TLDR: BTC & ETH is down. Bitcoin dominance is stagnant. The hot coin we look at this week is PENDLE.

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BTC & ETH Market Update 📈

Crypto is down slightly this week, with BTC being down 0.3% and ETH down 1.8%:

Bitcoin dominance has been increasing over the week, starting at around 50.4%, topping at 52.1% and ending the week around 51.8%. Capital often starts to flow into ETH and other altcoins as the price is increasing for more risk-on assets as well, causing a lower Bitcoin dominance as we have started to see over the course of multiple weeks.

It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.

The Bitcoin halving is coming up in April 2024. If history is any guidance we will continue to see BTC dominance climb up until after Bitcoin halving, whereafter people start to look for higher return moving further on the risk curve entering altcoins. This typically starts with ETH, and then on to mid- and low cap coins. Other coins being moved into are typically “ETH killers” like SOL, AVAX and other other L1s. Yet ETH is still the king amongst altcoins, as price action this week also shows.

With BTC dominance increasing and the ETH price decreasing more compared to BTC, the BTC/ETH ratio is trending to be stagnant to 20.6 ETH per BTC, underlining that BTC continues to be king in crypto, but alts like ETH are gaining momentum.

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Hot Coin: PENDLE 🔥

In this week’s newsletter we dive into PendleFi’s token with the ticker: PENDLE.

The price action and volume is has been growing consistently, and doesn’t seem to stop any time soon:

What is the project about?

Pendle Finance provides decentralized financial services with a focus on fixed yields and yield tokenization. It supports cross-chain compatibility and includes automated market-making mechanisms for effective yield trading.

Pendle was launched in June 2021 as a yield-aggregating protocol, that incentivizes the pooling of yield-generating tokens and the creation of yield markets across DeFi platforms. It allows holders of these tokens to mint them into YT and OT . Holders of yield-generating tokens can sell their rights to yield (Mint + Sell YT), allowing them to lock in their profits and receive upfront cash. Buyers of these rights (Buy YT) gain exposure to the fluctuating rates in a more capital-efficient manner as they do not need to purchase and stake the core underlying asset. As such, there is no need to worry about collateralization or liquidation risk.

Pendle is currently live on Ethereum and Avalanche. On Ethereum, Pendle supports Compound, Aave and Sushiswap. On Avalanche, Pendle supports Trader Joe and BENQI.

Why is the project exciting now?

There are three main reasons why we feature this project in this week’s newsletter and look at it as an attractive buy right now:

• Superior Yield

• Growing Volume & TVL

• Value Accrual

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