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.
Major cryptocurrencies all traded in the red this week, with a few dropping more than others. XRP slid by 20.74%, while DOGE lost 19.58% of its value. Sophisticated investors appear to lean bearish at the moment, with roughly two-thirds of leverage funds taking short positions in BTC futures, the most since April 2022. This may be related to the US Federal Reserve’s comment that it may continue raising interest rates.
(as of 9:30 AM Singapore Time, August 18, 2023)
Meanwhile, major fintech companies and traditional financial institutions continue to incorporate blockchain technology into their offerings. After PayPal announced its own stablecoin last week, it is introducing a Cryptocurrencies Hub for some users to interact with on-chain assets in their PayPal account. Notably, users will not hold those crypto assets on their own. While this runs against the idea of decentralization, it will give mainstream users convenient exposure to cryptocurrency and encourages broad adoption.
PayPal expanded its Web3 presence even further this week by announcing its integration with Ledger, allowing users of the Ledger Live app to on-ramp using its payment system. Ledger users can buy BTC, ETH, BCH, and LTC through PayPal once their accounts are linked, while Ledger will provide a layer of security as the hardware wallet keeps self-custodied assets safe.
Developments like these will likely attract new investors to cryptocurrency. This benefits the entire space as those newcomers may explore the many trading and wealth-building opportunities that are unique in crypto, leading to a more diverse and vibrant community.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
- While Bitcoin exchange-traded funds (ETFs) have been in the limelight, the US Securities and Exchange Commission (SEC) is said to be more amicable to greenlighting the first ETF based on ETH futures, according to sources who spoke to Bloomberg. The news sent ETH surging by 11% after a flash crash that took BTC down to roughly US$25,400. There are multiple matters that may have contributed to the initial crash. China’s Evergrande Group filed for Chapter 15 bankruptcy protection in New York to protect its US assets from creditors during restructuring, and the Wall Street Journal reported that SpaceX sold an unspecified amount of its BTC holdings — worth $373 million in 2021 — after writing down its value. This culminated into US$801 million in liquidations for overleveraged positions, but news about the SEC’s attitude toward ETH ETFs sent prices upward.
- MetaMask, has partnered with fintech company Banxa to introduce a streamlined Apple Pay option for purchasing cryptocurrency. This collaboration, initially announced in February, has led to an update that enables MetaMask users to buy Ethereum and other cryptocurrencies using Apple Pay’s “1-click” service. Among MetaMask’s various on- and off-ramp options, Banxa stands out as the sole provider of this simplified service. While the technical enhancement might appear minor, it significantly reduces the friction experienced during crypto purchases. According to MetaMask’s product manager Lorenzo Santos, the integration is especially designed for returning users who have already completed the necessary account setup and KYC procedures with Banxa. The implementation of this service is expected to attract more users to complete transactions and enhance the overall user experience. At present, MetaMask boasts an impressive 30 million active users.
- Sui Foundation’s Mainnet has demonstrated impressive resilience and scalability during its first 90 days of operation. Unlike most other blockchains, Sui’s design focuses on horizontal scalability and consistent gas fees. Throughout this period, the network achieved a peak of 5,414 transactions per second with 100% uptime, a notable accomplishment. Notable events like Ethos wallet’s Sui 8192 game (a version of the popular 2048 game) and the Bullshark Quests for SuiFrens NFT holders (who could participate by engaging with dApps on Sui) led to increased network activity, which Sui adeptly handled, showcasing its support for parallel and concurrent transactions. The data reveals a significant increase in transaction volume, with a peak of 65.8 million transaction blocks processed in 24 hours and a total of 965.87 million transactions. Notably, average gas fees remained stable despite the increased load, demonstrating Sui’s capacity for handling greater traffic. The network currently boasts 2.7 million active accounts and over 8 million NFTs. Sui’s success has been attributed to both its design and the collaborative efforts of its builder community.
- Europe’s inaugural spot bitcoin exchange-traded fund (ETF), the Jacobi FT Wilshire Bitcoin ETF, is set to launch on Euronext Amsterdam. Managed by Jacobi Asset Management, this green-focused digital asset fund adheres to the European Union’s sustainable finance guidelines, reflecting its commitment to positive environmental and social impacts. Overseen by the Guernsey Financial Services Commission, the ETF operates under the ticker BCOIN, with Fidelity Digital Assets as custodian and Flow Traders as market makers. The fund incorporates Renewable Energy Certificates (RECs) to offset Bitcoin’s energy usage and logs them on the blockchain for verification. Unlike US regulators, who favor futures-based bitcoin ETFs, Europe is leading in offering this direct bitcoin exposure avenue for institutional investors.
- Singapore has emerged as a global pioneer by finalizing regulatory guidelines for stablecoins, making it among the first jurisdictions to do so. Stablecoins are digital currencies designed to maintain a constant value against fiat currency, often backed by real-world assets. The stablecoin market, valued at around US$125 billion, is dominated by Tether’s USDT and Circle’s USDC. Singapore’s Monetary Authority has outlined key requirements, including holding reserves in low-risk, highly liquid assets that match or exceed the stablecoin’s value in circulation. Stablecoin issuers must also provide timely redemption and transparent disclosures. These rules apply to stablecoins linked to the Singapore dollar or G10 currencies. Singapore aims to bolster its position as a digital currency hub and provide regulatory clarity, distinguishing “MAS-regulated stablecoins” from unregulated tokens.
- The recently launched SEI token on the new layer-1 Sei Network achieved remarkable trading volumes, surpassing US$1 billion on its first day, outpacing major players like Bitcoin, Ethereum, and XRP on leading exchanges. South Korean-based Upbit played a significant role, contributing over half of the total trading volume at US$560 million. The token’s value saw fluctuations across exchanges, with Upbit seeing a premium peak at $0.64 compared to $0.45 elsewhere. The Sei Network, designed for high-frequency trading, has gained substantial attention, with plans for over 30 applications to launch on the network.
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- The US Securities and Exchange Commission (SEC) has deferred its decision on the proposed bitcoin exchange-traded fund (ETF) from Ark Invest and 21Shares. While not providing an immediate approval or denial, the SEC has initiated a review process, seeking public comments before reaching a conclusion. This move extends the timeline for consideration of the bitcoin ETF, emphasizing the regulator’s thorough evaluation. Ark Invest CEO Cathie Wood and 21Shares CEO Hany Rashwan expressed confidence in their product’s eventual approval, highlighting their commitment to a secure and regulated way for US investors to access Bitcoin. The SEC has 240 days to assess the ETF, and the most recent delay sets the next decision date for November 11, with a final ruling due by January 10, 2024. Amid a surge of ETF applications, Ark Invest and 21Shares had initially disclosed plans for their bitcoin ETF in April, positioning them ahead of recent filings. The anticipated delay was not unexpected, with industry experts suggesting that multiple Bitcoin ETF approvals might be issued simultaneously.
- Visa has successfully tested a groundbreaking solution on the Ethereum blockchain that paves the way for users to pay Ethereum gas fees using their Visa credit or debit cards. This innovation aims to simplify interactions with decentralized applications (dApps) on Ethereum, making digital transactions more user-friendly. The experiment, carried out during an internal hackathon, involves an intermediary step where transaction details are sent to a Visa-operated paymaster web service before being relayed to the blockchain. This service calculates the fiat currency equal to the gas fee and processes the card payment via Visa’s payment management platform, Cybersource. If widely adopted, this method could make blockchain-based transactions more accessible, reducing complexity and friction for mainstream users.
- Starting from January 1, 2024, a new regulation will require US businesses to gather personal information including the name, address, and government ID of individuals making cryptocurrency transactions exceeding US$10,000 in one go. While the US Treasury Department plans to implement this rule, advocacy group Coin Center previously challenged it, labeling it as “unconstitutional financial surveillance.” The lawsuit was dismissed in July on the grounds that the regulation had not yet taken effect. This development reflects an ongoing debate around privacy, financial transparency, and government oversight in the realm of cryptocurrency transactions.
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