Smart Money Is Becoming Bullish on Ether, Bitcoin, and Cryptocurrencies Again


Over the weekend, cryptocurrency prices further made a recovery, with Ether surging to almost $2,400.

Since last weekend's drop to $1,720, Ether soared about 40% and is currently trading around $2,270.

Despite this latest increase in price, the funding rate on Ether perpetual contracts is either negative or extremely low at 0.005%. With this, Ether’s price is now lower on the Binance futures market than CME, hence wiping out the arbitrage opportunity for institutional investors.

“Crypto native ETH sept basis (e.g., Binance, Huobi) now lower than CME's ETH sept basis for first time since CME ETH futures went live. looks like boomers are feeling bullish on crypto (smarter money IMO),” noted trader CL of eGirl Capital.

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Open interest on Ether futures contracts meanwhile is also on the rise along with the price. Total open interest has now gone to $5.57 billion, up from $4.43 billion in late June but still down significantly from the $11.6 billion peak in early May, as per Bybt.

On the leading exchange Binance, OI on Ether futures is 534.16k ETH. In USD terms, it’s $1.21 billion, up from $935.45 million but down from $2.56 billion on May 10. When it comes to Bitcoin, Binance now has 88,000 BTC in OI, while about 11 days back, it was 81.2k BTC, which in itself was an increase from 57k BTC ATH just two days before that.

Amidst all this, the stablecoin market cap has breached $111 billion, making up 7.7% of the total crypto market cap. So far in 2021, stablecoin market cap growth is 3.7x, far outpacing the total YTD crypto market cap growth of 1.9x.

Tether (USDT) remains the dominant stablecoin with almost $62.9 billion outstanding supply, capturing 58.56% market share. USDC, with a $24.3 billion market cap, is not far behind, having a 23.62% market share.

Even algo-stables like TerraUSD, Fei, Liquity, and Frax are showing promising growth, now comprising about 8% of the total stablecoin market cap.

Stablecoins are seeing growth, particularly after the market crash as crypto investors flooded into stables seeking some yield. During the massive sell-off in May, the combined market share of USDC and USDT reached an all-time high of 7% as a percentage of the total crypto market cap, up from a mere 3%.

Ethereum, of course, has the largest piece of the stablecoin pie, with $73.4 billion of the $111 billion outstanding supply issued on its blockchain.

In terms of protocols, in the lending sector, total value locked (TVL) in Aave v2 has $6.73B worth of stablecoins, in DEX space, Curve is capturing $3B in stables, while as a yield aggregator, Yearn has $1.13B of stables on its platform.

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