Tuesday, 11 July 2023

Market Summary

Market Summary 11 July 2023

Bitcoin Price: US$ 30,411.57 (+0.83%)
Ethereum Price: US$ 1,880.40 (+0.94%)  


Worldcoin, a San Francisco-based project co-founded by Sam Altman, CEO of OpenAI, aims to create a system that distributes tokens to all eight billion people on the planet as a form of universal basic income (UBI). To verify human identity in the rise of advanced AI, Worldcoin has developed “The Orb,” a physical device that scans the eyeballs of individuals. The project combines aspirations for UBI with the potential benefits of AI and decentralised financial tools. While ambitious, Worldcoin carries intellectual weight due to Altman’s involvement and his belief in the transformative power of Artificial General Intelligence (AGI). In other news, Grayscale, a crypto asset manager, criticised regulators for approving a leveraged bitcoin-based ETF while the company’s own spot bitcoin ETF application was rejected by the U.S. Securities and Exchange Commission (SEC). Grayscale argues that the approval of a riskier leveraged ETF indicates the SEC’s discriminatory treatment of spot bitcoin ETPs. Meanwhile, the discount to net asset value (NAV) for the Grayscale Bitcoin Trust (GBTC) has been narrowing following BlackRock’s application for a spot bitcoin ETF, raising investor hopes for SEC approval. The GBTC discount, which had previously been around 40%, fell to its lowest level since May 2022, currently sitting at about 27%.

Institutional investors have poured half a billion dollars into digital asset investment products, predominantly those holding Bitcoin, in the past three weeks, marking a reversal of the down trend that has affected crypto funds since April. CoinShares reported $136 million in inflows over the last seven days, bringing the total over the three-week period to $470 million. This influx of funds surpasses and offsets the previous nine weeks of outflows, resulting in a bullish year-to-date flow of $231 million. Bitcoin remains the most sought-after asset, accounting for $133 million of institutional buying in the past week, while Ethereum recorded a modest $2.9 million and a negative year-to-date outflow of $63 million. In other news, approximately $45 billion worth of Ethereum, representing 20% of the circulating supply, has been staked. Staking involves pledging tokens to the network to enhance security and earn rewards. Former SEC Chairman Jay Clayton believes that a spot Bitcoin exchange-traded fund (ETF) could gain approval from regulators if it offers similar efficacy to the futures market. Clayton expressed surprise at the interest of major players in traditional finance wanting to associate themselves with spot ETF applications for Bitcoin.

According to blockchain security and analytics firm Chainalysis, the recent exploit of cross-chain bridge protocol Multichain may have been an internal rug pull rather than a hack. Chainalysis suggests that compromised administrator keys could have been used in the unauthorised withdrawals, leading to the loss of over $125 million. The firm refers to the incident as a possible rug pull, indicating it may have been an inside job. Multichain’s smart contracts use a multiparty computation (MPC) system, similar to a multisignature wallet. Chainalysis points to internal issues within Multichain, including the disappearance of its CEO and technical problems, as reasons for suspecting insider involvement. In other news, research firm Kaiko warns that bankrupt crypto lender Celsius could exert sell-side pressure on the market if it sells or converts a portion of its crypto holdings, including bitcoin and ether. Kaiko notes that there is a lack of market liquidity for Celsius’ native token, CEL, and the liquidation of altcoins could further strain crypto markets due to poor liquidity conditions. Additionally, following the Multichain hack, scammers have launched a phishing scheme on Twitter, falsely linking it to the distribution of Fantom tokens. The fraudulent post claims that Fantom Foundation is issuing an emergency distribution to users affected by the hack and includes a phishing link to deceive users into providing their information.





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