Wednesday, 17 May 2023

Market Summary

Market Summary 17 May 2023

Bitcoin Price: US$ 27,033.84 (-0.47%)
Ethereum Price: US$ 1,824.21 (+0.44%)  


The volatility and trading volume of Bitcoin, the largest cryptocurrency by market capitalisation, continue to decline, indicating an ongoing atmosphere of uncertainty. While trading ranges within Bitcoin markets narrow, suggesting that the asset is perceived as appropriately priced, the decrease in trading volume and the reduction in the aggregate amount of stablecoins being added to exchanges reflect market participants’ hesitance. The current price level of around $27,000 for Bitcoin presents a potential short-term upside, being approximately 4.5% below a high volume node. In a separate development, Bitcoin’s realised price, which calculates the average value of Bitcoin supply based on the price at which coins were last moved on-chain, is on the verge of surpassing the realised price of long-term holders. Historically, such a “bull cross” has marked the end of bear markets and the beginning of significant price rallies. Meanwhile, Coinbase, the leading cryptocurrency exchange in the United States, has temporarily halted payouts of Ethereum staking rewards due to a minor technical issue, although user rewards will still be earned and eventually paid out. The problem is expected to be resolved within 48-72 hours.

Anchorage Digital, a digital asset trust bank, has introduced decentralised snapshot voting for its institutional investors. The San Francisco-based bank responded to the interest expressed by institutional investors in participating in projects’ digital governance. Snapshot voting is a decentralised voting system commonly utilised in decentralised finance (DeFi) to survey users and allow them to influence project decisions. In another development, Ledger, a popular hardware wallet company, has added a controversial feature called Ledger Recovery to its devices. This feature enables users to back up their private seed phrases through an ID-based private key recovery service, albeit at a cost of $9.99 per month. Although Ledger assures users that the service is voluntary and does not compromise device security, concerns have been raised within the crypto community about potential security risks. Additionally, executives from Signature Bank, which recently experienced a collapse alongside Silicon Valley Bank, testified before the Senate Banking Committee, asserting that Signature Bank was well-capitalised and solvent despite the significant customer withdrawals following SVB’s failure. The collapses of Signature Bank and SVB had a notable impact on the stability of the U.S. financial system, with both banks facing a wave of withdrawals, leading to losses on SVB’s bond holdings. The reasons behind Signature Bank’s shutdown, however, remain less clear.

Tokenised versions of real-world assets, such as commodities and real estate, have outperformed Bitcoin and Ethereum in 2023, as reported by blockchain analytics firm Nansen. Nansen’s Real World Asset Index, which tracks 22 different governance tokens created on Ethereum, has shown superior performance compared to the top two cryptocurrencies, with notable peaks in January and April. Tokenisation of commodities, real estate, art, and bonds have emerged as a disruptive trend in asset management, attracting interest from institutions like Goldman Sachs, Bradesco, and Siemens. In other news, the battle between crypto exchange Coinbase and the U.S. Securities and Exchange Commission (SEC) continues, as the SEC seeks a court order to dismiss Coinbase’s plea for clarification on crypto regulations. Meanwhile, the European Union’s landmark crypto regulation, known as Markets in Crypto Assets (MiCA), has passed its final legislative hurdle with unanimous approval from EU finance ministers, marking the concluding step in the legislative process.

OKX, a crypto trading platform, is launching new features that allow customers to mint and trade Bitcoin Ordinals and BRC-20 tokens using the OKX wallet. This move follows the exponential growth in market capitalisation for BRC-20 tokens, particularly memecoins like ordi, and the announcement by Binance, the world’s largest cryptocurrency exchange, that its NFT marketplace will support Ordinals trading. OKX’s Chief Innovation Officer, Jason Lau, believes that adding support for Ordinals and BRC-20 tokens aligns with the growing importance of web3 interactions. In other news, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler stated that he believes the crypto markets are generally non-compliant and based on a false narrative of decentralisation. Gensler highlighted concerns about non-compliance, conflicts of interest, and commingling of customer funds in the crypto industry, contrasting it with the regulatory oversight in traditional finance. Lastly, bankrupt lending platform Celsius has moved a significant amount of staked ether (stETH) valued at over $780 million, potentially as part of its strategy to recover inaccessible ether during ongoing bankruptcy proceedings. The introduction of a withdrawal feature by Lido Finance, the stETH provider, enables Celsius to start reclaiming its stETH holdings.




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