 January 14, 2021  Everything you need to make sense of the crypto markets and beyond Sponsored By:  By the CoinDesk Markets Team Edited by Bradley Keoun If you were forwarded this newsletter and would like to receive it, sign up here. Bitcoin (BTC) -0.6% $34,920 Ether (ETH) +0.3% $1,124 (Price data as of Jan. 14 @12:30 UTC) TODAY:
Price Point Guaranteed 25% APY? Today, the Cardano Foundation launched an Official Staking Pool - maintained, promoted and guaranteed by the Cardano team themselves. The project's main goal is to set standards and provide an oasis for institutional investors, that might be otherwise unwilling to invest in staking ADA. Providing a 25% APY and a variety of other generous features, the program has begun to outshine its main competitor Ethereum's current 15.6% APY. The team penned an article explaining everything in further detail.
DeepBaking in the age of the bull market. XTZ holders have enjoyed a smooth ride seeing the dollar value of their asset's rise, while being able to "bake" (stake) their holdings for even further growth. Thanks to the booming bull market, the Tezos team has introduced a new form of "baking" called "deepbaking", the intended upgrade mostly means that participants will be able to reap greater rewards for securing the network with their staked XTZ. Promising up to 1:1 RoI the project has garnered a lot of attention and reports are coming in that Tezos might soon stop accepting new participants for the time being. More details can be found on their blog.
Traditional Markets According to Bloomberg News, that political situation could entail the U.S. House of Representatives impeaching President Donald Trump with fewer than 10 days to go in his presidency, since Vice President Mike Pence appears unlikely to invoke constitutional authority to remove the president from office.
Gold strengthened 0.9% to $1,861 an ounce. Market Moves A high price does not a market make. But guess what does? High trading volume.
One of the important things to note about the bitcoin market during this year's rally is the record amount of cryptocurrency changing hands. That was true of the rapid ascent to new all-time highs above $40,000, and it's also been true on the way down.
What it means is that the market is staying liquid, seen as a healthy attribute, especially when prices are on the move. You might be a buyer at what might seem like nosebleed levels, but you're not the only one.
As reported Monday by CoinDesk's Muyao Shen, trading volumes and active addresses for bitcoin have now surpassed their previous all-time highs during the last crypto bull run of 2017.
"This is first and foremost a sign of how much bigger and mature the industry is, with a lot more money flowing on these exchanges," Bendik Norheim Schei, head of research at the Norwegian cryptocurrency analysis firm Arcane Research, told CoinDesk. "It is great to see higher volumes, making the market more liquid and efficient."  Bitcoin volumes by exchange. (CryptoCompare) The surging volume due to Monday's sell-off came in part from newcomers to the market, according to Schei.
"Some of this volume is definitely from new and unexperienced investors entering the market for the first time and panicking when the price starts falling," he told Shen. "These corrections are necessary and healthy, even in a bull market."
And those newcomers aren't necessarily rubes. They might even be sophisticated Wall Street players who have only recently dipped their toes into crypto – a sign of bitcoin's increasing adoption by big institutional investors as a way of betting on the currency debasement amid trillions of dollars of central-bank money printing.
"The retail-driven spot market, which was pretty much the entire market three years ago, is now part of a much more mature and diverse marketplace that includes derivatives, investment funds and other institutional involvement." Sui Chung, chief executive of CF Benchmarks, told CoinDesk.
(For what it's worth, healthy liquidity is considered such a crucial component of any market that the Federal Reserve last year cited "smooth" functioning of Wall Street's plumbing as a rationale for continuing its $120-billion a month of bond purchases, a form of monetary stimulus that was previously considered an emergency measure but increasingly is seen as normal.)
At least one industry executive says that futures markets might become more critical as more investors hoard their holdings of the cryptocurrency while waiting for prices to go up.
"With 'physical’ Bitcoin disappearing, the volumes of derivative contracts are soaring," said Richard Byworth, CEO of the cryptocurrency exchange firm Diginex, which last week launched its own "bitcoin perpetual futures contract."
There's high risk too: The market was apparently liquid enough that some $410 million of long positions in bitcoin futures (bets on further price gains) were wiped out Monday after margin calls on the Binance exchange, according to the data firm Glassnode in a tweet.
Denis Vinokourov, head of research at the London-based prime brokerage Bequant, says there's a "good deal of open options interest at the $52,000 price level."
With trading volumes growing, it's getting easier to place those bets, whether right or wrong. Bitcoin Watch  Table showing large bitcoin options trades on Deribit. (Laevitas) Despite bitcoin’s 20% crash on Monday, some options traders are betting on a continued price rally in coming weeks.
Some 4,000 call option contracts have been bought at the $52,000 strike in the past 24 hours, according to data from the Swiss-based data analytics platform Laevitas. The $64,000 and $72,000 strike call options show buying volume of 3,250 and 2,000, respectively.
The call options carry an expiration date of Jan. 29, so they represent a gamble that bitcoin could prices could rise above that level in the next few weeks.
In another indicator from the options market, the one-, three- and six-month put-call "skews," which measure the cost of puts relative to calls, remain entrenched in the negative territory. That’s a sign of call options, or bullish bets, drawing higher demand than puts, which are bearish. - Omkar Godbole
Read More: As Bitcoin Regains Lost Ground, Options Traders Bet on $52K Move By Late January  Bitcoin. DeFi. Ethereum 2.0. The biggest trends in crypto this year began to move the needle in the rest of the world. Multi-billion dollar funds bought bitcoin as an inflation hedge. Institutions began discussing the merits of decentralization. And the banking sector warmed to crypto.
CoinDesk’s 2020 Year in Review covers the major events, ideas and themes in crypto, and why they matter. The series is a comprehensive collection of op-eds, essays and interviews from some of the biggest names in crypto, published throughout the month.
Read more on how 2020 was crypto’s biggest year yet. Analogs The latest on the economy and traditional finance
 Federal Reserve remittances to U.S. Treasury Department, by year (Federal Reserve)
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