Crypto Market Update: BTC-gold ratio falls to January 2024 lows

Bitcoin Price Action and Gold Comparison
Bitcoin (BTC) has risen slightly since midnight UTC, trading in a range between $86,000 and $90,000. Despite the uptick, BTC continues to underperform relative to gold, with the bitcoin-to-gold ratio dropping to 20.18—the lowest level since January 1, 2024, according to TradingView.

The decline reflects ongoing investor preference for gold as a safe-haven amid concerns over fiscal policies in advanced economies and speculation about Federal Reserve rate cuts. The ratio could improve later Thursday if U.S. inflation data comes in below expectations, potentially boosting risk appetite in broader markets.

Derivatives and Market Sentiment
Bitcoin’s 30-day implied volatility, measured by Volmex’s BVIV index, has stalled near 50%, showing no immediate expectation of heightened volatility. In the U.S. Treasury market, the MOVE index has fallen to 62.73, its lowest since October, typically a positive signal for risk assets.

Among major crypto tokens, SOL, TRX, and DOGE have seen rising open interest (OI) in futures markets. Funding rates for BNB, XRP, SOL, TRX, and DOGE have turned negative. The combination of higher OI and negative funding in DOGE and TRX points to an increase in short positions.

Deribit options data show a continued bias toward BTC and ETH puts, reflecting persistent downside fears. Block trades included call calendar spreads and strangles in BTC, and put spreads and strangles in ETH.

Yearn Finance Exploit
Yearn Finance, one of DeFi’s earliest yield aggregators, suffered another exploit this week, with attackers draining approximately $300,000 from a legacy iEarn smart contract dating back six years. PeckShield reported that the stolen funds were swapped for 103 ETH, worth around $290,000.

Yearn clarified that the exploit did not affect current contracts or vaults. “The problem is exclusive to iEarn and does not impact current Yearn contracts or vaults,” the team posted on X.

This is Yearn’s second exploit in December, following a $9 million theft from a separate vulnerability earlier this month. Following the latest incident, YFI dropped nearly 6% and has underperformed the broader market. Total value locked (TVL) in the protocol has declined by over $50 million to $560 million since the first exploit.