Tuesday, 21 September 2021

Market Summary

Market Summary 21 September 2021

Fearful Market Shakes Out Little Leverage

  • Ever since the correction a few weeks ago, funding rates for BTC perpetuals have been slightly depressed. We noted last week that sentiment was fragile, and this is yet another sign of that. Price rebounded a bit from the lows, but funding is still negative.
  • The lack of deep, cascading liquidations implies this was either not a wipeout or the pain isn’t yet over. It’s possible that traders were just looking to de-risk some of their exposure going into tomorrow’s FOMC meeting. Global equities took a beating on today’s open, which could suggest that uncertainty over the Fed’s stance is the main reason for a risk-off environment across markets, amongst other things.
  • Today has been brutal across global financial markets, presumably from fears surrounding China’s real estate market. BTC and ETH were, at one point, trading at $42.5K and $2.9K respectively. The only non-stablecoin in the top 100 that avoided going into the red today was OMG.


Traders buy the Bitcoin dip even as Evergrande’s implosion rocks stock markets

  • Bitcoin (BTC) investors seem concerned about the increasing speculation that China’s second-largest property developer, Evergrande Group, will default on its $300 billion in debts. These fears manifest in global equities markets which saw a 1.5% to 3% drop at this morning’s market open. 
  • Despite the price move, the BTC outflow (net withdrawals) from exchanges has continued a multi-month trend, particularly on Coinbase Pro.


Talk of SEC subpoena swirls at New York crypto event as regulatory scrutiny grows

  • Monday morning, amid the bustle of the Mainnet 2021 crypto conference in New York, an attendee tweeted that he had witnessed an event speaker being “served by the SEC” before they were set to take the stage. 
  • The post set off a wave of speculation about the veracity of the claim, the recipient of the rumored subpoena and the broader notion that the Securities and Exchange Commission was using a crypto event as a springboard to conduct investigations.


Solana Blames ‘Denial of Service Attack’ for Last Week’s Downtime

  • Following weeks of upward momentum, during which time the price of its coin multiplied more than five times in value, Solana hit a serious roadblock last week when its blockchain network went offline for more than 17 hours starting on September 14. Today, the Solana Foundation issued an initial postmortem of the event, and cast the root cause in a new light.
  • Most of the information in the initial overview report confirms what was tweeted last week, either through Solana’s official Twitter accounts or that of Solana Labs CEO Anatoly Yakavenko. In essence, the network was overwhelmed by a flood of incoming transactions, which the Foundation had previously pegged at up to 400,000 per second.


Texas following El Salvador? Poll shows 37% of residents want crypto payments

  • A new poll from Newsweek suggests that as many as 10.8 million Texans may support legislation that makes cryptocurrency legal in the next election.
  • According to a Sept. 20 report, a Newsweek poll that surveyed more than 9,700 eligible voters across ten U.S. states suggested that 37% of Texas residents would vote in favor of a ballot measure to make crypto legal, while 42% said they would support crypto-friendly legislation similar to that in Wyoming. With a population of roughly 29 million people as of 2021, Texas could have more than 10 million residents supporting the adoption of cryptocurrencies.
  • The results of the poll, conducted by United Kingdom-based firm Redfield & Wilton Strategies between Aug. 20 and 24, came prior to two pieces of crypto legislation taking effect in Texas. The state’s House Bills 1576 and 4474, respectively, establish a blockchain working group and amend the state’s Uniform Commercial Code to recognize cryptocurrencies under commercial law.


Institutional investors increase their crypto holdings for 5th straight week

  • Cryptocurrency assets held by institutional managers rose for a fifth consecutive week, a sign that market participants had once again flipped bullish on Bitcoin (BTC) and the leading altcoins. 
  • Investment flows into crypto products totaled $42 million in the week ending on Sept. 19, with Bitcoin funds seeing inflows of $15 million, according to digital asset manager CoinShares. That’s only the third time in 16 weeks that BTC investment products saw positive inflows.
  • All major assets registered a weekly increase, with investors buying up $6.6 million worth of Ether (ETH) products and $3.7 million worth of multi-asset funds. Investors also allocated $4.8 million towards Solana (SOL), disregarding a denial-of-service disruption earlier this week as a result of network congestion.


Coinbase Drops Lend Product Plans After SEC Lawsuit Threat

  • Cryptocurrency exchange Coinbase has canceled plans to launch Lend, a product designed to deliver high-interest returns on USDC stablecoin holdings.
  • A Coinbase representative confirmed the news to Decrypt this morning, referring us to a recently updated blog post about the planned initiative, which was first announced in June but put on hold following the threat of legal action from the U.S. Securities and Exchange Commission (SEC)

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