Monday, 12 June 2023

Market Summary

Market Summary 12 June 2023

Bitcoin Price: US$ 25,925.55 (-0.40%)
Ethereum Price: US$ 1,752.76 (+0.07%)  


Tokens of major blockchain networks, including Solana (SOL), Cardano (ADA), and Polygon (MATIC), experienced a significant slide of over 20% within 24 hours, following allegations in a U.S. Securities and Exchange Commission (SEC) lawsuit against crypto exchanges Binance and Coinbase that labeled 13 tokens as securities. Speculation arose about a potential sell-off by a major crypto fund, exacerbating the decline. This risk-off event also affected other major cryptocurrencies, leading to substantial losses. In a separate development, the Organization for Economic Cooperation and Development (OECD) introduced the Crypto-Asset Reporting Framework (CARF), a new tax standard aimed at combating tax evasion in the crypto industry, while making amendments to the Common Reporting Standard (CRS) to address tax compliance requirements related to Central Bank Digital Currencies (CBDCs) and digital representations of fiat currencies.

London-based Gensyn, a blockchain-based marketplace protocol connecting buyers and sellers of compute power, has announced a successful $43 million Series A fundraise led by A16z Crypto, with participation from CoinFund, Canonical Crypto, Protocol Labs, Eden Block, and angel investors. Gensyn’s platform allows developers to build AI systems using connected hardware and pay for compute power on-demand. The funding comes amid the AI boom driven by the success of ChatGPT and the subsequent increased demand for GPUs. In other news, Nigeria’s Securities and Exchange Commission (SEC) has ordered Binance to cease operations in the country, stating that the exchange’s local operations are unregistered and unregulated. Binance, which has a significant community in Nigeria, is seeking clarity from the Nigerian SEC and expressing its commitment to working cooperatively on the next steps. Additionally, TrueUSD, the issuer of TUSD stablecoin, has temporarily paused minting of the stablecoin through Prime Trust, although it can still be minted and redeemed through other financial services. The move comes as Prime Trust is in the process of being acquired by BitGo Holdings, which aims to bring business continuity and long-term stability to Prime Trust’s clients. Despite its popularity, with adoption by Binance, TrueUSD’s market cap of $2 billion remains smaller compared to major stablecoins like USDT and USDC.

The open interest in Binance’s BNB token futures has reached a five-month high, indicating a rising number of unsettled and active futures contracts. The total open interest for BNB rose to 1.57 million BNB ($360 million) on Monday, the highest since January 1. This increase of over 8% in the past 24 hours and nearly 27% in one week coincides with a decline in BNB’s market rate, which fell to $221 early Monday. The decline in price and the surge in open interest suggest an influx of bearish short positions in the market. In other news, Binance CEO Changpeng Zhao has responded to data indicating significant outflows from the exchange. Analytics platforms like Nansen and DefiLlama have reported increased outflows from Binance following the SEC’s lawsuit against the firm. While there have been substantial outflows, CZ argues that the situation may not be as dire as it appears. Finally, billionaire investor Mark Cuban criticised the SEC for its lack of clarity in providing a registration process for cryptocurrency firms. He highlighted the challenges in determining what constitutes a security in the “crypto universe” due to the absence of a clear framework from the SEC. Cuban contrasted this with other sectors in the finance industry that receive more transparency through a “comments process” rather than lawsuits or labeling certain financial products as securities.




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