Tuesday, 14 December 2021

Market Summary

Market Summary 14 December 2021

Bitcoin Price: U$46,072.75 (-6.70%)
Ethereum Price: U$3,781.93  (-8.43%)


ETH Dominance, Mining Activity, & OpenSea’s Recovery

  • ETH and BTC have both performed well in 2021. However, as the year went on ETH edged out BTC, as reflected by market cap dominance. ETH’s dominance went from ~11% at the start of the year to ~21% today. BTC dominance on the other hand started at ~73% and is at ~42% today.
  • 2021 has been the year of smart contracts, with several new chains gaining meaningful traction. Further, ETH and altcoins tend to outperform BTC when the market is optimistic. This causes BTC to lose market dominance as growth lags that of other coins.
  • Bitcoin is back at its prior hash rate high of ~180M TH/s less than five months after China’s ban. Kazakhstan seems to have been affected by a power shortfall caused by crypto mining farms, so it remains an open question whether mining can sustainably occur in the region.
  • ETH suffered a similar fate as BTC when Chinese mining farms were shut down. However, the Ethereum network recovered in just under 2 months — a far quicker trajectory than BTC. Surprisingly, Ethereum’s difficulty and hash rate continued to soar and doesn’t seem to be stopping.
  • ETH 2.0 will move Ethereum from a Proof-of-Work (PoW) network to a Proof-of-Stake (PoS) network. The upgrade is expected to be implemented by June 2022. The move from PoW to PoS removes the need for large-scale miners and GPUs and shifts the process to stake-based validation.
  • Consequently, the growth in hash rate might seem counterintuitive at first given that ETH 2.0 is approaching and miners’ revenue will be heavily affected. However, there’s a good reason for that. Miners now collectively mint ~13,000 ETH per day, at today’s price of $4,000, that’s roughly $52M. With the remaining 6 months, there is still ~$9.36B ($4000 x 13,000 ETH x 180 Days) on the table to be earned by miners till ETH 2.0 goes live.
  • OpenSea volume has been recovering steadily over the past month. Random NFT mints seem to be slowing down, which translates to fewer “cash grab” NFTs in the market.
  • Recent volume has been driven by higher-quality NFTs, which include:
    • BAYC and MAYC are continuing to gain traction due to multiple celebrity purchases as well as partnerships, most noticeably with Adidas Originals.
    • RTFKT – CloneX, in partnership with Takashi Murakami. Their NFT was just revealed yesterday and has greatly contributed to the recent volume.
    • Metaverse Real Estate on Sandbox also benefited from their Adidas Originals partnership.


90% of all Bitcoin has now been mined

  • Bitcoin block #714,032, which was mined at 23:26 UTC, rewarded its miner with 6.25 BTC as per the current issuance schedule.
  • As a result of this latest emission, 90% of all bitcoin has now been mined.
  • The block increased the circulating supply of bitcoin to 18.9 million BTC exactly. That means there’s only 10% of the anticipated total supply of 21 million coins left to be produced — a process that will take tens of years to get close to the limit.


SEC chair’s regulatory agenda fails to include clarity on crypto, says Hester Peirce

  • Hester Peirce, a commissioner for the United States Securities and Exchange Commission known by many in the space as Crypto Mom, is pushing back against the regulatory body’s agenda for not including clarification on digital assets.
  • In a Monday joint statement, Peirce and SEC Commissioner Elad Roisman said they were “disappointed” in the failure of chairperson Gary Gensler’s regulatory agenda to include items aimed at helping companies raise capital, furthering investor protection, undoing recent rules passed by the commission and providing clarification on crypto. According to the two regulators, Gensler’s uncertain stance on digital assets may create problems for firms looking to operate in the space.
  • “Rather than taking on the difficult task of formulating rules to allow investors and regulated entities to interact with digital assets, including digital asset securities, the Agenda — through its silence on crypto — signals that the market can expect continued questions around the application of our securities laws to this area of increasing investor interest,” said Peirce and Roisman. “Such silence emboldens fraudsters and hinders conscientious participants who want to comply with the law.”


Bank of England calls for global tightening of crypto regulation

  • The Bank of England (BOE) said on Monday that regulatory and legal frameworks for crypto-assets would have to be ramped up both domestically and globally to combat the fast-moving market.
  • In its December financial stability report and financial policy committee (FPC) meeting minutes, taken on November 29 and December 9, the bank said that changes would “manage risks, encourage sustainable innovation and maintain broader trust and integrity in the financial system.” 
  • While recognizing the benefits of innovation, it said these developments would only be sustainable alongside “effective public policy frameworks.” 


96 private keys stolen from Vulcan Forged in $140 million theft

  • Earlier today, 96 private keys were stolen from the crypto gaming ecosystem Vulcan Forged, enabling the attacker to siphon off $140 million in cryptocurrency.
  • Vulcan Forged offers a smorgasbord of crypto activities. It is primarily a game studio, offering six different blockchain-based games. But it also has an NFT marketplace and its own decentralized exchange, where users can trade its token PYR.
  • The 96 wallets that were affected contained 4.5 million PYR, worth $140 million at the time of the attack. That’s 9% of the project’s total supply of tokens, according to CoinGecko, and 23.7% of the circulating supply. Other assets including ether (ETH) and polygon (MATIC) may have also been taken.


Myanmar shadow government declares stablecoin USDT an official currency

  • Myanmar’s shadow government, the National Unity Government (NUG), led by the supporters of jailed leader Aung San Suu Kyi, has declared United States dollar-based stablecoin Tether (USDT) as an official currency for local use. 
  • Per a report published in Bloomberg, the NUG will accept Tether for its ongoing fundraising campaign seeking to topple the current military regime in Myanmar. The shadow government also raised $9.5 million through the sale of “Spring Revolution Special Treasury Bonds” offered to the Myanmar diaspora across the world. The group aims to raise $1 billion through the sale of NUG-issued bonds.


Solana on-chain development increases after a recent DDoS attack

  • Solana — whose native crypto, SOL, is the fifth-largest cryptocurrency by market capitalization — is leading on-chain development charts despite a recent distributed denial-of-service (DDoS) attack.
  • As per Santiment data, Solana surpassed the daily GitHub submission rates of Polkadot and Cardano to become the leading blockchain over the past month. The number of daily GitHub submissions for Solana reached 90 between Nov. 12 and Monday, followed by Polkadot at 76 and Cardano at 65.
  • The surge in on-chain development activity for Solana comes in the wake of a recent DDoS attack on Thursday that slowed down the network considerably. The fifth-largest blockchain managed to mitigate the issues without a network shutdown, but it raised serious concerns over network vulnerability.

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