Crypto Market

BTC and ETH Market Insight

The crypto market experienced $855M liquidations on Friday, the biggest one since the FTX blowup. Open interests of $BTC and $ETH nuked, around June levels. The macro factor behind the sell-off was the continuous surge in global interest rates, which not only suppressed crypto prices but also hit risk assets in traditional markets. The deteriorating liquidity within the crypto market was a significant factor as well. The market got another headline after the crash: SEC set to greenlight ETH futures ETF. $ETH recovered 8% after the futures ETF news.

Options Market

After weeks of sluggish market, implied volatility arrested its tumble following an increase in realised volatility. The sharp drop in spot prices sparked the demand for implied vols and OTM puts. Short-term IVs rose from high 20s to near 40 handle. Skew sharpened deeply towards OTM puts on the front end. Nevertheless, the question whether the volatility would stay relatively elevated for a longer period remained unanswered. The desk sees IVs to stay relatively higher but would also be closely tuned to RVs should RV tumble anew.

Altcoins and Blockchain News

• On August 20th, Curve Finance officially responded to the “Removal of Chainlink Price Safeguards in crvUSD Oracle” by stating, “Nothing wrong with Chainlink. It shows the aggregate of all markets for spot prices correctly. But for the algorithm we created it‘s better to NOT use spot prices. And we don’t, but ‘safety limits’ are taken from chainlink Oracle which reports spot.”
• On August 13th, according to Dune data, 27,892 ETH have been bridged to Linea mainnet, with a total of 256,265 transactions and 185,331 interacting addresses.
• Jamf Threat Labs developed a post-exploit persistence technique on iOS 16 that falsely shows a functional Airplane Mode. In reality, after a successful device exploits the attacker plants an artificial Airplane Mode that edits the UI to display Airplane Mode icons and cuts internet connection to all apps except the attacker application. This enables the attacker to maintain access to the device even when the user believes it is offline. Cryptocurrency practitioners are advised not to take shortcuts and use jailbroken devices. This vulnerability is only possible to exploit on devices that have already been compromised or jailbroken.
• On August 19th, according to DefiLlama data, the total value locked (TVL) in DeFi across the entire network was approximately $38.207 billion. This marks a new low since January 6th of this year, representing a decline of approximately 27% from the peak earlier in the year.
• On August 19th, CertiK stated that there have been at least 12 security incidents in the past week, resulting in a total loss of approximately $11.5 million.
• On August 19th, OpenSea announced the discontinuation of support for BNB Smart Chain (BSC). Starting today, users will no longer be able to list BSC NFTs or provide offers. However, they can still view, search, and transfer BSC NFTs.
• On August 18th, according to Token Unlocks data, Avalanche is set to unlock 9.54 million AVAX tokens on August 26th. These tokens are worth approximately $103 million, accounting for about 2.77% of the total circulating supply.

Macro

The major benchmarks closed lower for the third consecutive week: the DJIA ended -2.2%, the S&P 500 lost -2.1%, and the NASDAQ -2.6%. Sentiments around a resilient economy and moderating inflation are not gone, but expectations are becoming more realistic. The steady rally from March to July is now encountered by global growth concerns.