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Native crypto exchange tokens point to early signs of a broader market recovery
Crypto markets rebounded on Thursday after days of selling pressure triggered by the collapse of DeFi ecosystem Terra Bitfinex's native token Unus Sed Leo has performed particularly well thanks to booming trading volumes on the exchange Crypto markets have hit their lowest level in more than a year as the fallout from Terra's implosion weighs heavily on essentially all digital assets. The total market capitalization of all cryptocurrencies bottomed out at nearly $1.1 trillion in Thursday morning trading. That's less than half its market cap at the start of the year, when crypto as a whole was worth 2.2...
Native crypto exchange tokens point to early signs of a broader market recovery
- Die Kryptomärkte erholten sich am Donnerstag nach Tagen des Verkaufsdrucks, der durch den Zusammenbruch des DeFi-Ökosystems Terra ausgelöst wurde
- Der native Token Unus Sed Leo von Bitfinex hat sich dank des boomenden Handelsvolumens an der Börse besonders gut entwickelt
Crypto markets have hit their lowest level in more than a year as the fallout from Terra's implosion weighs heavily on essentially all digital assets.
The total market capitalization of all cryptocurrencies bottomed out at nearly $1.1 trillion in Thursday morning trading. That's less than half its market cap at the start of the year, when crypto was worth a total of $2.2 trillion.
However, since the bottom, traders have returned about $135 billion of crypto's total market cap, although it is still unclear whether the bounce will continue.
The top 10 cryptocurrencies (excluding stablecoins) have rallied an average of more than 14% since the market's bottom - led by alternative Layer 1 token Avalanche and Binance's native exchange BNB, which have each gained about 25%.
Market leaders Bitcoin and Ether are recovering comparatively more slowly and are up around 9% since the local low.
In fact, some of the most resilient cryptocurrencies recently have been the native tokens traded on exchanges – notably Bitfinex’s Unus Sed Leo (LEO).
Similar to Binance coin's BNB, Bitfinex traders can save on fees by trading the token (LEO Double as a mechanism to reimburse funds lost in a significant 2010).
But LEO has fallen less than 2% since Terra's algorithmic stablecoin UST lost its dollar peg for the first time. Major cryptocurrencies Solana, Polkadot and XRP have all lost around 25%.
And over the past day, Bitfinex competitor FTX's native cryptocurrency, FTT, fell less than 4%, while Ether and Cardano fell 13%.
Daniel Matuszewski, co-founder of crypto investment firm CMS Holdings, said Blockworks exchange tokens have benefited from booming trading volumes inspired by volatility, largely due to built-in burning mechanisms.
These mechanisms typically serve as a method of rewarding token holders. Exchanges buy back tokens and burn them – permanently removing them – reducing circulating supply while bolstering purchasing power to increase prices.
“It was a very, very big 24 hours for the stock market, so there was a ton of firing and buying,” Matuszewski said. “The exchanges are doing an outrageous amount of business right now and making a lot of money, and that’s going into their tokens.”
According to data from the crypto index provider, exchange volumes increased by 14% overall over the past day Nomics with Bitfinex gaining a whopping 34%.
Matuszewski said the worst of the Terra debacle could soon be in the rearview mirror.
“When Terra died, it obviously hurt a lot of people, and I think as a result they had to de-risk elsewhere,” he said. Matuszewski added: "I'm sure people had to make margin calls and there was a lot of forced selling as a result of de-pegging. I think that part of the market cycle is largely over."
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The post Native Crypto Exchange Tokens hint at early signs of broader market recovery is not financial advice.