Crypto Market

BTC and ETH Market Insight

U.S. consumer confidence has plummeted to its lowest level in three years, creating pressure on risk assets. In addition, trade war concerns have been exacerbated by Trump's proposal of 25% tariffs on Canada and Mexico. Bitcoin fell below the $80K mark, hitting $78K on February 28. Throughout this bull run, BTC experienced just one -30% drawdown, which signaled a multi-month bottom. Historically, Bitcoin has rarely stayed below this level (the realized price for short-term holders) for long during a bull market.

Options Market

The market sentiment turned sour this week in response to rising concerns of stagflation and trade wars. A broad selloff was seen across multiple asset classes including crypto. Both BTC and ETH hit a multiple-month low before recovering. That being said, the option market hasn’t shown any signs of bullish sentiment recovering. Front-end implied volatility jumped in tandem with the realised volatility. Longer-dated IVs were sold down though. It might be interesting for those who seek to buy optionality at a lower price with a higher realised volatility. Near-term skew drifted further to favour puts due to the increasing demand for downside protection and call unwinding. 

Altcoins and Blockchain News

• According to official sources, the Ethereum Foundation has announced a new leadership structure. Starting from March 17, Hsiao-Wei Wang and Tomasz Stańczak will serve as co-executive directors.

   

• At ETH Denver, Metis Foundation's Natalia announced the launch of Metis Hyperion, a new high-performance Layer 2 chain.

   

• Arthur, the founder of DeFiance Capital, stated on social media that he had participated in an OTC transaction for FTX bankruptcy assets, purchasing SOL at $64 through Galaxy. Today, he received the unlocked tokens. He does not plan to sell any of them and believes that in three months, SOL's price will increase significantly.

   

• According to Dune analytics data, the daily trading revenue of the AI agent platform Virtuals Protocol has plummeted by 96.8% from its peak. The platform's daily revenue peaked at over $1 million on January 2 but had fallen below $35,000 by the end of February.

   

• According to Cointelegraph, amidst Bitcoin’s drop below $80,000, discussions about "buying the dip" on social media have surged to their highest level since July last year.

   

• Base's official X account announced that the development module Flashblocks, built in collaboration with Flashbots, has been launched on the testnet and will be deployed on the mainnet in Q2. Flashblocks can reduce the effective block time from 2 seconds to 0.2 seconds, making Base the fastest EVM-compatible chain.

   

• On February 28, The Block reported that Uniswap Labs has introduced a native fiat off-ramp feature. Users can convert crypto assets into stablecoins like USDC or ETH through integrated services such as MoonPay, Robinhood, and Transak, and withdraw funds to their bank accounts.

Macro

The major benchmarks finished the week with mixed results: the DJIA added +1.0%, the S&P 500 lost 1.0%, and the Nasdaq lost 3.5%. Chinese equities declined for the week: the Shanghai Composite Index declined 1.72%, the CSI 300 dropped 2.2% and the Hang Seng index shed 2.28%.