0:42 On our latest episode of This Week in the Markets, FalconX’s Head of Institutional Coverage, Aya Kantorovich joined our host, Paul Gordon to dissect the major happenings in the previous week in the world of crypto. The week was packed with a lot of newsworthy moments, the biggest of which was the Coinbase IPO, the first direct listing of a crypto-based company on a major exchange like NASDAQ.
Response to the IPO
According to Aya, this announcement had varying effects on trading in the markets, with retailers and institutional funds both responding differently. The $COIN IPO she said really helped spark volatility up comparing it to the previous week.
(01:16) “We were seeing volatility definitely slow down both on the spot market, which we faced directly as well as our clients who face the derivatives market” Aya noted.
(03:30) Aya added that she felt that folks were “buying the news” as people were watching the markets, seeing how it impacted the price of Bitcoin, as people were very much “buying or selling the news leading into the event.”
Twaps, Vwaps And The Rise Of Altcoins
(04:43) TWAPS and VWAPS have become one of FalconX’s largest product focuses that has come up over the last couple of weeks mostly powered by its use from institutional funds.
(04:52) In what some may call the third or fourth altcoin rally, Altcoins are gaining a lot of attention, noteworthy being the Binance smart chain projects, and L2s that are diversifying away from Ethereum. Similar trade attention has increased in some of the retail focused top 10 names like Link, Cardona and XRP.
Fall Of Bluechips
(05:39) However, one area where we haven’t seen as much action is the bluechips. They may have been lagging significantly as traders try to find blockchains with lower fees, or that the NFT space has directed attention away from them, Aya said.
The Legacy Of The Coinbase IPO
On the success of the $COIN listing, Ana was positive that having a validation like this exposed to providing institutional accessibility and adoption, and having that happen on a big scale is very exciting for the entire crypto ecosystem.
(07:57) Anchors of mainstream finance like family offices, asset managers and allocators, although haven’t gotten approval from their boards to access bitcoin directly, are now able to gain accessibility to $COIN because of the IPO.
The Future Of Exchange Tokens
With the recent performance of exchange tokens like BNB, host Paul was inquisitive about the future of these new tokens.
(11:40) People are trying to value these companies, and it’s not just exchange tokens, Aya said in response. It’s not just the BNB or FTX’s token FTT but AMN and Uniswap, which are seeing similar appreciations because folks are looking at assets that are easily tradable and across different exchanges whether it’s Binance, UniSwap or Coinbase.
(12:37) As well, the most interesting prospect lies in, say Binance, offering fractional shares of different stocks similar to what Robinhood does, Aya added. Perhaps this would be similar to Terra and Luna which provides crypto, not just for crypto and cryptocurrency native tokens and assets, but crypto expanding into US equities and securities. This means that an inherent threat exists to other exchanges when the underlying technology can be expanded in a regulatory sound way to incorporate some of these equities.
The Future Of Exchange Tokens
With these possibilities what crazy innovators would take over the lunch of the old, or would the old adapt and land somewhere in the middle? Paul asked, alluding to the future of exchanges like Coinbase. And can institutions be classified as fully degen now? Paul added.
(15:12) Aya’s perspective was that institutions are degen as well.
“It’s not limited to cryptocurrency native. If you look at our Q1 relative to Q4, 50% of the clients that we’re onboarding are non-crypto natives. These are family offices, and over 20% are from traditional finance. These are asset allocators and asset managers that come from Soros, Peter Thiel, Goldman” Aya said.
According to Aya, people are seeing value across the spectrum of finance. Although they may not go as far as buying Flow or NFT tokens, the adoption is certainly moving across the token names.