Crypto Market

BTC and ETH Market Insight

The Federal Reserve chose to keep interest rates at 5.5%, causing a slight market downturn due to expectations of a rate cut. Grayscale experienced a $2.2B outflow last week, but the outflows seem to be gradually slowing down. Reduced stablecoin flows to exchanges indicate less trading and possible investor caution over the past week. ETH has seen significant outflows from exchanges in recent weeks, as the narrative around restaking continues to gain momentum.

Options Market

The realised volatility remains subdued and continues its slow downward trend. The implied vol fell further in tandem with RV to be in a more negative carry. Term structure fell back into contango. Skew flipped back to call premium for both majors. The ETH/BTC spot spread pulled back about 13% from January highs, suggesting a good entry point for those bullish on Ethereum. Buying long-dated calls in ETH vs selling calls in BTC to leverage ETH’s potential against BTC can be something to consider.

Altcoins and Blockchain News

• Cosmos ecosystem liquidity staking protocol Stride has announced the completion of a $4 million strategic financing round. The round was led by DBA, with participation from 1confirmation, Road Capital, Modular Capital, Imperator, Chorus One, and others.
• Kava ecosystem's perpetual DEX protocol, Kinetix Finance, has announced the launch of its protocol token, KFI, in February.
• Bithumb has announced that starting from the 5th of this month at 12:00 AM local time, it will charge a 0.04% fee on all supported crypto assets for trading.
• Avalanche has stated on social media that the pre-release code for Durango, a proposed upgrade to the Avalanche network, has been released and will be activated on the Fuji Testnet on February 13th, 2024, at 11:00 AM Eastern Time.
• Delegate, the parent company of Ethereum infrastructure provider Delegate Labs, has completed a $9 million seed funding round with participation from Electric Capital, Arca, Variant, and Arrington Capital.
• Puffer Finance announced on social media that staking of stETH and wstETH is now open for users, allowing them to earn Puffer and EigenLayer points. Deposits made before February 9th will receive double points.
• Aevo has announced that it will airdrop AEVO tokens to early adopters of Aevo Exchange and will launch its liquidity mining program, Farming Program, in the coming days.
• Hong Kong is conducting an investigation into WorldCoin over alleged improper collection of customer iris data.

Macro

The equity market continued the rally, with the large-cap benchmarks outperforming the small-caps: the DJIA added +1.4%, the S&P 500 +1.1%, and the NASDAQ +1.1%. All eyes were on the Fed meeting on Wednesday: The short-term rate was unchanged as expected, but the possibility of rate cuts in March seemed to fade away, as stated by the Fed Chair Jerome Powell.