Welcome to the latest edition of our Market Roundup, where we cover the past week’s highlights in the rapidly evolving world of blockchain and decentralized technologies.
(as of 9:30 AM Singapore Time, October 13, 2023)
We’re halfway through Uptober, and month-to-date gains for Bitcoin and other major cryptocurrencies have been erased, with BTC unable to hold above US$28,000. This is despite the tendency for BTC to move higher during the 10th month of each year.
However, it’s necessary to compare BTC’s performance with that of other assets, including cryptocurrencies and other types of holdings. Since June, BTC has outperformed gold and US Treasury Inflation-Protected bonds, again living up to its reputation as a safe haven during turbulent times for traditional financial markets.
Data on bitcoin derivatives indicate that demand from bulls is softening. The premium on bitcoin futures is at its lowest point since June, before BlackRock filed for a spot exchange-traded fund. However, this does not immediately suggest traders are bearish overall.
In fact, there’s still excitement for the upcoming Bitcoin halving, which is expected to take place in April 2024. Additionally, there is the potential for spot bitcoin exchange-traded funds to be approved in the United States. These and other catalysts could shift BTC to an upward swing. Market sentiment isn’t great at the moment, but it’s important to take a longer view and prepare for the moments when the tide turns.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
- Ripple recently transferred 60 million XRP, valued at over US$30 million, to an undisclosed wallet, generating buzz within the XRP community. Some enthusiasts speculate this could hint at an impending settlement between Ripple and the US Securities and Exchange Commission (SEC), potentially boosting XRP’s price. The token has been on a downward slide over the week. With the backdrop of an ongoing lawsuit with the SEC and a trial set for April 2024, the actual implications of this move remain uncertain. Investors are advised to monitor significant transactions closely, as sudden price shifts may occur for XRP in the volatile crypto market.
- Swiss-based firm Backed Finance has introduced blB01, a tokenized short-term US treasury bond ETF on Coinbase’s layer-2 network, Base. This marks the first tokenized security available on Base, adhering to Switzerland’s Distributed Ledger Technology (DLT) Act, which mandates tokens to be fully collateralized and transferable across wallets. The underlying asset for bIB01 is the iShares Treasury Bond 0-1yr UCITS ETF (IB01), and the token is not affiliated with BlackRock or any iShares product. Only those who have completed Backed’s KYC and anti-money laundering checks can purchase the tokenized securities. Notably, Backed’s offerings are not registered as US securities, limiting their availability to non-US individuals. Presently, Backed has nine tokenized offerings with a total value locked (TVL) exceeding US$46 million.
- A recent study indicates that Bitcoin, primarily known as a store of value and, to some extent, a payment mechanism, has the potential for advanced functionality in smart contract deployment. Building on Bitcoin’s 2021 Taproot scripting upgrade, developer Robin Linus introduced the idea of “BitVM” or Bitcoin Virtual Machine. Unlike Ethereum’s approach, which executes computations, BitVM verifies them, resembling optimistic rollups. This innovation might enable trustless oracles for Discreet Log Contracts (DLCs), a Bitcoin-based smart contract system allowing bet or derivative creation without a middleman. However, BitVM’s two-participant limitation contrasts with Ethereum’s multi-party involvement. While Ethereum remains the go-to for general smart contract tasks, BitVM offers a unique method that capitalizes on Bitcoin’s security and decentralization but requires no core software modifications.
- Stablecoins have seen a significant 35% decline in market capitalization over the past 18 months, dropping from a peak of US$189 billion in May 2022 to US$124 billion recently. This dip is attributed to factors such as reduced retail participation, rising US treasury yields, and more attractive traditional finance rates. However, not all stablecoins are performing equally. USDT remains dominant, boasting a US$83 billion market cap, while USDC has suffered. Despite the overall downturn, stablecoins still play a critical role, constituting 10% of the crypto industry’s market share but facilitating 70% to 80% of all public blockchain settlements. Positive regulatory shifts and renewed crypto interest might reverse the downward trend.
- The Ethereum Foundation recently sold 1,700 ETH, equivalent to US$2.76 million, converting it to Circle’s USDC stablecoin via Uniswap, as reported by crypto analytics firm Scopescan. Historically, when the Foundation has offloaded its ETH holdings, it has typically signaled a downturn in Ethereum’s price. Notable past instances include the sale of 15,000 ETH in May 2023, 20,000 ETH in November 2021, and 35,000 ETH in May 2021. In each case, the sales coincided with a local price peak for Ethereum, followed by a decrease. Currently, the Ethereum Foundation holds roughly 315,900 ETH in its reserves. As of now, Ethereum’s price has dipped to US$1,595, marking a 1.6% drop since the previous day, according to CoinGecko data.
- Taiwan-based liquidity provider, WOO Network, has repurchased its equity and 20 million WOO tokens, valued at approximately $3.4 million, from the bankrupt hedge fund Three Arrows Capital (3AC). The tokens have been subsequently burned. This move comes after WOO Network’s agreement with Teneo, the liquidator for 3AC, to reclaim shares and tokens originally sold during its US$30 million Series A funding round in 2021. The WOO token’s price has experienced volatility recently, mirroring broader market fluctuations, but is still up 10% compared to the same period last year.
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- Tezos (XTZ) witnessed a sharp 7.5% increase overnight on Tuesday, October 10, outperforming most of the crypto market that saw negative returns. This surge can largely be credited to heightened trading activity on South Korean platforms, especially UpBit, and significant liquidations. The 24-hour trading volume for XTZ peaked at US$122.8 million, a stark contrast to its 30-day average of US$16.8 million. UpBit dominated the trading with a volume of US$39.7 million. This surge in volume and price led to liquidations nearing US$500,000, a three-month record for the token. By Wednesday morning, the price of XTZ had dropped from a peak of roughly US$0.736 to US$0.694. Historical data indicates tokens experiencing such trends on South Korean exchanges often see a price drop following the initial spike.
- JPMorgan has successfully executed its inaugural live blockchain collateral settlement transaction in collaboration with BlackRock and Barclays using the Ethereum-based Onyx blockchain and JPMorgan’s Tokenized Collateral Network (TCN). This groundbreaking transaction involved the rapid tokenization of BlackRock money market fund shares, which were subsequently transferred to Barclays as collateral for an over-the-counter derivatives trade. The process, which took mere minutes, showcases the transformative potential of tokenizing traditional financial assets, with BlackRock emphasizing the significant reduction in operational friction when handling margin calls. Major banks like JPMorgan and Citi are at the forefront of this innovative shift in the financial industry.
- Web3 platform Galxe fell victim to a DNS attack on October 6, resulting in losses exceeding US$150,000. After being offline for about an hour, Galxe alerted users on social platform X (previously known as Twitter) about the breach and advised against accessing their domain. Upon restoration, some users noted Google had blocked the site. A Web3 cybersecurity firm revealed that the compromised DNS records redirected users to a phishing site that siphoned funds from their wallets. There are suspicions that the perpetrators behind this breach might be linked to the attack on the Balancer protocol in September, which led to a loss of US$238,000. Attacks on Web3 projects skyrocketed in Q3 2023, with a year-on-year surge of 153%, culminating in nearly US$686 million in losses.
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Note: BTSE Blog contents are intended solely to provide varying insights and perspectives. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Markets are volatile, and trading brings rewards and risks. Trade with caution.