Welcome to the latest edition of our Market Roundup, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.
Top tokens trended slightly down this week, ending up at roughly the same levels at seven days prior after seesaw movements. This included BTC and ETH. Meanwhile, XRP — the token of Ripple Labs, which added new attorneys as it continues to defend itself against the US Securities and Exchange Commission in a lawsuit — rose by 2.50%.
(as of 9:30 AM Singapore Time, August 25, 2023)
Many crypto investors are still reeling from last week’s flash crash. Specifically, investors who bought BTC within the past five months are in the red, but most long-term investors, meaning those who have been holding their tokens for at least five months, have generated profits.
Short-term BTC traders appear to be offloading their holdings to cut their losses, pushing prices lower. Couple that with global economic uncertainty, and the market looks bearish in the near term.
Meanwhile, 1,580 BTC was moved by North Korean hackers. The trove is worth around US$40 million, and the United States Federal Bureau of Investigation warned platform operators that the state-affiliated groups may try to swap the bitcoin on their exchanges. This is far from the entire amount of crypto that North Korean cybercriminals have stolen. In one hack that took place in July, they drained US$60 million from Alphapo, a payments processor that also operates gambling sites and e-commerce platforms. Before that, they took US$100 million by conducting an attack on Atomic Wallet.
There are simple but effective ways for crypto users to protect their holdings. Cold wallets (or hard wallets) are a great way to store digital assets, and BTSE also ensures that its exchange offers users the best possible security while maintaining a high degree of convenience.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
- Bitcoin (BTC) and US inflation-adjusted bond yields have demonstrated their strongest inverse relationship since April 2023. Last week, Bitcoin experienced a 10% decline, coinciding with the yield on the 10-year inflation-indexed security surging to its highest level since 2009. The 30-day correlation coefficient between BTC and the bond yield plummeted to –0.72 from +0.28, indicating a stark divergence in their movements. This shift highlights the re-emergence of conventional financial factors influencing bitcoin’s price, disrupting the positive correlation observed in July amid hopes for a spot ETF approval. As the bond yield rose to 1.97% — a peak unseen since 2009 — bitcoin, the primary cryptocurrency, suffered its most substantial weekly drop since early November. Additionally, gold and the Nasdaq experienced declines, while heightened real yields, mounting energy expenses, concerns about China’s economy, and central banks’ commitment to elevated borrowing costs collectively worsened the outlook for risk assets.
- Mastercard has initiated a significant move in the realm of central bank digital currencies (CBDCs) by introducing a collaborative program involving industry players like Ripple, Consensys, and Fireblocks. The program’s primary objective is to facilitate innovation in CBDCs by fostering partnerships among key stakeholders. Raj Dhamodharan, Mastercard’s head of digital assets and blockchain, emphasized the importance of payment diversity and interoperability for a thriving economy. The program’s initial partners include Ripple, Consensys, Fireblocks, and tokenized asset service provider Fluency. While specific program details are yet to be disclosed, Mastercard’s emphasis on building CBDCs with inherent flexibility, consumer protection, and privacy aligns with its proactive approach. Mastercard had already initiated CBDC-related testing in September 2020 and later introduced prepaid cards in the Bahamas, allowing conversion of the country’s CBDC, the Sand Dollar, for practical use. This venture is poised to contribute valuable insights to central banks in their CBDC development endeavors.
- Coinbase has made a strategic move by acquiring an equity stake in Circle, both companies aiming to solidify their influence over the issuance and governance of the USDC stablecoin, along with associated fee revenues. The collaboration’s details were unveiled in a joint blog post by Circle CEO Jeremy Allaire and Coinbase CEO Brian Armstrong. The partnership involves the cessation of the Center Consortium, a governance entity formed five years ago to oversee USDC. This transformation will see USDC being introduced on six new blockchains beginning in September. Circle will take direct control of USDC issuance and governance, streamlining operations and accountability, as well as adhering to regulatory requirements. The shared interest income generated from wider USDC distribution and usage marks a new milestone in the collaboration between Circle and Coinbase, potentially significant due to USDC’s expanding presence across various blockchains. Despite recent regulatory challenges, the two companies find the need for a separate governance body diminishing due to increased regulatory clarity, aligning with their vision to enhance financial inclusion through stablecoins’ real-world utility. This development coincides with PayPal’s entry into the stablecoin market, highlighting the evolving landscape of traditional finance intersecting with cryptocurrency.
- Solana Pay, the decentralized payment protocol developed by Solana Labs, has seamlessly integrated its plug-in with Shopify, enabling millions of businesses on the platform to utilize it for transactions. The integration features the widely recognized USDC stablecoin as the initial payment option, known for its stability and regulatory adherence. This strategic move capitalizes on the familiarity consumers have with digital dollars, while also offering significantly lower transaction fees compared to credit card processing. Notably, Solana Pay’s integration opens doors for loyalty programs and easy setups, making it an attractive solution for merchants. With USDC’s US$26 billion market cap and Shopify’s impressive 10% share of US e-commerce, this partnership has the potential to reshape online marketplace payment systems.
- Shibarium, the Layer-2 network associated with Shiba Inu, is set to relaunch with enhancements aimed at addressing its previous traffic-related challenges. After undergoing testing and optimization, the network now incorporates a new monitoring system and fail-safe mechanisms to handle high levels of activity. This revitalization reflects Shiba Inu’s ambition to transcend its meme coin origins, with plans to implement the “ShibPaper” blueprint for governance and decentralization.
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- Ethereum’s landscape has seen intriguing movement as historical Ethereum holdings are repositioned. Vitalik Buterin, co-founder of Ethereum, recently transferred 600 ETH (approximately US$1 million) to Coinbase, as indicated by Etherscan data. Additionally, an Ethereum address associated with an ICO participant from 2014 moved 191 ETH (around US$320,000) to another address on August 20. This latter address, which previously purchased ETH during Ethereum’s initial coin offering, subsequently acquired UNIBOT and ApeCoin tokens. The transferred amount constitutes a fraction of Ethereum’s daily trading volumes, suggesting minimal market impact. On-chain analytics show Vitalik has shifted around US$3.6 million in ETH to exchanges like Kraken, Gemini, and Coinbase this year. While past transfers had sporadic price coincidences, the overall effects on Ethereum’s value appear incidental. Furthermore, this trend extends to other Ethereum whales, exemplified by a recent US$116 million transfer to Kraken and a US$7.4 million shift to a proof-of-stake contract. These actions, including Vitalik’s, underscore dynamic shifts within the Ethereum ecosystem without evident repercussions on token prices.
- Curve’s CRV token has experienced a significant 9.41% drop in value over the past week, drawing attention to a series of over-the-counter (OTC) deals initiated to salvage Curve founder Michael Egorov’s lending positions. The decline was triggered by a US$70 million exploit on July 31, which severely impacted CRV’s price. While most of the compromised funds were reclaimed, the CRV/ETH pool remained drained, posing a liquidity challenge for CRV. To prevent potential liquidations across the DeFi space, Egorov engaged in OTC deals, reportedly selling substantial amounts of CRV at US$0.40 per token, coupled with a six-month lockup period. However, enforcement of the lockups seems uncertain, as tokens are being transferred to exchanges, possibly for selling purposes. Egorov indicated that buyers who break the handshake agreement might not face negative consequences. Despite the token’s recent dip, Egorov’s current positions, secured by CRV collateral, appear relatively stable, with CRV trading at around US$0.45 presently.
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