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3/24/2022 - 3/31/2022

Weekly Crypto Market Overview

3/24/2022 - 3/31/2022

This Week in Focus

Notable News

3/23/2022: Axie Infinity’s sidechain Ronin was hacked and reportedly $625 million was stolen 1

  • Potentially one of the largest heists in crypto.
  • Ronin is a bridge designed to connect Ethereum and Axie Infinity, for the purpose of speeding up transactions while allowing users to transfer assets between the two protocols.
  • It appears that the purported hacker managed to gain control over five out of nine validator nodes. Four were controlled by Sky Mavis, the company that built Ronin. One was run by Axie DAO. 
  • Bridges are sometimes seen as a vulnerable area of blockchain security as they have less validators and maybe easier for malicious actors to gain control. Previously, Wormhole, a bridge between Solana and DeFi protocols, was reportedly hacked for $375 million on 2/3/2022. 2

3/28/2022: Bored Ape Yacht Club #835 allegedly sold for 115 DAI seemingly by mistake 3

  • Reportedly, Bored Ape’s price floor was 106.8 ETH at the time.
  • The owner accepted the offer for 115 DAI.
  • One speculation is the owner mistook DAI as ETH, as 112 was the highest bid in ETH.

3/29/2022: Polygon announced identity service built by zero-knowledge proofs (ZKP)

  • Polygon is a layer-2 scaling solution for Ethereum for faster, cheaper, and more scalable transactions. 4
  • It purportedly is in the process of building a user identification service, utilizing zero-knowledge proofs, so identities can be verified without revealing any of the confidential information.
  • This service will be compatible with Polygon’s wallet. It aims to decentralize user verification.
  • ZKP is getting applied more widely in blockchain protocols. It is used by ZCash and Ethereum 2.0, among others.  

Market Movement Summary

  • During the past week, equity market was slightly up, commodities retreated from recent rally, cryptocurrencies had a bull run. 5
  • Crypto market capitalization rose above $2 trillion on 3/25/2022, after being below the threshold since 2/10/2022. 6
  • Top 100 coins dominate 96.81% of the crypto market. 7
  • Historically, BTC and ETH’s correlation is around 0.8. Recently it increased to 0.9.8
  • BTC’s market dominance stands at 42.14% while ETH’s stands at 19.02%. 9

This Week’s Interesting Questions

  • What’s zero-knowledge proof? Answer.
  • Is Discord decentralized? No. 
  • How do bridges work? Answer.

General Market Movement

I. Crypto vs. Traditional Markets

Crypto vs. Traditional Markets

Source: Bloomberg, CoinGecko, Messari, from 3/31/2021 to 3/31/2022. Cross River Bank and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for illustrative purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

II. Correlation of Asset Classes

Correlation of Asset Classes

Source: Bloomberg, CoinGecko, Amberdata, from 3/31/2021 to 3/31/2022. Cross River Bank and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for illustrative purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

III. Correlation of Top 10 Cryptocurrencies (Ex-Stablecoins)

Correlation of Top 10 Cryptocurrencies

Source: Amberdata, from 3/31/2021 to 3/31/2022. Cross River Bank and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for illustrative purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Sector and Token Movement

I. Sector Performance of Top 100 Cryptocurrencies by Market Cap

Sector Performance of Top 100 Cryptocurrencies by Market Cap

Source: Messari, as of 3/31/2022. Cross River Bank and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for illustrative purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

II. Sector Analysis of Top 100 Cryptocurrencies by Market Cap

Sector Analysis of Top 100 Cryptocurrencies by Market Cap

Source: Messari, as of 3/31/2022. Cross River Bank and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for illustrative purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

III. Top & Bottom Performers of Top 1000 Cryptocurrencies by Market Cap

Top & Bottom Performers of Top 1000 Cryptocurrencies by Market Cap

Source: Messari, as of 3/31/2022. Cross River Bank and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for illustrative purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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1https://www.coindesk.com/tech/2022/03/29/axie-infinitys-ronin-network-suffers-625m-exploit/
2https://www.theverge.com/2022/2/3/22916111/wormhole-hack-github-error-325-million-theft-ethereum-solana
3https://www.theblockcrypto.com/post/139554/a-350000-bored-ape-nft-was-just-sold-for-only-115
4https://www.coindesk.com/tech/2022/01/10/polygon-stakes-claim-to-fastest-zero-knowledge-layer-2-with-plonky2-launch/
5 See Crypto vs. Traditional Markets table.
6https://coinmarketcap.com/charts/
7 See Sector Performance of Top 100 Cryptocurrencies by Market Cap table. 
8https://charts.coinmetrics.io/correlations/
9 Source: Messari, as of 3/31/2022.