Amberdata Digital Asset Snapshot: Policy Wins, Volatility & Crypto Trends

The Spot ETH ETF has been approved! Several events in the last two weeks highlighted a volatile period with prices of several cryptocurrencies fluctuating +/- 10% a day. A short run-through of these major events: the unofficial Bitcoin holiday “Bitcoin Pizza Day”, marking the day in 2010 when Florida man Laszlo Hanyecz bought two pizzas for 10,000 BTC; the extremely narrow House approval of H.R. 4763 (FIT 21); the extremely narrow House approval of H.R. 5403 CBDC Anti-Surveillance State Act, Senate repealing SAB121 (which was enacted by the SEC and deemed “anti-crypto” by many); and the Financial Conduct Authority (FCA) approvals of Bitcoin ETPs listing on the London Stock Exchange.

Let’s briefly go over why these policies are important. FIT 21 defines which regulatory organizations will oversee which digital assets, and the CBDC Anti-Surveillance State Act effectively prevents the Federal Reserve from issuing CBDC directly to individually. The Senate’s repeal of SAB121 was also a major win for digital asset policy, as SAB121 effectively prevented financial institutions from being custodians of digital assets. The most impressive thing about these policy wins was the bipartisan support needed to get these bills to pass: it demonstrates that digital assets are gaining in popularity with everyone. From being joked at as an alternative way to buy pizza, to being discussed in the highest legislative chambers of America, this Bitcoin pizza day will be one of the most memorable in digital asset history.

In other news, Sonne Finance (a DeFi Lending protocol) was exploited through a known Compound v2 exploit. Essentially, the protocol had copied and pasted key parts of the contract, which led to a loss of ~$20 million. Tornado Cash co-founder Alexey Pertsev was found guilty by a Dutch court this week of money laundering and sentenced to 64 months in prison. The DOJ arrested two MIT graduate brothers for “stealing” $25 million after they discovered and used a weakness in Flashbot’s MEV protocol.

Spot Market

Centralized Exchange (CEX) comparisons from weeks 5/14/2024 and 5/21/2024

CEX Volume Traded Market Share over the past quarter

With an electrifying rally to near record highs, CEXs are once again fighting for top dominance in the digital asset market share race. Coinbase maintains a dominating lead over the competition, holding nearly 70% of the volume in CEX market share in the US. Kraken is right behind Coinbase with a 10-15% fluctuation market share. It will be interesting to watch how CEXs vie for dominance in this bull market, whether through trade pair variety or lowering fees.

DeFi DEXs

Decentralized Exchange (DEX) protocol from weeks 5/14/2024 and 5/21/2024

DEX Quarterly Top Pools by Trading Volume

This bull cycle has been an exciting time for memecoins. PEPE, which most of the community had largely written off as an overhyped and one-shot wonder coin. We see that PEPE has reclaimed its spot in the top 10 traded DEX pairs. PEPE currently sits at a market cap of nearly $6 billion, when it was at only $3.5 billion at the start of May.

Uniswap V2 Top Pools Trading Volume over the last quarter

Zooming into the trading volume for these top pools, we see a lion's share of activity happening earlier this year in March, though there is still strong movement from earlier in May. PEPE and other memecoins always shine strongly in bull cycles, but it is important to watch them as they are also prone to steep price corrections during bear markets. 

DeFi Borrow/Lend

DeFi Lending protocol comparisons from weeks 5/14/2024 and 5/21/2024

Protocol Net Deposits and Withdrawals over the past month

Lending protocols continue to see a general net withdrawal from their networks, as users seek to place their capital in higher yield locations or move their supply to cheaper fees on L2s. Though the net withdrawal rate is only a few million, accumulated over time with no corresponding deposit increase may signal alarm bells for these protocols. Expect new yield farming tactics in this bull cycle, as these L1 lending protocols fight for relevance in an L2 world.

Networks

Network comparisons from weeks 5/14/2024 and 5/21/2024

Bitcoin and Ethereum average transaction fees over the past year, Bitcoin’s Y axis on the left and Ethereum’s Y axis on the right

Around this time last month, we shared this graph to show the impact Runes was having on the BTC network: record transaction fees. A month later, BTC transaction fees have returned to normal, showing that Runes did not have the staying power many people expected it to have. Finding a strong project such as Runes is important to sustaining a bull run: for the last bull cycle we were in, prices remained high due to NFTs. With Bitcoin’s returning relevance in hitting all-time highs, many Bitcoin maxis were hoping for Runes to be the next big thing, but this is unlikely to be the unicorn they were hoping for. Instead, with rumors of an ETH ETF on the horizon, many look toward the political atmosphere and digital asset policy for bullish signs.

Links

Recent from Amberdata

• Amberdata: Amberdata Product Update: Real World Assets Tokenization Dashboard

• Amberdata: Real-World Asset Tokenization Primer

• Amberdata: Providing Liquidity? How to monitor a Pool’s Smart Contract in real-time

• Amberdata: The ultimate guide to funding rate arbitrage

AmberLens:  intelligence.amberdata.com 

Spot Market

Spot market charts were built using the following endpoints:

• https://docs.amberdata.io/reference/market-metrics-exchanges-volumes-historical
• https://docs.amberdata.io/reference/market-metrics-exchanges-assets-volumes-historical
• https://docs.amberdata.io/reference/get-market-pairs
• https://docs.amberdata.io/reference/get-historical-ohlc

Futures

Futures/Swaps charts were built using the following endpoints:

• https://docs.amberdata.io/reference/futures-exchanges-pairs
• https://docs.amberdata.io/reference/futures-ohlcv-historical
• https://docs.amberdata.io/reference/futures-funding-rates-historical
• https://docs.amberdata.io/reference/futures-long-short-ratio-historical
• https://docs.amberdata.io/reference/swaps-exchanges-reference
• https://docs.amberdata.io/reference/swaps-ohlcv-historical
• https://docs.amberdata.io/reference/swaps-funding-rates-historical

DeFi DEXs

DeFi DEX charts were built using the following endpoints:

• https://docs.amberdata.io/reference/defi-dex-liquidity
• https://docs.amberdata.io/reference/defi-dex-metrics
• https://docs.amberdata.io/reference/defi-impermanent-loss 

DeFi Borrow/Lend

DeFi lending charts were built using the following endpoints:

• https://docs.amberdata.io/reference/defi-lending-protocol-lens
• https://docs.amberdata.io/reference/defi-lending-asset-lens

Networks

Network charts were built using the following endpoints:

• https://docs.amberdata.io/reference/blockchains-metrics-latest
• https://docs.amberdata.io/reference/transactions-metrics-historical
• https://docs.amberdata.io/reference/get-historical-transaction-volume