Crypto Market

BTC and ETH Market Insight

For the first time in nearly 18 months, the Federal Reserve left interest rates unchanged, but the central bank's commitment to bringing inflation down to its 2% target made the market expect more rate hikes this year. The percentage of USDT liquidity in Curve’s 3pool increased significantly from 22% to 70%, and it caused slight USDT depeg. DAI flipped BUSD and now was the third-largest stablecoin in the crypto market. The desk observed the supply of ETH flowed from short-term holders to long-term holders, as supply which was moved for >6 months has increased by 3.4%.

Options Market

Once again BTC and ETH showed some resilience in the wake of the alts sell-off. That said, ETH still underperformed BTC by 6% since the alts storm kicked in, which is not too astonishing as we previously expected ETH to suffer more in a spot downturn. Near-term IVs quickly cooled off in the rebound while the long-dated ones remained elevated compared to the levels before the selloff - 2-3 points higher for BTC and 5 points for ETH. Skew, on the other hand, implies a divided view on BTC and ETH - it returned nearly neutral for BTC and remained rather high for ETH, echoing the market’s view on a higher beta performance of ETH in a downward movement. 

Altcoins and Blockchain News

• Data shows that in the past week, ARK funds have sold a total of 96,767 shares of Coinbase stock (COIN), which is worth approximately $5.38 million at current prices.
• The full-chain cryptocurrency market protocol, TapiocaDAO, has completed a $6 million seed round of financing, with investors including Fisher8 Capital, LayerZero Labs, PARC Capital, and others.
• iShares, a subsidiary of asset management giant BlackRock, submitted a filing to the US SEC on June 16th for a physically-backed Bitcoin ETF, with Coinbase (COIN) serving as the custodian through its cryptocurrency trading platform.
• MakerDAO has officially announced that the Dai Savings Rate (DSR) will be increased from 1% to 3.49% on June 19th at 22:00 Beijing time.
• Frax Finance has announced that it will launch an Ethereum Layer2 network called Fraxchain, which will focus on the decentralized finance sector, and all Frax assets will be natively supported on Fraxchain. frxETH will be used to pay for gas fees on Fraxchain.
• claims.ftx.com went live on June 15th and will serve as a customer claims portal for debtors once the court signs the relevant orders and motions around July 3rd, 2023.
• Uniswap announced the release of Uniswap v4 code draft on June 13th, which will enable the public building of v4.
• Kofi, a developer for DefiLlama, announced on social media that the DefiLlama ChatGPT plugin has been launched, allowing users to search for DeFi protocols and blockchain data using keywords.

Macro

The Central Bank of China responded to the country's slowing economy by cutting rates for the first time since August, reducing the 1-year loan rate by 10 basis points to 2.65%, and also cutting the 7-day repo rate. Meanwhile, the US Federal Reserve kept interest rates at 5.00-5.25%, pausing for the first time in 10 meetings. The Fed's forecasts for inflation and growth increased slightly, and while core inflation showed slow progress, Jerome Powell noted that there are risks of inflation increasing.