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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.
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.
Bitcoin (BTC), the top cryptocurrency by market value, slipped 1.2% to $28,890, leading the CoinDesk Market Index (CMI) to a 1.7% decline.
STORY CONTINUES BELOW
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.
Read More: Traders Pile Into CRV Shorts Amid Concerns Over Curve Founder's Collateralized Borrowing
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%.
Read More: Judge Rejects Ripple Ruling Precedent in Denying Terraform Labs' Motion to Dismiss SEC Lawsuit
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.
See more: Get professional-grade crypto data and news at CoinDeskMarkets.com
James Rubin
James Rubin was CoinDesk's Co-Managing Editor, Markets team based on the West Coast. He has written and edited for the Milken Institute, TheStreet.com and the Economist Intelligence Unit, among other organizations. He is also the co-author of the Urban Cyclist's Survival Guide. He owns a small amount of bitcoin.
Omkar Godbole
Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.
