Crypto’s DeFi growth stalls as exchange-traded product offering grows

Data from CryptoCompare shows that the price of Bitcoin started last week with a sharp move higher, from the $39,000 mark to a $42,800 high before the cryptocurrency endured a sell-off that it drop to $38,500. 

Ethereum’s Ether, the second-largest cryptocurrency by market capitalisation, moved in a similar way and reached a $3,150 high over the week before plunging to $2,800, the level at which it’s trading at the time of writing. 

Headlines in the cryptocurrency space this week focused on the launch of physically-backed crypto exchange-traded funds in Australia. These include two ETFs being launched by Switzerland-based firm 21Shares AG along with leading ETF provider ETF securities. 

These funds, the ETFS 21Shares Bitcoin ETF (EBTC) and the ETFS 21Shares Ethereum ETF (EETH) are set to go live on April 27 and will directly invest in BTC and ETH respectively. Both funds will trade on the CBOE Exchange and track the prices of the cryptoassets in Australian dollars.

The assets backing them will be held in cold storage by Coinbase. They’re joined by Cosmos Asset Management’s Bitcoin ETF, which will be listed on CBOE and offers indirect exposure to spot BTC investments through the Purpose bitcoin ETF that was listed on the Toronto Stock Exchange last November. 

These new products come at a time in which the popular commission-free trading platform Robinhood has revealed it has agreed to buy London-based fintech app Ziglu, which allows users to trade Bitcoin and other cryptoassets. 

The deal could provide Robinhood’s growth prospects a crucial boost after the company reported a drop in monthly active users in the fourth quarter of 2021, to 17.3 million from 18.9 million the previous quarter, as it could help it expand in the UK and Europe. 

These moves are making it easier for investors to gain exposure to leading cryptocurrencies, even as the growth of the decentralized finance (DeFi) space stalls. After an impressive surge in activity last year, the total value locked dropped 20.8% from the end of 2021 to the first quarter of this year, now standing slightly above $150 billion. 

The stagnation can, in part, be attributed to weak performance in cryptoasset markets during the first quarter of the year. Despite the sluggish market conditions, cryptocurrency startup is reportedly interviewing banks for an initial public offering (IPO) that could come as soon as this year. recently reached a $14 billion valuation in a Series D round. 

As the prices of most cryptoassets dropped over the week, Terra’s algorithmic stablecoin TerraUSD (UST) became the third-largest stablecoin on the market after surpassing Binance USD (BUSD). Its supply still stands below that of USDC and USDT. 

‘Bitcoin is closer to being a currency’ – Morgan Stanley 

Morgan Stanley has suggested in a research report that while few people currently use cryptocurrency to pay for everyday goods because of high transaction fees and low merchant adoption, the tide is changing. 

To Morgan Stanley, partnerships with brick-and-mortar stores are an important milestone in the “evolution of Bitcoin usage as a medium of payment” as 85% of sales in the U.S. occur in shops and not online. 

Fees to send a BTC transaction using the Lightning Network are close to zero, which to Morgan Stanley makes them more practical for making small payments. Merchants accepting crypto payments, the bank added, would lead to a fall in volatility.

For users in Russia, crypto payments may look different than elsewhere in the world. The country is planning to run “pilot transactions” of the digital rouble that could be used for international payments as early as next year. 

While cryptocurrency payments aren’t as widespread as some proponents would like, new applications built are the space are being launched fairly regularly. One such application that was recently launched is Coinbase’s long-awaited non-fungible token (NFT) marketplace, which is now in beta for select customers. 

The NFT marketplace is accessible for everyone to view, although only select users are able to buy and sell assets on it for now. Coinbase opened a waiting list for the marketplace back in October which saw more than 1.5 million users sign up. 

Beta testers have been selected based on their position on that waitlist. The testers can create a profile on the marketplace which is accessible using any self-custody wallet. Coinbase does not charge transaction fees for a limited time and partnered with the 0x Protocol to optimize network fees. 

The marketplace has been likened to a type of social network for NFTs. For now it only supports Ethereum-based assets and payments, although the company plans to integrate with other blockchains in the future. 

Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies. 

Featured image via Unsplash.