Tuesday, 2 August 2022

Market Summary

Market Summary 2 August 2022

Bitcoin Price: US$ 23,268.01 (-0.11%)
Ethereum Price: US$ 1,630.28 (-2.85%) 


ETH Leads The Charge, Post FOMC Market Update

  • Since legacy markets bottomed on June 16th, ETH has significantly outperformed BTC and other major asset classes. While BTC has gained 14%, ETH has bounced nearly 60% as developers announced a definite timeline for the Merge.
  • It’s not just ETH that’s outperforming the king of crypto, but even altcoins are racing past BTC. The total crypto market cap (excluding BTC and ETH) is up by 20% in the same time period. In comparison, even the Nasdaq has managed a more sizable recovery by gaining 16%.
  • So what’s going on? Well, it appears that the speculatooors may be stealing some thunder away from BTC as they buy into the hype cycle created by the Merge. For the first time in history, aggregated open interest in ETH-based options has surpassed that of BTC-based options.
  • The Merge is one of the most anticipated events in all of crypto’s history. It will be interesting to see if ETH can keep control of the narrative and continue decoupling from BTC after it goes live. Currently, developers are forecasting a tentative date of Sept 19th for the final Merge.
  • On Wednesday, the FOMC raised interest rates another 75 bps, as expected. Markets rallied almost immediately after the FOMC statement was released, and maintained those gains throughout much of Powell’s press conference.
  • This is perhaps indicative of shifting sentiment as not-as-bad news is actually received as goods news; we tend to see this type of market behavior towards the latter stages of a bear market.
  • Risk assets seem to be moving between large macro events like the latest CPI print or FOMC meeting. Interestingly, the economic calendar is a bit bare for the remainder of the summer, most notably that we don’t have another official FOMC meeting until September.
  • With the macro calendar relatively sparse, risk assets may be able to take advantage, targeting the upside. The August CPI print holds extra weight because it’ll inform us as to whether inflation has truly peaked.


Blockchain security firm warns of new MetaMask phishing campaign

  • A cybersecurity firm has issued warnings over a new phishing campaign targeting users of the popular crypto wallet MetaMask.
  • In a Thursday post written by Halborn’s technical education specialist Luis Lubeck, the active phishing campaign used emails to target MetaMask users and trick them into giving out their passphrase. 
  • The firm analyzed scam emails it received in late July to warn users of the new scam. Halborn noted that at an initial glance, the email looks authentic with a MetaMask header and logo and with messages that tell users to comply with Know Your Customer (KYC) regulations and how to verify their wallets.
  • However, Halborn also noted there are several red flags within the message. Spelling errors and a fake sender’s email address were two of the most obvious. Furthermore, a fake domain called metamaks.auction was used to send the phishing emails.
  • In June, Halborn researchers discovered a case where a user’s private keys could be found unencrypted on a disk in a compromised computer. MetaMask patched its extension versions 10.11.3 and later following the discovery.
  • In late July, security researchers warned of a new malware strain called Luca Stealer appearing in the wild. The information stealer has been written in the Rust programming language and targets Web3 infrastructure such as crypto wallets. Similar Malware called Mars Stealer was discovered targeting MetaMask wallets in February.


Facebook’s metaverse will ‘misfire,’ says Vitalik Buterin

  • Ethereum co-founder Vitalik Buterin doesn’t believe that any of the existing attempts by corporations to create a metaverse are “going anywhere,” pointing to Meta as being one he believes will “misfire.” 
  • Responding to a tweet from Dialectic co-founder Dean Eigenmann, who believes venture capitalists may be wrong about what constitutes an ideal metaverse, Buterin said that while he believes “The metaverse is going to happen,” he doesn’t think any of the current attempts from corporates such as Mark Zuckerberg’s Meta are “going anywhere.”
  • The Metaverse is generally described as a highly-interactive 3D online world focused on social connection, with some looking to eventually be powered by augmented reality (AR) and virtual reality (VR). 
  • Buterin’s comments come despite a number of successful metaverse projects recently being launched on blockchain technology like Decentraland and The Sandbox. However, Buterin stated that its use cases are still not clear, adding that he didn’t think Meta’s attempt at creating a metaverse will be successful in its current form:
  • “We don’t really know the definition of ‘the metaverse’ yet, it’s far too early to know what people actually want. So anything Facebook creates now will misfire.”


Bitcoin miner capitulation due to end amid 1st difficulty increase since June

  • It may be as soon as August that miners start returning, and difficulty is already planning an uptick.
  • Bitcoin (BTC) miners have been capitulating for almost two months, but an end to the squeeze could already be here.
  • That was the conclusion from Blockchain infrastructure and cryptocurrency mining firm Blockware as it published its latest Intelligence Newsletter on July 29.
  • “The current miner capitulation began June 7th, 2022, and it has lasted a significant amount of time. It’s important to note that miner capitulations are particularly relevant because it reveals that a large number of machines are no longer hashing,” the firm wrote:
  • “Since June 7th, other new generation mining rigs have likely been plugged in by both public and private mining companies. However, enough old generation machines or inefficient overleveraged miners have shut off, that hash rate and difficulty have actually decreased in size.”


$200M BitGet BTC-USDT protection fund hints at investor-centric trend

  • Bitget’s reasoning behind using a combination of a stablecoin and Bitcoin in the protection fund is to counter massive unforeseen volatility in crypto markets.
  • With the ultimate goal to regain investor confidence amid a prolonged bear market, crypto derivatives exchange Bitget launched a $200 million fund to safeguard users’ assets. Bitget joins the growing list of crypto companies, such as Binance, that have taken an investor-centric approach to gain investors’ trust via protection funds.
  • The Bitget Protection Fund comprises 6,000 Bitcoin (BTC) and 80 million Tether (USDT), valued at $200 million at the time of writing. Considering the fact that crypto winter currently shows almost no signs of slowing down, Bitget pledged to secure the value of the fund for the next three years.
  • While Bitget chose to self-fund the entire protection fund without relying on a third-party insurance policy, Binance set up its user protection insurance fund, Secure Asset Fund for Users (SAFU), by allocating 10% of the trading fee. Starting off in 2018, SAFU reached a $1 billion valuation by early 2022. Sharing details about the newly founded fund, Gracy Chen, managing director of Bitget, added:
  • “The protection fund will help us mitigate investors’ concerns and attract potential users. As we continue to endure the crypto winter, it is crucial that our users can rest assured that their funds are kept safe.”


Aave DAO approving overcollateralized stablecoin splits crypto community

  • Aave DAO, the governance body behind decentralized finance (DeFi) giant Aave, has voted practically unanimously to create an overcollateralized stablecoin called GHO.
  • Aave Companies introduced the proposal on Thursday, and it received an overwhelming 99.9% community vote in support over three days. The vote ended on Sunday at 10:00 am UTC with 501,000 AAVE tokens pledged in favor of creating the crypto-collateral-backed stablecoin.
  • GHO will be a decentralized, Ethereum-based stablecoin pegged to the U.S. dollar and collateralized with multiple crypto assets. The next step in the process will be the creation of the GHO tokens through a new Aave Improvement Proposal (AIP), and any user looking to mint GHO will be able to do so by depositing any other crypto asset accepted by the Aave protocol.
  • Aave is a noncustodial decentralized crypto lending and borrowing platform and hopes to leverage its overcollateralized stablecoin to offer better liquidity and passive income opportunity.
  • Given that GHO will be overcollateralized, users must always deposit a higher amount of crypto than the minting value of the GHO. This should ensure an overcollateralized loan on the stablecoins. Once the user repays the loan, their position will be liquidated and their borrowed GHO will be burned.
  • The lending protocol will also charge interest on loans taken out in GHO, with payments going back to the Aave DAO treasury, rather than the standard reserve factor collected when users borrow other assets.


Huobi gets green light as exchange provider in Australia

  • Crypto exchange Huobi can begin offering cryptocurrency exchange services in Australia after its registration as a digital currency exchange provider with the Australian Transaction Reports and Analysis Centre (AUSTRAC) on Aug. 1. This means Huobi can now offer fiat to cryptocurrency trading services in the country.
  • Cointelegraph has reached out to Huobi to ascertain whether it will be able to offer full exchange services. The company initially indicated it would focus on providing OTC services after receiving its registration.
  • The exchange continues to look at broadening its horizons and is also eyeing a move into the American market. Huobi formed an American subsidiary, HBIT, in July 2022. It has received a Money Services Business license, with the company hoping to launch exchange services in the future.
  • Huobi also scored licenses in New Zealand and the United Arab Emirates in June 2022. Dubai’s Virtual Assets Regulatory Authority (VARA) granted the exchange provisional approval to begin offering its services in the country. Huobi’s local entity will offer a full suite of cryptocurrency exchange products and services, which will operate under a test-adapt-scale model as part of the process of becoming licensed. 


First Binance soulbound token BAB targets KYC user credentials

  • Binance cryptocurrency exchange is moving towards decentralized identity tools by launching its first-ever token designed to certify verified user status on the platform.
  • Binance on Monday announced the launch of the Binance Account Bound (BAB) token, aiming to address identity issues in the decentralized society (DeSoc).
  • In contrast to traditional crypto assets like Bitcoin (BTC), the BAB token is exclusively for online identification purposes and belongs to a type of Soulbound Tokens (SBT). Proposed by Ethereum creator Vitalik Buterin, SBTs are non-transferable, non-financialized tokens designed for DeSoc.
  • According to the announcement by Binance, the ​​BAB token is the first-ever SBT issued on the BNB Smart Chain. The token is aimed at many different use cases in the DeSoc but will initiall serve as Binance Know Your Customer (KYC) user credentials.
  • The BAB token will specifically be displayed on wallets to indicate the wallet’s owner has passed KYC verification on Binance. The token will function as a Binance identity and can be used by third-party protocols to verify BAB tokens for a variety of purposes, including avoiding bots, airdropping nonfungible tokens, voting and others, Binance said.


CryptoPunks’ trading volume surges 1,847% after Tiffany & Co. launches exclusive NFT collection

  • On Monday, the trading volume of CryptoPunks, one of the sector’s most popular nonfungible token (NFT) collections, surged by 1,847% over 24 hours. Over $1,226.68 Ether (ETH) worth of Punk NFTs was traded during that time. The surge in interest appears to be tied to luxury jewelry retailer Tiffany & Co. launch of its own NFT collection, which has a special perk for Punk holders.
  • Dubbed “NFTiffs,” the collection consists of 250 digital passes. Anyone can purchase NFTiffs, which are minted on the Ethereum blockchain. However, CryptoPunk holders can redeem the NFT for a customized-jewelry experience. After purchase, Punk holders can elect to receive a custom-designed pendant and an NFT digital artwork that resembles the final jewelry design. These are crafted by the company’s in-house artisans and inspired by the Punks NFT collection.
  • Depending on the color palette of the Punk NFT, Tiffany will create pendants using at least 30 gemstones such as sapphires, amethyst, spinel and diamonds with its frame in 18karat rose or yellow gold. Buyers will receive a rendering of their piece by October, with anticipated physical delivery in 2023.


Binance US will delist AMP following SEC claim token is a security

  • United States-based crypto exchange Binance.US said it will be delisting the AMP token “out of an abundance of caution” of possible enforcement by federal regulators. 
  • In a Monday blog post, Binance.US said it will be closing deposits of Amp (AMP) and removing the AMP/USD trading pair on Aug. 15 following the token’s mention in a legal action from the U.S. Securities and Exchange Commission, or SEC. The federal regulator filed a complaint against a former Coinbase product manager and two individuals in July that claimed that AMP and eight other cryptocurrencies were “crypto asset securities” that fell under the SEC’s purview.
  • “We believe that, in some circumstances, delisting an asset best protects our community from undue risk,” said Binance.US. “We operate in a rapidly evolving industry and our listing and delisting processes are designed to be responsive to market and regulatory developments.”

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