L1 Performance, Funding Spikes, Options Get More Expensive
SEP 02, 2021 • 3 Min Read
Ashwath BalakrishnanDisclosure: Delphi Ventures and members of our team have invested in BTC, DPX, FTT, ETH, AR & SOL. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice.
Metus vulputate eu scelerisque felis. Nulla facilisi cras fermentum odio eu. Scelerisque fermentum dui
faucibus in ornare quam viverra orci sagittis. A iaculis at erat pellentesque adipiscing commodo elit. In
fermentum et sollicitudin ac orci. Ultrices sagittis orci a scelerisque purus. Faucibus ornare
suspendisse sed nisi lacus sed viverra tellus in. Mauris cursus mattis molestie a iaculis at erat
pellentesque adipiscing. Volutpat diam ut venenatis tellus in metus vulputate. Eu consequat ac felis
donec et odio pellentesque. Eu mi bibendum neque egestas congue quisque egestas diam. Quam
lacus suspendisse faucibus interdum posuere lorem. Quam id leo in vitae. Ut faucibus pulvinar
elementum integer enim neque. Id ornare arcu odio ut sem nulla pharetra diam sit. Molestie ac feugiat
sed lectus vestibulum mattis. Ipsum nunc aliquet bibendum enim facilisis. Euismod nisi porta lorem
mollis aliquam ut porttitor.
Iaculis nunc sed augue lacus viverra vitae congue eu consequat. Gravida neque convallis a cras.
Nunc scelerisque viverra mauris in aliquam sem. Non odio euismod lacinia at quis risus sed vulputate
odio. Purus faucibus ornare suspendisse sed. Turpis egestas maecenas pharetra convallis posuere
morbi. Nec feugiat nisl pretium fusce id velit ut. Nunc congue nisi vitae suscipit tellus mauris a diam.
Posuere sollicitudin aliquam ultrices sagittis orci. Urna nec tincidunt praesent semper. Turpis nunc
eget lorem dolor sed viverra.
suspendisse sed nisi lacus sed viverra tellus in. Mauris cursus mattis molestie a iaculis at erat
pellentesque adipiscing. Volutpat diam ut venenatis tellus in metus vulputate. Eu consequat ac felis
donec et odio pellentesque. Eu mi bibendum neque egestas congue quisque egestas diam. Quam
lacus suspendisse faucibus interdum posuere lorem. Quam id leo in vitae. Ut faucibus pulvinar
elementum integer enim neque. Id ornare arcu odio ut sem nulla pharetra diam sit. Molestie ac feugiat
sed lectus vestibulum mattis. Ipsum nunc aliquet bibendum enim facilisis. Euismod nisi porta lorem
mollis aliquam ut porttitor.
Iaculis nunc sed augue lacus viverra vitae congue eu consequat. Gravida neque convallis a cras.
Nunc scelerisque viverra mauris in aliquam sem. Non odio euismod lacinia at quis risus sed vulputate
odio. Purus faucibus ornare suspendisse sed. Turpis egestas maecenas pharetra convallis posuere
morbi. Nec feugiat nisl pretium fusce id velit ut. Nunc congue nisi vitae suscipit tellus mauris a diam.
Posuere sollicitudin aliquam ultrices sagittis orci. Urna nec tincidunt praesent semper. Turpis nunc
eget lorem dolor sed viverra.
lacus suspendisse faucibus interdum posuere lorem. Quam id leo in vitae. Ut faucibus pulvinar
elementum integer enim neque. Id ornare arcu odio ut sem nulla pharetra diam sit. Molestie ac feugiat
sed lectus vestibulum mattis. Ipsum nunc aliquet bibendum enim facilisis. Euismod nisi porta lorem
mollis aliquam ut porttitor.
Market Update
After yesterday’s solid price action, ETH had a slow day while BTC attempted to make up for lost ground. Layer 1 network tokens continue to lead the market, while DeFi prices continue to stagnate.
Monster August for L1s
- Layer 1 coins have done extremely well over August, thanks in part to several announcements of ecosystem-wide liquidity mining. AVAX ripped upon the announcement of a $180M liquidity mining program, followed by a relentless bid on SOL. Fantom’s liquidity mining, though misunderstood, also sparked a rally in FTM. KSM and DOT look primed to join the party.
Funding Chads Up
- Funding was at healthy levels throughout August, but made a massive push up as traders aped into ETH perp longs. Funding began to spike just before ETH’s monster candle yesterday, which makes it clear that the perp market played a key role in pushing ETH above $3,500.
- Funding at high levels is a concern, as it implies more leverage in the market, and thus more traders that could be caught offside and liquidated. However, if we zoom out, funding isn’t all that high compared to what we saw in May this year.
- All in all, it seems like the market is starting to accept that this cycle isn’t over. But just to play devil’s advocate, this could also be the most elaborate bull trap in the history of crypto.
- BTC has lagged for most of this week but finally seems to have found some footing as it makes its way back to $50K. ETH/BTC has pulled back around 3% as a result.
- As ETH and other crypto assets started to run, a narrative that trend structure is similar to summer 2020 — where BTC consolidated and everything else rallied — began to emerge. The spike in funding, however, shows us that there’s still demand for BTC in the market as traders began to long BTC in anticipation of it catching up.
Volatility Ticking Up
- Implied volatility for short-term options is beginning to increase again, which means the cost of buying these options is going up too. Realized volatility for ETH is also starting to increase after a flat August.
- In our ETH market report, we noted that options seemed cheap and could be a capital efficient (but risky) way for investors to gain exposure to ETH. If ETH continues to trend upwards, implied volatility, and thus options premiums, will continue increasing too.
Notable Tweets
Singaporean regulator says Binance is not licensed to operate.
ICYMI: https://t.co/ypPw7YF3eX placed on investor alert list by Singapore regulatorhttps://t.co/OJcpz1sAWO
— The Block (@TheBlock__) September 2, 2021
A thread addressing the perceived negative impact of EIP-1559
“EIP-1559 sucks. After it was implemented gas prices skyrocketed!”
This take is propagated a lot and I think this is far from true. Correlation is not causation. I suppose gas prices would be much higher now if we didn’t have EIP-1559. How does EIP-1559 save you $ETH? ?? pic.twitter.com/zNGf9uf7AX
— korpi (@korpi87) September 2, 2021
Patrick O’Shaugnessy talks to Yield Guild’s Gabby Dizon about the metaverse and its impact.
My conversation with @gabusch, founder of @YieldGuild
This is a peek into a rapidly changing world online where people earn a living playing video games at huge scale.
Markets are being installed into games via crypto and the results are wild.
Enjoy!https://t.co/jCZve2HkJZ pic.twitter.com/BHKBQc43UM
— Patrick OShaughnessy (@patrick_oshag) September 2, 2021
