February 15, 2023

The governance token for liquid staking platform Lido (LDO) saw a 17% gain on Wednesday. The rally came amid a new vote approved that relates to distributing voting LDO tokens spread over a period of up to four years to decentralized autonomous organization (DAO) contributors. Lido DAO has the highest value locked of all decentralized finance protocols, according to DeFi Llama. A proposal was also submitted on Tuesday by the DAO’s financial unit over whether the DAO should sell or stake the 20,000 ether in its treasury.

(LDO 4-hour price chart)

Binance USD (BUSD), the third-largest stablecoin by market cap, has roughly returned to its $1 peg after Binance CEO Changpeng Zhao on Tuesday commented on his exchange’s connection to the popular Paxos-issued token. Backed by short-term treasuries and cash-like assets, BUSD rallied to $0.9997 in European morning hours on Wednesday, recovering from a two-year low of $0.9950 hit after the New York Department of Financial Services (NYDFS) on Monday ordered Paxos to stop minting more of the tokens. “BUSD is not issued by Binance,” Zhao said during a Twitter Spaces on Tuesday. “We have an agreement to let them [Paxos] use our brand, but that's not something that we created.”

Soros Fund Management, the investment vehicle of hedge fund billionaire George Soros, appears to have added exposure to some crypto companies before the end of last year, although the nature of the trades isn’t totally clear. According to a 13F filing with the U.S. Securities and Exchange Commission (SEC) dated Dec. 31, Soros Fund Management purchased 39.6 million worth of convertible debentures of crypto miner Marathon Digital Holdings (MARA). The fund was also showing ownership of call options and put options on 50,000 shares of MicroStrategy (MSTR). Soros' 13F from three months earlier disclosed only put options on 50,000 shares.

The degree of uncertainty, as measured by the implied volatility (IV), has dropped after the CPI release, paving the way for price gains. (Amberdata)

Bitcoin (BTC) and the tech-heavy Nasdaq index unexpectedly put in a positive performance on Tuesday even as U.S. consumer price index (CPI) data revived hawkish U.S. Federal Reserve concerns and sent Treasury yields higher.

While the CPI showed inflation continued to cool in January, the annual rate fell to just 6.4%, a bit faster than economist forecasts for 6.2%. The core rate dipped to 5.6% versus expectations for 5.5%.

The report revived concerns that the Fed may be more aggressive with rate hikes in 2023 than is currently anticipated, helping to send the 10-year Treasury yield up 12 basis points to its highest in one month at 3.75%. The two-year yield rose to a two-month high of 4.64%. Traders currently are betting on two more 25 basis point rate hikes by the Fed this year - one in March and one in May.

Source: Arcane Research

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