RESEARCH
BEQUANT Crypto&Coffee
Bitcoin rallied after Elon Musk said that Bitcoin is 'on the verge of getting broad acceptance' by traditional finance people, but gradually the rally fizzled away. Although the market remained broadly bid throughout the session. Even the troubled XRP was able to stage a strong rally but given the thinned liquidity conditions in the wake of mass delisting by exchanges following the suit with the SEC means that the asset may be susceptible to untoward trading practices that are not at all related to XRP. Still, the open interest (OI) on XRP rose to a new high as a result. Despite the aforementioned support by the legendary Elon Musk, Bitcoin's OI was unable to gain much traction and instead it was Ethereum and other alts that continued to benefit. The OI on Cardano is within a touching distance off $250 million, with SUSHI's and UNI's OI is also oscillating around $100 million mark. Very significant advances in traded profiles given the low OI of around $20 million in November last year. Given the ongoing focus on retail inspired short squeeze across equity markets and more recently silver, CNBC wrote “Yes, bitcoin could be the new GameStop”. In the article, it was highlighted that data from crypto news and analysis company The Block shows that hedge funds are short bitcoin by more than $1 billion. That term “shorting” means that traders and hedge funds are betting that the price of bitcoin will go down. Those short positions ramped up starting in October 2020, just as bitcoin's latest rally began to take hold. Meanwhile, individual investors are still buying into bitcoin, among other cryptocurrencies, as they bet that the price will go up. However, the aforementioned hypothesis is flawed because the shorting by professional money managers is done on the futures, not spot and all with the intention of capturing basis which continues to fluctuate wildly and offers plenty of opportunity to capture yield. Elon and Bitcoin may have dominated the headlines but it was DeFi that stole the show yet again. So much that the total value locked rose to above $27 billion and the likes of Sushiswap (SUSHI) rallied 30%, while Uniswap (UNI) also gained over 10% in the process. Nevertheless, even with the latest surge higher the two protocols continued to trade at relatively low price multiples compared to their peers. For example, Uniswap is trading at 18x based on price/sales ratio, with annualised revenue of over $1 billion. At the same time, Sushiswap is trading at a mere 7x, with an annualised revenue of $ 430 million. With that in mind, Sushiswap revealed some details over the upcoming MISO release. As a reminder, MISO is a Minimal Initial Sushi Offering, akin to token launchpad with crowdsale options, presale price discovery, token vaults and SUSHI holders are expected to benefit from the fees generated. Other updates that market participants are still waiting for include BentoBox, MIRIN, Deriswap, cross chain and Polkadot. Elsewhere, according to The Block citing sources, exchange operator Coinbase has chosen Nasdaq as the venue for its direct listing. The firm's plan to tap the public markets in the coming weeks follows a secondary offering on Nasdaq Private Market. According to one source, shares on Nasdaq Private Market were matched at a price of $200. With 254 million shares outstanding, that's an implied valuation of approximately $50 billion for the firm.
