RESEARCH
BEQUANT Crypto&Coffee
Can Bitcoin's current performance be considered as the greatest of all time (GOAT)? The short answer is yes. Bitcoin continued its relentless surge higher and after breaching the $18,000 level. The upside temporarily stalled at $18,500, but the dip buying interest was so strong that the dip into the low $17,000 was bought-up without any hesitation. The path towards an all time high is very much in sight. Similarly, Ethereum also faltered ahead of the $500 level and dipped into the mid-$400 zone before promptly recovering. Another day and another record high open interest (OI) across the futures venues. The trend of stablecoin margined products eating into the market share of Bitcoin margined venues is also expected to gather more momentum. With that in mind, the OI on the CME finally topped the big $1bln mark. Looking at other parts of the digital asset ecosystem and the yield hungry market participants were largely unfazed by the prospect of Bitcoin heading through an all time high and instead looked carefully for opportunities to put their capital to work. As noted earlier in the week, the conclusion of the first farming round by Uniswap resulted in liquidity on the protocol to halve from its peak of $3.3bln. Some of this liquidity moved over to Sushiswap, where the total liquidity now stands at just over $1bln. The aggressive trend in locking Bitcoin on the Ethereum is showing signs of flatlining but more than anything it likely reflects the development related to Uniswap and the recent conclusion of farming. Other venues, such as Sushiswap and Bancor, which proposed a new BNT liquidity mining program, will incentivize another wave of capital to be put to work across these and other decentralised venues. It is also very easy to forget the early growth stage that DEX venues are at, the volume at its peak on DEXes rose to almost $30bln in September, at the same time the volume on centralized venues stood at $300bln. With that in mind, there is plenty of capital and securitisation tools that would allow for some of this capital to find its way into DeFi marketplace. Valuations also appear attractive, with Uniswap trading at 10x based on price/sales ratio and Sushiswap at 4x. Cointelegraph writes that Ethereum-powered decentralized applications, or DApps, have attracted more than one million active users over the last 30 days according to analytics platform DappRadar. This milestone comes as interest in decentralized finance, commonly referred to as DeFi, received a second wind, with the number of users growing by 11% in the first 11 days of November. The ten DApps, six of which describe themselves as providing “DeFi and exchange” services, represent more than $21 billion in combined trading volume over the last 30 days. Also of note, the Digital Asset Management Review found that aggregate exchange traded products (ETP) volumes have surged 53% over the past 30 days. Average daily volumes now stand at $173.5 million compared to $113 million in October. ETPs are types of securities that track underlying securities, indexes, or financial instruments, in this case Bitcoin.
