This week, cryptocurrency markets experienced turbulence due to macroeconomic influences, while enthusiasts eagerly embraced new tokens from several notable airdrops. Bitcoin commenced the week at $63,000, aiming to surpass the previous week's opening price of $65,000. However, it faced rejection near this level on Tuesday, subsequently dropping below the crucial support threshold of $60,000, which had upheld prices for the preceding two months.
Throughout Thursday, risk assets steadily ascended, and Friday saw a significant surge following discouraging employment data, hinting at potential rate cuts. This development enabled Bitcoin to reclaim its vital support level at $60,000.
While the overall cryptocurrency market cap narrowly avoided its fifth consecutive week in the red, many enthusiasts found themselves rejuvenated by a wave of significant airdrops, potentially injecting momentum into price movements.
Renzo, an Ethereum liquid restaking protocol, and Kamino, a Solana money market, initiated claims for their initial airdrops on April 30, distributing a combined $200 million to early users based on current market prices.
On Thursday, friend.tech introduced FRIEND, a platform utility token tied to fee accrual from swaps and the purchase of new "Club" keys coinciding with the release of its V2. All FRIEND tokens were distributed to users, launching at its fully diluted valuation (FDV), with prices soaring to as high as $160 per coin during early stages of price discovery, indicating an astonishing $11 billion FDV.
Regrettably, FRIEND's value plummeted back down to earth as users expressed dissatisfaction with the V2 upgrade, hastily liquidating their holdings and withdrawing from the application. This led to a net outflow of 20,000 ETH from the platform and reduced the token's FDV to a much more modest $120 million at the time of analysis.
This week also saw the introduction of the EigenLayer airdrop, which, although not yet transferable or tradable, made significant waves across the cryptocurrency market.
Following this announcement, onchain yields experienced further compression, with the implied yield on Pendle's most liquid LRT pool plummeting by over 700 basis points since the previous Friday, now standing at 23.8%.
While the allure of airdrops has fueled bullish sentiments and enticed many to leverage their positions to maximize gains, their actual arrival has dampened speculative activity and led to a significant decline in yields throughout April. If this downward trend in yields persists, there's a notable risk of prices declining, as holders may opt to sell their crypto assets once the returns they can generate no longer adequately compensate for their opportunity costs.
May 2024, Cryptoniteuae