The week of 25 April - 2 May was a continuation of the sideways movement for the crypto market, this time with a slight decline. The total cryptocurrency market capitalization index started at $1.78 trillion. The next day we could see an increase to $1.84 trillion. By the end of the week, however, the index stopped at $1.68 trillion. The decrease by the end of the week was 5.6%.

"The first cryptocurrency" largely repeated this slightly downward sideways movement with fairly moderate volatility. Bitcoin started around the 39 450 level, reached a local peak of 40 610 the next day, and then we could see a gradual decline to 38 860. Thus, the total decline at the end of the week was 1.5%.

Oddly enough, the situation with Etherium during the week was almost identical: starting at a local bottom at 2920, then rising to a local high of 3140. Subsequently, by the end of the week, we could see a decline to 2860. The final decline was 2.7%. Further market dynamics will be largely determined by the upcoming US Federal Reserve meeting this week, where the next decision on interest rate hike will be made. 

News

Andreessen Horowitz (a16z) intends to commit $500 million to startups in India, TechCrunch reports. The company also intends to hire several employees for investment positions in India. The current partners of a16z, including Seema Amble and Sumit Singh, have already been in touch with local startups. Reportedly, a16z wants to invest in an exchange start-up with a valuation of around USD 250 million and is also in contact with an early-stage fintech start-up.

FIFA, the global governing body of world football, has engaged Algorand as its official blockchain partner. Under the agreement, Algorand will be the "regional sponsor" for North America and Europe for the FIFA World Cup in Qatar and the official sponsor of the Women's World Cup in Australia and New Zealand next year. The agreement comes weeks after cryptocurrency exchange Crypto.com became a sponsor of the 2022 FIFA World Cup. Algorand will provide an official FIFA blockchain wallet as part of the sponsorship and technical partnership, and will also be able to run promotions and media coverage through FIFA.

Nym Technologies, a Swiss identity protection startup that secures online activity against snooping with a 'mixnet', has announced a new $300 million fund to attract developers to its ecosystem. The Nym Innovation Fund has secured $300 million in commitments from a number of venture capitalists. These include Polychain, Greenfield One, Huobi Incubator, Tioga Capital, Eden Block, NGC Ventures, HashKey Capital, Figment, Fenbushi Capital, OKX Blockdream Ventures, Tayssir Capital, KR1, Lemniscap and Andreessen Horowitz (a16z).

Venly, a Belgian cryptocurrency company that provides technology to e-commerce brands and gaming platforms, has raised $23 million in a Series A funding round. The round was led by Courtside Ventures with participation from Transcend Fund, Coinbase Ventures, Tioga Capital and others. Founded in 2018, Venly integrates wallets and NFT products with the brand's blockchain, regardless of the blockchain used (which is largely why Venly's partners include Polygon, Binance, Avalanche and Hedera).

Market situation

The rather large market decline in April (BTC -18%, compared with -15% for NASDAQ) does not guarantee that this is the absolute minimum. According to research service glassnode, short-term holders (holding BTC in an external wallet for less than six months) are most vulnerable to downward price pressure and are likely to sell some of their assets. Such a scenario could lead to a sell-off in cryptocurrencies, which could result in BTC falling to 33 600USD.

The overall sentiment is under pressure from continued high inflation, a cycle of rate hikes, and renewed local quarantines in China, leading to a repeat of last year's supply chain disruption scenario.

On the options market, short-term options with execution in May were the most actively traded. The Fed meeting and subsequent press conference are expected this week as well as the Bank of England's refinancing rate decisions are events that could significantly influence the global market.

In block trades last week, according to gvol, traders preferred to bet on higher volatility after the FED meeting, trading near-term strikes. The alternative was to buy long-dated options in anticipation of a change in the global context - such trades (buying put options with an exercise price of 25 000 in September or buying call options at 80 000, almost worthless but capable of generating substantial profits in the event of a sharp price change).

Globally, the cryptocurrency market has officially entered a "bear phase" - where expectations of further price declines are dominant. However, the "price discovery" phase and the search for a final bottom may be delayed. New big players or regulatory changes could support the market (although such changes are not expected until the autumn, despite active discussion on both sides of the Atlantic).