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 9:30 AM Singapore Time, September 22, 2023)
This week, the winner among top tokens is undoubtedly Toncoin (TON), the native token of The Open Network, which was originally developed by Telegram. Its value has climbed more than 22% over the past seven days, hitting a six-month high and emerging as a favorite among crypto investors. Its meteoric rise is in part based on Telegram’s integration of a self-custodied wallet called TON Space. With over 800 million people using the messaging app, there’s immense potential for the broad adoption of decentralized financial solutions on The Open Network.
Bitcoin (BTC) hit a 20-day high when its price went above US$27,500 in the middle of the week, the first time since August 31. It has since receded, but on-chain data reveals the general trend to be accumulation. One major reason is that whales and long-term Bitcoin believers are continually adding BTC to their holdings in anticipation of the next halving, which is likely to occur in April 2024.
When a halving happens, once every 210,000 blocks, the block reward is reduced by 50%. The original block reward when the Bitcoin network launched in January 2009 was 50 BTC. It’s currently 6.25 BTC. Ever since the first BTC was minted, halvings have been events that have driven increased demand for the cryptocurrency, so the price of Bitcoin could appreciate rapidly if history rhymes.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
- The cryptocurrency community can breathe a sigh of relief as Coinbase revealed in a recent research report that the liquidation of tokens held by the beleaguered crypto exchange FTX is unlikely to precipitate a market shock. The sales are structured to avoid flooding the market, starting with a cap of US$50 million weekly, with prospects of gradual increments to a maximum threshold of US$200 million, pending approval from committees representing FTX debtors. Furthermore, the sale of “insider-affiliated” tokens will adhere to a 10-day advance notice to maintain market stability. Notably, a substantial fraction of FTX’s SOL assets, alongside others, are earmarked for vesting until 2025, delaying their entry into the marketplace. FTX has also secured the green light to hedge its sales of prominent tokens such as BTC and ETH through an investment advisor, a strategy envisioned to settle the debts with its creditors. This strategic maneuvering encompasses a substantial portfolio including US$1.16 billion in SOL, US$560 million in BTC, US$192 million in ETH, and a diverse array of other tokens amounting to US$1.49 billion.
- Stablecoin issuer Circle has introduced its USDC stablecoin to the Polkadot blockchain ecosystem, aiming to expand its dollar-backed stablecoin to a wider array of networks. Leveraging Polkadot’s interoperability features, which link several application-focused blockchains known as parachains, the USDC will be accessible to all interconnected parachains and their users via the Polkadot Asset Hub, using the XCM protocol. This integration fosters a wider usage of USDC in Polkadot-based projects such as Centrifuge, HydraDX, and Moonbeam, positioning it as a premier stablecoin option for users. Polkadot joins a roster of other blockchains including Ethereum, Solana, and Tron, supporting the native USDC, which holds a significant market presence with a valuation of US$26 billion, securing its place as the second-largest stablecoin in the market.
- Tether has authorized the minting of US$1 billion USDT to “replenish” the Tron network, a move aimed at providing liquidity and fulfilling future issuance requests and chain swaps, as confirmed by the firm’s CTO, Paolo Ardoino. The authorization is a security measure that reduces the exposure to security threats by limiting the frequency of accessing authorization private keys, as detailed on Tether’s FAQ page. While it’s not an issuance, it enables the instantaneous issue of USDT once customer funds are secured, maintaining a 100% reserve rate. The authorization comes in a year where USDT’s circulation on the Tron network soared to record levels, with the network presently accounting for US$42.8 billion of the US$83 billion USDT in circulation. Tether has augmented its USDT supply by US$16 billion since January 2023.
- Hong Kong lawmaker Duncan Chiu revealed that the region is on track to release stablecoin issuance guidelines by mid-2024, amid its efforts to morph into a prominent Web3 hub. The announcement, made during a forum in Shanghai, comes as Hong Kong consciously departs from mainland China’s stringent crypto policies, fostering a friendly environment for crypto firms instead. Since June, licensed exchanges have been permitted to offer retail trading services, echoing the city’s receptive stance towards digital assets. However, a cohort of experts criticized the government’s restrained approach in August, urging the initiation of a Hong Kong government-backed stablecoin to rival USDT and USDC. Meanwhile, law enforcement is vigilantly monitoring the crypto sphere, probing potential fraudulent activities, and recently arresting eight individuals linked to the cryptocurrency exchange JPEX incident, involving alleged financial misconduct totaling around HK$1.19 billion (US$152 million).
- The transaction count on Base, the Ethereum Layer 2 solution developed by Coinbase, hit 1.88 million on September 14, overtaking Ethereum. This was an all-time high for Base. To put that in context, Polygon had 2.1 million transactions on that day, and BNB Chain had 3.1 million transactions. Meanwhile, Base also overtook Solana in terms of total value locked (TVL). The network launched on August 9, with US$242 million in assets bridged to it in two weeks. It ranks third among Ethereum L2s, after Arbitrum and Optimism.
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- Grayscale Investments submitted a second proposal for an ether futures exchange-traded fund (ETF), this time under a different securities act from its first filing. The US Securities and Exchange Commission has previously approved bitcoin futures ETFs under both sets of regulations. Approval for an ether futures ETF would break new ground. As BTSE has mentioned in news roundups before, major asset managers such as BlackRock and Franklin Templeton have applied to launch crypto ETFs this year.
- Citigroup has unveiled Citi Token Services, a digital token service leveraging blockchain and smart contract technologies, to facilitate rapid cross-border money transfers for its institutional clientele. The service, operating on a private blockchain, offers round-the-clock automated trade finance solutions, promising to substantially reduce transaction times from days to mere minutes. A pivotal feature is the digitization of bank guarantees and letters of credit to streamline large transactions in the trade finance sphere. A fruitful pilot program conducted with logistics behemoth Maersk showcased the technology’s potential in simplifying the intricate payment and transaction processes in the shipping industry. Citigroup foresees a pivotal role for digital assets in the financial landscape, propelled by the ascendancy of central bank digital currencies and the tokenization of tangible assets.
- Nomura’s digital assets arm, Laser Digital, has unveiled a fund aimed at granting institutional investors enhanced access to Bitcoin investments. Termed the “Bitcoin Adoption Fund,” it promises long-only exposure to Bitcoin, emphasizing the digital currency’s central role in the ongoing macroeconomic shift from analog to digital frameworks, as noted by the head of Laser Digital Asset Management, Sebastien Guglietta. The custody of client assets in this endeavor will be managed by Komainu, a collaborative venture involving Nomura, Ledger, and CoinShares. This move, facilitated by the operating licenses bestowed by Dubai’s Virtual Asset Regulatory Authority (VARA) on both Laser Digital and Komainu, signals the launch of a series of investment products in the digital asset space.
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