Thursday, 21 September 2023

Market Summary

Market Summary 21 September 2023

Bitcoin Price: US$ 27,215.00 (-0.31%)
Ethereum Price: US$ 1,622.26 (-1.27%)  


Bitcoin experienced a decline to $26.9K following hawkish comments by Federal Reserve Chair Jerome Powell, who hinted at the possibility of further interest rate hikes if the economy outperforms expectations. The Federal Reserve left its benchmark interest rate range steady at 5.25% to 5.50% and projected higher rates for next year, indicating a shift towards a more restrictive monetary policy. Meanwhile, Maker (MKR), the governance token of DeFi lender MakerDAO, neared a 16-month high, trading at $1,320, boosted by increasing protocol profits and large investor accumulation. MakerDAO has been investing its reserves in U.S. Treasuries, driving revenue and profit growth, with two significant investors accumulating MKR this month. In addition, GammaSwap launched on the Arbitrum network, offering liquidity providers protection against impermanent loss, which could boost liquidity on the blockchain.

The remarkable calmness in the $25 trillion U.S. Treasury market, as reflected by the declining MOVE index, an indicator of Treasury note volatility, has implications for cryptocurrencies and risk assets. The subdued volatility supports risk assets like cryptocurrencies, including Bitcoin, as it stabilises leveraged financing and encourages liquidity in the global market. Reduced bond market volatility fosters higher borrowing and gearing of portfolios, benefiting assets such as Bitcoin and stocks. The recent decline in the MOVE index has corresponded with Bitcoin’s recovery from its low below $25,000, but it could surge if unexpected shocks lead to the unwinding of leveraged short positions in Treasury futures. Additionally, the UK’s Online Safety Bill, which applies to the metaverse, has been approved, further extending regulatory oversight to virtual spaces, including the evolving metaverse. Lastly, an unearthed video from 1998 features early Bitcoin pioneer Hal Finney discussing zero-knowledge (ZK) proofs, a concept that has gained significant relevance in today’s cryptocurrency industry for its use in scaling solutions and privacy-enhancing technologies. Finney’s contributions to the crypto field, including his close association with Satoshi Nakamoto, have solidified his status as a pioneer in the industry.

The Australian Securities and Investments Commission (ASIC) has initiated civil proceedings against Bit Trade, the operator of the Kraken cryptocurrency exchange in Australia, accusing it of failing to comply with design and distribution obligations for one of its trading products. The regulator alleges that Bit Trade offered its margin trading product to Australian customers without making a target market determination, resulting in approximately $8.35 million in losses to at least 1,160 Australian customers. Meanwhile, Hong Kong-based crypto exchange JPEX, which has faced legal troubles and customer complaints, has applied for deregistration in Australia. In other news, PayPal has rolled out its PYUSD stablecoin to Venmo users, and the PYUSD stablecoin is now available on various cryptocurrency exchanges.

Grayscale, a prominent digital currency investment company, has filed with the Securities and Exchange Commission (SEC) for a new Ether futures exchange-traded fund (ETF). Grayscale’s proposal seeks to list and trade shares of the Grayscale Ethereum Futures Trust ETF on the New York Stock Exchange Arca. The ETF aims to maintain holdings in Ether futures contracts with a constant expiration profile and will not require an Ether custodian. Grayscale Advisors, the sponsor of the ETF, is in the process of becoming registered as a commodity pool operator with the Commodity Futures Trading Commission. This move follows other firms filing for Ether futures ETFs, with optimism surrounding the Ethereum market after reports that the SEC would allow such ETFs. Additionally, Grayscale has officially abandoned all rights to post-Merge proof-of-work Ethereum tokens (ETHPoW) after determining that these tokens lacked meaningful liquidity and lacked support from the products’ custodian. Grayscale’s decision comes over a year after the Ethereum Merge transitioned the blockchain from proof-of-work to proof-of-stake.




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