First Mover Asia: Pine wants to test NFT market liquidity; Cryptos are good reds

The number of users in NFT markets is at its lowest level this year, but still higher than in 2021. The crypto-lending platform sees an opportunity.

Hello. Here’s what’s going on:

Price: Bitcoin and other cryptocurrencies fall with stocks.

Insight: Although interest in the NFT market has declined in recent months, the cryptocurrency lending platform Pine sees an opportunity.

Technician’s opinion: BTC is testing an important support zone, although the long-term momentum remains weak.

Prices

Bitcoin (BTC): $ 28,967 -5.3%

Ether (ETH): USD 1,941 -7.4%

The biggest winners

There are no winners in CoinDesk 20 today.

The biggest losers

Active Teleprinter Return DACS sector
Peas POINT -13.5% Smart contract platform
Polygon MATIC -13.5% Smart contract platform
internet computer PCI -12.9% Computing

Cryptos fall with stocks

It was a red Wednesday for almost everyone in crypto.

Red for bitcoin. Red for ether. And an even deeper red for other major altcoins as investors continued to challenge those who say digital assets are not keeping pace with equities.

Bitcoin was recently traded at around $ 28,900, in its range in the last few days after the collapse of stablecoin terraUSD (UST) and the LUNA token that supports it, but fell by 5% within the last 24 hours. Ether, the second largest cryptocurrency by market value, lost more than 8% in the same period after falling below $ 2,000. Among the rest of the fall and the waste, SOL, AVAX, DOT, MATIC, SAND and MANA have all recently fallen by at least 12%.

“The market is continuing on its current bearish path,” Autonomy CEO James Key wrote to CoinDesk, noting that crypto wallet addresses with small amounts of BTC topped 10 million for the first time. Still, he noted that “institutions … consider crypto as an exotic risky asset, and as we fall into a recession, these assets are the first to be sold by these players – that was always the disadvantage of them.” invites into the crypto space.

The stock markets had a more than unforgettable day as all sectors tumbled amid a growing investor fear of recession and bad news from the retail sector. The technology-focused Nasdaq fell 4.7%, while the S&P 500 fell 4%, their worst percentage decline in two years. The Dow Jones Industrial Average dipped more than 1,100 points, down 3.6%, its worst closing since mid-2021.

The retail sector played an important role in the recent economic recovery in the US, and even last week the sector looked lively after a strong consumer spending report. But on Tuesday, retail giant Walmart said its profits fell 25% year-on-year. Target followed on Wednesday morning with its own disappointing news: Sales rose only 3.3% compared to a 22% increase in the same quarter a year ago.

Bitcoin, which struggled to hold $ 30,000 after the UST debacle, and the rest of the digital asset industry have been swept up in recent events. On Wednesday, London-based miner Argo Blockchain reported first-quarter net profit of $ 2.1 million, a 90% year-over-year decline.

Meanwhile, Mike Novogratz, CEO of cryptocurrency merchant bank Galaxy Digital (GLXY.TO), said in a letter on the company’s website that the company made a profit before the UST crash. Pantera Capital also sold about 80% of its holdings, according to a New York Times report quoting investor Paul Veradittakit.

While Novogratz remains very optimistic about the cryptocurrency’s prospects, Novogratz said those hoping for a “V” bottom in the market would likely be disappointed. “It will require restructuring, a buyout cycle, consolidation and renewed confidence in crypto. Crypto is moving in cycles and we have just seen a big one.”

Markets

S&P 500: USD 3,923 -4%

DJIA: 31.490 -3.5%

Nasdaq: 11,419 -4.7%

Gold: $ 1,816 +0.1%

Knowledge

Crypto-lending platform Pine sees opportunities in NFT markets

The art that adorns the walls of the global elite is usually not just to look at. They also use it as a source of cash.

The team behind the Pine protocol proposes to do something similar, but for non-fungible tokens (NFTs). Following a $ 1.5 million round of funding led by Sino Global, Amber and Spartan Group, Pine is building a platform that allows NFT holders to access liquidity using their NFT as collateral, and a mortgage-like vehicle , it calls “Pine Now, Pay Later” for those who want to buy an NFT but need financing.

“A year ago I wanted to buy a Meebit, but I had no extra ETH in my wallet. Therefore, I sold my Bored Ape Yacht Club (BAYC) for 7 ETH to execute the trade. I wanted to buy another BAYC, but did “never, and I still have my Meebit right now. Looking back, I wish I had access to a platform like Pine,” said Pine co-founder Alex Ho in a statement illustrating a use case for the platform. “I decided to develop Pine so that NFT owners like me could unlock money without having to sell their NFTs. »

The platform offers loan pools with different terms in terms of borrowing rates, the level at which it is liquidated if the value falls, and the level of collateral, Ho said in an interview with CoinDesk.

A particular factor that differs between pools is the accepted loan-to-value ratio. Pine uses the bottom price (the lowest offered price) for the specific NFT collection from public data released by the markets as a benchmark for valuation. But these are subject to the intense volatility of the cryptocurrency market. Over the past two weeks, for example, ether has fallen almost 27% against the US dollar, which has sent valuations to fall along the way – problematic for those who borrow dollars against the asset.

How much liquidity is actually available in this market? Twenty thousand dollar JPEGs are pretty much a product of a bull market cycle, but will the same sense of value be prescribed to them in a bear market?

Data from the cryptocurrency analysis house Nansen suggest that the number of wallets being bought and sold is declining, and the number of returning buyers and early buyers has also declined.

“The number of projects with weekly sales of more than 10, 100, 1,000 and 10,000 NFTs has also been on a downward trend over the past week, signaling a decline in overall liquidity in the NFT markets. “said Martin Lee, a data journalist. at Nansen, in a note to CoinDesk.

Transactions per week is 50% below record highs this year, falling from around 500,000 at its highest to around 215,000.

But Lee also pointed to data showing that the number of users per week in NFT markets is the lowest it has been this year but still higher than at any point in 2021.

Nansen’s data show that there is still a higher weekly volume than most weeks in 2021, and over the past 30 days there has been a 58% increase in volume from 941,000 used ether per month to 1.49 million.

For Pine, expensive JPEGs – with all their questions of market volatility and liquidity – are just the beginning. The founders envision that their asset-backed financing protocol will eventually expand beyond this market to other verticals in the hands of specialist teams.

In theory, NFTs can be used to represent any kind of value document such as the title of a house or a security agreement to finance an investment in a company like a SAFT. After all, there are similar vehicles in the traditional financial world, and there is no reason why the same can not happen for cryptocurrency – if the industry can pass JPEGs of bored monkeys.

The technician’s opinion

Bitcoin’s daily chart shows support / resistance. (Damanick Dantes / CoinDesk, TradingView)

Bitcoin (BTC) has traded in a narrow range between $ 27,000 and $ 30,000 over the past few days. This is an important support zone for BTC and it is also the lower limit for a one year trading range.

BTC has fallen 3% in the last 24 hours.

A crucial break below $ 27,000 could provide additional downside targets for BTC, initially against $ 17,823. In addition, BTC’s downward 50-day moving average indicates continued weakness in the trend, which may keep sellers active.

Bitcoin is facing strong resistance between $ 33,000 and $ 36,000, which could block a price increase. On the weekly chart, momentum remains negative despite oversold measurements. This may increase the risk of a price breach, similar to what happened in March 2020 and November 2018.

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