DeFi Carry Trade Gains Traction and Forgotten Cryptos Rebound in the Americas

By Omkar Godbole (times given in ET) The resurgence of the bitcoin bull market was bound to rekindle interest in the DeFi sector. Now, discussions are heating up around a potential 'carry trade' utilizing DeFi protocol Ethena's yield-bearing staked USDe (sUSDe) to borrow stablecoins such as USDC and USDT from lending giant Aave. These stablecoins are then exchanged for USDe, yielding an attractive return from the substantial spread between sUSDe's nearly 30% annualized yield and AAVE's variable borrowing rates, which are currently below 20%. This return surpasses ether's staking yield of under 4% and the U.S. 10-year Treasury's yield of 4.24%. If this trade gains popularity, the arbitrage window may eventually close, with borrowing rates potentially matching the yield on sUSDe, according to observerClouted. This development is worth monitoring. Regarding market leader bitcoin, the largest cryptocurrency has rebounded to nearly $97,000 as of this writing — a level seen multiple times since mid-November — after testing demand for dips around $93,500 on Tuesday. Prices on Korean exchanges have realigned with their global counterparts following Tuesday's flash crash, which was triggered by the announcement of martial law. Traders are eagerly anticipating Fed Chairman Powell's speech later today, as well as Friday's non-farm payroll report, in hopes of a boost in bitcoin price volatility. With the return of the BTC Coinbase premium, the case for renewed bullishness appears promising, unless Powell dampens December rate-cut expectations. Meanwhile, beware of engagement farming on social media. Some X accounts are discussing record short positions in CME's ether futures, claiming it suppresses ether prices. However, this may not be accurate. Most of these shorts could be part of the popular price-neutral cash-and-carry arbitrage strategy, which includes long positions in the spot market or spot ETFs. It is no coincidence that Farside Investors' data shows a net inflow of $714 million into U.S.-listed ether ETFs over the past seven trading days. Looking at the broader market, Aptos has achieved a milestone with its DeFi total value locked surpassing $1 billion, representing a staggering 19-fold growth year-over-year. The number of transactions and the average cost to transact on the Avalanche C-Chain are at their highest since April and August, just as the Avalanche9000 upgrade approaches, according to data source Artemis. Tron's TRX token and the on-chain perpetual options protocol GammaSwap's GS token have reached record highs, while a whale sold a substantial 240 billion PEPE, according to Lookonchain data. Decentralized exchange PancakeSwap has launched 'PancakeSwap Springboard' to create and list tokens, borrowing a page from Pumpfun's playbook. Expect more speculative fervor. In traditional markets, keep an eye out for risk-off signals. The yen remains upbeat, and Wall Street executives are aggressively reducing their stock holdings, driving the ratio of insider sellers to buyers to nearly 6x, according to the Kobeissi Letter. Stay vigilant. Key Developments to Watch Token Events Conferences Token Talk By Shaurya Malwa Cryptocurrencies from as far back as 2018, dubbed 'dino coins,' are experiencing a resurgence in a refreshing shift away from memecoins. Several tokens that gained popularity during the first altcoin bull market are now following XRP's 400% price rally over the past 30 days with significant rallies of their own, albeit without an immediately apparent reason. Stellar (XLM), bitcoin cash, EOS, TRX, and Hedera (HBAR) have gained at least 50% over the past week, according to CoinGecko data, outperforming bitcoin and nearly every 'new' token being promoted or hyped on Crypto Twitter. The term 'dino coins' reflects a narrative shift where older cryptocurrencies are no longer seen as outdated but as resilient, seasoned projects. This shift can be attributed to their survival through multiple market cycles, lending them credibility among newer, less-proven offerings. Derivatives Positioning Market Movements Bitcoin Statistics Basket Performance Technical Analysis XRP's daily chart indicates that while prices set a new high on Tuesday, the MACD histogram, a momentum indicator, did not confirm the move, diverging bearishly. This suggests that the bullish momentum has weakened, and prices may decline. TradFi Assets ETF Flows Spot BTC ETFs Spot ETH ETFs Source: Farside Investors Overnight Flows Chart of the Day While You Were Sleeping In the Ether