This week we will also cover the interest of institutions in crypto, but first, let’s take a look at the general markets. Terra has identified a new ATH point and we will examine the key catalysts behind it. You will find weekly transaction fees, the rate of funds entering the markets and all other details in this article.
Weekly Evaluation of Cryptocurrency Markets
Transaction fees are also important data showing how intensely the related cryptocurrencies are used. Especially for Bitcoin and Ethereum, this should be followed constantly. Bitcoin fees are down 7% in a relatively quiet week. Ethereum fees continue to drop by 25% each week this time, hitting their lowest levels since last summer.
What about net flow to stock markets? Crypto entering the exchanges could signal selling pressure, while withdrawals could potentially be a bullish/collecting sign. Bitcoin has recorded modest exits from exchanges after seeing entries in the previous week.
Cryptocurrencies and Institutional Demand
Volatility and manipulation concerns can scare investors away. However, these do not appear to fully deter the interest of traditional financial and technology institutions. The main players in the crypto are thriving, and there are signs that institutional demand continues to rise, even if it is not reflected in prices. In 2020, intense interest from multi-billion institutions began and shows no signs of slowing down.
Currently, over 99% of all Bitcoin volume comes from transactions over $100,000, referred to as large transactions. The dominance of institutions and the change in the market structure accelerated in the third quarter of 2020. Since then, the share of large trading volume has consistently remained above 90%.
Important News About Corporate Entry
Bain Capital raises $560 for a crypto fund
Wall Street hedge funds reportedly pouring billions into crypto
GoldenTree, a $46 billion fund, hires Head of Digital Assets
Citadel Securities plans to enter crypto markets
Sequoia Launches $600M Private Crypto Fund
Pantera Capital has set aside $1 billion for its crypto fund.
Despite falling 50%+ from crypto markets highs, Terra (LUNA) continues to set new highs. Defying the bear market, LUNA has risen ten times more than it was a year ago, reaching a valuation of over $104.
So why did the LUNA rise?
It has raised a $1 billion investment from the Luna Foundation Guard (LFG) to build Bitcoin reserves to support UST (the stable coin of the Terra ecosystem).
LFG, which renewed the yield reserve of the Anchor protocol with 450 million dollars, was used to give depositors a 19.5% advantage in the UST.
The increased demand for UST (mostly to achieve these high rates) has caused large amounts of LUNA to burn, effectively reducing its supply.
Terra has promoted UST returns on Ethereum and Avalanche, making it one of the lucrative ones among stablecoins across multiple networks.