Amber Group Market Weekly Review 220104 | Bitcoin and Ethereum Market Insights, News Highlights

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• We have recently observed that the turnover ratio of Bitcoin between $45,000 and $50,000 continues to rise to 11.7% of the circulating supply. The coin price has increased by 78.5% compared to the first day of 2021, but dropped by 24.4% from the all-time high on November 10. The in-value implied volatilities of 3-month and 6-month expiry options have dropped below 80%, 10% lower than the average level, and perpetual contract rates are also within normal ranges. The market is currently uncertain, but we expect this to not last long.
• Over the past 18 months, Terra has built a comprehensive smart contract ecosystem, with UST becoming a dominant decentralized stablecoin. Luna's price has hit an all-time high, and this week Anchor Protocol's deposits have exceeded $10 billion.
• Defi blue chips outperformed Bitcoin this week, especially CRV and CVX. According to Delphi Digital's data, Convex has captured a lot of protocol value from Curve, with a cumulative profit of $11.3 million over three months. 5% of the profits are distributed to CVX token lockers.
• Following the launch of cvxFXS, the token FXS has shown strong price performance, rising by 76%. Convex's cvxFXS has rapidly climbed the FXS holding leaderboard. At the current locking speed, we expect Convex to become a major holder of FXS, similar to what it has done for CRV.
• The locked volume in Defi options has doubled compared to November. Users not only receive token incentives and lockup rewards but also receive option premiums for selling options. We expect this demand to continue to grow, with more competition among protocols to capture more market share.

BTC options IV continues to decline. Last weekend, the 3-month ATM IV fell below 70. This is the first time since mid-May that BTC options IV has dropped to such a low level. While we believe the crypto options market is evolving towards a more liquid and efficient market, the relatively lower IV could become the "new normal," but such a prolonged period of relatively low IV still suggests potential volatility in the near future. We still anticipate an increase in IV in the first quarter and expect the IV-RV spread to continue to narrow in 2022.

• On January 2, based on Algorand, the automated market maker AMM Tinyman tweeted that an attack occurred on January 1st and 2nd, exploiting a previously unknown vulnerability in the contract, allowing the attacker to withdraw assets from pools they were not authorized to access.
• According to the latest data, popular American music star Britney Spears purchased Bored Ape Yacht Club #7202 for 70 ETH, approximately $261,048.20.
• According to official data from Fantom Foundation, the number of addresses on the Fantom chain has exceeded 1.5 million. This marks a 29,452% increase in the number of on-chain addresses compared to January 1, 2021. It is worth noting that on January 1, 2022, Yearn.finance founder Andre Cronje announced a new experiment to be deployed on Fantom this month.
• Square Enix President: Including decentralized games in the portfolio will be a major strategic theme in 2022.
• NFT public chain Efinity wins the 6th Parachain slot auction on Polkadot.
• Terra founder releases 2022 crypto industry predictions: The shift towards Web 3 has already begun.
• Polygon pays approximately $3.46 million in bounty to two white hat hackers, as a PoS contract loses around 800,000 MATIC due to a vulnerability.
• METADAO experiences a Rug Pull, resulting in a loss of approximately $3.25 million.
• The market capitalization of decentralized stablecoin UST exceeds $10 billion.

• The Christmas rally pushed the S&P 500 index to historic highs, with major indices recording gains this week. As of Friday's close, the Dow rose by 1.08% to close at 36,338.31 points; the S&P 500 rose by 0.86% to close at 4,766.19 points; and the Nasdaq rose by 0.07% to close at 16,320.08 points.
• The impact of the Omicron variant on economic activity has been relatively mild. Initial jobless claims fell to nearly a fifty-year low at the beginning of the week, with continuing claims dropping much more than expected and reaching the lowest level since the outbreak of the pandemic.
• The overall U.S. bond yields remain steady. Technical factors supported a modest rise in rates midweek, with the 10-year U.S. Treasury yield reaching a monthly high of 1.55% on Wednesday. On Friday, the 10-year bond yield fell to around 1.50%.

Established in 2017, with operations across major cities in Asia and Europe, Amber Group provides crypto financial services to over 1,000 renowned institutional clients. With a total trading volume exceeding $1 trillion across over 100 exchanges, and assets under management exceeding $4 billion, Amber Group helps clients manage risks associated with various crypto assets, providing flexible investments and maximizing returns to optimize long-term value.

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