ETH Touches $3k as Tailwinds Align, Ethena Launch Generates Both Fanfare and Concern
Market Update
- Equity markets are under pressure this morning, with the QQQ and SPX indices dropping over 1% and approximately 0.70%, respectively. This downturn occurs amidst a backdrop of a declining DXY and lower rates, underscoring a continued decoupling between risk assets and the bond market since early January. The crypto market is also experiencing a pullback, following Bitcoin's premarket attempt to surpass the $53k mark and Ethereum's notable weekend achievement of reaching the $3k level for the first time in nearly two years. This ETH momentum is partly fueled by the growing anticipation of ETF approvals and the excitement over the forthcoming Dencun upgrade in mid-March. This fervor is reflected in the recent spike in OI on the CME, nearly back to all-time highs in ETH terms. Despite these developments, BTC was rejected at the $53k threshold as the US market opened, and ETH has since retraced to around $2920. Layer 2 solutions such as IMX, OP, and STX have retained some of their gains, outperforming the broader market this morning. Looking forward, the week appears light on significant macro data, though the market will receive the release of the FOMC's meeting minutes on Wednesday, and many investors will be tuned into Nvidia's earnings call on Wednesday for directional signals on the market and the broader economy.
Source: Velo
- Ethena, a newly launched stablecoin platform, seeks to offer a yield-bearing synthetic USD product by accepting ETH as collateral. It stakes this collateral and shorts ETH to establish a delta-neutral position, aiming to harvest yield from both staking and the basis paid from positive funding rates. Since its inception, Ethena has minted over $287 million in USDe, drawing attention with its innovative approach that currently offers a 27% annual yield on staked USDe tokens—a rate adjustable weekly. Despite its move from beta to public access and the generation of significant inflows, Ethena has encountered skepticism regarding the viability of its model and risk management strategies, with critics pointing to past failures of similar ventures. A primary concern is the potential for a negative funding regime, where ETH enters backwardation, causing the short ETH trade to negatively impact the collateral value as funding moves in the opposite direction. Although the project has indicated the presence of risk management measures, such as an insurance fund, the real test will come with any significant market downturns.
Source: @noxiousq on Dune
- Starknet is scheduled to launch its native token, STRK, today, with trading set to commence on centralized exchanges such as Binance, Bybit, Bitfinex, and OKX following the initiation of airdrop claims for over 700 million STRK tokens. This airdrop initiative aims to distribute 7% of Starknet's total 10 billion token supply across nearly 1.3 million wallets, rewarding early users, Ethereum contributors, and open-source developers. Starknet, an Ethereum Layer-2 network that leverages ZK-Rollup technology, intends to use STRK to decentralize governance. The plan to unlock over 1.31 billion STRK for core contributors and investors soon after launch has drawn criticism, mostly due to the pre-launch vesting schedule provided to early contributors. Starknet is expected to achieve a fully diluted valuation of over $20 billion, positioning it above both ARB -0.15% and OP, the two Layer-2 networks that currently dominate L2 activity. Given that Starknet's daily transaction volume was 80% lower than Arbitrum's and more than 60% below Optimism's just yesterday, this valuation has indeed raised some eyebrows.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Due to a personal matter, Mark Newton will be temporarily unable to publish Daily Technical Analysis. Additional information is not available at this time, but we will provide updates as soon as this changes.
Daily Important Metrics
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All metrics as of February 20, 2024 11:18 AM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $1.02T | $51,700 | ↓ -0.75% | ↑ 22% | |
 ETH | $351B | $2,923 | ↑ 0.43% | ↑ 28% | ↑ 6.05% |
 SOL | $47B | $107 | ↓ -5.94% | ↑ 5.19% | ↓ -17% |
 ADA | $22B | $0.6122 | ↓ -1.81% | ↑ 3.28% | ↓ -19% |
 DOGE | $12B | $0.0846 | ↓ -3.40% | ↓ -4.95% | ↓ -27% |
 LINK | $11B | $19.01 | ↓ -3.97% | ↑ 27% | ↑ 4.57% |
 DOT | $9.7B | $7.59 | ↓ -1.89% | ↓ -6.43% | ↓ -29% |
 MATIC | $9.3B | $0.9674 | ↓ -1.97% | ↑ 0.75% | ↓ -22% |
 NEAR | $3.5B | $3.32 | ↓ -5.89% | ↓ -7.72% | ↓ -30% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -0.64% | $37.25 | ↑ 4.78% | ↑ 1.09% | ↓ -21% |
| BITW | ↓ -43% | $24.10 | ↑ 3.88% | ↓ -1.87% | ↓ -24% |
| ETHE | ↓ -13% | $19.73 | ↑ 4.50% | ↑ 1.39% | ↓ -21% |
| BTCC | ↑ 0.17% | $8.07 | ↑ 3.46% | ↓ -1.34% | ↓ -24% |
News
QUICK BITS
The Block CME to launch Euro-denominated micro bitcoin and ether futures next month The CME plans to launch euro-denominated micro bitcoin and ether futures on March 18, pending regulatory approval. |
The Block MetaMask integrates Blockaid security alerts for wallet users across multiple chains Web3 wallet MetaMask has integrated Blockaid’s privacy-security alerts by default across multiple chains to warn users against malicious transactions. |
MARKET DATA
CoinDesk Ether Hits $3K for First Time in Nearly 2 Years Amid Rising ETH ETF Excitement The price of ether, the native token to the Ethereum network, rose past $3,000 for the first time since April 2022 on Monday, continuing a recent hot streak. |
CoinDesk Bitcoin ETFs See Record $2.4B Weekly Inflows; BlackRock's IBIT Leads: CoinShares Inflows significantly accelerated last week, indicating increasing demand for new spot-based ETFs, CoinShares' head of research James Butterfill said. |
CoinDesk Bitcoin Order Books Are Most Liquid Since October as Market Depth Nears $540M Order book liquidity indicates how easy it is to buy and sell large quantity at stable prices. |
CoinDesk Starknet Token STRK Begins Trading at $5 After Mammoth Airdrop Starknet distributed 728 million tokens to around 1.3 million addresses in what is being dubbed as the largest airdrop of the year. |
DOSE OF DEFI
The Block Liquid restaking protocols surge past $3.5 billion in total value locked The TVL in liquid restaking tokens now stands at over $3.5 billion as users continue to deposit funds into EigenLayer through them. |
CoinDesk DeFi Platform Earning Yield by Shorting Ether Attracts $300M on First Day Ethena offers a 27% annualized reward to holders of its USDe stablecoins, a yield mostly generated by shorting ether futures. |
REGULATION
The Block South Korea’s opposition party vows to endorse spot bitcoin ETFs: report Now both the ruling and opposition political parties of South Korea are promising to allow spot bitcoin ETFs ahead of the upcoming election. |
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