Efficient Frontier
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Efficient Frontier

Institutional FOMO thesis

Welcome back to Efficient Frontier’s biweekly newsletter!

FOMO Thesis

Depressed markets

  1. Funding rates and basis reflect demand for Bitcoin long positions.Funding has been negative to neutral for weeks. This week Bitcoin futures in Binance, crypto’s largest exchanges, traded even slightly lower than the price of the underlying Bitcoin, reaching backwardation and signalling extreme lethargy.
Left:Perpetual funding rate. Source:CryptoQuant. Right:Binance futures basis. Source:TheBlockCrypto
Social media activity. Source:TheBlockCrypto
GBTC vs BTC. Source: TheBlockCrypto

Positive narrative

Source: Google trends

Institutional interest

Bitcoin addresses with over 1K Bitcoin. Source:GlassNode

Number go up

  1. The World’s Largest Digital Asset Lender, Genesis Trading, keeps enjoying a record demand for cryptocurrency loans. Genesis lent $50 billion in Q4 2021 and ended the year with $12.5 billion in active loans.
  2. The number of dollar stablecoins keeps climbing, now with $182.6 billion in circulation.
  3. Gold backed tokens have seen lately a sharp growth, reaching $550,000 in circulation
  4. On-chain trading has continued to grow since 2020. Despite still being at an experimental stage, trading in decentralised and distributed spot exchanges has reached 15% of centralizes spot trading volume.

News & links

  1. Bridgewater, the world’s largest hedge fund prepares to invest in crypto
  2. Kazakhstan authorities shuts down over 100 crypto miners due to pressure on electricity grid
  3. India’s parliament to discusses its proposed heavy tax on cryptocurrency traders
  4. Dubai’s new crypto regulator grants licence to FTX and Binance
  5. Time Magazine interviews Ethereum founder Vitalik Buterin for their cover article, New York Times publishes “The late comer’s guide to crypto”.

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