ADVANCEMENTS IN THE CRYPTOCURRENCY WORLD CRYPTOCURRENCIES RESILIENT DESPITE WEAK STOCKS, MORE REGULATORY ACTION

Stablecoin market caps have stabilized while the percentage of ether in smart contracts continues to rise, a report from the bank said.

Cryptocurrency markets have remained resilient despite stocks' weakness over the past week and increased regulatory activity in the U.S., Citi said in a research report Friday.

“Correlations with equities have continued to decline from last year’s peaks,” analysts led by Alex Saunders wrote. “Volumes remain robust, although on-chain and search activity have not been as durable.”

Stablecoin market caps have become steady after they declined following the collapse of crypto exchange FTX, while the percentage of ether (ETH) in smart contracts continues to rise, the report said. A stablecoin is a type of cryptocurrency whose value is pegged to another asset, such as the U.S. dollar or gold.

Following the U.S. Securities and Exchange Commission's plan to sue Paxos, the issuer of stablecoin binance USD (BUSD), there have been more than $3.5 billion in BUSD outflows, representing a 23% fall in market capitalization, Citi noted. The outflows have generally made their way into rival stablecoin tether (USDT), the bank said.

“Total-value-locked (TVL) activity in ETH terms has not picked up as much as prices,” the note said, and decentralized exchange (DEX) volumes are unchanged this month after a steady decline.

The bank notes that non-fungible-token (NFT) activity has increased in recent weeks, though transactions levels remain far below 2022 averages. Crypto search interest remains low despite the year-to-date rally in digital assets, the note added.

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Lido Finance had to activate its safety feature — staking rate limit — after over 150,000 ETH was staked in a single day.

Liquid staking protocol

Lido Finance activated a protocol safety feature called “staking rate limit” after more than 150,000 Ether ETH $1,636 was staked with the protocol in a single day.

Lido is a liquid staking solution for digital assets, allowing users to stake Ether without them needing to have their tokens locked. When a user deposits Ether, Lido issues them a liquid variant of ETH, known as staked Ether (stETH), giving users staking rewards for each day the tokens are held in their wallets.