Market News
Weekend Movers – Optimism (OP) and Curve (CRV)
After dropping under $30,000 earlier last week, Bitcoin continues to remain around $29k. As of writing, BTC/USD has been trading at $29,393, down 3.8% in the past 30 days. However, trading volume increased 138% from a day ago to $10.4 billion on Monday.
According to market analysts, this is a season of accumulators, but there is an expectation of a drop in the near future. While the market is anticipating a rise in volatility, a possible price increase by year’s end is not out of the picture either, driven by the Blackrock spot Bitcoin ETF ruling and the Bitcoin Halving in April next year.
As Galaxy Digital’s Mike Novogratz recently said in an interview with Bloomberg, “the most important thing that happened this year in Bitcoin is Larry Fink,” who was a nonbeliever but has now turned to saying that “this is going to be a global currency.”
For now, Bitcoin continues to consolidate in the range while the majority of long-term holders remain unmoved for over six months. With long-term holders not rushing to sell their BTC holdings, it is contributing to the reduced selling pressure in the market.
While the BTC price is stuck, Bitcoin miner reserves have been increasing. According to data from CryptoQuant, the BTC miner reserve has gone up from 1.826 million on May 27 to 1.841 million on July 30.
In addition, the Bitcoin mining industry is booming in Russia. The country has already been a powerhouse in Bitcoin hash rate thanks to the availability of cheap energy and its cold climate, and ever since China’s ban in 2021, Russia’s share of global Bitcoin mining capacity has been further on the rise, making it the 3rd largest in the world.
The crypto fear and greed index also remains in the neutral zone with a score of 50/100. Meanwhile, Ether, the second-largest cryptocurrency by market value, is trading at $1,867 as it celebrates its 8th birthday.
More Favorable Environment Ahead
On the regulatory front, Coinbase CEO Brian Armstrong revealed in an interview that the US Securities and Exchange Commission (SEC) asked the largest crypto exchange in the US to halt all crypto trading except Bitcoin before suing the company.
“They came back to us, and they said . . . we believe every asset other than bitcoin is a security,” he told FT. “And, we said, well, how are you coming to that conclusion, because that’s not our interpretation of the law. And they said, we’re not going to explain it to you, you need to delist every asset other than Bitcoin.”
Such a move, according to Armstrong, would have “essentially meant the end of the crypto industry in the US.”
Meanwhile, David Duong, Coinbase’s head of institutional research, recently shared his concerns about the potential impact of macroeconomic factors on the crypto markets. During an interview, Duong pointed to the US dollar as a potential short-term challenge for crypto.
According to him, the recent rebound of the USD is a significant concern because a stronger dollar could potentially dampen the appeal of digital assets as crypto is often valued against the US dollar.
He further pointed to the aggressive stance of global central banks and the interest rate differentials to play a significant role in shaping the crypto market dynamics. With the European Central Bank (ECB) intending to hike interest rates and Japan’s move away from yield curve control, this could contribute to the USD maintaining its strength for a more extended period.
While all this might not bode well for the crypto market, Duong does anticipate a more favorable environment as we progress into the second half of 2023, by which point he expects Mt. Gox settlements to be completed and people to “start talking about the halving in earnest.”
Best Weekend Performer
While Bitcoin is struggling, some altcoins are still enjoying the gains. In the past 24 hours, FLEX coin has jumped 15% while BSV (11.2%), BCH (4%), XDC (3%), and KAS (3%) are also in the green.
This past week, however, has been good for Maker, whose 7-day gains are still at 23%, followed by XDC (19%), COMP (13%), BSV (8%), and SHIB (5%). As for the weekend, DeFi token Uniswap rallied 10%, but it wasn’t the biggest gainer, as the crown for that goes to Optimism.
Optimism (OP)
Among the top 100 cryptos, OP was the best performer, with 15% gains over the weekend.
The 43rd largest cryptocurrency with a market cap of $1.14 billion is currently trading at $1.69, up 6.5% against USD, 6.3% against ETH, and 5.5% against BTC in the past 24 hours. These price gains resulted in an increase of 160.80% in market activity that sent its 24-hour trading volume to over $222 mln.
The price of OP has been enjoying an uptrend in the first half of 2023 until April, when it started dropping in value. However, since mid-June, when it was trading around $1, prices have rebounded and are up 85.5% in 2023 so far.
OP’s price is in the green by 26.6% in the 30 days but down 2% over the past year. The token actually hit its all-time low value at $0.40 about a year ago in June 2022, while its all-time high (ATH) was at $3.22 in Feb. 2022, since which it has lost 47.7% of its value.
OP is the native token of the layer two protocol called Optimism, which is also a smart contract platform that aims to enable low-cost and near-instantaneous Ethereum transactions. The token holders form a collective, which involves a Token House that lets holders vote on projects and a Citizen House that allows holders to vote on how funds can be dispersed to projects outside its ecosystem.
The token has a total supply of 4.294 billion, out of which only 679 mln (less than 16%) is circulating in the market. OP will be seeing scheduled token unlocks until August 2027. The first 5% of its supply was distributed as an airdrop on May 31, 2022, while 14% of the token’s total supply has been reserved for future airdrops.
Founded in 2019 by Jinglan Wang, Karl Floersch, and Kevin Ho, this layer 2 uses “optimistic rollups” where batches of Ethereum transactions are collected and rolled up into a single transaction on Optimism’s own blockchain. And only a single, rolled-up transaction is sent back to the Ethereum blockchain. So far, a total of $178.5 million has been raised by the project over four rounds for its development.
Recently, Optimism recorded a higher daily transaction count than its biggest competitor Arbitrum (ARB), for the first time since January, nearing 1 million. Total value locked (TVL) on Optimism has also climbed to $895 mln, up from $775 mln in mid-June, as per DeFi Llama. Meanwhile, Token Terminal shows that revenue on Optimism has surged 155% in the past week and 169% in the past six months.
This growth is due to the launch of OpenAI CEO Sam Altman’s crypto project Worldcoin (WLD). While the project started on Polygon, on its launch, it also migrated to Optimism to explore new opportunities and leverage the capabilities offered by the platform. Besides Worldcoin, Coinbase’s newly developed chain BASE, which is built on top of the OP Stack, saw a surge of 400% in deployed contracts as their devnet went live. This further drove the ongoing growth of the Optimism blockchain.
Click here to learn all about investing in Optimism (OP).
Worst Weekend Performer
With the broad crypto market in red, many altcoins have been seeing significant drops in their prices. In the past 24 hours, the FXS token went down by 6.3%, along with the likes of SNX (5%), TRX (4.8%), AAVE (4.3%), QUANT (4%), and APE (4%).
This past week, however, has been the worst for Toncoin, whose 7-day losses are still at 16%, followed by PEPE (12.4%), ApeCoin (11.3%), GALA (10.6%), MINT (9.8%), SUI (7.3%), and GRT (6.7%). As for the weekend, Tron (TRX) dumped 7%, but it wasn’t the most by any stretch, as Curve came out as the worst affected of the lot.
Curve (CRV)
Among the top 100 cryptos, CRV was the worst performer, with 15% losses over the weekend.
With a market cap of $569 mln, CRV is the 76th largest cryptocurrency that was trading at around $0.722 when just ahead of Monday, its price dropped to $0.617. As of writing, CRV is trading at $0.638 while managing $294 mln in trading volume, representing an increase of 1,984% from a day ago.
Down 21.5% in the past two weeks, CRV is also in the red by 54.2% over the past year and has lost a whopping 95.8% of its value since its $15.37 peak in August 2020.
CRV is the native token of the stablecoin exchange Curve, which was introduced by Russian scientist Michael Egorov in 2020. Egorov also cofounded NuCypher and decentralized bank LoanCoin.
These latest losses in CRV prices came after the DEX became the victim of an exploit on July 30. North of $100 mln worth of cryptos is at risk due to a “reentrancy” bug in the programming language Vyper used to power parts of the Curve system.
Curve Finance CEO Michael Egorov announced in a Telegram channel that thirty-two million CRV tokens, equivalent to over $22 million, had been drained from the swap pool. He added that, when considering additional losses beyond the stolen tokens, the total estimated losses surpass $40 million.
The DEX operates more than 200 different pools, but only those using Vyper were affected with crvUSD contracts, and any pools on it were not affected.
Hackers have drained several stablecoin pools on the platform used for pricing and liquidity on several different DeFi services. Blockchain auditing firm BlockSec estimated in its preliminary analysis that the total losses could be above $42 million.
This move destabilized trading markets for the CRV token, which in turn, could potentially liquidate Curve founder’s $70 million borrowing position on DeFi lending protocol Aave. As such, Aave Ethereum v2 version disabled its CRV borrowing function.
Besides CRV’s value, this hack also affected Curve Finance’s TVL, which tanked 43% to $1.737 billion from $3.26 billion, according to DeFiLlama.
The exploit of Curve has also reportedly led to one of the largest ever MEV reward blocks of 584.05 Ether (ETH), noted Ethereum core developer Eric.eth.
