Digest: The Main News On The Cryptocurrency Market (February 1-7)
The first week of February was eventful. DEX trading volume hit a new high, XRP experienced an epic pump and price drop, while Visa prepares to integrate a crypto service for black Americans. Elon Musk again successfully “played with DOGE on Twitter” and not only – our today’s review about these and other news.
DEX trading volume exceeded $55 billion
Decentralized Exchanges (DEX) continue to gain momentum at an accelerated pace. At the end of January, the DEX trading volume exceeded $55 billion and doubled its historical maximum in less than six months. For comparison, in September 2020, this figure was $26 billion, in September 2019 – $281 million.
The increase in trading volumes is directly related to the surge in activity on trading floors. Uniswap continues to be the leader in the DEX sector, with 45% of the market share. January was extremely productive for Uniswap: trading volume on the exchange reached $29.5 billion, total blocked amount (TVL) increased to $3.18 billion.
The undisputed dominance of Uniswap has slightly shaken last month, because the main competitor, SushiSwap, is breathing in the back. This exchange has grown significantly after its merger with the Yearn ecosystem. As a result, SushiSwap’s DEX market share increased to 22% with a trading volume of $12.2 billion. The total amount blocked on SushiSwap rose to $2.34 billion.
However, the competition between Uniswap and SushiSwap only serves to benefit the DEX market and signals an impressive increase in user confidence.
Visa announced the development of crypto service for Black Americans
Visa has taken another step towards integrating cryptocurrency into the global payment system. The company announced the launch of pilot software for the help of individuals, who are not clients of traditional banks, can buy, store, sell cryptocurrency.
The initiative was part of a collaboration with First Boulevard, a digital bank targeted at black Americans. According to Jack Forrester, chief product officer at Visa, APIs are designed to bridge the wealth gap between different populations. Difficulty getting mortgages, higher interest rates, and racial pay gaps are just a few of what continues to be faced by the black community in America.
The digital assets of Visa clients will be on the balance sheet of the digital asset bank Anchorage, which was the first in the U.S. to receive a license from the regulator to provide crypto services. Users are expected to be able to withdraw cryptocurrency to external wallets. In this matter, Visa has overtaken PayPal, whose clients can make crypto transactions exclusively within the framework of the payment system.
Elon Musk pumped up DOGE again
Elon Musk continues to hooligan and moves his “favorite cryptocurrency” up. As practice shows, Elon only needs to write the word “DOGE” on Twitter, and the price of the token soars up in a matter of minutes.
On February 4, the scenario repeated itself: after Elon Musk’s tweet, the DOGE price increased by 45% within 30 minutes to $0.058. But the CEO of SpaceX didn’t stop there. After a short time, in his account, he published a caricature of an episode from the famous cartoon “The Lion King”, in which, allegedly, “Elon Musk” holds Simba with the muzzle of the “DOGE” meme-dog. As a result, in 24 hours DOGE has risen in price by 64%.
Over the weekend, Elon Musk continued to “play with DOGE” on Twitter. On February 7, he published a poll “The Future Currency of the Earth”, in which only 2 positions were presented – “DOGE” (who would doubt it) and “the rest of the crypto”. In the survey, which was attended by more than 2 million subscribers, DOGE won with a score of 70.7%. Well, quite a predictable outcome.
Despite the humorous nature of the survey, the result was not long in coming: on Sunday, the price of DOGE rose by another 27% and reached $0.082.
SushiSwap took over a part of Uniswap’s market share
SushiSwap, the decentralized exchange, has once again proved that it is ready to compete with Uniswap and intends to change the attitude of the skeptical part of the market towards itself. Between mid-December and February, the exchange was able to increase its market share to 22%, thereby reducing the percentage of Uniswap dominance.
The increase of SushiSwap was driven by its merger with Yearn.finance (YFI) in December 2020, according to analyst Mira Christanto. If earlier accusations of Uniswap cloning flew towards SushiSwap, now the criticism has subsided, since this merger confirmed the legitimacy of the project and provided protection for TVL.
Despite the busy migration of tokens to the platform, SushiSwap still lags behind Uniswap in terms of blocked funds. To catch up with a competitor, SushiSwap needs at least another $1.11 billion.
XRP skyrocketed 147% and crashed sharply
XRP again became the subject of heated discussion this week, but the news feed was far from controversial. XRP jumped 147% between January 30 and February 1, reaching $0.76. For a short time, the token burst into the top three crypto leaders in terms of market capitalization with an indicator of $27 billion. The abnormal price rise turned into a sharp drop: in a matter of hours, XRP fell from $0.75 to $0.39.
Many analysts saw this XRP behavior as a “pump and dump” strategy. Shortly before the XRP rally, a group called Buy & Hold XRP was created in the Telegram messenger, whose members called for the purchase of the token. Enthusiasts managed to inflate XRP quotes, but, like all pumps, the upward movement did not last long and ended where it began.
Experts point out that speculative group investing is becoming a trend and social networks make this process much easier. In the last month alone, we have witnessed high-profile pumps involving Dogecoin, XRP, GameStop, and AMC. According to analysts, such episodes in the biography of assets may partially undermine their reputation.
USDC volumes on exchanges increased by more than 112%
USD Coin continues to grow its market share. The figures presented this week by the analytical company Glassnode eloquently confirm this: in January, the amount of USDC on exchanges increased by more than 112% from 431 million dollars to 915 million dollars.
Since the beginning of 2021, USDC has been minted for about $1 billion. According to Glassnode, the increase in USDC emission may be related to the strategy of traders to play on the possible upcoming drawdown of the cryptocurrency.
According to analysts, one of the catalysts for the growth of USDC was the launch of software from the Circle company, with the help of which users were able to convert USDC to US dollars.