Bitcoin BTC price hits 3-week low, lingers near $21.7k amid ongoing inflation concerns

Bitcoin falls to its lowest level in almost a month.

Good morning Asia. Here’s what’s happening in the markets.

Federal Reserve Chair Jerome spoke harshly for the second day in a row. Banking giant JPMorgan ended its relationship with crypto exchange Gemini, CoinDesk’s Ian Allison first reported. Crypto-friendly bank Silvergate will cease operations.

Bitcoin absorbed everything and then fell to its lowest level in almost a month. The largest cryptocurrency by market cap recently traded around $21,750, down more than 2% in the last 24 hours. BTC fell below $21,600 at times after oscillating above $22,000 for most of this month. Investors have grappled with worrisome jobs and price data, prompting Powell and Federal Reserve governors to reignite monetary aggressiveness as an inflationary recipe.

The prospects for a 50 basis point (bp) rate hike are now around 70% after a more dovish 25bp hike had been heavily favored in recent weeks.

“After celebrating disinflation greenshoots over the past two months, the Federal Reserve has had to resume its hawkish stance by speaking harshly on rate hikes. I think it’s interesting to note that they flaunted their rate hikes as having a significant impact on inflation, and then it became clear that inflation has proved more persistent than expected. Quinn Thompson, head of growth and capital markets at blockchain-based capital markets platform Maple, wrote to CoinDesk in an email. “A 50 basis point rate hike is now basically inevitable.”

Thompson added that “barring a break in the system, such as a credit event, it seems increasingly likely that there will be no rate cuts until next year.”

Ether performed similarly to Bitcoin, also declining around 2% to change hands just above $1,530. This level was well below its late February highs above $1,700. Other major cryptos were mostly down, with SOL, the token on the Solana blockchain, down more than 9% and APT, the native cryptocurrency on Layer 1 blockchain Aptos Labs, down over 6%. The CoinDesk Market Index, a measure of the performance of the broader crypto market, fell nearly 3%.

The Nikkei rose about 0.5% as trading opened in Asian stock markets. US indices were flat, with the tech-heavy Nasdaq and the S&P 500, which has a strong tech component, up slightly, but the Dow Jones Industrial Average (DJIA) was down a few percentage points.

IMaple’s Thompson has been concerned about crypto’s prospects given the Fed’s apparent hawkish turn, which has historically driven prices of crypto and other riskier assets plummeting.

“I suspect we may retest the lows that were set last year on the back of rate hikes but also the continued Fed monetary tightening regime draining liquidity from markets,” he wrote. “Much of this tightening monetary policy is being priced into bond markets. But risky assets have yet to price in the potential for downside, and that could spell trouble for stocks and crypto.”

Conic Finance’s Big Promise, But Will It Deliver?

A previous version of this story appeared separately on CoinDesk’s website.

A new earnings-tracking tool by popular stablecoin exchange Curve has attracted over $60 million from depositors a little over a week after it was launched.

Conic Finance, which went live on March 1st, allows users to deposit tokens into its Omnipools, a new product that will diversify exposure across the Curve ecosystem while increasing rewards.

Each omnipool allocates the liquidity of a single asset to different curve pools. All Curve Liquidity Provider (LP) tokens will be set to Convex to boost Curve (CRV) rewards. Convex (CNX), another Curve ecosystem token, will also be rewarded, as will Conic (CNC), Conic’s native token.

Conic users can earn up to 21% annualized returns on the three omnipools for Dai (DAI), Frax (FRAX) and USD-Coin (USDC). The USDC pool alone has attracted over $50 million in liquidity as Conic currently offers one of the highest available yields in the crypto market for USDC. Frax and Dai’s deposits are significantly lower at $7 million and $5 million, respectively.

Holders can lock their CNC tokens for vlCNC to participate in Conic governance and directly control how liquidity curve pools are allocated by voting in Conic’s Liquidity Allocation Votes (LAV) – which determine the proportion of an omnipool’s liquidity , which a curve pool can obtain.

In the coming weeks, Conic’s demand among traders for its revenue-generating products could ultimately generate value for its own CNC token.

As such, CNC tokens are currently trading at $8 and are down 4% in the last 24 hours with a market cap of $32 million.

Certainly not all DeFit observers support Conic’s approach. Colin Johnson, the CEO and co-founder of tokenized art investment platform Freeport, called Conic “an interesting new way to access returns within the Curve ecosystem,” but cautiously added that “we’ve seen in the past what happens with promised returns from 20% happened. or more (terra).”

“They either fade away quickly — which is most likely happening here — or they build up a lot of stress that the system can’t handle, and we get an implosion,” Johnson wrote. “Users should always be careful when the yield is delivered in a token that represents the exact system they are interacting with. When this token falls out of favor, its price tends to go down.”

According to developer documents, Curve leverages smart contracts to provide an efficient way to exchange stablecoins while maintaining low fees and slippage. Depositors on Curve earn annual returns of up to 4% from one of the many pools on the platform, which locks over $5 billion worth of Ethereum-based tokens on its platform.

Curve tokens (CRV) are issued as yield farming rewards to liquidity providers on Curve Finance and can be converted into proxy voting CRV (veCRV). Holding veCRV allows users to participate in platform governance, earn higher rewards and fees, and receive airdrops.

The tokens are time-locked, which means users are encouraged to lock their CRV for a long time to get more veCRV and platform rewards. However, this mechanism effectively ties up liquidity and incurs an opportunity cost for users.

This is where protocols like Conic come in, allowing users to access or provide liquidity to the Curve ecosystem to be rewarded without having to lock their tokens for long periods by depositing directly to Curve .

Bitcoin fell to a three-week low after Federal Reserve Chair Jerome Powell prompted traders to price in a higher “final rate” before Congress. Martha Reyes, member of the Advisory Board of the Digital Economy Initiative, had his say. Also, Marieke Flament, CEO of NEAR Foundation, shared her views on Web3 and female leadership in crypto on International Women’s Day. Craig Salm, Chief Legal Officer of Grayscale Investments, Çağla Gül Şenkardeş, CEO of MenaPay, and Umeh Chinonye, ​​Brand Strategist of WomenInDeFi also participated in the conversation. Grayscale and CoinDesk are both owned by the Digital Currency Group (DCG).

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