Even if much of the speech on Aptos this week has ranged from sarcastic comments to outright condemnation, the newest cryptocurrency on the market is gaining a lot of attention, generating considerable volume in its first few days of trading.
Since Friday afternoon, APT, the native currency of the Aptos block chain, has done at least $1.3 billion in volume since Wednesday, its first full day of trading, according to CoinGecko. It’s an interesting counterpoint to all the teasing the project got on Crypto Twitter, which is the closest thing the industry has to a town square.
The much-hyped blockchain unveiled its main network on Monday. Over the next 24 hours, the project took to much critics due to the lack of transparency around its tokenomics, that is, the details of the economic model and the distribution of the cryptocurrency.
Cryptocurrency podcaster Cobie took aim at exchanges planning to list the APT token before the tokenomics went public.
Then, when the details of their token distribution were leaked, the team confirmed them in a blog post and received a new round of criticism.
That’s because 51% of APT’s supply is held by venture capital firms. To some traders, like an investor who calls himself “iamDCinvestor” on Twitter, that’s an indication that the entire project is “a pretty blatant cash grab.”
On Tuesday afternoon, Aptos co-founder and CEO Mo Shaikh took to Twitter to address concerns and acknowledge that the launch “could have gone better.” All of this happened just before the token began trading that night. Then, in its first few hours, APT collapsed by 40%.
Its price has not improved much since then. As of Friday afternoon, it is trading at $7.38, down 46% from its first trade, according to CoinGecko. Still, the token has a market capitalization of $963 million. That puts it ahead of KuCoin, TrueUSD, Pax Dollar, and Maker’s native token MKR.
All the attention, even if most of it has been negative, means that there have been a lot of APTs changing hands on cryptocurrency exchanges.
Binance has accounted for more than half of all APT daily spot trades every day since the token launched on Tuesday night. As of this writing, the world’s largest cryptocurrency exchange has seen $193 million worth of transactions, or 57%, across its five APT trading pairs in the last 24 hours.
Huobi Global, which is normally just outside the top 10 crypto exchanges by volume, has seen an outsized portion of APT trades. It accounted for 11% of all spot volume and saw $39 million worth of APTs traded across all three of its pairs (Tether, USD Coin, and Tron’s USDD stablecoin) since yesterday.
That means the APT-USDT pair has generated more volume on Huobi than the USDC-, Solana- and Huobi Token-USDT pairs.
Meanwhile, the perpetual contracts that the Aptos team had rumored having been asking exchanges not to launch so soon, I have seen a lot of action.
The author of a crypto newsletter, who goes by “alpha_pls” on Twitter, was one of many who urged traders to “send Aptos to zero.”
The way traders can do that, or at least bet against an asset, is by going short on derivatives.
Futures contracts are a type of derivative that allows investors to bet on the price movements of an underlying asset. Being short on an asset means that an investor thinks the price will go down; Being long on an asset means that an investor is betting that its price will rise.
A standard futures contract expires over the course of a couple of weeks, months, or even years. But a perpetual contract remains open, meaning the trader remains exposed to the risk of being liquidated if the market swings too far in one direction.
Open interest, or open derivative contracts for APTs, peaked at 11 a.m. on Wednesday, Oct. 19, at $153 million, according to Coinalize. That was the time when APT recovered slightly from its low of $6.75. Since then, open interest has been fairly stable at around $130 million.
Coinalyze aggregates the value of open APT futures positions on Binance, FTX, OKX, Huobi, Bybit, and Bitmex. That doesn’t capture all of the exchanges that offer perpetual contracts for Aptos, but they are the largest.
In the last 24 hours, there have been $2.5 million worth of APT futures contract liquidations, a sign of how volatile the price has been and, perhaps, how enthusiastic traders have been in placing bets on its futures. destiny.
That makes Aptos contracts the fifth highest in liquidations in the past day, behind Bitcoin, Ethereum, Ripple’s XRP and Solana, according to Coinalyze.
Most exchanges will automatically liquidate or sell a trader’s assets for cash, if they are unable to meet margin on their futures position. Liquidation risk increases if the underlying asset is especially volatile, a trader has high leverage on his position, or both.
When a trade is leveraged, that means the trader has placed a bet with money they don’t have in their account and essentially borrowed from the stock market. For example, Binance allows traders to open perpetual APT contracts with 25x leverage. That means someone could open a contract worth $2,500 with just $100.
But if the price of APT went up when a trader bet it would go down, he could be forced to add more margin to that $100 or risk being liquidated. Liquidation means that a trader loses all of his cash and usually has to pay a liquidation fee to the exchange.
Early Wednesday morning, leverage on Aptos perpetual contracts represented 9% of APT’s circulating supply, according to Vetle Lunde, an analyst at Arcane Research. But funding rates were extremely negative, he noted. On twittermeaning that traders who shorted APT would have had to spend a lot of money to hold their positions.
But Aptos financing rates at Binance Y FTX have approached or recently become positive. That means traders who managed to hang on to their short positions could soon push the price of the token down even further.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.
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