Wednesday, 14 December 2022

Market Summary

Market Summary 14 December 2022

Bitcoin Price: US$ 17,774.70 (+3.28%)
Ethereum Price: US$ 1,320.69 (+3.55%) 


BNB Chain Maintains Lead on New Addresses

  • Over the last twelve weeks, BNB Chain has gained 17.4M new addresses while other blockchains combined have gained 20.8M new addresses. This metric only counts new addresses that have made their first transaction.
  • While new addresses can be useful to estimate blockchain adoption, this metric is also susceptible to manipulation by seeding numerous addresses with small values to perform a single transaction.
  • Polygon made strong new address gains in October. During the week of Oct. 3, Polygon temporarily surpassed BNB Chain, recording 932K new addresses compared to BNB Chain’s 839K.
  • Fantom witnessed a resurgence in new addresses following the comeback of Andre Cronje. In the week before Andre’s Medium post on Oct. 25, Fantom averaged 5K new addresses. This increased by 64x to reach 319K, following the post.
  • Solana continues to experience fallout from the FTX collapse. Before the collapse, Solana averaged 149K new addresses per week. This has decreased by 33% to reach 99K ever since.


November Gaming Insights

  • Over the past month, blockchain-gaming dApps saw 92% more transactions than NFT marketplaces and roughly 50% more unique active-wallet interactions compared to DeFi. Similar to the past three months, these figures have hovered around 21.5M and 800k, respectively.
  • Over the same time frame, there has also been positive growth across the top 10 Web3 games by the number of monthly unique active-wallet interactions. Three standout titles in November were Arc8, WAM, and Planet IX, which all saw wallet activity increase significantly.
  • November saw a 33% increase in the number of projects funded (12 vs. 9) and a 34% increase in the total funds raised compared to October. Funding announcements are often delayed and thus should be considered a lagging indicator of industry growth.
  • Layer 1 blockchain Aptos partnered with Korean gaming studio Npixel. Npixel has expressed interest in exploring potential future blockchain-based content.
  • Tezos has been working with Unity to co-develop an SDK that makes it easier to implement wallet-pairing, interaction with smart contracts, and asset authentication into games. This will be the first Unity-verified Web3 SDK available on Unity’s Asset Store.
  • Polygon will be working with Walt Disney. Polygon will start by developing a collection of “digital collectibles” distributed to Disney employees during special occasions.
  • ImmutableX released a product to help creators enforce royalties for their collections. The Ethereum-focused tool is a community-governed list of white/blacklisted smart contracts that enforce royalties.


U.S. inflation shows signs of cooling at 7.1% in November, below estimates

  • Inflation in the U.S. came in at 7.1% in November, compared to the 7.3% year-on-year forecast. The month-on-month increase was 0.1%, down from 0.4% in October. 
  • Cryptocurrencies and traditional stock markets rose in response as yields dropped.
  • While inflation shows signs of easing, interest rates remain elevated. The market is watching to see how much the Federal Reserve will raise interest rates tomorrow, with the expectation that it will slow down the pace from its recent increases of 75 basis points to 50 basis points on the assumption that inflation is taking a bit of a breather. 
  • While today’s data is unlikely to sway the Fed in its rate decision being announced tomorrow, U.S. core and headline inflation figures will likely set the tone for the central bank, and by extension, the upcoming year, said David Stritch, a currency analyst at Caxton.


Algorand Rises After Italy Selects Blockchain Protocol for Digital Guarantees Platform

  • Blockchain Protocol Algorand (ALGO) was up about 3% on Tuesday, as the layer 1 technology was selected to be the blockchain to support a digital guarantees platform in Italy.
  • ALGO was trading at around $0.223 at the time of writing, according to CoinDesk data.
  • Algorand joined the Bank of Italy and the Italian insurance authority IVASS at an event hosted by the Research Center for Technologies Innovations and Finance (CETIF) in Milan on Tuesday to demonstrate how bank and insurance guarantees can be issued on blockchains, according to a statement. A bank guarantee is a type of financial backstop that’s offered by a lending institution where the lender ensures that the liabilities of the debtor will be met.
  • The new platform is expected to come into force in early 2023 and will be the first time a European Union (EU) member state enables the use of blockchain technology for bank and insurance guarantees, according to the statement.


Tether helps Binance swap 3 billion USDT to Ethereum from Tron

  • Tether announced that it’s assisting crypto exchange Binance with a “chain swap,” which involves converting 3 billion USDT to the Ethereum network from the Tron network. 
  • “In a few minutes Tether will coordinate with Binance to perform a chain swap, converting from Tron to Ethereum ERC20, for 3B USDT. The tether total supply will not change during this process,” Tether said. 
  • In this case, Tether will be performing a chain swap from the Tron network to the Ethereum network.
  • USDT is issued as a token issued by Tether on the Ethereum, Tron and other blockchain networks and used to facilitate trading operations on cryptocurrency exchanges such as Binance.


Grayscale Bitcoin Trust Discount Reaches Record 50%

  • Grayscale Bitcoin Trust (GBTC) shares hit a record-high discount rate relative to the price of bitcoin (BTC), pushing past 50% for the first time after the U.S. Securities and Exchange Commission reiterated its reasons for denying an application to convert the world’s largest bitcoin fund into an exchange-traded fund.
  • Crypto analysts have said that the discount would likely close if the conversion went through, since the redemption process available for ETF market makers would likely cause the shares to trade back toward the price of the underlying bitcoin.
  • In the past couple hours, the discount has since pulled back slightly to around 48.66%.
  • GBTC, which is managed by Grayscale Investments, was designed as a way to let investors in traditional markets gain exposure to bitcoin, the largest cryptocurrency. The fund currently has about $10.7 billion of assets under management, a figure that’s down 65% over the past 12 months thanks largely to this year’s steep decline in crypto prices.


Tether vows to remove secured loans amid rush to show solvency

  • Tether intends to remove all secured loans from its backing in 2023 after The Wall Street Journal said that the stablecoin operator’s increasing roster of loans might make it unable to pay back redemptions in the event of a crisis.
  • The company told the WSJ that its loans reached $6.1 billion, or 9% of Tether’s total assets, as of Sept. 30. The group’s consolidated total assets reached more than $68 billion in the third quarter. Tether claimed to make sure borrowers offer “extremely liquid” collateral for these loans, but now the operator plans to scrap them altogether. 
  • “Tether is professionally and conservatively managed, and this will be demonstrated once again by successfully winding down the lending business without losses — since all loans are over-collateralized by liquid assets,” the company said in a statement. 


Binance’s CZ Welcomes ‘Stress Test’ as Exchange Resumes USDC Withdrawals

  • Changpeng “CZ” Zhao, founder and CEO of exchange giant Binance, welcomed the “stress test” of withdrawals on his exchange, addressing the surging user redemption requests from the platform in a tweet on Tuesday.
  • “Business as usual for us,” CZ said. “Some days we have net withdrawals; some days we have net deposits.”


Binance Customer Withdrawals Exceed $3 Billion in 24 Hours – ?

  • Behemoth crypto exchange Binance has seen massive withdrawals in the past week and—on Tuesday—the highest amount of one-day withdrawals since June, Nansen data has revealed. 
  • Binance’s international arm saw over $8.78 billion leave its exchange and $5.1 billion in incoming funds, meaning the exchange faced a net outflow of roughly $3.66 billion. While such data only refers to Binance’s Ethereum and ERC-20 token movements, approximately 63% of Binance’s portfolio is on Ethereum and the outflows are much larger compared to other crypto exchanges over the same period.
  • Binance’s $3.66 billion weekly outflow is leagues more than Coinbase, for example, which saw a net outflow of roughly $574 million from its main exchange and $248 million from its Coinbase Custody service. Binance US saw a net outflow of over $38.7 million in that same period.


Crypto Markets Analysis: Bitcoin Holds Initial Move Higher Following Unexpectedly Strong Inflation Report

  • Bitcoin’s price pushed higher following better-than-expected inflation data on Tuesday. The report showed U.S. inflation rising 7.1% versus the 7.3% projected by economists responding to a FactSet survey. Core inflation, which excludes more volatile food and fuel costs, increased 6% versus expectations of 6.2%.
  • November marks the second consecutive month that inflation has risen at a slower pace than expected. The positive report strengthens the perception that the Fed’s Federal Open Market Committee (FOMC) interest rate increases are having the desired impact of taming inflation.
  • The probability the FOMC will increase rates by a 50 basis points (bps) during its next meeting this week increased to 82%, from 73.5% a day prior. The FOMC raised rates by 75 bps at its last four meetings. Market participants are hoping that the central bank will soon end its monetary hawkishness altogether.
  • Bitcoin (BTC) and ether (ETH) prices jumped immediately after Tuesday’s CPI announcement and were recently up 3.9% and 4.7%, respectively.


Canada to Prohibit Crypto Firms From Offering Leveraged Trading to Citizens

  • Crypto platforms applying for registration in Canada will have to agree to tighter rules in the country, including a ban on margin and leverage trading.
  • Firms will also have to hold the assets of Canadian clients separately from their proprietary business, according to expanded terms outlined by the Canadian Securities Administrators (CSA) on Monday.
  • Crypto businesses were told in August that they needed to submit a pre-registration undertaking (PRU) to operate while pursuing full registration. A deadline by which PRUs must be received has not yet been announced but will be communicated to platforms “shortly,” a CSA release said.


Glassnode in Youtube

  • Our final video report for the year is live.
  • We cover:
    • Volatility, Derivatives, and leverage
    • #Bitcoin on-chain supply concentrations.
    • Stress in #Bitcoin mining. 
    • #Ethereum post-Merge supply dynamics.
    • Shifting trends in Stablecoin markets.

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