Concerns about cryptocurrency contagion may have reached a peak after numerous brokers and market makers disclosed counterparty risk, Celsius Network filing for Chapter 11 bankruptcy protection, and ether (stETH) returns to parity, Citi said in a report on Wednesday.
Staked Ether’s discount to Ether (ETH) has narrowed, the bank’s report said, suggesting some liquidity pressures may be over, adding that the “acute phase of deleveraging” is now over as many of the industry’s leading brokerages and market makers will disclose their risks. Another positive sign, the bank said, is that the outflow of stablecoins has been contained, and that outflows from cryptocurrency exchange-traded funds (ETFs) have stabilized in recent weeks. Exchange and futures leverage is also “benign”, the report noted.
Volatility in the crypto markets in May and June led to a series of “internal market dislocations,” one of which was the difference between the dollar price of Bitcoin (BTC) on Coinbase (COIN) and the price on rival exchange Binance in Tether (USDT), the report said. While Coinbase prices are typically higher, which may reflect new entrants or institutional demand, the price turned around in May, the release said.
The Citi report added that this “Coinbase premium” is also now returning to historical levels, indicating less stress in the crypto market.
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Source: Igaming
