What happened last week

TradFi

The past week has been quiet for traditional markets in anticipation of FOMC meeting on Wednesday this week with the SPX gaining 0.77% and the DXY gaining 1.31%. Bonds also had a very quiet week with the 10-year yields recording the smallest daily range in almost a year on Monday. Markets priced in the 25-basis point hike by the Fed, which announced on Wednesday turned out to be in line with expectations. The market is undecided on September’s decision with only a 24% chance of a hike and will be looking for clues on a potential pause or pivot in the press release which may become a key driver of the markets in the coming weeks.

Crypto

The price of Bitcoin traded in the range between $29'500 and $30'350 over the past week, as investors were cautious ahead of the FOMC decision on Wednesday. Even though there was a temporary surge in price on Sunday, both BTC and ETH have been trading within their respective limited ranges throughout the week, resulting in a rather lackluster trading period.

Amid the general trend, DOGE was a remarkable outlier, showing a significant weekly increase of +6%. This surge in DOGE's price was linked to speculation within the crypto community, revolving around Elon Musk's potential plan to incorporate DOGE as a payment token for his new branded platform X (former Twitter). Additionally, the introduction of Worldcoin (WLD), envisioned by the entrepreneur and OpenAI's founder Sam Altman, attracted considerable attention as it got listed simultaneously on major exchanges. The weekly closing seems to be aimed at an average price of $2.2 across the exchanges. The current market capitalization stands at $240m, with an average daily trading volume of roughly $162m.

Looking ahead to August, BTC collars seem like an intriguing option, especially with the upcoming decision on the first ETF scheduled for August 13th. Until the verdict is announced, it's likely that the market will continue to remain range bound. However, once the decision is known, there's a possibility that we'll witness a significant move in either direction, putting the current range to the test.

MakerDao Burn Mechanism

MakerDAO, the second largest lending protocol in terms of total value locked, has recently implemented a burning mechanism known as the Smart Burn Engine. This system aims to redistribute surplus Dai from the Surplus buffer to MakerDAO's governance token, MKR, through a UniswapV2 Pool. The performance of the MKR token has been remarkably strong over the past 7 days, witnessing an impressive surge of 24.51%. Notably, this significant increase has outpaced the performance of the majors BTC and ETH, which have experienced declines of 1.33% and 0.57% respectively during the same period. Moreover, even prominent DeFi protocols such as AAVE and COMP have been unable to match MKR's outstanding performance within this timeframe.