Bounce with it. Crypto markets were jostled about by macroeconomic factors this week, meanwhile the degens were basking in new tokens after the arrival of numerous high-profile airdrops! What happened in markets this week?
Bitcoin started out the week at $63k and attempted to break above the $65k open from the week prior before rejecting from the level on Tuesday and plunging below the key $60k boundary that had supported price throughout the prior two months.
Risk assets ground steadily upwards throughout Thursday and exploded higher on Friday after poor employment data suggested that rate cuts may be imminent, allowing BTC to reclaim its key support level at $60k.
While the total crypto market cap (TOTAL) only narrowly avoided its fifth red week in a row, many degens were recapitalized by a slew of major airdrops this week, potentially providing the fuel needed to send prices higher.
Ethereum liquid restaking protocol Renzo and Solana money market Kamino both launched claims for their initial airdrops on Tuesday, April 30, distributing a combined $200M to early users at current market prices.
Late Thursday night, friend.tech launched FRIEND, a platform utility token that accrues fees from swaps and can be used to purchase new “Club” keys, to coincide with the release of its V2. With 100% of the FRIEND supply going to users, the token launched at its fully diluted valuation and traded as high as $160 per coin during the early illiquid stages of price discovery, implying a mind-boggling $11B FDV!
Unfortunately, FRIEND plummeted back to orbit this morning as users decried the quality of the V2 upgrade and jeeted their holdings from the application in a rush for the exit, draining a net 20k ETH from the application and leaving the token at a much leaner $120M FDV at the time of analysis.
Also unveiled this week was the EigenLayer airdrop. While the token is not yet transferable or tradable, its arrival certainly sent shockwaves across the crypto market…
Onchain yields continued to compress this week after the announcement, with the implied yield on the most liquid LRT pool on Pendle falling over 700 basis points since last Friday, down to 23.8%.
While the promise of airdrops has fueled bull market narratives and inspired many to seek out leverage to best capitalize on the opportunity, their arrival has lessened speculative activity and caused yields to come in significantly during the month of April. Should yields continue to decline, there is a substantial risk that prices will trade lower, considering that holders may begin to sell crypto assets once the returns they can generate are no longer great enough to compensate them for their opportunity costs.
