Autor Cointelegraph By Cointelegraph Consulting

February saw a noticeable shift between inflation and U.S. Federal Reserve news, followed by news of a conflict in Eastern Europe that completely overshadowed the earlier concerns of economic health. What’s transpiring in Ukraine is causing an immediate marketwide price drop. Bitcoin (BTC) had a notable decline of 11% over a 16-hour time period, while the majority of altcoins plummeted 20% or more.The initial expectation was for the war to have a negative impact on cryptocurrency prices, which it did for a short period of time. However, as fear set in, prices quickly ramped up.But the short sample size of days thus far has indicated there are reasons to believe that the crisis can have a positive effect on BTC and altcoins, just like was seen in March 2020, with the mainstream COVID consciousness.Sentiment turned fearful but eased after prices roseSentiment is often a good gauge to figure out what the trading crowd expects to happen next. Over the past month, the crowd sentiment as a leading indicator was extremely effective.On the tail end of Fed and inflation discussions in early February, cryptocurrency prices rose sharply, peaking by the middle of the month as Bitcoin topped $45,000 before a steep correction. FUD was the overarching theme when the war broke in late February, but the sentiment improved as prices recovered quickly, causing many to speculate that prices dropping was nothing more than a “dead cat bounce.”Now, traders have entirely switched back into being mildly bullish toward Bitcoin. It’s important to mention that cryptocurrencies could be especially volatile as they currently cling to the rapid developments of the European crisis.30-day price returns all over the mapThe case for being a Bitcoin maximalist was very much on display over the past month of volatility. Yes, there were many projects such as Terra (LUNA), XRP and Shiba Inu (SHIB), among many others, that came out ahead of BTC in terms of percentage market cap gained. But Bitcoin’s ability to not have relatively volatile slides compared to virtually all other cryptocurrency counterparts, as well as actually leading the recovery charge for portions of the past month, is why Bitcoin hodlers sat pretty.High-end Tether buying power increasedStablecoins, such as Tether (USDT) — particularly with how large addresses are accumulating or selling their holdings — have increasingly become a good bellwether in this regard.There has been a steady rise in the proportion of USDT’s supply that is held by addresses with 10,000–1 million USDT, which actually totaled over $1 billion in February. Typically, the amount is maxed at 1 million because beyond this threshold, many exchange addresses can be found, which are not accounted for. Regardless, based on what is seen, there is clear evidence that sharks and whales have significantly more USDT ready to purchase cryptocurrencies compared to a month ago.Bitcoin whales appear to be in a slight decline/holding patternAfter hitting a one-month low in supply held on the day of the war announcement, Bitcoin whales have accumulated just slightly and have stayed flat with their cumulative holdings. After hitting a one-month low in supply held on the day of the war announcement, they accumulated just slightly and have stayed flat with their cumulative holdings since. Still, stablecoin whales with wallet holdings of 10,000–10 million USDT have bought over $1 billion worth of USDT in February, indicating a 7% increase in buying power in just one month.Any sign of this group of addresses showing notable accumulation would be a great sign that FUD is dissipating from the key group of stakeholders that can start or stop a bull run at a moment’s notice.NVT remains in bullish territoryThe Santiment Network Value to Transactions Ratio (NVT) model measures the amount of unique BTC circulating on the network, then calculates whether that output is above, on par, or below the expected amount of circulation to justify Bitcoin’s current market cap.For now, the amount of unique BTC circulating on its respective network looks quite promising. Since October 2021, this model has flashed a semi-bullish sign, indicating that the amount of utility Bitcoin is seeing is justifying that its market cap would normalize at a slightly higher level than it’s currently sitting. March is just getting started, but it’s off to a good start with a bullish signal on a very small sample size of days recorded.Bitcoin continues moving off exchangesBitcoin’s cumulative supply sitting on exchanges has continued its encouraging slide downward, reaching 10.76%. This is the lowest ratio of BTC supply on exchanges since November 2018. Generally, this continued decline implies a decreased risk of future sell-offs.Meanwhile, the supply of Tether on exchanges is decreasing, which is less encouraging to see. More USDT on exchanges generally implies upcoming plans of cryptocurrency purchases, though it can occasionally be for the purposes of transferring to fiat and cashing out. But for now, attention should be given to a rise in this metric, especially while it’s matching the USDT accumulation of large addresses.Network realized profit/lossAnother interesting development has been Bitcoin’s network realized profit/loss. When the war news broke and prices plummeted, this metric dropped to its lowest level since late January. Typically, these large negative spikes are indicative of price bottoms forming. This is due to the fact that the network is trading at a loss at the time and usually requires a price rise to neutralize and find a balance.Following the rise in price after the initial FUD from the first day, BTC’s network realized profit/loss very rapidly shifted to the most positive it has been since late January. With the network trading highly in profit once it nearly scraped $45,000, a local top formed, and prices have dropped back down mildly at the time of this writing.Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. This analysis was prepared by leading analytics provider Santiment, a market intelligence platform that provides on-chain, social media and development information on 2,000+ cryptocurrencies.Santiment develops hundreds of tools, strategies and indicators to help users better understand cryptocurrency market behavior and identify data-driven investment opportunities. Sign up to Santiment here: https://santiment.net/pricing

In 2018, the two main ways video game players can earn a living were through e-sports and live streaming — or perhaps a successful YouTube channel. But, thanks to the rise of blockchain technology, the financial aspect has never been more interwoven with the gaming industry. While most users are acquainted with one or two facets of financialization in gaming such as earning and cashing out rewards from completing game quests a la Axie Infinity, there are several other methods exist that have yet to be explored by most users in the cryptocurrency market’s flourishing new vertical called GameFi.CryptoKitties in 2017 is the first known game to use blockchain technology, introduce nonfungible tokens (NFTs) and enable players to have a verifiable claim on their virtual assets. Then, in 2019, the introduction of an in-game currency called Smooth Love Potion (SLP) boosted Axie Infinity’s popularity and paved the way for other decentralized finance (DeFi) components to penetrate blockchain gaming. Such parallels that GameFi has with DeFi include staking, liquidity mining, NFT trading and NFT fractionalization.Last year, the gaming subsector of the cryptocurrency market exploded which came on the heels of the NFT market boom. It even outperformed Bitcoin (BTC) and the DeFi sector back in December. While the uptrend has fizzled out in recent months, popular games like Axie Infinity, DeFi Kingdoms, Pegaxy, MOBOX and Bomb Crypto continue to rake millions per day in transaction volume.Much of the excitement around gaming in 2021 also stems from an increase in venture capital interest. For instance, Solana Ventures and Lightspeed Venture Partners launched a $100 million GameFi ecosystem fund in November 2021. A month later, BNB Chain, formerly known as Binance Smart Chain (BSC), and Animoca Brands also established a $200 million fund dedicated to GameFi projects built on BSC. There are elements of DeFi in gaming that have attracted investors and players alike and these are discussed below.The NFT componentAs mentioned above, NFTs were initiated by CryptoKitties, which has provided players a way to ascribe value and ownership to certain assets in a game. Take Axie Infinity, for example. NFTs on this Ethereum-based video game serve as the game’s entry cost. To begin playing, users must have three “Axies,” which are the game’s characters acquired from other players through Axie Infinity’s marketplace. Axies are NFTs and their prices vary depending on their rarity and utility. Players can earn from Axies by finding buyers to whom they can be sold at a profit. With other games such as Splinterlands, NFTs take on the form of trading cards whose market value is also determined by their rarity.FractionalizationThe concept of NFTs and fractionalization are intertwined but fractional NFTs make games more accessible to everyone. Fractionalization is essentially a whole NFT divided into smaller fractions, providing claims of ownership to several people such as the case of Gustav Klimt’s painting The Kiss, whose digital version was sold as 10,000 fractional NFTs. Owners of fractionalized NFTs can then trade their assets on secondary markets and make money. It is similar to real estate crowdfunding which, incidentally, is another growing use case of NFTs. With gaming, on the other hand, rare and expensive in-game assets could best be sold under a fractionalized NFT as it democratizes the ownership process.For example, Waves Ducks, another play-to-earn game, have integrated fractionalization via its “Collective Farms” that intends to lower entry costs. One “duck” would cost 3.3 Waves Duck (EGG) to hatch and at EGG’s price at the time of writing, that would be nearly $700. By joining a farm, however, a player can play the game with as little as 0.01 EGG and receive tokens representing their stakes in the farms.StakingThe staking function is a common theme in DeFi and has also entered the realm of blockchain gaming. Staking support for Axie, where users can lock in AXS tokens to secure the network and get paid rewards, went live in September 2021. Mobox also offers users to earn MBox tokens through staking. Aside from this, staking rewards can also be used to purchase in-game items or upgrades or even generate keys to unlock new NFTs. Staking with Mobox requires users to add to a liquidity pool and earn tokens based on the pool’s APY. Several smaller GameFi projects have introduced staking to their games as well. Ostensibly, staking benefits users by earning more tokens, but some tokens earned through staking are also used for governance, enabling holders to vote on specific directions for the game and the community. But, most importantly, it incentivizes users to hold on to their tokens which, in turn, promotes a real and active economy.Liquidity MiningThe liquidity mining component can also play an important role in GameFi, as is the example of the game DeFi Kingdom. Built on the Harmony blockchain, DeFi Kingdom offers a suite of DeFi aspects to its game right from its inception, appealing to DeFi fans and putting the game aspect as a secondary feature. The liquidity mining pools in the DeFi Kingdom come in the form of in-game “gardens.” LP shares are represented as a plot filled with blooming plants, which grow in accordance with their yields. Users earn JEWEL tokens, the game’s main token used for purchasing in-game NFTs or liquidity mining outside the game.These are just some of the inclusions of DeFi technology in gaming but innovations in this sector are not ceasing. Some even believe that GameFi is also fueling the materialization of Web3 since it’s migrating a once centralized form of entertainment to a more decentralized domain, with communities more connected or in control of the game ecosystem. In actuality, this is already taking place as the DeFi features of gaming is already a prelude to what Web3 is.Cointelegraph Research’s upcoming report is all about GameFi. Stay tuned.Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. The newsletter dives into the latest data on social media sentiment, on-chain metrics and derivatives.We also review the industry’s most important news, including mergers and acquisitions, changes in the regulatory landscape, and enterprise blockchain integrations. Sign up now to be the first to receive these insights. All past editions of Market Insights are also available on Cointelegraph.com.

Terra’s native staking token, LUNA, was one of the best-performing cryptocurrencies of 2021, with gains north of 13,000%. Terra has also surpassed Binance Smart Chain (BSC) in total locked value with $17.62 billion, making it the second-biggest DeFi chain just after Ethereum. Much of this growth is due to Terra’s ecosystem, with a community of developers continually building decentralized applications on top of Terra. But it may come as a surprise to know that before there were hundreds of apps built on Terra, there were only two that existed at the start of 2021 in the Mirror Protocol and Chai. Mirror allows users to create synthetic assets, mimicking the price behavior of traditional and digital financial assets. Traders use Mirror to gain exposure to these markets without holding or owning the underlying asset. Chai, on the other hand, is a payments app operating in South Korea with more than 2.5 million users. These apps were created on the basis of real-world utility, providing practical use for users and furthering cryptocurrency adoption.Anchor ProtocolIts third core app, Anchor Protocol, was only launched on the mainnet in March 2021, but it quickly became a popular yield farming protocol in the decentralized finance (DeFi) space. Anchor is designed to generate yields in Terra’s stablecoin, TerraUSD (UST), by locking up an equivalent LUNA or Ether (ETH). So far, the total collateral value locked in Anchor has grown to $5.2 billion, according to the official website, which is already a 4,375% change from the first day of its launch.Collateral growth coincides with the expansion of its user base, increasing daily at about 440 users, which, compared to Mirror, is growing at nearly three times the pace. The increase in the user base can also be seen to grow alongside the gradual rise in Terra’s transactions.Growth in the number of applicationsFollowing the core apps, multiple new projects have sprouted in the Terra ecosystem in the categories of gaming, metaverse, DeFi, nonfungible tokens and many others. There are also multiple cross-chain communication protocols that enable Terra assets to freely migrate to other chains. For instance, Solana bridge protocol Wormhole v2 facilitates asset transfers across Terra, Solana, Ethereum, BSC, Polygon, Avalanche and Oasis. This was made possible by Terra’s Columbus-5 mainnet upgrade.Developers have also built projects with the core Terra apps as a base. One example is Orion Money, which utilizes the Anchor Protocol to generate higher returns for other stablecoins such as Tether (USDT), Binance USD (BUSD), USD Coin (USDC) and Dai. It does this by utilizing EthAnchor, converting stablecoins into Wrapped TerraUSD (wUST) and then depositing it to Anchor where the APY is up to 20%.Why did Terra grow?Back in July 2021, Terraform Labs, the company behind the Terra blockchain, raised $150 million from several investors, including Arrington Capital, Lightspeed Venture Partners and Pantera Capital. The funds were for incubating projects on Terra, which have likely spurred further development. However, Do Kwon, founder and CEO of Terraform Labs, believes it is something more fundamental. In an interview, Kwon said that what fostered Terra’s strong community is rooted in the concept of decentralized money, which Terra is able to achieve with its algorithmic stablecoins.Terra has a family of stablecoins that are pegged to various fiat currencies, such as the United States dollar, euro and Korean won. It also has a flagship stablecoin called TerraSDR, which is pegged to the International Monetary Fund’s Special Drawing Rights. The price stability of these stablecoins, such as UST, is maintained algorithmically, putting forward incentives for users to respect the stablecoin peg through arbitrage opportunities. The algorithm has done just that by keeping UST’s dollar peg during times when it deviated from it. Such a design makes Terra’s stablecoins more decentralized, possibly deflecting regulatory concerns that beset other stablecoins. And according to Kwon, it is what excites the Terra community.At its core, Terra requires these stablecoins for its applications, which boosts its overall use cases, thereby making it more attractive for users to hold and creating a more robust ecosystem.Terra, the year aheadThe $150 million raised last year by Terraform Labs is just the first batch of funds dedicated to nurturing Terra’s projects. Another $50-million fund was launched by Hong Kong venture capital firm Chiron Partners in December 2021, which is also allotted to supporting projects. On Jan. 7, a proposal to provide $139 million was announced and is aimed at bringing more UST use cases — this time, to several DeFi projects on Ethereum, Solana and Polygon for at least the next six months. With all of these in play, is the Terra ecosystem geared for the same growth it had in 2021?Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. The newsletter dives into the latest data on social media sentiment, on-chain metrics and derivatives.We also review the industry’s most important news, including mergers and acquisitions, changes in the regulatory landscape, and enterprise blockchain integrations. Sign up now to be the first to receive these insights. All past editions of Market Insights are also available on Cointelegraph.com.