing several exchange-traded products in Europe.
The S&P Dow Jones has announced this week the addition of five new crypto indices, including an index that tracks over 240 coins. The indices join legacy financial indicators that have been paramount in the traditional markets, such as the S&P 500 and the Dow Jones Industrial Average.
Fabulous Five
The focal point of the five new indices is the S&P Cryptocurrency Broad Market Digital Index (BDM). This index will seek to provide a broad snapshot of the crypto market, and is the index tracking a hefty 240 coins at launch. At present time, there are approximately 275 cryptocurrencies with a market cap great than $100MM. However, the S&P Dow Jones has not disclosed if market cap will dictate selection criteria, at least for the BDM index.
The S&P Dow Jones only first expressed their intent to track crypto prices as recently as December 2020, and debuted Bitcoin and Ethereum price tracking indices just a couple months ago.
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The remaining four indices are BDM derivatives that include the following:
Cryptocurrency LargeCap Index: A BDM subset that hones in on select coins with the largest market caps.
Cryptocurrency BDM Ex-MegaCap Index: A BDM subset that excludes bitcoin and ethereum.
Cryptocurrency BDM Ex-LargeCap Index: A BDM subset that excludes that aforementioned crypto LargeCap Index.
Cryptocurrency BDM LargeCap Ex-MegaCap Index: A BDM subset that includes the aforementioned LargeCap Index, and excludes the already established MegaCap Index.
The indices join the ranks of early digital asset benchmarks already established by S&P Dow Jones, including the S&P Bitcoin Index, S&P Ethereum Index, and S&P Cryptocurrency MegaCap Index.
Related Reading | Bitcoin Trading Volume Plunges To Lowest Level Since 2020
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The What, How & Why
The indices will pull pricing data from their already-established cryptocurrency partner Lukka, an enterprise-grade crypto software and data provider. Increasing indices around crypto reflect a clear growth in consumer demand that the S&P Dow Jones is now looking to address. “The market for cryptocurrency assets continues to grow and with that, transparent benchmarking and index-based solutions based on crypto and blockchain assets are more essential than ever,” according to the S&P Dow Jones press release.
Global Head of Innovation and Strategy at S&P Dow Jones Indices Peter Roffman stated in the release that “for more than a century, our indices have offered insight into how the markets are performing. Now… we’re providing that answer to cryptocurrency investors,” adding that the indices “gives one of the broadest snapshots yet of this rapidly growing asset class with the ability to slice and dice by market cap. We’re excited to bring this significant level of additional transparency to the cryptocurrency market.”
Despite a healthy pullback in recent months, the broad market growth of crypto at large is clearly realized by the S&P Dow Jones Indices. | Source: CRYPTOCAP-TOTAL on TradingView.com
Related Reading | Central Bank Balance Sheet: Bitcoin’s Most Bullish Chart Ever
Featured image from Pixabay, Charts from TradingView.com
As retail interest in DeFi grows, solutions like indices offer easy passive portfolio management opportunities.
The index space is highly competitive, with DeFi Pulse Index taking the large majority of the market capitalization.
The project’s upcoming release will turn all underlying tokens in the indices into yield-generating assets.
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Crypto, and DeFi in particular, can be tedious work to follow. By facilitating investment in specific sectors through indices, Indexed Finance creates an enticing financial product that removes much of the hassle of micromanaging a portfolio.
What Is Indexed?
Not dissimilar to a traditional index fund, Indexed offers passive portfolio management strategies that allow for easy investment in broad sectors of the crypto market.
In traditional finance, indices are an extremely popular product. There are currently5,000 U.S. indicesavailable to trade on the stock market. They allow investors to increase their exposure to particular market sectors while softening any sudden downward price movements from a single investment. These indices can represent a country’s largest companies, the key players in a certain sector (theXLVfor the health care market, for example), or even a wider selection of consistently well-performing companies like the Dow Jones Industrial Average. Indices play a key role in analyzing the health of a sector and facilitating investments in a broader market.
Indices reduce the amount of research necessary to gain broad exposure to the market too. Following the development of various projects is often a full-time job and many investors enjoy the reduced stress of not having to micromanage their funds. In the world of crypto, this strategy also reduces the cost of gas fees. Instead of manually trading and rebalancing your portfolio, an index maintains its allocations automatically. Over the long run, these savings can be significant given the cost of using Ethereum.
Indices also reduce volatility if one part of the index dramatically falls. This is more common in crypto than in traditional finance; DeFi, in particular, is vulnerable to any number ofhacksand smart contract bugs, which has led individual tokens to drastically losing their value.
What Indexed is offering, however, is more than a normal index fund. Indexed is built on top ofBalancer liquidity pools. Balancer has the unique advantage of providing liquidity pools that can accommodate more than two assets and assign each asset to a particular weight in the pool.
This provides two advantages for Indexed. First, the pools automatically rebalance themselves as they provide arbitrage opportunities when individual tokens exceed their targeted weight.
Second, the indices charge a certain fee when users swap in and out of them, which is redistributed to the pool. In exchange for the underlying tokens, users receive one token representing their stake in the pool. This is similar to how a Uniswap LP token represents a share in a pool with two tokens; an index token represents a share in a pool with a basket of tokens.
Indexed users can mint pool tokens or burn them if the pool token becomes more valuable than the underlying assets. Source:Indexed.
Traditional indices function through rebalancing. If one of the assets in the index performs well, some of it is sold for the lesser-performing ones to keep the preferred composition.
Instead of letting arbitrageurs exploit opportunities to mint and burn the pool token in exchange for the underlying tokens, Indexed doesn’t need to rebalance the indices to their target weight themselves and save on gas fees. By charging a small burn fee, they also redistribute part of the arbitrage profit to their users.
IntroducingThe Indexed Finance Indices
When Indexed launched in December 2020, it did so with two indices: DEFI5 and CC10.
The first is a pool consisting of five DeFi bluechip tokens, including Uniswap, Compound, Curve, Synthetix, and Aave. The second index is focused on various well-known large-cap cryptocurrencies chosen by the founders.
These two indices saw incredible growth during the first quarter of 2021, with solid returns across the board.
Performance of the current indices on May 5. Source:Indexed.
Since then, three more indices have launched, each with its niche and value proposition.
The Oracle Top 5 Index is focused on oracles, with a heavy allocation in Chainlink. It is currently the least popular index in terms of market cap, but it has enjoyed growth.
The NFT Platform Index is a one-stop investment into many different NFT platforms, governance tokens, games, and virtual land. This index is a clever way to invest in the fast-growing sector of non-fungible tokens without putting in the hours of research into different existing platforms and projects.
While the potential of NFTs is clear to many, the current state of the market is hard to follow, and the popularity of different platforms may come and go. The NFT index comprises ten different tokens from projects such as Enjin, Axie Infinity, Decentraland, Rarible, or NFTX. Even if one of these projects were to fail, the overall price of the index would be less affected.
Perhaps the most exciting index is DEGEN.This indexfeatures small- to mid-sized DeFi tokens that the Indexed community considered to have large upside potential. The idea for the index was put forward by a well-known Twitter user calledredphonecryptoon the promise of delivering an easy option for crypto investors with much higher risk tolerance, sometimes called “Degens.”
Sers, what a strange, wicked, beautiful journey crypto can take us mortals on
It appears we’ll soon have a tradeable $DEGEN token
It will = a basket of 10 of the fastest-growing, most promising small cap tokens in crypto
& it will run on https://t.co/Icqdr0xGKn $NDX
More 👇
— redphonecrypto (@redphonecrypto) February 7, 2021
Some of the tokens in DEGEN are much more established (RUNE, ALPHA, RSR, REN, etc…) and often have vocal communities, making the DEGEN index a good move for Indexed’s broad appeal.
The current composition of the DEGEN index. Composition is subject to change as some of these tokens grow their market cap. Source:Indexed.
Broad appeal is the name of the game for Indexed. The most significant hurdle for the protocol isn’t internal but external. The competition in the index space is fierce, and Indexed has some well-established competitors in front of them.
On Apr. 28, Indexed has also released their484 Fundin cooperation with0x_b1, one of the largest active DeFi wallets operating with more than half a billion dollars.
Who’s Their Competition?
The biggest challenge ahead of Indexed is twofold. First, they have to provide a better financial product than their competitors that maximizes returns. Second: investors have to know about it.
Indices are all about comfort. Investors want to know they’re exposed to the market with little to no portfolio management needed. In turn, they accept that they might not catch every move and miss out on some portfolio optimization they could have done with more research. Index investors choose these products to avoid the headache but still enjoy high returns.
As explained above, by charging a fee on arbitrage opportunities, Indexed’s Balancer pool system generates a small yield from their indices. It brings their investors slightly higher returns than their competition. Still, this advantage may not be enough to entice new investors.
Current performance in USD of Indexed’s DEFI5 and CC10 against competitors DPI and ETH. Source:Indexed’s medium.
Their main competitor is the DeFi Pulse Index (DPI) from IndexCoop. Currently, DPI boasts a $140 million market cap while the total value locked in all of Indexed Finance stands at $28 million. While holders of DEFI5 have enjoyed a few additional percentages of profit against DPI, DPI’s prior arrival to the market has given it the necessary boost to attract more investors.
Additionally, one of Indexed’s most potent value propositions is currently being threatened. By holding DPI, investors were rewarded for the appreciation of their underlying assets, while Indexed also rewarded investors with swap fees from Balancer pools. However, the DeFi index scene was recentlytaken by stormby BasketDAO’s bDPI, which replicates DPI only with interest-bearing tokens. Very quickly, users migrated more than $40 million worth of DPI to BasketDAO’s protocol to enjoy the additional yield.
This isn’t overly worrying to Indexed’s team either. In an interview with Crypto Briefing, team memberEmanuel Coencommented: “We’ll see if BasketDAO can differentiate themselves over the long-term. DPI’s big strength is not the portfolio structure they use but their marketing skills and brand. This can’t be forked.”
Additionally, replacing tokens with their interest-bearing equivalents is not the most lucrative solution out there. Lending UNI tokens on Compound at the moment only returns 0.2% APY, so there are certainly better strategies out there to increase the profitability of these underlying assets.
Index Coop, the community behind DPI, reacted quickly by proposingnew waysto activate the underlying liquidity of DPI. If these were to pass, it would further incentivize people to invest in DPI. This is something that Indexed, in its current form, can’t replicate. As the funds are locked in an AMM pool, Indexed can’t use these to generate yield elsewhere.
Indexed does, however, have a few tricks up its sleeve baked into its upcoming v2 launch.
What’s in Indexed’s Future?
One of the notable strengths of the protocol lies in its flourishing community.
Perhaps more than other DeFi protocols, a community-led index provider needs active discussions and community involvement to propose new indices creatively, discuss the underlying assets those will include, and, perhaps most importantly, spread the word about these assets.
Indexed has sustained multiple critical relationships with influential members of the DeFi community. One such figure was Molly Wintermute fromHegic, who very early oninvested$100,000 in the protocol, kickstarting its early life. As previously mentioned, redphonecrypto and0x_bay, two famous crypto Twitter personalities, were behind the idea for DEGEN. And most recently, DeFi whale0x_b1reached out to Indexed to cooperate with them on an index mirroring the mysterious addresses’ investments.
Indexed acted quickly, and NDX holders arevotedon a proposal for the new index ERROR.
0xb1 🏋️ strategy. What say you @ndxfi?
— 0xb1.484 | 四八四 (@0x_b1) March 18, 2021
The new index is now released under the name 484 Fund with the ticker symbol ERROR.
However, the most exciting development for Indexed is the recent announcement of their second version and a change to the fundamental structure of their indices. To keep up with the competition now using underlying assets to generate additional fees through yield, Indexed will create a newvault-like portfolio structurewhere funds can be used to generate yield through platforms such asAave,Compound, orYearn.
With these vaults, the community will create management strategies for its new indices far more complex than the current structure. Indexed also has other projects in the works for its v2, such asUniswap v3position managers. A reworked tokenomics would also increase value accrual to NDX token holders, similar to Curve’s vesting system.
In conclusion, Indexed Finance has two critical challenges ahead of them. First, they need to continue innovating and building the most financially profitable indices on the crypto market. Second, they need to let investors know about them.
Indexed Finance’s success will be heavily dependent on their community for both of these essential tasks.
Fun ideas such as the DEGEN index not only present an appealing financial opportunity they also help Indexed expand its reach and become a larger player in the crypto space.
Disclaimer: The author held BTC, ETH, NDX, and a number of other cryptocurrencies at the time of writing. One or more members of Crypto Briefing’s management team owns HEGIC. The company (Decentral Media Inc.) owns HEGIC.
This news was brought to you by ANKR, our preferred DeFi Partner.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Ethereum’s new highs pulled the rest of the DeFi space with it, but gas fees may hamper future growth.
Bitcoin has traded sideways since hitting all-time highs last month, giving space for an alt season among various DeFi tokens.
NFTs are back on the rise with Hashmasks taking center stage. Thankfully, an NFT index has just launched capturing several popular projects in one token.
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This week’s edition of wNews dives into why Ethereum and DeFi are currently surging. More importantly, though, the space was again faced with staggering gas fees reminding newcomers that it’s a whale’s game.
Portfolio size aside, Bitcoin traded sideways this week after a rather volatile January. Data suggests that dip-buying is the current trend despite a steep correction on the cards. Still, new all-time highs are likely to arrive before that happens.
Finally, an emerging NFT index saves investors time and effort when trying to ride the digital collectibles trend. Froth nor not, this project offers exposure to some of the most popular NFT tokens in the space.
All that and more, below.
Ethereum Goes All The Way
The major headline this week was the meteoric rise of Ethereum. As ETH breached$1,600, recording a new record high for the second time this year, various DeFi projects followed closely.
Etherean moon bois took to Twitter to celebrate the “inevitable.”
ETH is less than 6% the value of gold
Room to grow I’d say
— Ryan Sean Adams – rsa.eth 🏴 (@RyanSAdams) February 4, 2021
The surge’s reasons are myriad, but Nansen founder and CEO,Alex Svanevik, cited two in particular. “Ethereum has solidified its position as the number one blockchain for decentralized finance, putting the ‘Ethereum killers’ narrative to sleep,” he told Crypto Briefing.
“There’s also strong evidence of retail inflow, which can be seen across metrics. January, for instance, had the highest amount of active Binance depositors since 2018, according to data from Nansen.”
Alongside ETH, Aave (AAVE), UMA Protocol (UMA), and SushiSwap (Sushi) also entered price discovery. The moves from these smaller tokens and their dominance in the DeFi sector suggest an entirely different kind of alt season. In 2017, for instance, tokens like Cardano (ADA), Tezos (XTZ), and Ripple (XRP) all mooned despite their lack of utility at that time.
The altcoins of yesteryear lacked clear use cases and convenient user interfaces for the here and now. DeFi tokens are much different.
Aave offers real utility in its bank-like savings and lending arrangement. UMA has created a rather sprawling design space for synthetic assets. And Sushi, well, theupgrades have been myriad,and it even boasts deeper liquidity for some pairs than its counterpart, Uniswap.
There’s also been a few important bits of news that have fueled these tokens’ growth.
Svanevik reminded that both Uniswap (UNI) and Aave wereincluded in Grayscale’s recent filingfor new trusts. This allows traditional investors to “make direct bets on the DeFi sector,” said the Nansen CEO.
Unlike the 2017 altcoin wave, users can easily measure how all of these protocols are doing this time around.Bobby Ongof CoinGecko told Crypto Briefing:
“There seems to be a rerating of DeFi projects as these projects continue to attract large whale users during this crypto bull market. Total Value Locked in USD terms on many DeFi projects has continued to increase as a function of increasing crypto prices. The Price/Sales ratio for many of these projects continues to be low and fundamentally attractive to traders.“
The rise in this batch of tokens also added fuel to the ongoing index wars happening in DeFi. The largest combatants include DeFiPulse (DPI), Indexed Finance’s DeFi Top 5 Tokens Index (DEFI5), PowerPool (PIPT), and Synthetix (sDEFI).
All indexes enjoyed double-digit gains over the past seven days, but sDEFI took the crown with a whopping 59.7% rise in the same period. In the last 24 hours, DPI leads with a 15% rise.
Whichever index investors are holding, all of them are winning big.
Index comparison of sDEFI, DEFI5, and DPI. Source:CoinGecko
Unfortunately, those looking to buy any of those tokens were left out in the cold. Soaring gas prices amid the flurry of mooning tokens made even simple token swaps extremely expensive. Ong cited this as a major threat to Ethereum as “DeFi is now only constrained to large whales who can afford to pay the high gas fees and is no longer welcoming to beginners.”
Thus, as growth mounts, so too do the barriers to entry.
In the past, high gas prices havecrushed whole businesses. This time around,some firmsare cutting over to new networks before overhead becomes dire.
Ethereum gas prices from Jan. 1, 2020, to Feb. 4, 2021. Source:Etherscan
There are very few workarounds to this issue in the immediate. Ong recommends that newcomers keep a close eye on gas prices, and make their move once it drops. Zooming out, however, moments like this make Layer-2 solutions and alternate blockchains hugely enticing.
Experiment: Write the best possible 1-tweet pitch for your “ETH killer” of choice.
– Polkadot
– Avalanche
– Solana
– Tron
– Cardano
– EOS
– NEO
– RSK
– Algorand
– Tezos
– NEAR
– Flow
– Cosmos
– DFINITY
– Hashgraph
– Binance SC
Will hide all replies except the best one for each.
— Eric Wall 🟨 (@ercwl) February 3, 2021
Optimism PBC and its Layer-2 solution are enjoying the most traction as of late, particularly in the DeFi space. Already, Synthetix, Uniswap, and Chainlink have tapped Optimism for their scaling needs.
There’s still a long road ahead, but these developments have been promising for said Ethereans.
This isn’t the only solution, of course, and Svanevik added that each solution is in a neck and neck race to onboard users. “I expect to see the L2 ecosystem flourish around Ethereum and that some of the heaviest gas consumers like Uniswap will migrate some portion of their usage there. Having said that, L2 adds another level of complexity to the Ethereum user experience, which is already quite convoluted,” he said.
Alongside these developments brews a key debate: Will Layer-2 arrive before an alternative blockchain overtakes Ethereum?
The list of competitors is long, but Ong only has his eyes on two protocols: Solana and Polkadot. He said:
“Other Layer 1 blockchains in my opinion do not have a chance at challenging Ethereum. I am expecting several Ethereum DeFi projects to also be available on Solana soon and it will be exciting to see how both Polkadot and Solana will compete against Ethereum.”
None of this has yet settled, of course.
Unfortunately, the biggest winners until a key winner emerges will be users with large portfolios. Only those who can afford the high cost of operating within Ethereum will truly enjoy the bounties of the booming DeFi space.
Market Action: Bitcoin (BTC)
Elon Musk changed his Twitter bio to “#Bitcoin” early morning Friday last week.
Endorsementfrom the world’s richest man caused a major upswing in the price of over 15% to the weekly high of $38,600. Besides Musk’s shout out, BTC’s recent price action was also due to a massive$3.5 billion options expiration.
Bitcoin has continued to trade in a horizontal range between $38,800 and $29,013. The mid-line of the range at $33,500 is acting as a crucial resistance and support level.
Bitcoin price chart. Source:Trading View
The weekly high of $38,600 and theall-time high of $42,000are the most crucial Bitcoin resistance levels.
The on-chain flow of old coins versus daily transaction volume suggests that Bitcoin has averted large-scale profit bookings from early investors.
The dormancy flow, which measures the ratio of old coins moved to the daily on-chain volume, reached the overbought threshold early in January. The metric has been useful in identifying generational tops and bottoms in BTC price.
The graph took a negative turn at the resistance as profit booking slowed.
Bitcoin dormancy flow. Source:Glassnode
Currently, it suggests that Bitcoin may undergo a correction similar to 2019 when BTC price dropped from $13,800 to lows of $7,000—a 50% correction.
The derivatives market dominates Bitcoin trading, specifically longs. This is another worrying signal for the market. The open interest for Bitcoin futures, combined at regulated and non-regulated exchanges, is nearing its peak of $13.1 billion. Currently, the open interest is$12.2 billion.
The momentum of spot buys at global platforms like PayPal, Cash App, andthe institutional addition of BTCmust continue to avoid a deeper correction. According to lead Bitcoin analyst atSIMETRI,Nathan Batchelor, this appears to be precisely what is happening. Batchelor told Crypto Briefing:
“On-chain data surrounding BTC looks very solid at the moment. Dips are being bought up aggressively and the technicals for Bitcoin look to have improved considerably over the recent days. I would not be surprised to see $42,000 taken out before a meaningful pullback occurs.”
Market Action: Ethereum (ETH)
Ethereum’s native cryptocurrency, ETH, broke above the bullish ascending triangle pattern, targeting a price of $2,100.
ETH/USD daily price chart. Source:Trading View
The support levels for correction are at $1,400, $1,200, and $1,050.
The number two cryptocurrency has performed better than Bitcoin since the correction from all-time highs.
Crazy thought, but you would’ve made more selling $BTC to $ETH than btc to usd at the local 41k top.
Crypto/crypto if you want to play cycles.
Crypto/fiat up only.
— Su Zhu (@zhusu) February 2, 2021
ETH gained 133% from the year’s start, reaching a peak of $1,700. In comparison, Bitcoin surged 45% in the first week of January and has stalled below since.
BTC/USD and ETH/USD price chart. Source:Trading View
Ethereum’s use for DeFi has caused a surge in the network’s fees. The median gas price for Ethereum transactions is225 Gwei, more than $100 at press time.
While the above trend may cause the retail DeFi crowd to look for alternative platforms, Ethereum’s median transaction volume of $1,050 indicates that it is still the preferred network among high-volume investors.
In other news, futures contracts for Ethereum willgo live on CMEon Monday, allowing American traditional finance investors to bet on Ethereum.
Many see the CME debut as a clear top for ETH, much like BTC in 2017. Still, some believe otherwise.
I don’t expect a crash after the launch, as it happened in 2017. For two reasons. First, the market is now more mature, the macro is different, and there are different players involved. Second, $ETH remains a high beta asset. $BTC determines the market direction, $ETH follows.
— Alex Krüger (@krugermacro) February 3, 2021
The price action of the number one and two cryptocurrencies in the coming week will help set the tone for the rest of the quarter. Batchelor of SIMETRI reported:
“Ethereum does appear to be targeting $2,400 after bulls triggered a massive cup and handle pattern on the higher time frames. Only a series of daily price closes under the $1,400 level would cause technical traders to question the validity of the ongoing breakout.”
Crypto To-Do List: Invest in an NFT index fund
For those who’ve been following the crypto space closely, you’re probably already aware of at least some of what’s happening in the NFT market.
Celebrities likeLogan Paul,Soulja Boy, andMark Cubanhave now begun experimenting with on-chain digital collectibles—and that’s in the last few days alone.
Before that, the industry saw Carl Coxannouncethat he would be tokenizing his music on Ethereum, Rick and Morty’s creatordropped a collection, and Beepleraiseda record-breaking $3.5 million from his “Everydays” collection.
Sorarehastappedsome of the world’s best soccer players for its fantasy game as well. They’ll be available as tradable NFTs. These are just a few recent examples of the NFT craze. These digital artworks have long played an ancillary role in the Ethereum ecosystem.
Firstly, social status was determined byCryptoPunks, and now people are changing their Twitter avatars to match theirHashmasks.
Whatever one may think of this corner of crypto—overhyped, overpriced, groundbreaking, the future of art, or maybe a combination of all of these—it can be overwhelming to keep up.
Like many other areas of crypto, finding an NFT to invest in on Rarible or OpenSea is a full-time job of its own. And if investors are looking for a piece in a Nifty Gateway drop, they’d best be sure that they have a fast finger ready (the most sought-after pieces sell out instantly).
Fortunately, there’s now a way to gain exposure to non-fungible tokens without going through the hard work involved with investing in the assets themselves. It’s made possible by a new platform called NFTX.
NFTX creates ERC-20 tokens that are backed by NFTs. These tokens have different qualities to NFTs—they are fungible and composable.
The tokens are known as funds, and anyone can create one.
There are already funds available for various types of CryptoPunk, Axies, CryptoKitties, and Hashmasks.
The funds fall under two categories:
D1, which are backed 1:1 by an NFT contract.
D2, which are Balancer pools for combining D1 funds.
In a blog postintroducingthe project, NFTX said its “current mission is to become a DeFi black hole for NFT assets.”
The project launched last month and included the release of theNFTX token. Now trading at around $106.51, the token will be used to govern the protocol’s future.
Though it’s still early for NFTX, plans include adding a liquidity mining program this year.
As with any nascent crypto project, there’s no guarantee of success. But if it does achieve its goal of becoming a liquidity vacuum for all major NFT contracts. Based on the indexes that are already available now, it’s already making solid progress.
In a space where future value is so hard to determine, NFTX could be the best way of getting started.
That’s all for this week’s edition ofwNews, readers. Stay tuned for next week’s dispatch.
Disclosure: At the time of writing, some of the authors of this feature had exposure to ETH, AAVE, BTC, UNI, and POLS.
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