Stably Weekly Newsletter – 03/27/2024

Announcements & Product Updates

• Curvance partnership: We are in discussion with Curvance, an innovative cross-chain money market protocol launching within a few months, to facilitate lending/borrowing markets for our stablecoins. More details will be announced when Curvance officially goes live.

• Fraxtal DeFi protocol: As mentioned in last week’s newsletter, we are currently contributing to the development of a stablecoin-powered DeFi protocol on the Fraxtal layer-2 network, with the launch ETA expected in Q2. Below are new details we can reveal about the protocol:

• • • It’s designed to provide sustainable stablecoin yield and liquidity

    • Liquid staking tokens (LST) and liquid restaking tokens (LRT) will be supported

    • Users will earn Fraxtal points from the native Flox blockspace reward mechanism

• April asset listing poll: Which crypto narrative should we support token listings for next month? Artificial Intelligence, LST & LRT, Memes, or GameFi? Let us know what you think via our X (Twitter) poll. Voting ends this Friday.

• List your asset for free on Stably Ramp: We now offer a zero-fee listing program to any third-party project interested in listing its assets on Stably Ramp. In exchange, the project can integrate the Stably Ramp iFrame widget, enabling its users to onboard from 170+ countries/regions and buy, sell, or swap these assets with stablecoins and traditional payment methods. Interested projects only need to apply. We will list the requested asset within 30 days if (1) we can source on-chain liquidity for it, (2) the project completes integrating Stably Ramp, and (3) the project passes our internal compliance review process.

Market & Industry Highlights

• Market Commentary from QCP Capital (03/27):

• Early numbers are showing positive BTC spot ETF inflows with Fidelity posting strong numbers, giving BTC a nice lift over 70k level.

• The option market is structurally bullish BTC and fearful of ETH downside. We see consistent demand for BTC calls >100k out to Dec and large buyers of ETH puts around 2800 for Apr (up to about 20k ETH!). This has caused ETH risk reversals to go to -5% to the downside again which was the early signal for the previous dip.

• • There were strong inflows for BTC spot ETFs overnight with more than $418m net. However, the immediate reaction was that BTC was priced lower, touching 69,269 lows in Asia session.

  • What does this inverse reaction tell us? Has the speculative FOMO ended or are we just in a consolidation phase?

  • If this lull continues, we will probably see both the forward and vol curves flatten significantly. Currently, forwards remain elevated at over 20% in the front-end. Vol curve also remains high and steep with BTC front-end under 65% and back-end over 80%, elevated by continued demand for 100k calls out to Dec.

• 03/19 (Bloomberg) – BlackRock Files With SEC to Offer Fund With Tokenization Firm Securitize
• 03/20 (NewsBTC) – Bitcoin Supply On Crypto Exchanges Hit 4-Year Low
• 03/21 (Coinpaprika) – US Lawmakers Optimistic on Crypto Regulation Ahead of Elections
• 03/22 (CoinDesk) – El Salvador Doubles Down on Bitcoin
• 03/23 (Crypto Intelligence) – Vitalik Buterin Doubles Grant for ENS
• 03/23 (The Daily HODL) – Chainlink Leads the Oracle Space in Terms of Recent Activity
• 03/24 (CryptoBriefing) – EU Parliament Approves Ban on Anonymous Crypto Transactions
• 03/25 (Coinpaprika) – Worldcoin’s Big Move: Opening Iris Scanning Tech to Public
• 03/26 (Coinpaprika) – SWIFT Advances CBDC Integration with Successful DLT Test
• 03/26 (CoinDesk) – Crypto Exchange KuCoin Violated AML Laws, U.S. Charges
• 03/27 (CoinDesk) – Coinbase Loses Most of Motion to Dismiss SEC Lawsuit
• 03/27 (CoinDesk) – North Korean Hacker Stole $62M from Munchables on the Blast L2 Network

7-day crypto price performance heatmap.

• Junk Bonds Commentary from Stably: In times of market stress, bond ETFs have consistently provided price discovery and the ability for investors to express their differing investment views in real-time. Historically, when junk bond ETFs were above their 200-day moving average, it indicated a risk-on investor sentiment typically bullish for risk assets. Conversely, being below this average may suggest bearishness. For more information, please refer to this hypothetical backtest for trading Bitcoin based on 200-day moving average signals from the JNK ETF.
  
  As of today, JNK is 4.98 points above its 200-day moving average (vs. an all-time average of 1.20 points). This could be interpreted as a very bullish signal for both equities and crypto in the short term.

Top pane: JNK with a 200-day simple moving average. Center pane: S&P 500. Bottom pane: BTC.

• Alt Season Commentary from Stably: The 12-Month Alt Season Index is an indicator that measures the relative price performance of altcoins vs. Bitcoin in the previous 12 months. When the Index rises above 50, it signifies altcoins outperforming Bitcoin which is typically associated with major crypto market rallies (for example, during the 2021 bull market and DeFi Summer 2020).
  
  As of today, the Index’s value is 41. This could be interpreted as Bitcoin slightly outperforming altcoins for the time being, which means that a major crypto rally and alt season are still not in play, yet, but could be coming soon.

12-Month Alt Season Index.

• DeFi & Stablecoin Commentary from Stably: DeFi total value locked (TVL) and total stablecoin market capitalization are two reliable on-chain metrics to assess the crypto market’s current health. Rising TVL and stablecoin market capitalization indicate an increasing level of investor trust and engagement within the DeFi ecosystem, suggesting a robust and growing market. On the other hand, declining TVL and stablecoin supplies can signal a decrease in market liquidity and investor confidence, often reflecting bearish market sentiments.
  
  As of today, the total TVL in DeFi and the total stablecoin market capitalization stood at $180.20 billion (+14% WoW) and $149.86 billion (+1.95% WoW), respectively. This could be interpreted as a bullish signal for the crypto market as well as DeFi in the short term.

DeFi TVL and total stablecoin market capitalization.

Other Updates

• Trustpilot Review: As a valued user of Stably Ramp, your experience with our platform is highly valuable to us. We would greatly appreciate it if you could share your thoughts on TrustPilot, helping others to understand the benefits of our service. Your feedback is not only appreciated but also instrumental in shaping our community and services.