David Canellis


<p><em>This is Cheatsheet, a primer on what’s happening in crypto today.</em></p>



<p>If dog coins were barking before, now they’re really biting.</p>



<p>Six of the eight best performing cryptocurrencies at the top end of the market are memecoins, and four of those are dog coins.</p>



<p>Pepe (<a href="https://blockworks.co/price/pepe">PEPE</a>) leads with 38% gains as of 5 am ET, followed by bonk (<a href="https://blockworks.co/price/bonk">BONK</a>), shiba inu (<a href="https://blockworks.co/price/shib">SHIB</a>), dogecoin (<a href="https://blockworks.co/price/doge">DOGE</a>), floki (<a href="https://blockworks.co/price/floki">FLOKI</a>) and <a href="https://blockworks.co/price/sats">SATS</a>, each up between 34% and 13% over 24 hours.</p>



<p>Fantom (<a href="https://blockworks.co/price/ftm">FTM</a>) and BitTorrent (<a href="https://blockworks.co/price/btt">BTT</a>) are somewhere in between. Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) is meanwhile up 5.7% after inching back above $65,100 — less than 6% shy of its $69,044 all-time high.&nbsp;</p>



<p>Ether (<a href="https://blockworks.co/price/eth">ETH</a>) is ahead 3% and hovers at $3,500 flat. The ETH/BTC, which measures ether’s price in terms of bitcoin, has given up most of its gains last month and could soon turn negative for the year to date.</p>



<h2 class="wp-block-heading">What’s happening on-chain</h2>



<p>Bitcoin’s fledgling DeFi ecosystem is attracting serious capital — and degeneracy.&nbsp;</p>



<ul class="wp-block-list">
<li><strong>Flipped: </strong>Bitcoin DeFi now <a href="https://defillama.com/chains">ranks</a> above Solana, Polygon and Avalanche for total value locked (TVL).</li>



<li><strong>Flooded: </strong>Bitcoin’s TVL, now $2.65 billion, has exploded by almost 800% over the past month as the crypto climbed by half.</li>



<li><strong>Fandangled: </strong>Almost all of it is tied up in “staking events” for two unreleased layer-2 projects, Merlin’s Seal and B2 Buzz.</li>
</ul>



<p>Interest in Bitcoin as a base layer for stuff other than BTC has bubbled since the NFT-like Ordinals took off last January. Merlin’s Seal and B2 Buzz are part of a crop of projects rushing to capitalize on that hype.&nbsp;</p>



<p>Unlike the crypto staked in liquidity pools and debt protocols like Orca and Maker, Bitcoin’s current big-two are popular with those chasing allocations of a token sale. Distributions are to be generally scaled to how much has been staked, echoing <a href="https://blockworks.co/news/blast-optimistic-rollup-launch">recently-launched Ethereum layer-2 Blast</a>.</p>



<p>Bitcoin has a number of adjacent protocols already live, including payments layer Lightning, Rootstock, Liquid, Stacks and DeFiChain. Wide differences in tokenomics, technology and terminology has led Bitcoin Magazine to <a href="https://bitcoinmagazine.com/press-releases/bitcoin-magazine-editorial-policy-on-bitcoin-layer-2s-l2s">define</a> what it considers an actual “Bitcoin protocol” moving forward, including the use of bitcoin as the native asset.</p>



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<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/17017196/embed#?secret=husYkui1Kp" data-secret="husYkui1Kp" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div></figure>



<p><em>Ether is still outperforming Nvidia stock over the past five years&nbsp;</em></p>



<p><strong>Read more: </strong><a href="https://blockworks.co/news/ordinals-impact-on-bitcoin-network">Ordinals are driving up Bitcoin fees — but that may be good for the network</a></p>



<ul class="wp-block-list">
<li>DEX volumes have cooled somewhat since last week: $6.5 billion over the past day, down 30% from last Wednesday’s near-yearly high of $9.45 billion.</li>



<li>Solana DEX Raydium flipped BSC’s PancakeSwap for daily volume after posting $799 million, second overall behind Uniswap.</li>



<li>Tether is only $300 million fresh supply away from becoming only <a href="https://blockworks.co/news/tether-almost-100b-club">the fifth cryptocurrency to ever reach</a> a $100 billion market cap.</li>
</ul>



<h2 class="wp-block-heading">Crypto business</h2>



<p>Practically every crypto stock is set to open higher this week — except China-headquartered BIT Mining, which had slipped 3% pre-market as of 5 am ET.</p>



<ul class="wp-block-list">
<li><strong>Bhu-tane: </strong>Bitdeer (BTDR), the Bitmain spinoff operating bitcoin mines in Bhutan and the US, is on track to open 11% higher than Friday’s close.</li>



<li><strong>Electric: </strong>CleanSpark (CLSK) continues to outperform, climbing 9.1% pre-market. Rival Riot is up less than 5%.</li>



<li><strong>More like Macro: </strong>MicroStrategy (MSTR) has now eclipsed CLSK for year-to-date returns, now the number-one crypto stock this year with 85.5%.</li>
</ul>



<p>MicroStrategy’s market value is no longer <a href="https://blockworks.co/news/microstrategy-bitcoin-valuation">mostly bitcoin</a>. The stock is currently worth $18.32 billion with $12.54 billion BTC on its balance sheet and liabilities worth $2.53 billion — meaning markets either value its software business as much as $9.4 billion, or they’re adding premium to its bitcoin-stacking strategy.</p>



<p>And while Bitcoin may be closer than ever to retesting 2021’s high, January’s “sell the news” event around the launch of bitcoin ETFs has dragged heavily on most mining stocks.</p>



<p>Only four bitcoin miners have outperformed the S&amp;P 500’s 7.9% returns so far this year: CLSK, Marathon (MARA), Core Scientific (CORZ) and Bitfarms (BITF).</p>



<p><strong>Read more:</strong> <a href="https://blockworks.co/news/eia-drops-bitcoin-miner-survey">EIA to drop emergency bitcoin miner survey following court battle</a></p>



<ul class="wp-block-list">
<li>Liquidations worth $262.3 million have <a href="https://www.coinglass.com/LiquidationData">struck</a> crypto derivatives traders over the past day, 60% of it hitting short sellers.</li>



<li>On average, that’s $110,000 lost per minute on short bets, with BitMEX’s dogecoin market seeing the largest recent liquidation ($2.45 million).</li>



<li>Overall CEX open interest is again at all-time high, now $28.92 billion.</li>
</ul>



<h2 class="wp-block-heading">On the ground</h2>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">BTC is now officially at an all-time high in EUR terms. <a href="https://t.co/58wdEanu5K">https://t.co/58wdEanu5K</a> <a href="https://t.co/kHup8rPpMx">pic.twitter.com/kHup8rPpMx</a></p>&mdash; mhonkasalo (@mhonkasalo) <a href="https://twitter.com/mhonkasalo/status/1764582701204402644?ref_src=twsrc%5Etfw">March 4, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption"><em>European Counter-signal Bank</em></figcaption></figure>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Congrats! <a href="https://t.co/aK2Ps3pG9h">https://t.co/aK2Ps3pG9h</a></p>&mdash; Mustafa Al-Bassam (@musalbas) <a href="https://twitter.com/musalbas/status/1764584134574305719?ref_src=twsrc%5Etfw">March 4, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption"><em>This is what peak performance looks like</em></figcaption></figure>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Blockchain network fees will eventually be treated the same way as server costs<br><br>Paid for by apps on behalf of their users, invisible, a cost of doing business, not something anyone thinks about except backend devs</p>&mdash; hayden.eth 🦄 (@haydenzadams) <a href="https://twitter.com/haydenzadams/status/1764403930824384663?ref_src=twsrc%5Etfw">March 3, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption"><em>Devs do something (pay our fees)</em></figcaption></figure>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Cheatsheet: Crypto short sellers losing $110K per minute

Sam Reynolds

<div id="highlights-block_60e85c561089b" class="highlights">
        <ul>
                <li>Continued interest in DeFi means the value of ether has risen steadily even as bitcoin enters a bear market </li>
                <li>But ether, as a store of value for DeFi, might have come competition on the horizon</li>
            </ul>
    
</div>



<p>Decentralized Finance (DeFi) is proving to be the great differentiator between bitcoin and ether, as a new report from CoinDesk Research shows that bitcoin had one of its worst quarters ever, while ether had double-digit gains.&nbsp;</p>



<p>In the second quarter of 2021, CoinDesk Research found that bitcoin had its third-worst quarter ever, in terms of price performance, with the CoinDesk Bitcoin Price Index (XBX) dropping 40.39%. Only the fourth quarter of 2018, where it dropped by 44%, and the first quarter of 2018, where it posted a 50% decline, were worse. In total contrast, the CoinDesk Ether Price Index (ETX) finished the quarter up 18.69%.&nbsp;</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1001" height="787" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/coindesk-research-bitcoin-ether-diverged.jpg" alt="" class="wp-image-5422" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/coindesk-research-bitcoin-ether-diverged.jpg?w=1001 1001w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/coindesk-research-bitcoin-ether-diverged.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/coindesk-research-bitcoin-ether-diverged.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/coindesk-research-bitcoin-ether-diverged.jpg?w=327 327w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/coindesk-research-bitcoin-ether-diverged.jpg?w=332 332w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/coindesk-research-bitcoin-ether-diverged.jpg?w=279 279w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/coindesk-research-bitcoin-ether-diverged.jpg?w=80 80w" sizes="(max-width: 1001px) 100vw, 1001px" /><figcaption>Source: CoinDesk Reserach </figcaption></figure>



<p>As for DeFi, like ether’s gains, it posted growth with the total locked-in value increasing by 13% during the quarter.&nbsp;</p>



<p>“It&#8217;s only the fourth time since ETX inception in the fourth quarter of 2016 that ether and bitcoin have recorded mixed quarters, but quarterly returns for the two price indexes have diverged by more than 50 percentage points nine times since the first quarter of 2017,” the report said.</p>



<p>The report said that there’s still a correlation between bitcoin and ether, but it&#8217;s slipping, coming in at 0.75.&nbsp;&nbsp;</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="715" height="562" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/CoinDesk-research-defi-report.jpg" alt="" class="wp-image-5421" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/CoinDesk-research-defi-report.jpg?w=715 715w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/CoinDesk-research-defi-report.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/CoinDesk-research-defi-report.jpg?w=327 327w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/CoinDesk-research-defi-report.jpg?w=332 332w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/CoinDesk-research-defi-report.jpg?w=279 279w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/CoinDesk-research-defi-report.jpg?w=80 80w" sizes="(max-width: 715px) 100vw, 715px" /><figcaption>Source: CoinDesk Research </figcaption></figure>



<p>It’s not about DeFi’s outperformance of bitcoin, but rather “eth’s outperformance of DeFi,” explained CoinDesk Research analyst Christine Kim in an interview with Blockworks.</p>



<p>“In a crypto winter, more investors and traders are fueled to search for yield in a very yield-scarce environment. People are going to look for ways to put their assets to work to secure some kind of a return on their investment,” Kim told Blockworks. “And that&#8217;s where the DeFi ecosystem really helped to step in with various protocols and applications, which are lending markets as well as decentralized exchanges.”</p>



<p>Kim said that this quarter’s notable divergence strengthens the weakened correlation between these two crypto assets.&nbsp;</p>



<p>“Very <a href="https://cms.blockworks.co/ethereum-more-than-just-a-currency/" target="_blank" rel="noreferrer noopener">different value propositions</a>, investment narratives,” she said.&nbsp;</p>



<p>But that’s not to say that ether, as a currency, doesn’t have competition. While much has <a href="https://cms.blockworks.co/ethereums-role-in-a-multi-chain-future/" target="_blank" rel="noreferrer noopener">been reported about alternatives</a> to Ethereum, the blockchain, Kim sees many emerging ERC-20 (the type of token used on Ethereum) tokens competing as stores of value.&nbsp;</p>



<p>“One of the things that will be interesting to watch in the upcoming quarter is the makeup of crypto assets locked in DeFi,” Kim said. “We’re starting to see a lot of different types of tokens in use.”</p>



<p>One of those alternatives is <a href="https://www.gemini.com/cryptopedia/wbtc-what-is-wrapped-bitcoin#section-what-is-w-btc" target="_blank" rel="noreferrer noopener">tokenized bitcoin</a>, ERC-20 tokens on the Ethereum blockchain that represent bitcoin stored in trust.&nbsp;</p>



<p>“In a bear market, there&#8217;s going to be potentially more holders of Bitcoin looking to secure gains by using their bitcoin and transferring it to the Ethereum-based DeFi market,” Kim said. “That&#8217;s a huge avenue for liquidity, and a huge liquidity surge that could be potentially forthcoming to DeFi.”</p>



<p>And this liquidity surge, Kim argues, will bring further legitimacy to DeFi and Ethereum all while fueled by bitcoin’s use as a store of value — even when it&#8217;s <a href="https://cms.blockworks.co/wrapped-crypto-tokens-and-why-theyre-critical-to-markets/">wrapped in Ethereum</a>.   </p>


bitcoin defi