Introduction
Although the market remains sluggish, market volatility is gradually decreasing, and uncertainty is diminishing. With US ETFs beginning to shift towards net inflows, the market is expected to rebound, but macro indicators remain key signals determining market trends.
1、Investment and Financing Observations
Last week, the crypto market saw a total of 41 investment and financing events, an increase of 28.12% compared to the previous week, with a total funding of $170 million, up 13.33%:
In the DeFi sector, 11 financing events were announced, with quant trading platform Arbelos Markets securing a $28 million financing led by Dragonfly Capital.
In the GameFi sector, there were 5 financing events, with web3 game developer Seeds Labs completing a $12 million seed round, with participation from Blizzard Fund and others.
Infrastructure and tools saw 16 financing events, including cryptography startup Lagrange securing a $13 million seed round, with Founders Fund leading.
NFT-related fields announced 1 financing event, with Singaporean Web3 platform Galaxis raising $10 million.
In the DePIN sector, 2 financing events were announced, with Solana ecosystem DePIN project Ambient securing a $2 million seed round, led by Borderless Capital.
Other Web3/crypto applications announced 6 financing events, with Web3 social app Kiosk based on Farcaster securing $10 million, led by Electric Capital.
The increase in the number of cryptocurrency market financing transactions for two consecutive weeks and the rebound in total funding last week indicate that institutions are still actively raising funds and expanding their layouts despite the downturn. Market enthusiasm is focused on Bitcoin ecology, GameFi, and infrastructure areas. Active institutions last week included Animoca Brands, Dragonfly, and the Solana Foundation, primarily focusing on GameFi and infrastructure.
About Arbelos
Arbelos Markets is a quant trading platform focused on providing necessary trading liquidity to institutional participants and serving as a counterparty for products such as options and futures.
About Arch Network
Arch Network is a Bitcoin-native application platform that introduces smart contract functionality directly into Bitcoin through a novel architecture. This architecture utilizes the Rust-based zero-knowledge virtual machine ArchVM, paired with a decentralized validator network, collectively referred to as the Arch network.
About UXUY
UXUY is a next-generation decentralized multi-chain trading platform based on the MPC wallet. UXUY actively participates in the Bitcoin Layer2 ecosystem, fully integrating into the Bitcoin Lightning Network and Taproot ecosystem, providing lightning address DID services to users, and becoming an important bridge connecting the Bitcoin and Ethereum ecosystems.
2、Industry Data
VRP Index shows market stabilization, with diminishing uncertainty.
Data tracked by Bitfinex analysts shows that since the Bitcoin halving on April 20th, the monthly VRP (Volatility Risk Premium) has plummeted from 15% to 2.5%. Analysts state that the significant narrowing of VRP indicates that market expectations are readjusting, entering a market environment with relatively low volatility, and diminishing uncertainty. This can be viewed positively by long-term investors. A week ago, Arthur Hayes, former CEO of BitMEX cryptocurrency exchange, stated in a post that BTC has bottomed out, but the expected upward trend may be slow.
About VRP (Volatility Risk Premium)
VRP data calculation is based on the difference between the BTC 30-day implied volatility index (BVIV) of Volmex and the 1-month realized volatility (VBRV);
VRP reflects the trend of implied volatility (an indicator of expected price volatility) caused by asset options over time exceeding actual volatility;
US BTC spot ETFs see net inflows, with only GBTC experiencing outflows.
According to monitoring by HODL15Capital: Last week, US BTC spot ETFs bought 1,318 BTC, with only GBTC experiencing capital outflows. As of May 10th, global BTC spot ETFs collectively hold 949,756 BTC. Since the launch of BTC spot ETFs, GBTC has seen cumulative net outflows of $17.6329 billion, reducing its assets under management to $1.7647 billion.
In terms of the correlation between US ETFs and market performance, if ETF inflows continue and strengthen, it will indicate that the future market trend will gradually start to rise. However, considering that oscillation selling pressure still exists, the upward trend will most likely slowly rise within oscillation.
It is reported that a significant portion of the early GBTC outflows is related to bankruptcy proceedings (e.g., Genesis and FTX), profit realization from GBTC discount trading (discounted to NAV by 40% a year ago), and transfer to low-cost products (<0.5% compared to 1.5%).
Hong Kong ETFs see consecutive net redemptions, liquidity returns to normal.
According to SoSo Value data, both Hong Kong ETH and BTC spot ETFs saw net redemptions, with the ETH spot ETF experiencing 3 consecutive days of net redemptions:
- On May 10th, the BTC spot ETF had a net redemption of 99.99 BTC, with a total holding of 41,600 BTC, a daily turnover of $1.46 million, and total net assets of $262 million. The Huaxia ETF still holds 19,400 BTC, ranking first.
- On May 9th, the ETH spot ETF had a net redemption of 471.25 ETH, with a total holding of 15,630 ETH, a daily total turnover of $542,000, and total net assets of about $46.71 million. The Bosh Hashkey ETF holds 6,500 ETH, ranking first.
Currently, ETF liquidity in the Hong Kong market will return to normal, and the current direction of ETF flow will not lead to structural trend reversal in the market. It is recommended that investors pay attention to trend dynamics by using Hong Kong ETFs as tracking indicators, but as leading indicators for investment.
Over 2.6 million BTC are in a loss position, with new adjustments possible.
According to Glassnode data: As BTC prices fall, as of May 9th, over 2.6 million bitcoins are in a loss position, while 86% of BTC supply remains profitable. This change indicates that many short-term holders are now at a loss, compared to data from February 28th when 99% of BTC supply was profitable.
Currently, the cost of short-term holders is about $59,800. If prices continue to decline, more BTC will be in a loss position, and the next week may be a period of oscillation for short-term holders. If short-term holders engage in selling of a certain scale, the market trend may briefly adjust.
3、VC Holdings
Note: The above data is from https://platform.arkhamintelligence.com/, and the statistical time is 17:00 on May 13, 2024 (UTC + 8).
4、This Week’s Focus
May 13th
- Federal Reserve Governor Jefferson’s speech;
- FOMC voter and Cleveland Fed President Mester’s speech on central bank communication;
- Bitcoin re-collateralization infrastructure BounceBit goes online and distributes BB tokens through Binance Megadrop, ending on May 13th at 8:00;
- OKX Jumpstart launches Notcoin (NOT), where TON holders can pledge TON to exchange for NOT tokens;
- Aptos (APT) will unlock approximately 11.31 million tokens on May 13th at 2:00, worth about $103 million, accounting for 2.64% of the circulation;
May 14th
- US April PPI;
- Federal Reserve Governor Lisa Cook’s speech;
- Federal Reserve Chairman Powell and ECB board member Knot participate in a meeting and deliver speeches;
- A Dutch judge will rule on Tornado Cash developer Alexey Pertsev on May 14th;
May 15th
- US April CPI;
- US April retail sales monthly rate;
- BNB Chain will conduct the second-quarter airdrop alliance plan snapshot on May 15th at 8:00 (UTC+8);
- opBNB testnet nodes need to upgrade to the latest version before the hard fork on May 15th;
- Starknet (STRK) will unlock 64 million STRK tokens on May 15th at 8:00, worth about $77 million, accounting for 8.79% of the circulation;
- CyberConnect (CYBER) will unlock 886,000 CYBER tokens on May 15th at 14:00, worth about $6.84 million, accounting for 4.13% of the circulation;
- Aevo (AEVO) will unlock approximately 827 million AEVO tokens on May 15th at 15:59, worth about $1 billion, accounting for 752.36% of the circulation;
May 16th
- US initial jobless claims for the week;
- Federal Reserve Governor Bowman’s speech;
- Federal Reserve Governor Bar on testimony in the Senate Banking Committee;
- Alpaca Finance’s PYTH airdrop distribution plan ends on May 16th;
- Arbitrum (ARB) will unlock approximately 92.65 million ARB tokens on May 16th at 21:00, worth about $92.57 million, accounting for 3.49% of the circulation;
May 17th
- FOMC voter and Cleveland Fed President Mester’s speech on economic prospects;
- FOMC voter and Atlanta Fed President Bostick’s speech on economic prospects;
- China’s State Council Information Office holds a press conference on the national economic situation;
- The Nigerian court has postponed the hearing of the tax evasion case involving Binance executives until May 17th;
- WikiEXPO holds “WIKI FINANCE EXPO HONG KONG 2024” offline event at Sky100 in Hong Kong;
- The “Witch Event Self-report” launched by LayerZero will end on May 17th at 19:59:59;
- ApeCoin (APE) will unlock approximately 15.6 million tokens on May 17th, worth about $19 million, accounting for 2.48% of the circulation;
- Immutable (IMX) will unlock approximately 25.53 million IMX tokens on May 17th, worth about $57.95 million, accounting for 1.75% of the circulation;
May 18th
- FOMC voter and San Francisco Fed President Daly’s speech;
- Nym (NYM) will unlock approximately 3.02 million tokens on May 18th at 8:00, worth about $470,000, accounting for 0.39% of the circulation;
- Manta Network (MANTA) will unlock approximately 6.67 million tokens on May 18th at 17:30, worth about $11 million, accounting for 2.66% of the circulation;
5、Conclusion
Last week, the crypto market continued to experience oscillating trends, with market activity reaching only 30% of its previous peak, but market expectations suggest a slow upward trend. Additionally, both the number of investment and financing transactions and the total funding are showing an upward trend. Funds continue to flow into DeFi, GameFi, infrastructure construction, and other Web3/crypto application areas, reflecting investor recognition of the long-term value of these areas and optimistic expectations for the industry’s future development.
This week, the release of US April PPI and CPI data will be critical as the Federal Reserve has not yet abandoned the option of raising interest rates in inflation suppression and management. Therefore, the market needs clearer directional indicators to focus on the main direction of fund flow in the future. Furthermore, APT, IMX, ARB, STRK, and AEVO all face large token unlocks, especially AEVO, with token unlocks equivalent to approximately $1 billion, which will bring significant uncertainty to the market. However, if US inflation data is under control, the entire crypto market will most likely enter a slow oscillating rebound phase.
From a medium-to-long-term perspective, the infrastructure construction and technological innovation of the crypto industry have laid a solid foundation for its stable growth and mature development. Therefore, for investors, maintaining strategic patience and focusing on the long-term value and development potential of the industry will be the key to future success.
Note: All of the above opinions are not investment advice. If there are any inappropriate points, please feel free to leave a message to correct them.
Welcome to follow and join the MIIX Capital community to learn more about cutting-edge information:
Website：https://www.miix.com
Twitter EN: https://twitter.com/MIIXCapital
Telegram EN: https://t.me/MIIXCapitalEN
We welcome job applicants to send applications to [email protected].
Positions available: Investment Research Analyst/Operations Manager/Visual Designer
All Comments