Gold Prices Hit New Heights, Benefiting Gold-Backed Tokens
Gold prices have recently reached unprecedented levels, positively impacting digital tokens that are backed by this precious metal, commonly viewed as a safe-haven asset. XAUT, the leading gold-backed token by market capitalization, surged to a record high of $4,425, while PAXG and KAU also experienced gains, contributing to a total market capitalization of $4.38 billion for gold-backed tokens. Timothy Misir, head of research at BRN, commented via email that the prevailing sentiment among investors is one of caution regarding macroeconomic uncertainties, which has tempered enthusiasm for cryptocurrencies, despite an improvement in liquidity conditions.
Bitcoin and Market Trends Amid Economic Indicators
Bitcoin, often referred to as digital gold, saw its value increase to $89,800, coinciding with a fall in the dollar index and a rise in technology stocks that boosted Asian equity markets. Noteworthy gains were observed in leading chip manufacturers, including Taiwan Semiconductor Manufacturing and Samsung Electronics, which helped alleviate concerns surrounding a potential AI bubble. Futures linked to the S&P 500 also rose by approximately 0.3%, signaling a promising start for U.S. markets on the following Monday. However, while the recent price increase is a positive development, achieving a sustainable recovery will necessitate renewed interest from institutional investors, whose participation appears to have declined. According to CoinShares, digital asset investment products worldwide experienced a net outflow for the first time in four weeks, totaling a loss of $952 million.
Derivatives Market Shows Mixed Signals
Despite some stability in the market, demand for risk-taking has not yet surged. Futures data presents a varied outlook, with Bitcoin (BTC), Ethereum (ETH), HYPE, and BNB showing slight increases in open interest over a 24-hour period. Conversely, many other significant cryptocurrencies have seen capital withdrawals. Long positions in BTC that are leveraged with borrowed funds continue to increase on Bitfinex, a trend often associated with prolonged bear markets. The 30-day implied volatility for BTC remains steady at around 45%, indicating a lack of dynamic trading as the year comes to a close. Meanwhile, Ether’s implied volatility has dropped to 70%, marking its lowest level since October 9. On the CME, open interest in BTC futures has fallen below 120,000 BTC for the first time since early 2024, suggesting a decrease in institutional engagement. Other tokens like BCH, SHIB, WLFI, and TON are experiencing negative funding rates in perpetual markets, signaling a preference for short positions, while major cryptocurrencies maintain slightly positive funding rates. On Deribit, activity shows a mixed landscape with both BTC call and put spreads being traded, and traders in ETH are focusing on calendar spreads. Overall, put options for BTC and ETH continue to command a premium over call options, although the put bias has lessened somewhat since Friday.
Curve DAO Rejects Funding Proposal Amid Transparency Concerns
Curve DAO recently voted against a proposal to allocate 17.45 million CRV tokens, valued at approximately $6.3 million, to Swiss Stake AG, a firm led by the founder of Curve Finance, Michael Egorov, which is responsible for essential development tasks for the decentralized exchange. In the past 24 hours, the CRV token itself has risen by around 4%, outperforming the broader cryptocurrency market, while the CoinDesk 20 index increased by 0.35% during the same timeframe. The proposal aimed to support protocol development, infrastructure, and security initiatives for the 25-member team at Swiss Stake but was ultimately rejected, with 54.46% of voters opposing it and 45.54% in favor. Notably, wallets associated with Yearn Finance and Convex Finance, two significant entities in the decentralized finance space, cast nearly 90% of the votes against the proposal, as indicated by on-chain data. Some members of the DAO raised issues regarding the lack of transparency in the reporting of prior expenditures, emphasizing that the DAO should receive a detailed and transparent account of expenses before considering further funding requests.
