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- 🟣 April was a drag
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Trading volumes slump
Degen offline
Winding down an L2
Low BTC interest
As bitcoin struggles to find some solid footing in the midst of a choppy range, some hard data from April shows just how the market dynamic has shifted for the worse.
Confirming what any market participant can readily observe, April broke a seven-month streak of growing spot trading volumes across both spot and futures markets, according to CCData.
Spot volumes dropped about 33%, including a 39% slide for a soon-to-be CZ-less Binance.
Monthly derivatives trading volume fared even worse, down by almost 48%. Even futures heavyweight CME saw a roughly 20% lull.
Bitcoin ETF flows once again ended the week in the red on Friday, with $84.7 million in net outflows driven by renewed selling in GBTC. However, the ETFs notched $116.8 million in net inflows for the week as a whole.
Not Degen’s day
The Base-connected L3 chain Degen has been down for about 18 hours at time of writing. Rollup-as-a-Service provider Conduit is working to restore service to the chain, which operates using just two primary bridges.
“ETA is [11 am EST] for the nodes to be synced to the post-reorg state with a valid database. Will keep you posted,” the chain’s official X account posted at 10:04 am EST.
The outage underscores the vulnerability of vertical scaling chains that lack features to secure funds when things go wrong. As of now, every Degen degen has funds trapped, pending resolution.
Degen chain had over $10 million in TVL at its peak in early April.
Another recent high profile example: Gitcoin’s OP stack-based Public Goods Network (or PGN). After deciding to wind down the network in January, Gitcoin discovered that doing so would make it challenging for users to retrieve some $1.3 million in deposited funds across 40,000 wallets still present.
Without a mechanism to self-propose a withdrawal, a liveness failure in PGN (like when the Gitcoin Foundation pulls the plug) could leave funds inaccessible — there is no escape hatch.
That leaves the chain’s operators with a choice to either maintain the status quo — which could cost them hundreds of thousands in fees and expenses — or find some other way to extricate assets and later return them to their rightful owners.
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Past futures interest:
Alongside April’s dwindling spot and futures trading volume, bitcoin open interest slumped in April, ending a year-to-date growth trend.
Open interest across major derivatives exchanges saw about a 25% decline. Loss of interest shrank the average BTC funding rate to 3.5%, though they remained mostly in positive territory throughout the month.
After the April cold showers, will May bring a reflowering of interest? We’ll check in a few weeks.
The Across protocol emerges as a dominant bridge within the Ethereum and L2 ecosystem, settling notable volumes with low latency, low fees and no slippage. The protocol’s architecture is based on intents, a deviation from many of its competitors' designs of “lock-and-mint” or “message-passing.” The recent v3 upgrade dramatically expands the scope of transaction types that can be settled through Across, enabling a higher degree of cross-chain interoperability and chain abstraction.
Compute DePINs are one of the best positioned verticals in crypto for mass adoption as AI compute demand has exposed structural inefficiencies in the cloud computing and leading-edge compute markets. These structural inefficiencies could last for years, as concentrated and technically complex supply chains are moving too slowly to meet the insatiable demand for compute as the step function growth in demand for AI compute sustains.
It’s the second governance proposal to be weighed by Jito’s new DAO.
If we can’t bring real context to the world of blockchain data, then we’ll be stuck with useless solutions like proof-of-reserves for the foreseeable future.
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The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.
