Short-bitcoin funds saw inflows of $10 million last week compared with outflows of $12 million from long positions, according to crypto asset manager CoinShares, as upbeat U.S. economic data weakened investors’ appetite for risky assets. BTC fell below $23,000 on Saturday, its lowest point since Feb. 15. Short-bitcoin funds, which profit from a decline in the price of BTC, saw inflows last week while the price of bitcoin fell over 3% after it failed to consolidate above $25,000. “We believe this reaction reflects nervousness amongst U.S. investors prompted by the recent stronger-than-expected macro data releases, but also highlights its sensitivity to the regulatory crackdown in the U.S.,” CoinShares said in a weekly report.
Gumenyuk Dmitriy/Shutterstock
Liquid staking is the new second-largest crypto sector, overtaking decentralized lending and borrowing. Liquid staking is now a $14.1 billion sector based on the total value of assets that have been locked on blockchain networks by users in return for rewards. Decentralized lending and borrowing protocols have $13.7 billion locked, while decentralized exchanges remain the largest sector with $19.4 billion. The upcoming Shanghai software upgrade on the Ethereum blockchain is seen as the catalyst for the rise of liquid staking because it will enable stakers to withdraw the ether they have staked and accumulated rewards on for the first time.
Texas regulators have said the benefits to creditors from Binance.US’ proposed acquisition of bankrupt lender VoyagerDigital may be negligible. A court filing Friday said the benefits hinge on whether Alameda Research is successful in recovering $446 million transferred to Voyager prior to its own bankruptcy. The court document also detailed concerns over Binance’s staking program, which it said appears to constitute an illegal securities offering. Alameda Research is a trading firm affiliated with collapsed crypto exchange FTX. It was also owned by FTX founder Sam Bankman-Fried.
Market Insight: Traders Feast on Stacks
Dune Analytics
Stacks Networks’ tokens are surging as investment funds use the smart contract-focused layer 2 companion chain to the Bitcoin network to bet on BTC’s growth.
Stacks’ STX tokens have jumped 23% in the last 24 hours, continuing the upward trend which has seen them grow 50% over the last week, according to data by CoinGecko.
The momentum comes courtesy of the Ordinals protocol, which allows users to inscribe references to digital art into small transactions on the Bitcoin blockchain.
Investment manager North Rock Digital recently noted that Stacks’ focus on decentralized finance (DeFi), use of smart contracts and Bitcoin compatibility set it apart from other blockchain projects.
The chart shows bitcoin’s 30-day rolling correlation with Ethereum’s native token ether, the second-largest cryptocurrency by market value.
The correlation between the two has strengthened since mid-January, a sign of renewed focus on macroeconomic factors.
Traders’ appetite for risky assets has weakened, with U.S. Treasury yields rising in response to rates. Traders are pricing three more 25 basis point rate hikes from the Federal Reserve in March, May and June.
– Omkar Godbole
Over the past few months, CoinDesk has been developing a reward system for Consensus 2023 attendees to bring long-term value. We’ve partnered with Art Blocks Engine, TokenProof and Passage Protocol to launch the Consensus Multi-Year, Multi-Tiered NFT Ticket, coming on March 2. Learn more.
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