Bitcoin Falls 1.2% as Curve Chaos Sparks Systemic Crisis Fears in DeFi
CRV has bounced 20% since Justin Sun organized some relief for the token, but remains 23% lower this week.
Jul 31, 2023 at 10:06 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/JZYCX7ETLJHRDI3GB5HRONRA5E.png)
/arc-photo-coindesk/arc2-prod/public/LXF2COBSKBCNHNRE3WTK2BZ7GE.png)
The crypto market was off its worst levels, but remained down across the board on Tuesday afternoon as risk-off sentiment continued following last weekend's exploit of Curve Finance and Monday's court ruling potentially throwing into question June's legal victory for Ripple's XRP.
Curve's native token CRV is down 4% over the past 24 hours to $0.59, but earlier Thursday had slid to as low at $0.50 before Tron blockchain founder Justin Sun purchased more than $2 million worth of the token and pledged additional assistance through a liquidity pool set up on the Tron network.
CRV's jitters dragged down other prominent decentralized finance coins like COMP, FXS, and AAVE.
Dinging market sentiment, particularly among altcoins, a federal judge – in an otherwise unrelated case involving the SEC's lawsuit against Terraform Labs – rejected the distinction made by another judge last month in the Ripple case between public and institutional sales of the payments focused cryptocurrency XRP.
XRP is lower by 1.4%, while the native tokens of Solana, Cardano, Polygon and Stellar are all down 2%-3%.
In an email to CoinDesk, Dave Weisberger, the CEO and co-founder of algorithmic-trading platform CoinRoutes, noted altcoins downward drift following the HEX suit, although he added that it involved a "misappropriation of funds" and did not indicate anything structurally wrong with the broader market.
“In general, we’re in the dog days of summer and in turn seeing relatively low volumes for Bitcoin along with Ethereum," Weisberger also wrote, but added that "larger-size buyers" seemed to be accumulating bitcoin as the price recently dropped.
"Sentiment has improved...," but "...the market seems to be in a holding pattern," he wrote.
:format(webp)/s3.amazonaws.com/arc-authors/coindesk/fef307fe-e7ed-4f5a-badc-d7a5744bbd1e.png)
James Rubin was CoinDesk's U.S. news editor based on the West Coast.
:format(webp)/s3.amazonaws.com/arc-authors/coindesk/31d39a34-26a1-4e78-a5da-d5cf54a9d695.png)
Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.