Friday, 21 January 2022

Market Summary

Market Summary 21 January 2022

Bitcoin Price: US$ 40,661.69(-2.39%)
Ethereum Price: US$ 2,999.92 (-2.69%)


Bitcoin Spot Metrics, USDC Leads Ethereum, & GBTC’s Plunge

  • Treasury yields have been picking up considerably over the last few weeks and risk assets have reacted negatively, with the $41-42k levels currently being defended. BTC briefly breached the $40K psychological level on the Jan. 10 before buyers rushed to defend Sept. lows..
  • Bitcoin’s recent price action has caused the percentage of BTC in profit to fall to levels not seen since Jul. last year, and it currently stands at 68.7%. This suggests that over 30% of Bitcoins have exchanged hands within the last year, when the cryptocurrency was trading above current prices, and these entities are holding on to an unrealized loss.
  • With BTC’s price action turning positive over the last few hours, some of this may have trivially changed. And percentage of supply in profit hitting lows tends to point to a mid-term bottom — but not always.
  • The data shows that miners have been accumulating BTC for weeks — since mid Nov. to be precise, when BTC price fell into the $50K region. Since the beginning of this year, there has been an increasing rate of accumulation, indicating bullish sentiment among bitcoin miners. However, keep in mind the impact of miners on the market has dwindled dramatically over the last five years, so this doesn’t entail a meaningful shift in market outlook.
  • Interestingly, total miner revenue hasn’t suffered a significant drop despite the downturn. In fact, Bitcoin’s mean hash rate has surpassed May’s all-time highs.
  • USDC has gradually become Ethereum’s most popular stablecoin, as it eclipses USDT to become the largest capitalized stablecoin on the network. For the most part, USDC’s goodwill in the Ethereum ecosystem has been driven by uncertainty around Tether and how it holds its reserves.
  • USDC has said that the tokens are mostly backed by cash and cash equivalents as well as short-term treasury bills. On the flipside, 44% of USDT’s backing is held in commercial paper.
  • On the surface, users might perceive USDC and USDT as susceptible to the same risks (e.g regulation, censorship), but USDT also bears a higher redemption risk than USDC due to the risk profile of its reserves.
  • GBTC discount to BTC spot price took a massive hit, and is down -28% against spot prices as of yesterday. Since the start of the year, GBTC has plunged -17% compared to BTC which has declined only -9%.
  • Investors of GBTC must go through a 6 month lock-up period before they can sell their shares in secondary markets. Furthermore, there is no redemption function for the current Trust, which is a contributing factor to the large GBTC discount today.
  • Grayscale has been trying to convert the trust into a spot BTC ETF. If and when they succeed, one can expect discounts to be cleared up by arbitrageurs fairly quickly.


Moonbeam (GLMR) launch brings EVM interoperability closer to the Polkadot network

  • After years of development and promises of interoperability, the Polkadot network moved toward its first Ethereum virtual machine (EVM) compatible smart contract protocol with the launch of Moonbeam (GLMR). The platform is designed to make it easy to use Ethereum developer tools to build or re-deploy Solidity projects in a Substrate-based environment.
  • The most significant development providing momentum for Moonbeam has been the project’s official launch on the Polkadot network,  a move which should bring cross-chain interoperability with the Ethereum network to the sharded multi-chain protocol.


SEC rejects Skybridge’s application for spot Bitcoin ETF

  • The United States Securities and Exchange Commission, or SEC, has officially disapproved the application for First Trust SkyBridge’s spot Bitcoin exchange-traded fund after several deferments.
  • In a Thursday filing, the SEC rejected a proposed rule change from the New York Stock Exchange, or NYSE, Arca to list and trade shares of the First Trust SkyBridge Bitcoin ETF Trust. The SEC said any rule change in favor of approving the ETF would not be “‘designed to prevent fraudulent and manipulative acts and practices” nor “protect investors and the public interest.”


Bitcoin shrugs off Russia crypto ban fears as BTC price nears $43.5K

  • Bitcoin (BTC) surged on the Wall Street open on Jan. 20 as news that Russia was planning to “ban” cryptocurrency failed to impact price performance.
  • Others zoomed out further, with fellow analyst William Clemente noting a possible breakout of a downtrend in place since early December.
  • The action came despite fresh desires to clamp down on Bitcoin and cryptocurrency more broadly from Russia’s central bank, with comments calling for a blanket ban on circulation and usage as well as mining.
  • Unlike similar announcements — and reiterations of those announcements — by China, the market was entirely unfazed by the plans, something which was not lost on pundits.
  • “Russia is looking to repeat the mistakes of China,” analyst and podcast host Scott Melker, known as the “Wolf of All Streets,” reacted.


1inch Network expands to Avalanche and Gnosis Chain

  • The 1inch Network announced on Wednesday its plans to deploy the 1inch Aggregation Protocol on Avalanche and the 1inch Limit Order Protocol on Gnosis Chain, formerly known as the xDai Chain. In a statement shared with Cointelegraph, the 1inch Network expressed its aim to further expand its capabilities within the decentralized finance, or DeFi, industry.
  • “1inch’s main goal is to offer users the best deals across the blockchain space,” said Sergej Kunz, 1inch Network co-founder, adding that the expansion to Avalanche and Gnosis Chain “will offer 1inch users more options for cheap and fast transactions.”


Meta reportedly plans to integrate NFTs on Facebook and Instagram profiles

  • Multinational tech conglomerate Meta is reportedly diving into nonfungible tokens (NFTs) by integrating a feature that will let users show off their NFTs on their Facebook and Instagram profiles. According to the report, Meta is currently working on prototypes that will allow users to mint collectible tokens.
  • Meta is also discussing potentially launching a marketplace that allows the buying and selling of NFTs. However, while the news may excite millions of NFT enthusiasts that use social media, all of the projects are within the earliest stages and may still change accordingly.


MicroStrategy CEO won’t sell $5B BTC stash despite crypto winter

  • Despite a 40% drop in the value of Bitcoin (BTC), MicroStrategy’s Michael Saylor has no intention of selling his firm’s $5-billion stash.
  • Even if BTC suffers a lengthy bear market, Saylor told Bloomberg that he is a “Bitcoin bull” and does not intend to alter MicroStrategy’s multi-billion-dollar BTC acquisition plan. He took a firm stance against cashing out BTC:
  • Despite the recent market sell-off, Saylor still considers BTC one of the best inflation hedges and alternatives for stock buyback events. He dismissed any concerns about the cryptocurrency’s decline from its all-time high of $69,000 in November to less than $40,000 this month, stating that because inflation is so high, the company’s assets are actually a source of “great comfort.”
  • Saylor, who previously branded cash a “melting ice cube,” anticipates more Wall Street names will buy BTC at current prices, describing it as “a great entry point for institutional investors.” shares details on security breach: 483 accounts compromised

  • The security breach saga gets clarity with an official statement from the Singapore-based crypto exchange following a halt on withdrawals after detecting “suspicious activities” in user accounts.
  • In a statement on Thursday, revealed that “4,836.26 ETH, 443.93 BTC and approximately US$66,200 in other currencies” had been taken from clients’ accounts without their permission. The overall loss is presently valued at around $33.8 million, per the current market value.
  • Following a security breach, several users have made complaints that their money had been stolen. However, the company’s previous responses had failed to quell concerns.
  • To safeguard against such an accident happening again, claims to have implemented an additional layer of protection in which a new whitelisted withdrawal address must be registered within 24 hours before the first withdrawal.

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