Market Soars After FOMC; Binance Dabbles Into Decentralized Storage With BNB Greenfield

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• Risk assets jump higher as Fed officials indicated potential end to rate hikes; Adani scraped share sell despite full subscription (more in Macro & TradFi)
• BNB Greenfield releases White Paper, Filecoin announces to launch EVM-compatible filecoin virtual machine in March (more in DeFi & CeFi)
• BTC and ETH supply on-exchanges remains at 1-year low (more in On-Chain)
• Near-term IV crushed after FOMC meeting (more in Crypto Derivatives)
• BTC and ETH advance higher, approaching their respective 50-week EMA (more in Crypto Technical Analysis)

Macro & TradFi

Global risk assets soared after the FOMC, as Chairman Powell said the central bank would deliver a “couple” more rate hikes before slowing down; despite the chairman’s likely effort to contain market’s euphoria, asset prices pushed higher and volatility collapsed more as his press conference went on. Adani Enterprises pulled the stock sale despite full subscription, leading to the Adani empire’s listed entities to dump further and some now might face MSCI index exclusion risks if the market cap declines more; the corp’s family of bonds issued by different entities also stumbled upon, with some less favorably structured credit trading at distressed levels.

US stocks are in sugar high post-FOMC; NASDAQ rallied 3.22%, SPX 1.42% although DOW gave up some earlier gains to close around flat. Meta shares are up 18% in after-hour trading following the company’s earnings beat and a $40B buyback plan. US Treasury bonds gained across the curve, with 10-year benchmark yields 10bps lower. Asian shares are trading higher; Korea’s KOSPI opened ~1.5% higher while Hong Kong’s HSTECH futures indicated ~1.3% gain before the opening bell.

DeFi & CeFi

• SBF barred from contacting former or current employees of Alameda and FTX.
• BNB Greenfield, a new decentralized data storage system, releases White Paper
• Filecoin to launch EVM-compatible Filecoin Virtual Machine (FVM) in March
• Tether CTO Paolo Ardoino tweets, Tether never borrowed from Celsius
• Aave launches a tool for migrating positions from V2 to V3
• Uniswap's community passes the proposal of deploying Uniswap V3 on Boba Network
• Alameda’s attempt to extract $446 Million loan repayment to Voyager rejected
• Mars Hub, a Cosmos SDK chain, goes live on Cosmos ecosystem
• Scroll Deploys Uniswap V3 Frontend on Testnet
• Lyra, a options trading protocol, live on Arbitrum, integrates with GMX

BNB Greenfield, a new decentralized storage blockchain on BNB chain, has released its white paper. Storage providers can store data on terminals or centralized services, where economic incentives and penalties ensure storage provider performance. BNB Greenfield leverages Tendermint-consensus Proof-of-Stake for security, and $BNB will be the gas and governance token on this new blockchain. Native cross-chain bridges connect BSC and Greenfield with $BNB.

Meanwhile, in the same vertical, Filecoin will introduce the EVM-compatible Filecoin Virtual Machine (FVM) to add smart contracts to the network by March. FVM will offer programmable storage bounties and auctions. It will also support a cross-chain interoperability bridge connecting Ethereum. Data-centric DAOs and Layer 2 solutions including data availability sampling, computation fabrics, reputation systems, and incentive-aligned Content Delivery Networks are a few more use cases. Currently, Filecoin has approximately 3,000 storage providers.

On-Chain

The supply of Tether continues to grow, adding new capital into the crypto ecosystem as BTC continues its rally.

Elsewhere, both BTC and ETH supply on-exchanges remain at a 1-year low as it seems that even though the bull run, holders are not in a rush to take profits.

Crypto Derivatives

• BTC and ETH funding rates remain positive
• 7-day ATM IV fell to 55.9% and 64.4% for BTC and ETH respectively
• 30-day 25d call skew rose for BTC and ETH to 3.04% and -0.97% respectively

Top 3 CEX USDT perp funding rate arbitrage based on last 24-hour lookback:

For futures, total liquidations in the past 24H amounted to $100.39M, majority coming from shorts at $62.94M.

On the options front, near-dated IV plummeted after the FOMC meeting. Term structure remains in backwardation, flattening for ETH. The rise of far-dated IV for BTC may indicate that traders think the BTC rally will continue. Variance risk premium dropped for BTC to 15% and rose slightly for ETH to 11.4%. Volume of put-call ratio fell to 0.34 for BTC and 0.57 for ETH.

On the flow front, the majority of the volume comes from far-dated call options expiring on 31 March and 28 Apr. Sentiment on BTC appears to be positive as the most traded instrument in 24H was a far OTM call option, 2.56k contracts of BTC 31 Mar 2023 32k calls. Call spread is the most popular trading strategy.

Lastly, the VIX plunged by 7.89% to 17.87.

Crypto Technical Analysis

For TA, BTC soared above $24K following FOMC press conference with bullish momentum continuing into today’s Asia trading. On the H4, after a period of consolidation between the 20-day exponential moving average (EMA) and the 50-day EMA, the bulls regained control in late US trading hours. If the bulls can maintain the $24,000 support level, the price may test the $24,500 to $25,200 resistance zone, with the 50-week EMA line being a key level to monitor.

As for ETH, it rallied above the $1.67K resistance level as it approaches the $1.7K area. Daily RSI jumped higher but remains below its overbought territory, unlike BTC. On the weekly, price nears the 50-week EMA line at $1.74K which could act as a strong resistance level to cross.

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Daily Readings

TradFi

• Blackstone REIT blocks investor withdrawals in January

• Gautam Adani, one of India's most powerful men, suffers a rare defeat

• AMD shares jump as earnings defy collapse seen at Intel

• BoE set to lift rates to 14-year high, might hint at next moves

• ECB to raise rates again and face questions about future path

• Wall St rallies as Fed's Powell nods to easing inflation after rate hike

• Meta stuns Street with lower costs, big buyback, upbeat sales

• U.S. job openings unexpectedly increase in December

• China's Jan factory activity contracts at slower pace - Caixin PMI

• Gautam Adani calls off $2.5 billion equity sale as regulatory concerns grow.

Crypto

• AllianceBlock Token Plunges 51% After $5M Exploit of Bonq DAO.

• Rocket Pool Community Voting Whether to Self-Limit its Growth.

• Crypto Investors Can Purchase Bankruptcy 'Put Options' to Protect Funds on Binance, Coinbase, Kraken.

• Facebook Parent Meta’s Metaverse Division Lost $13.7B in 2022.

• Stargate to Reissue STG Tokens Following Alameda Wallet Hack.

• Coinbase NFT Pauses New Collection Drops, Denies Shuttering Marketplace.

• Binance’s BNB Chain to Offer New Decentralized Storage System.

• US Blacklists Bitcoin, Ether Addresses Tied to Russian Sanctions-Evasion Efforts.

• Doodles 2 NFT Mint Opens, Dooplicators Price Soars on OpenSea.

• Decentralized Exchange Dexalot Starts a Hybrid DeFi Subnet.

• Retail giant Pick n Pay to accept Bitcoin in 1,628 stores across South Africa.

• Meta gets court win in metaverse acquisition plans: Report.

• MakerDAO launches $5M legal defense fund.

Deal Flow

• DeFi Marketplace Archimedes Raises $4.9M in Seed Round Led by Hack VC.

Yours sincerely,
Treehouse Research 🌳