Wednesday, 11 January 2023

Market Summary

Market Summary 11 January 2023

Bitcoin Price: US$ 17,440.66 (+1.53%)
Ethereum Price: US$ 1,335.62 (+1.15%) 

 

Daily Transactions on Arbitrum and Optimism Inch Closer to Ethereum

  • On Jan. 7, the combined daily transactions on Arbitrum and Optimism totaled 942K, only 16K transactions short of Ethereum’s 958K.
  • On the same day, Optimism also hit an all-time high for daily transactions at 691K. Optimism’s daily transaction count has steadily increased since March 2022 despite the bear market.
  • On the other hand, Arbitrum’s daily transaction count is down 50% from an all-time high in November 2022, even as the network still processes over 200K transactions daily.
  • Combined, the daily transaction count on the two L2s has tripled from 315K to 942K over the past three months, with Optimism’s share increasing from 41% to 73%.
  • The increase in transactions can be attributed to multiple factors including quests that reward NFTs, new protocols offering boosted rewards, users hunting for airdrops, and lower fees than Ethereum.
  • Ethereum hit an all-time high for daily transactions at 1.9M on Dec. 9, 2022. The spike occurred due to an abnormally large amount of pure ETH transfers between externally owned accounts.

 

Options trading firm Group One takes position in MicroStrategy

  • Options trading firm Group One took a “beneficial ownership” position in MicroStrategy that includes the option to buy 1.26 million shares of Class A common stock, according to a document filed with the U.S. Securities and Exchange Commission.
  • Microstrategy shares closed up 8.6%. 
  • MicroStrategy is one of the largest holders of bitcoin, with a total of about 132,500 BTC as of Dec. 28. 

 

Ethereum Software Firm ConsenSys to Cut Upwards of 100 Staff

  • ConsenSys, the developer of the crypto wallet MetaMask, plans to lay off 100 staffers or more, according to a person familiar with the matter.
  • The New York City-headquartered Ethereum studio currently has about 900 employees. The planned cuts are understood to be in the process of being finalized, and the exact number is not known at this point, said the person.
  • It’s adding to what’s already a bad week for crypto employment, with U.S. exchange Coinbase also announcing cuts of 20% of its staff, or around 950 jobs, on Tuesday. CoinDesk estimates nearly 27,000 jobs have been lost across the industry since April of last year.

 

Crypto.com Delists Tether’s USDT Stablecoin for Canadian Users

  • Crypto.com, one of the world’s top exchanges by volume, will delist Tether’s dollar-linked stablecoin, USDT, from its trading platform for users in Canada, according to an email sent by the firm to customers.
  • The company made the decision “in accordance with instructions from the Ontario Securities Commission (OSC) as part of our pre-registration undertaking for a restricted dealer license,” a spokesperson for the exchange said in the email.
  • All USDT trading pairs, transactions, deposits and withdrawals will be delisted by 1 p.m. ET on Jan. 31, the email continues. All remaining USDT user deposits on the exchange after that time will be converted to Circle-issued USDC.
  • Crypto.com’s action comes as regulators around the world are increasing their scrutiny of centralized exchanges in the wake of the collapse of FTX and as competition between the top stablecoins grows.
  • The Canadian Securities Administrators (CSA), the country’s top securities regulatory body consisting of regulators from 10 provinces and three territories , said last month it would strengthen its oversight over crypto exchanges by “expanding existing requirements” for trading platforms operating in the country. The CSA said that it “continues to monitor and assess the presence and role of stablecoins in Canadian capital markets,” according to a press release.

 

A Binance Stablecoin Wasn’t Always Fully Backed: Bloomberg

  • Binance acknowledged that its Binance-peg BUSD stablecoin hasn’t always been backed fully with reserves, but said it’s now fixed the problem, according to a report from Bloomberg.
  • The token was at times undercollateralized in 2020 and 2021, Bloomberg reported, citing an analysis by Jonathan Reiter of blockchain analytics company ChainArgos.
  • “The process of maintaining the peg involves many teams and has not always been flawless, which may have resulted in operational delays in the past,” a Binance spokesperson told Bloomberg. “Recently, the process has been much improved with enhanced discrepancy checks to ensure it’s always 1-1 pegged.”
  • The spokesperson noted that user redemptions were never impacted by the issue, but did not detail for how long Binance-peg BUSD was undercollaterized, nor when Binance discovered the issue and fixed it.
  • But in a blog post published after Bloomberg’s article came out, Binance explained that there was a “timing mismatch” in backing Binance-peg BUSD with BUSD. “From the data it is clear that the rebalancing did not always keep pace with the demand for Binance-Peg BUSD,” Binance wrote. “Having identified this ourselves last year we now rebalance more frequently to ensure that Binance-Peg BUSD is transparently fully backed.”

 

Gemini Terminates Its Crypto Yield Product, Amping Up Battle With Genesis

  • The Winklevoss twins’ crypto exchange Gemini escalated its dispute with Digital Currency Group’s (DCG) Genesis Global Trading – its partner on a crypto lending product pitched to smaller investors – by terminating a key aspect of their relationship.
  • Gemini ended the master loan agreement (MLA) between its customers and Genesis, Gemini told customers of its Gemini Earn in an email on Tuesday. “This officially terminates the Earn Program and requires Genesis to return all assets outstanding in the program,” according to Gemini’s email. “Existing redemption requests are not impacted and continue to await fulfillment by Genesis.”
  • In a statement, a spokesperson for Genesis said the company does “not agree with everything that Gemini has said” and was “disappointed that Gemini is waging a public media campaign despite ongoing productive private dialogue between the parties.” It added: “This is a very complex process that will take some additional time, but we are committed to moving as quickly as possible.”

 

Grayscale Bitcoin Trust Discount Narrows to 8-Week Low as DCG Faces Pressure

  • The Grayscale Bitcoin Trust’s (GBTC) early 2023 rally has outpaced that of its underlying bitcoin (BTC) holdings, thus significantly narrowing its discount to net asset value (NAV).
  • The closed-end trust with more than $10 billion in assets under management is up 17.5% to begin the year versus about a 5% advance in the price of bitcoin to its current $17,300. That’s brought the GBTC discount to NAV down to about 38% – the narrowest in eight weeks – after having closed out 2022 at a 45% discount. The discount touched a record 50% in December.
  • The discount to NAV began 2022 in the 20% area, and prior to early 2021 it was the norm for several years for GBTC to trade at an often sizable premium to NAV.
  • “The GBTC discount compressing may be the product of traders betting on either the complete unwind of the trust or Grayscale being forced to enable full/partial redemptions,” said Sean Farrell, head of digital asset strategy at Fundstrat. “However, it is tough to draw any conclusions just yet since volumes are so low and the market is so illiquid.”

 

DeFi Protocol Yearn Finance Will Let Anyone Create Curve Reward Farms

  • Decentralized-finance (DeFi) project Yearn Finance will allow users to create their own vaults to accrue yield and deposit proceeds to earn even more token rewards.
  • Yearn will charge 10% as performance fees for providing such a facility. DeFi is a term used to describe financial activities carried out on a blockchain without traditional middlemen.
  • So far, users have been limited to vaults created by Yearn’s contributors and developers. With the introduction of the “permissionless vault factory,” anyone can create their own strategies and offer them on Yearn, where other interested users can deposit their own tokens and earn yields.
  • This may, in time, increase Yearn’s user base and attract more liquidity to the popular DeFi tool. Yearn produces revenue based on user liquidity, when it charges a portion of the rewards as fees for its yield-aggregation service.

 

Glassnode –  Our first Week On-chain Video report is live for 2023! Youtube

  • Extremely low volatility which often precedes explosive moves.
  • Dead quiet on-chain activity for $BTC and $ETH.
  • Whale on-chain volume collapses
  • Drawdown in the Realized Cap

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