CMC Market Pulse delivers actionable market insights, giving you all the key narratives and developments you need in under 5 minutes.
Market Overview 📉
Monday’s open saw the markets fall into a bloodbath as the Nikkei fell 12.4%, the worst day for the Japan index since 1987’s “Black Monday,” dragging down the global markets. The S&P 500 fell 4.4%, while the tech-heavy Nasdaq lost 3.43%.
Bitcoin (BTC) fell a staggering 15.7% from the daily open to a low of $49,500, while Ethereum (ETH) was hit much harder, declining a drastic 22% to hit $2,170. On Monday alone, the total cryptocurrency market cap fell 16%, losing over $500 billion as the total crypto market cap fell below $2 trillion.
Liquidations surged past $1 billion on Monday amidst the crash, the highest level since March this year, with more than $800M in longs wiped out. Funding rates have completely reset, with BTC funding rates falling to 1.36%, while ETH funding rates have fallen into the deeply negative territory amidst weak sentiment.
The market slowly climbed back up over the rest of the week, ending the week with BTC down 5.27% while ETH remained down 19.07% since the week prior, signaling sluggishness in Ethereum’s recovery so far.
📌 Wallets linked to Jump Trading have been selling off their ETH holdings throughout the week, after redeeming their ETH tokens from Lido — Link
📌 Wallets linked to the Genesis bankruptcy estate have also initiated the transfers of more than $1.5B in BTC and ETH in payments to creditors — Link
📌 Morgan Stanley to allow their 15,000 wealth advisors to pitch BlackRock’s IBIT and Fidelity’s FBTC to their clients — Link
Why does it matter?
After working through several supply overhangs such as the Mt. Gox distributions, the market was dealt a heavy blow from macro headwinds from the Bank of Japan’s interest rate hike and fears of a recession in the US due to a disappointing July jobs report.
To add fuel to the fire, Jump’s selling of ETH and distribution of Genesis funds did not help the case for crypto, especially for ETH, which made new lows on ETH/BTC and even on ETH/SOL. In fact, ETH/BTC is currently trading at 0.04, a level not seen since April 2021.
Source: CoinMarketCap, TradingView
Altcoins held on strong against BTC and ETH this week, with TOTAL3/BTC rising just over 1% this week. This is largely due to Solana, which outperformed BTC by 5.62% over the week. While we had no clear sector of altcoin outperformance this week, the market still saw several winners amongst the decline. Some of the top gainers included Helium (HNT), Ripple (XRP) and Gigachad (GIGA).
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Narrative of the Week 📰
The biggest move of this week boiled down to the massive unwinding of the USD/JPY carry trade as a result of the interest rate hike by the Bank of Japan. As the markets were shaken up on the weekly open, analysts, traders and investors alike watched closely for the next move from the Bank of Japan.
📌 Despite the small 25 basis point hike in interest rate, the unwinding of the USD/JPY carry trade has resulted in both traditional and crypto markets falling tremendously — Link
📌 The Bank of Japan has announced its intention to not continue interest rate hikes during market instability, giving the market some much needed short-term relief — Link
📌 Leading money market platform, Aave, bags $6M in revenue from liquidations during the week as the protocol keeps lending markets safe amidst this week’s market volatility — Link
📌Co-founder of BitMEX Arthur Hayes believes this is an opportunity to buy the dip, citing the injection of liquidity by the US Treasury and the caving in of the BOJ to stop hiking rates — Link
Why does it matter?
The USD/JPY carry trade has been a highly popular trade in Japan due to the long term zero interest rate policy in Japan, coupled with an ever-weakening Yen. In this trade, Yen is borrowed and used to purchase an asset in an external market. This usually tends to be US equities due to its high growth.
However, with the rate hike, the trade suddenly becomes much less profitable than it used to be. As investors sell off USD-denominated assets for Yen, this causes a strengthening of the Yen, further exacerbating the process as their Yen-denominated loans have now increased in value in comparison to their USD-denominated investments. As a result, this creates a cycle of unwinding, resulting in a large-scale unwind of the trade.
Major Project Updates 🗓️
📌 Injective completes the Altaris upgrade, increasing the chain’s scalability, improving developer tools, and introducing a real-world asset oracle to the chain, opening the doors to RWA tokenization on Injective — Link
📌 Global asset manager Franklin Templeton, which has over $1.5 trillion in assets, announced the launch of its blockchain-based BENJI money market fund, with $420 million in assets, on leading L2 Arbitrum — Link
📌 Gaming blockchain Ronin sees its bridge exploited for 4K ETH and 2M USDC ($12M in value). The exploit was fortunately intercepted by a white-hat MEV bot, which has since returned the funds — Link
📌 Fantom officially rebrands to Sonic Labs, leading up to the public launch of the Sonic chain, the latest development from the Fantom team to create the fastest ever EVM chain — Link
📌 Cosmos-based Kujira, sees leveraged KUIJI positions held by the team liquidated, resulting in a massive dump in token price and bad debt in several Kujira protocols. The team has since released a plan to rectify the issue — Link
Why does it matter?
One of the hottest narratives this year has been that of real-world assets, especially in the realm of tokenized treasury bills and real estate. This has been further spurred on with talks of BlackRock’s interest in the tokenization of real-world assets. With Injective’s new integration of a real-world asset oracle, this could make Injective a contender in the space alongside giants like Ethereum and Solana.
DeFi Brief 🏦
Source: https://coinmarketcap.com/chain-ranking/
📌 Leading ETH staking platform, Lido Finance, unveils Lido Institutional, their enterprise-level solution for ETH staking through partnerships with institutional custody providers, multiple audits and a decentralized network of node operators — Link
📌 Perpetuals DEX, Aevo, has announced plans to kick off the buyback of at least 1M AEVO tokens a month, using funds from the protocol’s insurance fund, much to the criticism of users — Link
📌 Solana DEX aggregator, Jupiter Exchange, has successfully passed the governance vote to cut the supply of the JUP token by 30%, with 95% of voters in favor — Link
📌 Ethereum-based Telegram trading bot, Banana Gun, expands to Solana with the release of Solana Reborn, bringing their copy-trading and limit order features to Solana — Link
📌 Synthetix introduces USDx, their native stablecoin to Arbitrum. USDx is backed by collateral such as ETH, ARB, USDC, USDe and others, and can be used as collateral for perpetual trades and deposits — Link
📌 Perpetuals DEX, Vertex Protocol, unveils Edge Layer, an upgrade to the Vertex sequencer built to unify cross-chain liquidity in DeFi — Link
📌 Kamino Finance releases their upcoming roadmap, including Kamino Lend V2, token holders alignment for governance and Kamino’s growth flywheel — Link
Why does it matter?
With ETH finally having its own spot ETF, institutional eyes are all on ETH now. As interest in the second largest cryptocurrency increases, so does interest in DeFi on Ethereum. As such, new solutions targeting more sophisticated investors are required to give professional investors the assurance required to allocate their funds to DeFi. Teams like Lido are stepping up with Lido Institutional to provide investors with institution-grade solutions to access ETH staking in a safe and accessible manner.
Meme Coins 🚀
📌 Blast memecoin, Pacmoon, migrates from Blast to Solana, with plans to burn all PAC tokens by 14th August, with a new ARMY token to be dropped to users based on burned PAC tokens — Link
📌 Martin Shkreli-linked Trump memecoin, DJT, rugs for $2.1M as 20% of the token supply is sold off and the liquidity for the token removed — Link
Chart of the Week 📊
Fundraises 💰
📌 Solana-based DePIN project, Andrena, raises $18M in a funding round led by Dragonfly, with support from CMT Digital, Castle Island Ventures, Wintermute Ventures and more — Link
📌 Solana restaking platform, Solayer, receives a strategic investment from the venture capital arm of Binance, Binance Labs. The funds will be used for scaling the protocol and additional partnerships — Link
📌 Web3 game studio, Curio, raises $8.7M in a seed funding round led by Bain Capital Crypto and SevenX Ventures, with participation from OKX Ventures, Robot Ventures and more — Link
Airdrops Abound 🎁
📌 Zero-knowledge rollup, Zircuit, announces their Season 1 airdrop of the ZRC token. The ZRC token is currently non-transferrable — Link
📌 ETH liquid restaking protocol, Renzo, releases the airdrop checker for Season 2 of their REZ token airdrop to reward restakers on their platform — Link
📌 Lending protocol, Kamino Finance, concludes Season 2, releasing their airdrop checker for 350M KMNO tokens to be distributed to eligible users — Link
📌 Ethereum L2 Mode Network opens claims for the second half of their Season 1 airdrop for users who kept assets on Mode throughout the three month vesting period since the first airdrop — Link
Tweet of the Week 📝
Source: 0xLawliette
Ethereum holders just can’t catch a break.
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