360 Crypto Overview

0/ The crypto market rebounded strongly last week. 

Bitcoin is up by 7% since the Federal Reserve raised interest rates on March 16 and has remained comfortably above $40,000.

Altcoins also underwent a relief rally and outperformed Bitcoin. Major cryptos gained more than 10%, with Ethereum leading the pack as the network moves closer to ETH 2.0.

The VC activity in the crypto market is hot, as Katie Haun raises $1.5 billion to invest in Web 3.0 startups, Qualcomm announces a $100 million metaverse fund, and multiple startups see nine-digit funding rounds over the last week.

1/ Surprisingly, the financial markets were pleased with the hawkish tone of the US Fed as it approved the first rate hike in three years and announced to start tightening in as early as May. 

Stocks and crypto rallied, suggesting that the Fed's move was already priced in risk assets.

The subsequent commentary from the Fed on its openness to bumping up the funds rate by more than 25 basis points at future meetings was also disregarded by the crypto market as major assets continued to trade higher.

Yet, the fear zone reading of the crypto Fear and Greed index suggests that a general tense mood prevails in the market.

2/ As Bitcoin's performance signals strength, the largest altcoins see a stunning turnaround from the previous week. 

Ethereum Classic and Bitcoin Gold, the hard forks count for the largest gains. 

With almost every large and mid-cap coin is in the green from March 17 - 22, smart contract platforms and DeFi tokens end the week in a positive territory. 

AAVE's price jumped on the announcement of Aave V3, its new protocol version that enables cross-chain transactions between its versions on multiple networks. 

The newly launched ApeCoin, which was airdropped to BAYC and MAYC holders, is also among the winners.

3/ BTC has remained in the bear market territory since January (when it hit $33,000) both in terms of price and on-chain metrics (number of transactions on-chain, short-term holders, high-volume transactions). 

However, there was an upsurge in crypto futures open interest from $31 billion to more than $36 billion. Derivatives markets are pricing low implied volatility and futures premiums.

Growing leverage in the market usually leads to high market volatility (more often to the upside). Still, geopolitical and economic issues could likely ruin the bulls' ongoing party.

4/ Ether has begun a steady climb in March from a local low of $2,500, jumping above the $3,000 psychological level on March 22. 

The recent surge was primarily due to analysts playing up the highly anticipated migration from ETH 1.0 to ETH 2.0. Significant outflows from exchanges could have been another factor, which amounted to 180,000 ETH withdrawn last Friday — the highest quantity since October 2021.

ETH/BTC ratio is still ranging between 0.06-0.08 since October 2021. As Ethereum displayed strength against BTC over the last week, the ETH/BTC ratio jumped to around 0.07 again, but ETH could soon be meeting some short-term technical resistance at 0.072.

5/ Grayscale Investments announced a new fund focused on smart contract platforms on Mar. 22. 

The ”Smart Contract Platform ex Ethereum” fund will track the tokens of the blockchains outside of the Ethereum ecosystem. Yet, all assets picked by Grayscale are deep into correction territory in 2022. 

Avalanche is the best performing asset so far, losing a quarter of its market cap in the first three months of 2022. Other coins performed even worse, with ALGO and SOL prices halved in the past months. 

It will be interesting to see if the new fund would boost investor confidence and push the prices of the tracked assets up.

6/ This week, Yuga Labs, the parent company of the Bored Ape Yacht Club NFT collection, launched its own token, ApeCoin. 

Prior to the token debut, Yuga Labs acquired the CryptoPunks and Meebits’ IP rights and teased the new ‘Outside’ metaverse as the company plans to build an ecosystem around its core NFT collections. 

As a part of the token launch, 15% of the APE supply was airdropped to BAYC and MYAC NFT holders.

The ApeCoin price more than doubled on the second trading day, but part of the gains evaporated after a week of trading amid the sliding trading activity.  

Yuga Labs announced a $450 million funding round from major VCs on Mar. 22, with the news sending the token up 10%.

7/ This week, are looking at Ribon Finance, a a crypto structured products protocol, which allows its users to trade crypto options on a DeFi layer. Apart from options, Ribon also offers complex crypto derivatives. 

Big crypto investment firms have used Ribon Finance, such as QCP, which opened a $1 million position in AAVE options. 

Recently, Ribon received an $8.75 million investment from crypto VC firm Paradigm to build new risk products and continue to scale the protocol, including doubling down on the project's multi-chain approach.