Tuesday, 13 September 2022

Market Summary

Market Summary 13 September 2022

Bitcoin Price: US$ 22,395.74 (+2.61%)
Ethereum Price: US$ 1,716.37 (-2.82%) 

 

Merge Week Is Finally Here

  • Starbucks will offer an NFT-based loyalty program on Polygon. Users can earn or buy NFTs that offer benefits.
  • CME Group launches ETH-based options, three days before the Merge.
  • MicroStrategy plans to sell up to $500m in Class A shares to buy more BTC. Elsewhere, BTC hashrate just hit an all-time high.
  • Algorand Foundation says it deposited 35m USDC on Hodlnaut before the platform suspended withdrawals.
  • On September 8th, the notional open interest of ETH-based options marked the largest positive divergence compared to BTC options ever, at a ratio of 1.74. Historically, ETH options have averaged a ratio of 0.54 compared to BTC options.
  • On this date, the total open interest in ETH options totaled 7.54k (in $m) compared to 4.3k for BTC options. With the Merge now less than 3 days away, speculators continue piling into ETH options (vs BTC options) at historic levels.
  • Prior to the July 2022 announcement indicating timelines for the Merge, the aggregated open interest in ETH options had never surpassed that for BTC options.  Since then, the ETH/BTC open interest ratio has increased by 300%, showcasing the intense appetite for ETH exposure leading into the Merge.
  • The upgrade is expected to occur on September 15th, triggered at block #15540293. Will the Merge be yet another sell-the-news event or will the changes to ETH issuance rate and tokenomics prove strong enough to keep the party going?

 

Tether USDT stablecoin goes live on Near Protocol to boost DeFi presence

  • Major stablecoin issuer Tether Operations Limited continues expanding integrations with diverse blockchain networks, launching the Tether (USDT) stablecoin on the Near Network.
  • Tether USDT is now live on the Near Network, a smart contract-enabled blockchain platform designed for decentralized applications, Tether officially announced on Monday.
  • The integration of Tether into the Near blockchain is a major milestone in the firm’s commitment to increase its presence in decentralized finance (DeFi) ecosystems, the firm said. “It will alleviate the potential adverse effects associated with market volatility and accelerate scalability for its users,” the announcement added.
  • The Near Network is the eleventh blockchain that is currently available for Tether USDT. The stablecoin is now also live on chains like Polygon, Kusama, Ethereum, Solana, Algorand, EOS, Liquid Network, Omni, Tron and Bitcoin Cash’s Standard Ledger Protocol.

 

Starbucks announces new NFT experience for coffee members

  • According to a new post on Monday, Starbucks says it will offer its U.S. members the ability to earn and buy digital collectible stamps in the form of nonfungible tokens, or NFTs. Dubbed “Starbucks Odyssey,” each collectible digital stamp has its ownership verified on the blockchain and will include a point value based on its rarity. As more stamps are collected, members’ points will increase, unlocking access to unique experiences. 
  • The iconic coffee chain says that rewards range from receiving a virtual espresso martini-making class to accessing unique merchandise to exclusive events invites at Starbucks Reserve Roasteries and possibly trips to the Starbucks Hacienda Alsacia coffee farm in Costa Rica.
  • Members can earn NFTs by playing interactive coffee-themed games or taking on fun challenges on Starbucks Odyssey, which will be launched later this year. Users can also purchase the NFTs on the built-in marketplace without the need to connect their wallets or use any crypto.

 

Bitcoin might be down but interest in crypto and NFTs is here to stay: Ledger CEO

  • According to Pascal Gauthier, CEO at Ledger, in spite of the bear market there is a lot to be optimistic about in the crypto and Web 3 space.
  • The future for crypto remains very bright. That’s according to the CEO of Ledger, Pascal Gauthier who sat down for a tête-à-tête with Cointelegraph in his home country, France. Gauthier, who enters his eighth year working at Ledger, explained that the recent downward price action in Bitcoin has not brought interest in crypto to a standstill:
  • “Bitcoin might be down, but people are buying NFTs and you know, they’re participating in communities.”

 

Glimpses of positive momentum in an overall bearish market? Report

  • At the end of August, the supply held by long-term Bitcoin holders was 6,000 coins away from reaching its ATH of 13.61 million. Long-term-holder supply is the number of coins that have not moved in 155+ days. This amounts to 70.6% of the total outstanding supply and is the threshold at which the probability of selling and spending in the future diminishes.
  • Such a high number marks a very bullish signal, giving insight into the supply that may be on the market in the future. This is only one side of the supply-and-demand equation, however, and crypto does not act in a vacuum outside of overall macroeconomic conditions. As can be seen in the chart below, BTC’s price went down even as supply left the market.

 

Chamber of Digital Commerce says ‘the time has come’ for the SEC to approve a Bitcoin ETF

  • The crypto advocacy group Chamber of Digital Commerce called on the Securities and Exchange Commission, or SEC, to approve applications for Bitcoin exchange-traded funds (ETFs) in the interests of United States-based investors.
  • In a Monday report titled “The Crypto Conundrum,” the Chamber of Digital Commerce said the U.S. has fallen behind other countries whose residents have access to crypto investment vehicles including Bitcoin (BTC) ETFs. The crypto advocacy group added there were “no reported instances of hacking or theft and no indications of market manipulation” related to Bitcoin ETFs released abroad, suggesting the SEC’s reasoning in previously rejecting applications was “misguided and counterproductive.”
  • “As the SEC continues to stonewall, the United States continues to fall further behind other countries as capital that would have been invested in the United States, which would be managed by U.S. firms employing U.S. persons, is instead deployed in other, more innovation-friendly countries,” said the Chamber of Digital Commerce — naming Canada, Germany, Sweden, Switzerland and Australia.

 

64% of staked ETH controlled by five entities — Nansen

  • A report from blockchain analytics platform Nansen highlights 5 entities that hold 64% of staked Ether (ETH) ahead of Ethereum’s highly anticipated Merge with the Beacon Chain.
  • Ethereum’s shift from proof-of-work to proof-of-stake is set to take place in the coming days after final updates and shadow forks have bee completed in early September. The key component of The Merge sees miners no longer used as validators, replaced by stakers that commit ETH to maintain the network.
  • Nansen’s report highlights that just over 11% of the total circulating ETH is staked, with 65% liquid and 35% illiquid. There are a total of 426,000 validators and some 80,000 depositors, while the report also highlights a small group of entities that command a significant portion of staked ETH.
  • Three major cryptocurrency exchanges account for nearly 30% of staked ETH, namely Coinbase, Kraken and Binance. Lido DAO, the biggest Merge staking provider, accounts for the largest amount of staked ETH with a 31% share, while a fifth unlabelled group of validators holds 23% of staked ETH.

 

Bitcoin proponent claims PoS rewards aren’t ‘yields,’ Vitalik snaps back

  • Independent developer and Bitcoin proponent Udi Wertheimer created quite a buzz on Crypto Twitter earlier on Monday after he claimed that a proof-of-stake (PoS) based yield reward system for staking is more of a penalty for non-stakers.
  • Wertheimer, who is a well-known Ethereum critic, believes that the PoS staking reward system isn’t exactly a yield reward. In PoS staking, a user cannot do anything with their staked ETH, while those who don’t stake their tokens and participate in other network activities aren’t rewarded.
  • With thEthereum Merge just a couple of days away, the sly on the PoS system didn’t really go down well with the Ethereum community, including co-founder Vitalik Buterin.
  • Buterin responded to Wertheimer’s criticism by claiming that Bitcoin mining is not much different from PoS staking as proof-of-work (PoW) mining “penalizes anyone who has a smaller percentage of hash power than their percentage of the coin supply.”

 

Huobi to delist Monero and other privacy coins, citing regulatory pressures

  • Cryptocurrency exchange Huobi will delist seven different privacy coins from its platform as regulatory pressure mounts on anonymity-enhanced currencies (AECs).
  • The exchange announced that it had terminated the trading service of a number of privacy tokens including Dash (DSH), Decred (DCR), Firo (FIRO), Monero (XMR), Verge (XVG), Zcash (ZEC) and Horizen (ZEN).
  • These tokens will begin to be delisted on Sept. 19, while deposit services ceased on Monday in conjunctio with the announcement. Users were urged to cancel open orders for the privacy coins, while the exchange will cancel any existing orders at the delisting time and credit users’ spot accounts.
  • Huobi noted that it made efforts to meet compliance policies of more than 100 countries in which its services are available. The announcement cited efforts to comply with the latest financial regulations, as well as the company’s Token Management Rules.
  • Article 17(16) of its rules list addresses “trading concealment or suspension,” which gives Huobi Global the right to conceal or suspend token trading in the following circumstances. Clause 16 is directed at privacy coins in particular:
  • “The token is a privacy token, does not support offline signatures, or its node source codes are not open-sourced.”

 

Glassnode

  • Bitcoin has now been within a persistent market downtrend for ten months since the ATH in November 2021. This week, Bitcoin spot prices touched the $18,649 level, marking the second lowest local low at a 72.5%  drawdown from the cycle top. Compared to prior bear cyclical bottoms, the 2022 contraction has not been as significant on a percent drawdown perspective. The lows in 2015, 2018 and 2020 reached over 77%+ drawdowns from ATH.
  • The current bear market has spent 56 days in this condition, despite a brief bounce back above the Realized Price and Long-Term Holder variant. Compared to the typical duration of ~190-days below the Realized Price in previous bear markets, 56-days remains a relatively short period of time.
  • Such events only occur during the late stage of bear markets, and denote periods where the average cost of acquisition over the past 155 days, is now more advantageous than the average long-term holder cost basis. This is synonymous with a capitulation, where coins purchased near the cycle top are sold and change hands at much lower prices.
  • Despite a 10-month downtrend, this bear market has not yet reached this cross-over stage. Previous bears took between 145 days and 339 days to recover after such a cross-over. by Given the trajectory of these two realized price traces, we can expect a cross-over by mid-September.
  • Since mid-August, the total Percent Supply in Loss jumped by 11.8%, reaching 48.1%. As shown in the figure below, the contribution of Short-Term Holders 🟥 (9.3%) is significantly higher than Long-Term Holders 🟦 (2.5%). This difference highlights the rising momentum of capital inflow in the period since spot prices crashed below the Realized Price in early Jun.
  • In other words, this high concentration of STH coins between $24k and $18.5k shows that 9.3% of the coin supply has recently transacted, suggesting both capitulation, and an equivalent demand inflow within this price range. It also highlights a risk, in that a large volume of investor coins (48.1% of supply) are underwater below $18.5k, and 11.8% of supply has a cost basis between $18.5k and $24.5k.

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