Crypto Index Tracker: Metaverse Leads Decline into New Year
- By Bilal Hafeez and Dalvir Mandara
- 2 min read
Crypto markets have had a tumultuous start to the year after bitcoin closed 2021 with drawdowns of 33% in December. Bitcoin marked its 13th birthday yesterday (3 January) – the date at which the first block was mined and has been trading sideways at around $46,500; an 8.5% decrease over the past seven days. Outside of bitcoin, moves were not uniform – our Smart Contract and DeFi indices saw declines of 5.8% and 4.9%, respectively. The metaverse index leads the fall at 11.2%.
This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.
Crypto markets have had a tumultuous start to the year after bitcoin closed 2021 with drawdowns of 33% in December. Bitcoin marked its 13th birthday yesterday (3 January) – the date at which the first block was mined and has been trading sideways at around $46,500; an 8.5% decrease over the past seven days. Outside of bitcoin, moves were not uniform – our Smart Contract and DeFi indices saw declines of 5.8% and 4.9%, respectively. The metaverse index leads the fall at 11.2%.
Here are the performance details:
- DeFi Index. All five coins in our DeFi basket fell over the past seven days. Maker (MKR) fell the most at 9.1% and Compound (COMP) fell the least at 3.9%.
- Metaverse Index. All five coins in our metaverse basket saw declines. Gala (GALA) fell the most at 19.5% and Enjin Coin (CNJ) fell the least at 10.1%.
- Smart Contract Platform Index. All five coins in our smart contract basket are in the red. Solana (SOL) fell the most at 13.5% and Polkadot (DOT) fell the least at 4.2%.
- Bitcoin. This fell 8.5%, but notably has performed better than solana and cardano over the past seven days.
What Are In The Four Indices?
Here are the indices in more detail:
- Bitcoin: the OG of crypto markets deserves its own category and is in many ways the true benchmark for any other crypto market.
- Smart contract platforms: after bitcoin, the big innovation was to have blockchains that were more programmable. These could host smart contracts or decentralised applications and have allowed the emergence of the metaverse and defi. Ethereum (ETH) is the most popular version of a smart contract platform. But we also include rivals: Solana (SOL), Cardano (ADA) and Avalanche (AVAX). We also include Polkadot (DOT) which allows interoperability between blockchains and the use of smart contracts via parachains.
- Metaverse: coins associated with the creation of a virtual space/digital world on the internet using a combination of augmented reality, virtual reality, and social networks. One of the largest is this space is Axie Infinity (AXS), which is a play-to-earn gaming platform. Another is Decentraland (MANA), which is a virtual world that allows ownership of land amongst other things. The three other coins we include are Sandbox (SAND), Enjin Coin (CNJ) and Gala (GALA).
- Decentralised Finance (DeFi): financial services built on top of blockchain networks with no central intermediaries. This can be a very broad category, so we narrow this down to platforms that focus on lending and borrowing or to yield farming. The five coins we have selected are Aave (AAVE), Maker (MKR), Compound (COMP), Uniswap (UNI), and PancakeSwap (CAKE).
Dalvir Mandara is a Quantitative Researcher at Macro Hive. Dalvir has a BSc Mathematics and Computer Science and an MSc Mathematical Finance both from the University of Birmingham. His areas of interest are in the applications of machine learning, deep learning and alternative data for predictive modelling of financial markets.
Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.