Tuesday, 19 September 2023

Market Summary

Market Summary 19 September 2023

Bitcoin Price: US$ 26,762.51 (+0.89%)
Ethereum Price: US$ 1,636.66 (+0.87%)  


Chainlink’s LINK token experienced a remarkable surge of over 10% in value, reaching $6.83, outperforming the broader cryptocurrency market. This surge is attributed to the optimism generated by Chainlink’s collaboration with SWIFT, the interbank messaging system, to enhance the adoption of tokenised assets. Chainlink’s co-founder, Sergey Nazarov, and ANZ’s banking services lead, Nigel Dobson, explored cross-chain settlement using Chainlink’s Cross-Chain Interoperability Protocol (CCIP) during SWIFT’s Sibos event. Additionally, Chainlink partnered with the Depository Trust and Clearing Corporation (DTCC) to work on SWIFT’s Blockchain interoperability project, enabling seamless interoperability between different blockchains. ANZ demonstrated the utility of Chainlink’s CCIP by conducting a cross-chain purchase of tokenised assets with their stablecoin, A$DC. This development exemplifies how financial institutions can leverage CCIP for cross-chain transactions. Meanwhile, on-chain data revealed significant LINK transfers, including deposits to Binance and a multisig address. In another realm, U.S. Senator Elizabeth Warren garnered support from key lawmakers, including Sen. Dick Durbin and Sen. Gary Peters, for her Digital Asset Anti-Money Laundering Act, although the bill’s passage remains uncertain due to a divided Congress. Crypto lobbyists have contested the legislation, fearing its impact on digital asset innovation. The bill aims to extend anti-money laundering requirements to various digital asset participants. Notably, it enjoys support from Wall Street bankers. Lastly, Malta’s Financial Services Authority is revising its crypto rulebook to align with the EU’s Markets in Crypto Assets regulation (MiCA). The proposed changes include regulations for exchanges, custodians, and portfolio managers, with an emphasis on having an “orderly wind-down plan.” MiCA, effective in 2024, represents comprehensive crypto regulation in the EU, and Malta seeks to harmonise its rules with MiCA to facilitate a smooth transition for virtual financial asset service providers within its jurisdiction.

William Quigley, a co-founder of Tether, has expressed skepticism regarding PayPal’s PYUSD stablecoin, stating that it is unlikely to bring significant innovation and is primarily focused on cost savings. He believes PayPal’s stablecoin will serve as a cost-saving measure for the company, with uncertain benefits passed on to users. Despite Tether’s dominance in the stablecoin market, Quigley acknowledges PayPal’s potential to disrupt it due to its extensive user base. PayPal’s stablecoin enables cost-efficient multicurrency transactions by creating a private blockchain-backed multicurrency money supply, reducing the need for financial intermediaries. Quigley suggests PayPal could either continue charging currency conversion fees and increase profits or lower transaction costs for consumers and merchants. Meanwhile, developers on the Avalanche blockchain have introduced Multiswap, a tool allowing users to swap up to 300 different tokens in a single transaction, enhancing trading flexibility and efficiency. This liquidity pool-based approach facilitates complex trading strategies with low fees. Lastly, research by RxR indicates that Ether (ETH) is trading at a 27% discount to its fair value, determined using a modified Metcalfe law model that factors in Ethereum’s scaling networks. The traditional model focuses solely on the Ethereum mainnet user base, while the modified version incorporates users on scaling networks. According to the modified model, ETH’s valuation stands at $275 billion, signaling an undervaluation in comparison to the traditional model’s valuation.

Billionaire investor and Dallas Mavericks owner Mark Cuban fell victim to a phishing scam, losing around $870,000 worth of tokens due to inactivity, highlighting the prevalence of such attacks in the crypto industry. Cuban’s wallet was drained of various assets, including stablecoins and Ethereum-based tokens, after likely downloading a fake MetaMask wallet application. Fortunately, he managed to salvage $2.5 million worth of Polygon’s MATIC tokens. This incident follows a similar phishing attack on Ethereum co-founder Vitalik Buterin’s account, resulting in the loss of $700,000 by users who sent tokens to a fraudulent link seemingly endorsed by Buterin. In another development, Ethereum experienced a rare setback as its new test network, Holesky, failed to launch due to a misconfiguration issue, prompting a two-week postponement. Ethereum developers had otherwise smoothly implemented key upgrades over the past year. Meanwhile, the Cosmos-native blockchain Canto announced plans to migrate to Ethereum as a layer 2 zero-knowledge rollup, following a similar move by Astar, signaling a trend of blockchain projects embracing Ethereum’s layer 2 solutions for scalability and security. Lastly, Citigroup introduced Citi Token Services, a private, permissioned blockchain offering cross-border payments, liquidity, and automated trade finance solutions to institutional clients, showcasing the growing interest in blockchain technology for financial services.





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