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Crypto chaos continues; mass BTC liquidations in exchanges across Asia | The Daily Forkast

Mass liquidations are observed across exchanges as the crypto market continues to struggle. Meanwhile, institutions explore DeFi.

The crypto market continues to struggle as investors turn towards stablecoins to minimize losses. 

Mass BTC long positions were liquidated across exchanges in Asia, but Singapore-based Bybit tells us that the numbers don’t tell the full story. 

Meanwhile decentralized finance lending protocol Maple Finance brings DeFi to institutions. 

We’ll have more on that story — and other news shaping the cryptocurrency and blockchain world — in this episode of The Daily Forkast, May 20.

Transcript

Welcome to The Daily Forkast, May 20th, 2021. I’m Angie Lau. Let’s get you up to speed from Asia to the world.

In Asia, more crypto chaos today. A lot of red across the board with just a speck of green. Ethereum down a little over 9% at the end of Asia trading hours. At one point down as much as 25%.

Bitcoin in the green for a brief moment today, but closing down about half a percent. Internet Computer, ICP, up nearly 30%. Although not included in some aggregators, it’s ranked nine, according to CoinMarketCap data.

And now, two stablecoins are in the top 10: USDC and USDT.

Investors looking for cover from the market crash. USDT market dominance now up to near 5%. It has nearly doubled in the past week. We spoke with Bifinex, Tether CTO Paolo Ardoino for an upcoming episode of Word on the Block today. He said institutional traders on Bitfinex were calmer about Bitcoin than retail investors

“The thing is that if you use less leverage, you have time when the markets you need to send more collateral to your position and you have time to deposit Bitcoin, Ethereum and Tether to support your position. So that’s basically basic ABC risk management.”

Yesterday, almost US$6 billion worth of Bitcoin long positions were liquidated within three hours, starting from around 9:00 pm Hong Kong time. Over US$7.5 billion were liquidated across exchanges yesterday, making it the second-largest single day liquidation to date.

Asian exchanges Huobi, OKEx, and Bybit were responsible for more. Singapore-based Bybit, where over US$1.4 billion dollars were liquidated alone, tells us that this number is actually higher

“Our exchange stayed operational throughout the trading activities. But not all other exchanges managed the same. So whatever those numbers are and however eye-popping they are, it’s not even the full picture.”

The market rollercoaster extends beyond crypto as well, though, as the equity markets have also had a wild ride here in Asia. At the end of the trading hours in Hong Kong, Hang Seng down 172 points. KOSPI and Shanghai Composite also down on the day.

Asianmarketsense founder Andrew Sullivan says the inflation fears in the U.S. could lead to an interest rate hike and that could make more traditional forms of savings, such as bank deposits more attractive versus the often volatile crypto markets.

“If the bank is going to start offering you 5% interest rates in a couple of years’ time, then people’s thinking starts changing about their attitude to the risk that they’re taking with their money.

And I want to leave you with this. Even as savers turn to traditional forms of savings like bank deposits, crypto native companies are going to DeFi.

Decentralized finance lending protocol Maple Finance is bringing 17 million in DeFi loans to institutions seeking capital for their growth. Borrowers include leading trading firms and market makers such as Alameda Research and Amber Group based in Hong Kong, Maple Finances CEO Sidney Powell told Forkast he’s seen tremendous demand for capital from DeFi coming from crypto Native institutions in Asia’s financial centers Hong Kong and Singapore.

“You’ve got those companies who are crypto native who are extremely profitable now, who have very, very strong growth runways over the next few years, and yet they’re not able to access capital from traditional financial institutions.”

Access to capital on a day when so much capital has been wiped off the table.

And that’s The Daily Forkast. I’m Angie Lau. Until next time.