Markets have crumbled over the past month on the back of the collapse of FTX, a debacle that we will delve deeper into later in this report. Other factors that added fuel to the fire were political unrest in China and Iran, in addition to inflationary pressures around the world. The overall cryptoasset market decreased by almost 15% over the past month to rest at a little over $860B in value. Bitcoin and Ethereum dropped by 16% and 17% respectively over the past month. Aside from that, Solana was one of the most affected by the second-order effect of the market turmoil with a monthly performance of -56%. November’s outlier was Polygon, increasing by 3%, which makes the L2 stand out as the only cryptoasset within the major sectors to have progressed despite selling pressures across the board.

Figure 1: TVL and price development of major crypto sectors

Source: 21Shares, Coingecko, DeFi Llama

Key takeaways from this report

• Bitcoin inflows top the ETP market in November

• Regulators piggyback on the FTX debacle to lobby for their proposals.

• Contagion spreads and ring-fencing unites crypto infrastructure layers.

• DeFi shows resilience compared to centralized platforms.
Spot and Derivatives Markets

Figure 2: Net New Assets by ETP Underlying (In $M)’

Source: 21Shares

The chart above indicates that investors this year have been keener on diversifying their exposure to crypto than in a single asset. For the more directional trades to single assets to single assets, investors value scalability with more inflows into Polygon and deem the infrastructure play to remain relevant, as year-to-date, Ethereum and Avalanche also benefited from more than $20M inflows each.

On-chain Indicators

Figure 3: Bitcoin Balance on Centralized Exchanges

Source: Glassnode

From November 8 to 28, BTC balances on centralized exchanges like Binance, KuCoin and Kraken fell by 6%. Such a decline in such a short time hasn’t happened in the history of the industry. After the collapse of FTX, users moved over 170K BTC either to cold storage, DeFi applications, or sold some of them. This can attest that there is a growing mistrust or uncertainty against centralized crypto entities and in contrast, more confidence in their decentralized counterparts.

Next Month’s Calendar

Source: 21Shares, Forex Factory

Read full report here

Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

Disclaimer

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.