Bitcoin Hits 3-Week Low, Hangs Near $21.7K Amid Ongoing Inflation Concerns
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Good morning. Here’s what happens:
Prices: Bitcoin fell to its lowest level in more than three weeks. It regained some ground to trade at around $21.7K.
Insight: Conic Finance aims to offer its users returns as high as 21% across three separate omnipools, diversifying exposure across the Curve ecosystem. But can it deliver?
Prices
CoinDesk Market Index (CMI)
1013
-25.2 ▼ 2.4%
Bitcoin (BTC)
$21,734
−496.0 ▼ 2.2%
Ethereum (ETH)
$1536
−30.7 ▼ 2.0%
S&P 500
3,992.01
+5.6 ▲ 0.1%
Gold
$1819
+5.3 ▲ 0.3%
Nikkei 225
28,444.19
+135.0 ▲ 0.5%
BTC/ETH prices per CoinDesk indices, as of 07:00 ET (11:00 UTC)
Bitcoin falls to its lowest level in almost a month.
Good morning, Asia. Here’s what’s happening in the markets.
US Federal Reserve Chairman Jerome Powell spoke tough for the second day in a row. Banking giant JPMorgan ended its relationship with crypto exchange Gemini, as CoinDesk’s Ian Allison first reported. Crypto-friendly bank Silvergate will close operations.
Bitcoin absorbed it all and then plummeted to its lowest level in nearly a month. The largest cryptocurrency by market capitalization recently traded at around $21,750, down more than 2% in the past 24 hours. BTC dipped below $21,600 at one point after largely falling above $22,000 for much of this month. Investors have struggled with worrisome jobs and price data that have prompted Powell and the Fed governors to revive their monetary aggressiveness as an inflation prescription.
Prospects for a 50 basis point (bps) rate hike are now around 70% after strongly favoring a more dovish 25 bps hike in the previous weeks.
“After celebrating the green shoots of disinflation over the past two months, the Federal Reserve has had to restart its hawkish positioning by talking tough about rate hikes,” Quinn Thompson, head of growth and capital markets at blockchain-powered capital markets platform Maple, wrote to CoinDesk in an e -mail. “I think it’s interesting to note that they showed that their hikes had a significant impact on inflation, and then it became clear that inflation has proven to be more stubborn than expected. A 50 basis point rate hike is basically inevitable now. “
Thompson added that “barring a break in the system, such as a credit event of some kind, it seems increasingly likely that there will be no rate cut until next year.”
Ether fared similarly to bitcoin and was also down around 2% to change hands just above $1,530. This level was well off the late February highs above $1,700. Other major cryptos were mostly in the red with SOL, the token of the Solana blockchain up more than 9% and APT, the native cryptocurrency of tier 1 blockchain Aptos Labs down over 6%. The CoinDesk Market Index, a measure of the performance of the broader crypto market, fell nearly 3%.
The Nikkei rose around 0.5% as trade in Asian stock markets opened. US indexes were flat with the tech-heavy Nasdaq and the S&P 500, which has a heavy technology component, climbing slightly, but the Dow Jones Industrial Average (DJIA) fell a couple of ticks of a percentage point.
IMaple’s Thompson was wary of cryptos’ outlook amid the Fed’s seemingly hawkish turn, which has historically sent prices of crypto and other riskier assets tumbling.
“I suspect we may retest the lows reached last year as a result of rising interest rates, but also due to the Fed’s ongoing monetary tightening regime draining liquidity from the markets,” he wrote. “Much of this tight monetary policy is being priced into fixed income markets. But risk assets have not yet priced in the potential for downside spillovers, and this could spell trouble for equities and crypto.”
Biggest winners
Biggest losers
Insight
Conic Finance’s big promise, but will it deliver?
An earlier version of this story appeared separately on CoinDesk’s website.
A new tool to capture returns from prominent stablecoin exchange Curve has attracted over $60 million from depositors just over a week after launching.
Conic Finance, which went live on March 1, allows users to deposit tokens into their omnipools, a new product that diversifies exposure across the Curve ecosystem and increases rewards.
Each omnipool allocates the liquidity of a single asset to different curve pools. All curve liquidity provider (LP) tokens are staked on Convex to increase curve (CRV) reward revenue. Convex (CNX), another curve ecosystem token, is also rewarded, as is conic (CNC), Conic’s original token.
Conic users can earn up to 21% annual returns on the three omnipools for dai (DAI), frax (FRAX) and USD coin (USDC). The USDC pool has attracted over $50 million in liquidity alone, as Conic currently provides one of the highest available returns in the crypto market for USDC. Deposits of frax and dai are significantly lower at $7 million and $5 million respectively.
Holders can lock their CNC tokens for vlCNC to participate in Conic governance and directly control how liquidity is allocated across Curve pools by participating in Conic’s Liquidity Allocation Votes (LAV) – which determine the proportion of an omnipool’s liquidity as a Curve -pool can receive.
In the coming weeks, Conic’s demand among traders for its yield-generating products may eventually generate value for its own CNC token.
As such, CNC tokens are currently trading at $8, losing 4% in the last 24 hours with a market cap of $32 million.
To be sure, not all DeFit watchers fully embrace Conic’s approach. Colin Johnson, CEO and co-founder of tokenized art investment platform Freeport, called Conic “an interesting new avenue to access returns within the Curve ecosystem,” yet cautiously added that “we’ve seen historically what happens with promised returns of 20 % or more (Terra).”
“Either they dissipate quickly — which is most likely to happen here — or they build up an amount of stress that the system can’t handle, and we have an implosion,” Johnson wrote. “Users should always beware when the returns are delivered in a token that represents the very system they are interacting with. When that token falls out of favor, the price tends to plummet.”
Why use Conic?
Curve uses smart contracts to provide an efficient way to exchange stablecoins while maintaining low fees and low slippage, according to developer documents. Depositors on Curve earn annual returns of up to 4% from one of the many pools on the platform, which lock up over $5 billion worth of Ethereum-based tokens on the platform.
Curve tokens (CRV) are issued as return rewards to liquidity providers on Curve Finance, and can be converted to vote depository CRV (veCRV). By holding veCRV, users can participate in platform management, earn higher rewards and fees, and receive airdrops.
The tokens are time-locked, meaning users are encouraged to lock the CRV for a long time to receive more veCRV and platform rewards. However, this mechanism effectively locks up liquidity, creating opportunity costs for users.
This is where protocols like Conic come into play, allowing users to gain exposure to, or provide liquidity to, the Curve ecosystem to be rewarded without having to lock up tokens for long periods of time by staking directly on Curve.
Important events.
Crypto Expo Dubai 2023
09:30 HKT/SGT(1:30 UTC) China’s consumer price index (y/y)
07:30 HKT/SGT (23:30 UTC) Japan’s total household consumption (year/year)
CoinDesk TV
In case you missed it, here’s the latest episode of “First Mover” on CoinDesk TV:
Bitcoin Touches Three-Week Low After Powell’s Hawkish Testimony; NEAR Foundation CEO at Web3 Outlook
Bitcoin fell to a three-week low after US Federal Reserve Chairman Jerome Powell’s hawkish testimony to Congress spurred traders to price a higher “terminal rate.” Digital Economy Initiative Advisory Council member Martha Reyes weighed in. In addition, CEO of the NEAR Foundation, Marieke Flament, discussed her views on Web3 and female leadership in the crypto space on International Women’s Day. Grayscale Investments Chief Legal Officer Craig Salm, MenaPay CEO Çağla Gül Şenkardeş and WomenInDeFi Brand Strategist Umeh Chinonye also joined the conversation. Grayscale and CoinDesk are both owned by Digital Currency Group (DCG).
Headings
JPMorgan Cuts Ties With Crypto Exchange Gemini, Source: Coinbase said its banking relationship with JPMorgan remains intact.
Alpha Sigma, Transform Ventures Partner on New $100M Crypto-Focused Fund: The firms create a holding company called Alpha Transform Holdings, Inc.
Crypto long and short: why layer 2 protocols matter: They are the overflow spaces for the bustling Bitcoin and Ethereum ecosystems.
Coinbase Starts “Wallet as a Service” Companies Can Build into Their Own Apps: The US crypto exchange says the new service can help companies “bring the next hundred million customers into Web3 through a seamless wallet onboarding experience.”
Gitcoin’s Owocki says crypto can regenerate the world. Just don’t call him Starry-Eyed: A programmer by training, Kevin Owocki’s approach to securities law is based not on any formal legal training, but on crypto-optimism, evolutionary science, economics and legal theory, focusing on the principal-agent problem.
