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.

US central bank chairman Jerome spoke harshly for the second day in a row. Banking giant JPMorgan ended its relationship with crypto exchange Gemini, as CoinDesk’s Ian Allison first reported. Crypto-friendly bank Silvergate to shut down operations.

Bitcoin soaked it all up and then fell to its lowest level in nearly a month. The largest cryptocurrency by market capitalization recently traded at around $21,750, down more than 2% over the past 24 hours. BTC dipped below $21,600 at one point, after largely falling above $22,000 for most of this month. Investors have been grappling with worrisome jobs and price data that have prompted Powell and Federal Reserve governors to reignite their monetary aggressiveness as a recipe for inflation.

Prospects for a 50 basis point (bps) interest rate hike now stand at around 70% after heavily favoring a lower 25 bps hike in previous weeks.

“After celebrating the reductions in inflation in the last couple of months, the Federal Reserve has had to resume its hawkish stance by talking tough about rate hikes, I think it’s interesting to note that they are presenting their hikes as having an impact of significant increase in inflation, and then it became clear that inflation has turned out to be more stubborn than anticipated. Quinn Thompson, head of growth and capital markets at blockchain-powered capital markets platform Maple, wrote to CoinDesk in an email. “A 50 basis point rate hike is basically inevitable now.”

Thompson added that “barring any break in the system, such as a credit event of some kind, it looks increasingly likely that there will be no rate cut until next year.”

Ether fared similarly to bitcoin and also fell about 2% to change hands just above $1,530. This level was well off its recent February highs above $1,700. Other major cryptos were mostly in the red with SOL, the Solana blockchain token up more than 9% and APT, the Aptos Labs native blockchain layer 1 cryptocurrency up over 6%. The CoinDesk Market Index, a measure of the broader crypto market’s performance, fell nearly 3%.

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

IMaple’s Thompson was cautious about the outlook for cryptos amid the Fed’s apparent pivot, which has historically sent prices of cryptos and other riskier assets lower.

“I suspect we may retest the lows reached last year as a result of rate hikes, but also due to the Fed’s ongoing monetary tightening regime draining liquidity from the markets,” he wrote. “A lot of this tight monetary policy is being priced into fixed income markets. But risk assets should still be priced into the potential for negative spreads, and that could spell trouble for stocks and cryptos.”

The big promise of Conic Finance, but will it come true?

An earlier version of this story appeared separately on CoinDesk’s website.

A new tool to capture yields from prominent stablecoin exchange service Curve has attracted over $60 million from depositors just over a week after launching.

Conic Finance, which went public on March 1, allows users to deposit tokens into its omnipools, a new product that diversifies exposure across the Curve ecosystem while increasing rewards.

Each omnipool distributes the liquidity of a single asset across different sets of the curve. All Curve Liquidity Provider (LP) tokens are placed in Convex to increase Curve Rewards (CRV) earnings. Convex (CNX), another token of the Curve ecosystem, is also rewarded, and so is Conic (CNC), Conic’s original token.

Conic users can earn up to 21% annual returns on three omnipools for dai (DAI), frax (FRAX) and USD currency (USDC). The USDC pool has attracted just over $50 million in liquidity, as Conic is currently offering one of the highest yields available in the crypto market for USDC. Frax and dai deposits are significantly lower at $7 million and $5 million, respectively.

Holders can stake their CNC tokens for vlCNC to participate in Conic governance and directly control how liquidity is distributed across Curve pools by participating in Conic’s Liquidity Allocation Votes (LAV) – which determine the share of liquidity of an omnipool that can take a Curve set.

In the coming weeks, Conic’s demand among dealers for its yield-generating products could ultimately generate value for its own CNC brand.

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

To be sure, not all DeFit watchers are fully embracing Conic’s approach. Colin Johnson, CEO and co-founder of tokenized art investment platform Freeport, called Conic “an interesting new avenue to access yield within the Curve ecosystem,” but added carefully that “we’ve historically seen what happens with returns promised of 20%. or more (Terra).”

“They either fade rapidly — which is very likely the case here — or they create an amount of stress that the system can’t handle, and we have an explosion,” Johnson wrote. “Users should always be careful when yielding on a token that represents the very system they are interacting with. When that token falls out of favor, its price tends to drop.”

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

Curve Tokens (CRV) are issued as productivity rewards to liquidity providers on Curve Finance and can be converted into CRV with votes (veCRV). Holding veCRV allows users to participate in platform governance, earn higher rewards and fees, and receive airdrops.

Tokens are time-locked, meaning users are encouraged to lock their CRV for a long time to get more veCRV and platform rewards. However, this mechanism effectively blocks liquidity, creating opportunity costs for users.

This is where protocols like Conic come into play, allowing users to gain exposure or provide liquidity to the Curve ecosystem to be rewarded without having to lock up their tokens for long periods of time by depositing directly to Curve.

Bitcoin fell to a three-week low after US Federal Reserve Chairman Jerome Powell’s tough testimony to Congress prompted traders to price in a higher “terminal rate.” The member of the Advisory Council of the Digital Economy Initiative, Martha Reyes, expressed. Plus, NEAR Foundation CEO Marieke Flament discussed her view on Web3 and women’s leadership in the crypto space on International Women’s Day. Grayscale Investments Chief Legal Officer Craig Salm, MenaPay CEO Çağla Gül Şenkardeş and WomenInDeFi Brand Strategist Umeh Chinonye joined the conversation. Grayscale and CoinDesk are both owned by Digital Currency Group (DCG).