Thursday, 2 December 2021

Market Summary

Market Summary 2 December 2021

Bitcoin Price: $57,184.06 (+0.41%)
Ethereum Price: $4,582.96 (-1.02%)


LUNA ATH Breakout, DEX Volumes Rise, Hawkish Fed Commentary

  • US equity markets opened higher today, recovering from yesterday’s dip incited by Fed Chairman Jerome Powell’s comments. At a Senate briefing, Powell said the risk of persistently higher inflation has increased and noted it may be appropriate to consider wrapping up their balance sheet taper plans sooner than initially planned.
  • With bond purchases potentially ending quicker, the slowdown in global liquidity growth contributes to a somewhat negative outlook for both the equity and crypto markets alike in the near term. Adding to those fears is the sudden emergence of the Omicron variant of the coronavirus, which caused quite a bit of volatility across global markets this past week. Overall, there are reasons to exercise caution as an investor until we have more clarity.
  • LUNA hit a fresh all-time high yesterday, undeterred by Powell’s hawkish comments that sent the broader crypto market lower. Notably, ETH also shrugged off the downturn as it rallied past $4700 and inched closer to a new high.
  • LUNA’s circulating supply saw a sharp spike on Nov. 11,  caused by an increase in the amount of LUNA to be burned from the community pool over the next two weeks. Approximately 88.675M LUNA will be burned over this period. Circulating supply has since reverted to levels seen before the spike, with over 8.2M LUNA burned in the last 7 days.
  • Recent stablecoin regulation threats could act as a tailwind for UST growth, potentially attracting capital inflows from more centralized stablecoins whose operations have been called into question.
  • Monthly ETH emissions have also started to decline. Net ETH emissions for Nov. 2021 were the lowest seen since EIP-1559 was implemented. Other than ETH transfers, Uniswap and OpenSea remain the top contributors toward the ETH burn. 
  • Another interesting observation: 
    • Curve has the 2nd highest TVL amongst Ethereum DeFi protocols at ~$19.2B, yet it only did ~$4.3B of volume in November 2021. 
    • Compare that to Uniswap, which has ~$10.4B TVL, and facilitated ~$83.8B of volume over the same time period. Of course, a lot of this is explained by Curve’s focus on pegged assets while 
    • Uniswap lets you trade any Ethereum-based token. But a large amount of stablecoin volume has moved to Uniswap since it implemented lower fee tiers, seemingly causing Curve’s volume growth to slow down. Curve’s TVL is also inflated by CRV emissions to LPs, many of whom are just trying to farm more tokens.


Square changes its name to ‘Block’ as part of broader push into crypto

  • Jack Dorsey’s payment firm Square is rebranding the name of its corporate entity to “Block,” according to a company announcement on Wednesday. The change will become official on December 10. 
  • The name change stems from the firm’s desire to become more deeply embrace decentralized and blockchain technology, citing that the name change has been in the works for the past year. 


Polygon’s expanding ecosystem backs MATIC’s rise toward a new all-time high

  • Polygon’s ecosystem is expanding and proof of this can be seen in the increase in protocol launches, cross-chain migrations, the launch of a Polygon-focused exchange-traded product (ETP) and a steady uptick in user activity.
  • Most recently, IDEX decentralized exchange announced that it would launching v3 of its exchange on the Polygon network, making it the first hybrid liquidity DEX on Polygon.
  • Another reason for the bullish price action for Polygon has been increased interest from institutional investors. Several exchange-traded products (ETPs) for Polygon have been listed in recent months, including the Osprey Polygon Trust in September and the 21Shares Polygon ETP in November.


South Korean crypto VC Hashed launches new $200 million fund

  • Hashed, a crypto venture capital firm based in South Korea, has launched a new $200 million fund.
  • The Hashed Venture Fund II will invest in Web3 startups, including those focused on metaverse, blockchain gaming, NFTs, and DeFi.


ZCash surges 7% after Digital Currency Group CEO announces $85M purchase

  • Digital Currency Group CEO and founder Barry Silbert has purchased more ZCash to add to his company’s coffers as the price of the token moved above $240 for the first time in days.
  • In a Wednesday tweet to his more than 678,000 followers, Silbert announced the purchase of $85 million in Zcash (ZEC), or roughly 376,106 tokens assuming an average price of $226. The buy is just the latest for Silbert, who seems to be portraying himself as a contrarian in the crypto market — responding to negative comments on ZEC by purchasing millions more.


Fireblocks Launches Support For Avalanche

  • Fireblocks, a leading provider of custody and settlement solutions for digital assets to more than 650 banks, hedge funds, and financial institutions, has launched support for Avalanche. Its institutional users can now access Avalanche’s C-Chain to custody and transfer the AVAX native token without jeopardizing efficiency or security.
  • Additionally, its users can access decentralized applications built on Avalanche through DeFi API or WalletConnect.


Alpha Finance Lab, Joins Avalanche Rush with $6 Million Allocation

  • Alpha Finance Lab, an ecosystem of cross-chain DeFi products, has joined the Avalanche Rush Program. The Avalanche Foundation and Alpha Finance Lab allocated a total of $6M ($3M in AVAX and $3M in ALPHA) of liquidity mining incentives to Alpha Homora V2, one of Alpha Finance Lab’s main products. The program will begin in December, with an exact date announced soon.


1inch Network closes $175 million Series B, aims to serve institutional customers

  • 1inch Network, a crypto project behind the popular decentralized exchange (DEX) aggregator 1inch app, announced Wednesday that it has closed a $175 million Series B funding round.
  • The announcement comes three months after The Block reported that 1inch was raising at least $70 million in Series B funding. A month after that report, 1inch said it had increased the targeted raise amount to $175 million.


Fidelity Canada reportedly launching spot Bitcoin ETF

  • While waiting on the United States Securities and Exchange Commission (SEC) to make their decision about whether or not they will approve a spot Bitcoin exchange-traded fund (ETF), Canada-based investment firm Fidelity is reportedly launching a spot ETF in the country, subject to regulatory approval. 
  • According to a tweet shared by Bloomberg senior ETF analyst Erick Balchunas, the fund “Fidelity Advantage Bitcoin ETF” is currently pending listing on a Canadian exchange. Balchunas also pointed out that if the new fund succeeds, it would become the largest asset management firm that offers Bitcoin services.


China’s central bank proposes to monitor metaverse and NFTs

  • China’s crackdown on crypto is expanding into the metaverse and nonfungible tokens (NFT), an executive at the People’s Bank of China (PBoC) recently implied.
  • Speaking at a national financial security summit, Gou Wenjun, director of the Anti-Money Laundering (AML) unit at the PBoC, pointed to the risks associated with leaving the new trends of the crypto ecosystem, such as NFTs and the metaverse, unregulated. He claimed that, while people would use said digital assets for privacy and wealth appreciation, they are also prone to be used for illicit purposes such as money laundering and tax evasion.

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