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.
(as of 1:30 AM UTC, June 30, 2023)
After last week’s news about BlackRock and other firms filing for Bitcoin exchange-traded funds (ETFs) led to a rally in crypto prices, value of the top tokens seesawed, with some paring back as investors took profits.
But sentiment still remains bullish, and more traditional financial institutions have been jumping on the bandwagon. Additionally, ARK Invest, which has the oldest active filing for a Bitcoin ETF in the United States, adjusted the language in its application to mimic BlackRock’s, in hopes that it will become the first to be considered for approval.
If the United States Securities and Exchange Commission gives the green light to a Bitcoin ETF application submitted by ARK Invest or any other firm, be prepared for many changes to come to crypto, starting with fresh sources of liquidity.
As TradFi institutions begin to dip more than their toes into the water of on-chain assets, one major mover this week was Bitcoin Cash (BCH), whose value was up by 90% week-over-week after being listed by Citadel Securities-backed exchange EDX Markets.
Also, crypto natives are also making moves to iterate and breathe new life into their own corners of the space. Terraform Labs and Do Kwon may forever live in infamy, but six engineers are determined to revive the Terra ecosystem for LUNC holders. Calling themselves the “Six Samurai,” the engineers put forward a governance proposal to request the Terra Classic community earmark US$116,000 over three months to fund the rebuilding, which they hope will create fundamental value for the Terra Classic ecosystem — and by extension, the price of LUNC.
With different sources showing intense interest in crypto, and newcomers entering the space every day, the future of digital assets looks bright.
- JP Morgan has successfully conducted its first blockchain transaction for corporate clients in Europe using its JPM Coin. The transaction, carried out by Siemens AG, involved a Euro-denominated payment on JP Morgan’s permissioned blockchain. JPM Coin, available only to institutional clients for settling payments, has been in operation for four years and has processed around US$300 billion in transactions. The move reflects the trend of traditional financial companies exploring blockchain technology to enhance settlement efficiency and security. Additionally, German software giant SAP announced its use of Circle’s US Dollar Coin (USDC) for cross-border payment testing, aiming to facilitate faster transactions for SMEs. Crypto firms and banks have increasingly relied on blockchain for processing payments and handling digital assets.
- Ethereum has achieved a significant milestone as the amount of staked ETH has surpassed 20 million, nearly doubling in just one year. Staking involves locking up cryptocurrency in a proof-of-stake blockchain to enhance network security and earn rewards. With over US$38 billion currently being used for staking, Ethereum’s blockchain is becoming more secure as more people participate. The popularity of staking soared after the Shapella upgrade, which allowed for withdrawals. The influx of 3.6 million staked ETH (US$6.9 billion) following the Shanghai upgrade demonstrates the sustained high interest in the Ethereum network. Staked ETH now constitutes approximately 19.4% of the total circulating supply of ether, highlighting the growing trend of ETH holders embracing decentralization and moving away from centralized entities.
- Last week saw the highest weekly inflows to crypto investment products since July 2022, with a total of US$199 million. Bitcoin dominated the inflows, accounting for US$187 million. The total assets under management in crypto investment products reached a yearly high, surpassing US$37 billion. London-based ETC Issuance GmbH’s Bitcoin exchange-traded product, BTCE, led the inflows with US$77.3 million. ProShares’ Bitcoin Strategy ETF (BITO) had the largest inflows in the U.S. at US$60.4 million, surpassing US$1 billion in total assets under management. The positive sentiment was attributed to recent spot Bitcoin ETF applications, starting with BlackRock’s application, which sparked renewed interest in the market. Ethereum investment products received US$7.8 billion in inflows, indicating a lower appetite for Ethereum compared to Bitcoin. Altcoins had only minor inflows, with XRP and Solana (SOL) seeing some activity.
- Multinational software company SAP is currently conducting tests for cross-border USDC payments on Ethereum’s Goerli testnet. The test is open to interested businesses globally and aims to address the slow and expensive nature of existing cross-border payments, which can take up to seven days to complete. Participants in the test will receive USDC on the test network to make payments and receive payments from predefined test business partners. SAP plans to integrate blockchain-based payment processes into its mid-market enterprise resource planning (ERP) solutions, enabling a seamless experience for issuing invoices and executing payments with digital currencies. SAP is also exploring other cryptocurrency solutions beyond cross-border payments, including commerce and employee payments.
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- HSBC, the largest bank in Hong Kong, has reportedly introduced cryptocurrency services, allowing its customers to buy and sell Bitcoin and Ethereum-based exchange-traded funds (ETFs). The move aims to expand local users’ exposure to cryptocurrencies in Hong Kong and comes alongside the launch of the Virtual Asset Investor Education Center, which aims to educate investors about cryptocurrency-related risks. The news follows reports of the Hong Kong Monetary Authority pressuring major banks to accept crypto exchanges as clients, prompting HSBC to offer these services.
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