Join Delphi Research today and immediately get access to our full Member Portal!
Join Delphi Research today and immediately get access to our full Member Portal!
Join Delphi Research today and immediately get access to our full Member Portal!
Latest Releases

Oct 19/2021

Market Creeps Higher as Bitcoin Futures ETF Debuts

Oct 19/2021

DAO Governance Digest #8

Oct 18/2021

Ghosts In The Machine – The First AI NFT Collection

Oct 13/2021

Flashing A Light On The Dark Forest – Part 1
Trending

Oct 12/2021

MCDEX: The New Kid on Perp Street

Oct 11/2021

BTC Leading The Way, Polygon Transactions Drop

Oct 13/2021

Flashing A Light On The Dark Forest – Part 1

Oct 12/2021

DAO Governance Digest #7
Delphi Daily
Show More
Token Swap Proposed (FTT-BIT)
  • Alameda Research has proposed a $180m token swap of FTT and BIT to the BitDAO Treasury, with a commitment of not to sell for 3 years.
  • The move expands FTX’s exposure to ByBit as BitDAO’s treasury is funded by 0.025% of ByBit’s futures trading volume.
  • FTT currently trades as a higher price multiple when the two are measured against the amount of revenue dedicated to either token burns (in FTT’s case) or a treasury (BIT). Notably, BIT tokens earn higher daily revenue than FTT tokens, which can be backed into by breaking down FTT’s weekly token burns.
  • Alameda Research has proposed a $180m token swap of FTT and BIT to the BitDAO Treasury, with a commitment of not to sell for 3 years.
  • The move expands FTX’s exposure to ByBit as BitDAO’s treasury is funded by 0.025% of ByBit’s futures trading volume.
  • FTT currently trades as a higher price multiple when the two are measured against the amount of revenue dedicated to either token burns (in FTT’s case) or a treasury (BIT). Notably, BIT tokens earn higher daily revenue than FTT tokens, which can be backed into by breaking down FTT’s weekly token burns.
Read More
Binance Burns Big
  • Binance just announced their largest ever BNB burn at $635.44m in the 3rd quarter of 2021.
  • An important point to note is that the formula for Binance quarterly token burns are not specifically disclosed, hence it is difficult to ascertain whether the burns are a direct result of higher trading volume and revenue. FTX  burns FTT equal to a third of exchange fees while Huobi dedicates 15% of total revenue to HT burns, drawing a direct correlation between the two.
  • Both Binance and Huobi have been plagued with regulatory issues in China over the last month, with the former announcing restricted access for mainland customers last week and Huobi halting new registrations for Chinese users in September, in compliance with Beijing’s crypto ban.
  • FTX has yet to announce a dramatic overhaul to its China user base and has been growing relatively consistently versus the other two.
  • Binance just announced their largest ever BNB burn at $635.44m in the 3rd quarter of 2021.
  • An important point to note is that the formula for Binance quarterly token burns are not specifically disclosed, hence it is difficult to ascertain whether the burns are a direct result of higher trading volume and revenue. FTX  burns FTT equal to a third of exchange fees while Huobi dedicates 15% of total revenue to HT burns, drawing a direct correlation between the two.
  • Both Binance and Huobi have been plagued with regulatory issues in China over the last month, with the former announcing restricted access for mainland customers last week and Huobi halting new registrations for Chinese users in September, in compliance with Beijing’s crypto ban.
  • FTX has yet to announce a dramatic overhaul to its China user base and has been growing relatively consistently versus the other two.
Read More
Activity on Terra Climbs
  • Transactions on the Terra Blockchain have increased considerably since the middle of the year.
  • This growth comes on the back of several new protocol launches including Nexus Protocol, Valkyrie Protocol, and a bunch of NFT mints over the last few weeks.
  • The price of LUNA has taken a breather since hitting fresh highs post-Columbus 5 and currently trades around ~$36, roughly 27% off its ATH.
  • Transactions on the Terra Blockchain have increased considerably since the middle of the year.
  • This growth comes on the back of several new protocol launches including Nexus Protocol, Valkyrie Protocol, and a bunch of NFT mints over the last few weeks.
  • The price of LUNA has taken a breather since hitting fresh highs post-Columbus 5 and currently trades around ~$36, roughly 27% off its ATH.
Read More
GBTC On Fire (Sale)
  • GBTC is currently trading near its steepest discount of the year on the back of the ProShares Bitcoin Futures ETF launch today.
  • Due to the nature of GBTC, the shares are locked up for 6 months and GBTC holders subject to such lock ups are unable to trade in reaction to market movements. There is also no redemption function in the trust itself, which makes its tracking less efficient.
  • Today, Grayscale filed to convert GBTC into a Spot Bitcoin ETF, probably in reaction to competition posed by the Proshares and Valkyrie ETFs. If successful, the discounts seen on GBTC will be cleared quickly as ETFs tend to track their underlying much more closely.
  • GBTC is currently trading near its steepest discount of the year on the back of the ProShares Bitcoin Futures ETF launch today.
  • Due to the nature of GBTC, the shares are locked up for 6 months and GBTC holders subject to such lock ups are unable to trade in reaction to market movements. There is also no redemption function in the trust itself, which makes its tracking less efficient.
  • Today, Grayscale filed to convert GBTC into a Spot Bitcoin ETF, probably in reaction to competition posed by the Proshares and Valkyrie ETFs. If successful, the discounts seen on GBTC will be cleared quickly as ETFs tend to track their underlying much more closely.
Read More
Macro Conditions Send Mixed Signals
  • Despite these growth concerns, the market is now pricing in at least two Fed rate hikes by the end of 2022 as inflationary pressures continue to build.
  • Fed Funds Rate Futures (in white) have begun to accelerate over the last few weeks. Fed Fund futures embody the markets’ view on where target interest rates will be set at the end of next year (we inverted the axis on the above chart to show the close relationship with the US dollar, so the recent increase means rate expectations are rising).
  • Meanwhile, the U.S Dollar index (DXY), in orange, has strengthened in recent months as expectations for tighter policy proliferate (DXY tracks USD against a basket of major currencies, with the euro making up the largest weighting). A stronger dollar also implies tighter financial conditions and often serves as a headwind to global growth, which as we know is a major threat to the sustainability of the economic recovery thus far; this could cause some trouble if the Fed gets too hawkish too early (i.e. tapering, raising rates).
  • For more context on these developments, see our recent report on the The State of Global Markets.
  • Despite these growth concerns, the market is now pricing in at least two Fed rate hikes by the end of 2022 as inflationary pressures continue to build.
  • Fed Funds Rate Futures (in white) have begun to accelerate over the last few weeks. Fed Fund futures embody the markets’ view on where target interest rates will be set at the end of next year (we inverted the axis on the above chart to show the close relationship with the US dollar, so the recent increase means rate expectations are rising).
  • Meanwhile, the U.S Dollar index (DXY), in orange, has strengthened in recent months as expectations for tighter policy proliferate (DXY tracks USD against a basket of major currencies, with the euro making up the largest weighting). A stronger dollar also implies tighter financial conditions and often serves as a headwind to global growth, which as we know is a major threat to the sustainability of the economic recovery thus far; this could cause some trouble if the Fed gets too hawkish too early (i.e. tapering, raising rates).
  • For more context on these developments, see our recent report on the The State of Global Markets.
Read More
Macro Conditions Send Mixed Signals
  • In our view, major central banks aren’t yet finished when it comes to accomodative monetary policy.
  • The global economy has rebounded since the depths of 2020, in many ways far faster than many expected. As a result, policymakers have looked to scale back their involvement and “normalize” policy as the world shows signs of restoration. The outlook for global growth, however, is far murkier, as we noted in our recent analyst call for Institutional members.
  • For starters, key economic indicators have disappointed in recent months, portraying a weakening, rather than strengthening, recovery. The peak in global liquidity growth earlier this year preceded the peak in economic momentum, which occurred right around the same time BTC and the rest of the crypto market started to roll over in late April to early May; notably, investors’ risk appetite seems to have topped out around the same time.
  • In our view, major central banks aren’t yet finished when it comes to accomodative monetary policy.
  • The global economy has rebounded since the depths of 2020, in many ways far faster than many expected. As a result, policymakers have looked to scale back their involvement and “normalize” policy as the world shows signs of restoration. The outlook for global growth, however, is far murkier, as we noted in our recent analyst call for Institutional members.
  • For starters, key economic indicators have disappointed in recent months, portraying a weakening, rather than strengthening, recovery. The peak in global liquidity growth earlier this year preceded the peak in economic momentum, which occurred right around the same time BTC and the rest of the crypto market started to roll over in late April to early May; notably, investors’ risk appetite seems to have topped out around the same time.
Read More
The Bright Side: Perp Funding Remains Reasonable
  • Perpetuals offer another litmus test on the market. Normally, a tell-tale sign of an overheated market would be ‘perp’ funding rates surging erratically.
  • However, current funding rates still look compressed when compared to early 2021. While funding is not exactly cheap–at 0.05% per day, it costs 18.3% to be long for a whole year at that rate–when the benefit from being long exceeds the cost, the choice is obvious.
  • We should expect funding to rise as the market continues to trend. But we haven’t reached the threshold where it costs an arm and a leg per day to be long BTC. This suggests worries about excessive leverage may be premature.
  • Perpetuals offer another litmus test on the market. Normally, a tell-tale sign of an overheated market would be ‘perp’ funding rates surging erratically.
  • However, current funding rates still look compressed when compared to early 2021. While funding is not exactly cheap–at 0.05% per day, it costs 18.3% to be long for a whole year at that rate–when the benefit from being long exceeds the cost, the choice is obvious.
  • We should expect funding to rise as the market continues to trend. But we haven’t reached the threshold where it costs an arm and a leg per day to be long BTC. This suggests worries about excessive leverage may be premature.
Read More
Open Interest Is Nearing ATHs, But is it Cause for Alarm?
  • Open interest in BTC futures is nearing its all-time high, which has been a cause for concern for commentators on Twitter. Open interest growth reflects an increase in leverage. However, when the price of an asset is increasing, open interest measured in USD is bound to go up. Rising open interest as BTC closes in on its all-time high is only natural, as, quite obviously, the unit price of BTC causes the notional amount of positions to rise.
  • For all intents and purposes, BTC open interest is already at an all-time high. FTX, Binance, Bitfinex, and CME all hit their highest level of BTC futures open interest in the last few days.
  • The shortfall comes from Asian exchanges like Huobi and OKEx, which were market drivers in early 2021 but have seen open interest decline. Deribit and Bybit, both hotbeds for leveraged traders, are also yet to near their open interest all-time highs.
  • Open interest in BTC futures is nearing its all-time high, which has been a cause for concern for commentators on Twitter. Open interest growth reflects an increase in leverage. However, when the price of an asset is increasing, open interest measured in USD is bound to go up. Rising open interest as BTC closes in on its all-time high is only natural, as, quite obviously, the unit price of BTC causes the notional amount of positions to rise.
  • For all intents and purposes, BTC open interest is already at an all-time high. FTX, Binance, Bitfinex, and CME all hit their highest level of BTC futures open interest in the last few days.
  • The shortfall comes from Asian exchanges like Huobi and OKEx, which were market drivers in early 2021 but have seen open interest decline. Deribit and Bybit, both hotbeds for leveraged traders, are also yet to near their open interest all-time highs.
Read More
Podcasts
Crypto Markets

Loading...