RESEARCH
BEQUANT Crypto&Coffee
The relentless appetite for risk drove the market higher yet again and with that, aggregate Bitcoin futures open interest (OI) advanced to a new record high. Interestingly, the CME has lost some ground to the likes of OKEx and Binance, although the OI still remains above $1 billion. Nevertheless, with the contango structure abound, the path towards $20,000 is still intact, even if the said path is turning out to be much choppier than some would have hoped. While Bitcoin continued its bull riding proceedings, the boisterous market for Ethereum is no longer so and in fact, while Bitcoin OI is back at its highs, Ethereum’s OI has made little progress since the 2.0 beacon chain was activated in the wake of sufficient funds being deposited. At the same time, the amount of Ethereum locked across DeFi has risen to above 7mln and is at its highest level since November 24. It is worth bearing in mind that while the total number of Bitcoins locked on Ethereum network did decline since its peak, the actual notional value of Bitcoins is much higher as the assets were minted at much lower absolute levels. In turn, the total value locked across various DeFi offerings now stands at $14.95 billion.
CoinDesk recently reported citing data from Glassnode, that the amount of fees on Ethereum spent on ether deposits to centralized exchanges has fallen to less than 1%, as of Dec. 9, 2020, from around 26% in late October 2017. Most of 2020, almost all fees spent on transactions involving centralized exchanges (CEXs) were used for ether withdrawals. This also supports the notion that Bitcoin’s upside traction will not undermine DeFi based tokens and prevent further inflows. On the contrary, it appears that the recent excursions as evidenced by the sharp rise in XRP’s OI, as well as Litecoin, demonstrates that market is exploring other alpha generating opportunities and at the moment, the go to place for alpha is DeFi.
Sushiswap continued to gain further upside, breaking through the previous day’s resistance as the total value locked increased further and thus remains on track to potentially do total value locked flippening on Uniswap. As noted recently, SUSHI trades at compelling multiples when compared to its peers such as UNI and CRV.
In terms of news flow, CoinDesk reported that Ruffer Investments has allocated what is currently worth approximately 2.5% of its multi-strategies fund to Bitcoin, roughly $15 million. The fund manages roughly $620 million. “We see this as a small but potent insurance policy against the continuing devaluation of the world's major currencies” the London-based firm wrote.
Elsewhere, CoinDesk reported that Cboe Global Markets is joining the race to take cryptocurrency pricing mainstream. The exchange owner will launch a suite of tools in 2021 in a licensing partnership with execution provider CoinRoutes. Cryptocurrency indexes, historical data and real-time ticks are all on the table.
