Mantra exposes crypto liquidity problems, and Coinbase is bearish: Finance Redefined
The cryptocurrency market has been experiencing significant fluctuations in recent weeks, with some of the most popular tokens taking a hit. One such token is Mantra's OM token, which collapsed by over 90% on Sunday, April 13, from roughly $6.30 to below $0.50. This sudden drop has raised concerns about the lack of liquidity in the crypto market and its potential impact on investors.
The collapse of Mantra's OM token has been attributed to "critical" liquidity issues within the crypto industry, according to Gracy Chen, CEO of Bitget. Chen stated that the event highlights an issue with fluctuating weekend liquidity levels, which can create additional downside volatility for tokens. This concern is shared by other cryptocurrency exchanges and experts, who believe that the lack of liquidity can lead to market manipulation allegations among disillusioned investors.
Institutional investors are also sounding the alarm, with Coinbase's latest report highlighting that cryptocurrencies may be in a bear market until a recovery occurs in the third quarter of 2025. The exchange's April 15 monthly outlook for institutional investors shows that the altcoin market cap shrank by 41% from its December 2024 highs of $1.6 trillion to $950 billion by mid-April.
Coinbase's global head of research, David Duong, warned that a new crypto winter may be upon us, citing extreme negative sentiment due to global tariffs and potential further escalations. The report adds to concerns about the bearish trend in the crypto market, which may have already begun.
Another High-Profile Attack on Zoom
In a separate incident, Manta Network co-founder Kenny Li was targeted by a sophisticated phishing attack on Zoom that used live recordings of familiar people to lure him into downloading malware. The meeting seemed real with the impersonated person's camera on, but the lack of sound and a suspicious prompt to download a script raised red flags for Li.
Li reported that he immediately left after recognizing the attack, and asked the impersonator to verify themselves over a Telegram call. However, they didn't comply and soon blocked him afterwards. The North Korean state-backed Lazarus Group was behind the attack, according to Li.
Crypto Narratives in Q1 2025
The cryptocurrency market is still recycling old narratives, with few new trends yet to emerge and replace the leading themes in the first quarter of 2025. According to a quarterly research report by CoinGecko, AI tokens and memecoins dominated crypto narratives, accounting for 62.8% of investor interest.
The report found that AI tokens captured 35.7% of global investor interest, while DeFi borrowing surged over 900% from bear market lows. The decline in the crypto lending market was attributed to the decimation of lenders on the supply side and funds, individuals, and corporate entities on the demand side.
Crypto Lending Down 43%, DeFi Borrowing Surges 959%
The crypto lending market's size remains significantly down from its $64 billion high, but decentralized finance (DeFi) borrowing has made a more than 900% recovery from bear market lows. According to a Galaxy Digital research report published on April 14.
The decline in the crypto lending market started in 2022 when centralized finance (CeFi) lenders Genesis, Celsius Network, BlockFi, and Voyager filed for bankruptcy within two years as crypto valuations fell. Their collective downfall led to an estimated 78% collapse in the size of the lending market, with CeFi lending losing 82% of its open borrows.
Market Recap
Most of the 100 largest cryptocurrencies by market capitalization ended the week in the green, with Decentralized exchange (DEX) Raydium's (RAY) token rising over 26% as the week's biggest gainer. The AB blockchain (AB) utility token followed closely behind, up over 19% on the weekly chart.
Thanks for reading our summary of this week's most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.