The Yield Guild Games (YGG) token experienced a huge pump over the past week, rising by 580% and peaking at $0.99 on Monday, August 7. On August 3, Yield Guild Games announced the 4th season of the Guild Advancement Program (GAP), which features some of the biggest names in the gaming space, triggering the surge.
Also, the announcement to launch a YGG/USDT trading pair for perpetual contracts on Binance fueled the rise.
However, as some venture capital firms that initially backed the project were transferring their tokens to centralized exchanges, the token abruptly crashed shortly after reaching this price level and is currently trading at about $0.34. The token on-chain movements might indicate that institutions would like to offload their tokens on the pump.
The Shiba Inu (SHIB) blockchain system announced that it would tie all the applications built on its platform to a blockchain-based digital identity to increase trust among Shiba Inu users and governments. It is a big step for the Shiba Inu ecosystem to gain more legitimacy, breaking away from its meme-coin status
Overall Market
Bitcoin has been hopping around the $29,000 level in the last two weeks. BTC price dipped below the $29k level a few times last week, but it managed to rebound back above this key support level.
Cathie Wood, CEO of ARK Investment Management, expressed her optimism on August 7 by stating that multiple spot-Bitcoin exchange-traded funds (ETFs) may be approved at the same time by the US Securities and Exchange Commission (SEC)
Mike Novogratz, CEO of crypto investment manager Galaxy Digital, also shared the same optimism toward the spot-Bitcoin ETF approval during the earnings call on Tuesday, August 8. He said it is a question of when the SEC approves the spot-Bitcoin ETF, not if.
We saw the BTC price rise from the daily low of $28,700 in the US session today, and the BTC price traded above the $30k level for a short period of time in the early Asia session before it dropped back below.
Options Market
As discussed last week, our OTC desk observed that the implied volatility on BTC and ETH options continued to decline in the last 30 days. Both the implied volatility of BTC and ETH are trading at record lows. We saw a 5% price move on BTC today after it dropped below the $28,700 level. ETH, however, only had a 4% intraday movement during the same period.
As the above charts show, our OTC desk notices that while the IV of 30-day BTC options starts to increase, the IV of 30-day ETH options remains low.
Meanwhile, our desk observes that the at-the-money implied volatility of ETH options is lower than that of BTC ones across all expiration dates that we monitor.
Such abnormally negative spreads between BTC and ETH options indicate that ETH volatility may continue to be suppressed relative to BTC over the next few weeks, if not months. We should observe a comparatively stable price on ETH for the second half of 2023, unless there are significant innovations in the Ethereum ecosystem, like the DeFi innovation in 2020 and the NFT hype in 2021.
Macro at a glance
Last Thursday (2023-08-03)
The Bank of England announced a 25bps rate hike on its interest rate to 5.25%, as expected. BoE follows the same path as what the Federal Reserve and ECB did last week.
The US released the Initial Jobless Claims at 227k, the same as estimated, and slightly higher than the previous week’s 221k.
The US Non-Manufacturing PMI reading in July was 52.7, lower than the estimated 53.0 and the previous month’s 53.9. The Non-Manufacturing Prices reading in July was 56.8, higher than the estimated 52.1 and the previous month’s 54.1. The two readings imply the US economy is still in the expansion phase, but the price pressure might come back, proving Fed Chairman Powell’s view that inflation is sticky.
Last Friday (2023-08-04)
The US released Nonfarm Payrolls in July at 187k, lower than the estimated 200k.
The US unemployment rate is reported at 3.5%, better than the estimated 3.6% and down from the previous month’s 3.6%.
On Tuesday (2023-08-08)
China's Exports in July dropped 14.5% YoY, a bigger drop than the estimated -12.5% and the previous month’s 12.4%
China’s Imports in July also dropped 12.4% YoY, a bigger drop than the estimated -5.0% and the previous month’s -6.8%
The numbers indicate China's economy is weaker than the market anticipated
We have China's CPI reading in July this Wednesday, and US CPI and PPI readings in July on Thursday and Friday, respectively.
Convert Portal Volume Breakdown
The above table shows the volume breakdown of our Convert Portal.
This week our desk saw a stable distribution across different categories, while the weight on crypto-to-stablecoin trading dropped over 1%. After last week’s Curve Finance exploit, the cash-out demand from investors and traders has decreased.
The weight on crypto-to-crypto transactions increased almost by 1%, indicating investors and traders are actively adjusting their crypto asset portfolios during this sideways market.
Why trade OTC?
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