Friday, 24 September 2021

Market Summary

Market Summary 24 September 2021

Relief Rally, L1s Battle, L2s Gain Steam

  • The wider crypto market seems to be experiencing some relief on the back of receding volatility expectations following the market sell-off earlier this week. Meanwhile, Chinese authorities appear to be preparing for a worst case scenario in which Evergrande collapses. With this in mind, the relief rally across global markets could be partly driven by a perceived higher probability of government intervention to manage and mitigate its potential spillover effects.
  • Over the past 30 days, ETH has struggled to keep up with other L1 tokens. A likely cause for this has been the flurry of announcements regarding new incentive programs on these L1s to attract liquidity and users. Solana, Terra, Avalanche and Fantom have all seen a surge in TVL over the past month, while Polygon seems to have plateaued, at least momentarily.
  • Avalanche’s TVL growth in particular has been steady, even amidst the recent market weakness. At the application level, Trader Joe has seen the largest inflows, with its TVL having grown ~57% over the last 7 days.
  • L2s have continued to gain steam, with them now comprising ~1% of total daily gas spend on Ethereum. Relative to the beginning of the summer, Arbitrum and Optimism have seen their share of total L2 gas consumption surge. When combined, both now account for ~50% of the total. Importantly, we should note, that this isn’t necessarily an indicator of greater success.
  • An optimal L2 should offer high throughput off-chain and an efficient / small footprint on-chain. For example, dYdX has undergone incredible growth recently in terms of trading activity yet still only accounts for ~6% of total L2 gas consumption. This is due to the fact that Starkware’s proofs benefit from economies of scale, becoming more gas efficient as they batch more transactions.

 

Bears aim to pin Bitcoin price below $46K leading into Friday’s $3B BTC options expiry

  • Bears aim to pin Bitcoin price below $46K leading into Friday’s $3B BTC options expiry
  • This week’s combination of bearish factors was enough to bring ‘s (BTC) price down to its lowest levels in 46 days, and this nearly obliterated 86% of the $2 billion September call (buy) options that expire on Sept. 24.
  • There’s still room for some surprises, especially considering the deadline is 8:00 UTC on Sept. 24. However, the incentives for the bears seem small because the sub-$40,000 test on Sept. 21 caused less than $250 million in futures contracts liquidations.

 

Twitter rolls out bitcoin tipping for iOS users via Lightning, looks to NFTs for the future

  • After rumors swirled earlier this month, social media platform Twitter has officially rolled out its tips function worldwide — with a bitcoin integration included via the Lightning network.
  • Clicking on the feature enables users to tip creators through third-party services like CashApp, which is operated by Square, a payments company founded by Jack Dorsey. But in an effort to make monetization accessible in places that may not have easy access to fiat, users can also tip in bitcoin.

 

Ethereum balance on crypto exchanges hits new lows as ETH price retakes $3K

  • The whole quantity of Ether (ETH) held by all of the crypto exchanges fell to its lowest ranges, simply as its costs rose again above $3,000 per token on Sept. 23.
  • Data collected by CryptoQuant, a blockchain analytics platform, confirmed that exchanges’ web Ethereum token reserves dropped to 18.533 million ETH, in comparison with 23.92 million ETH a year in the past. Meanwhile, the price to buy one Ether rose from nearly $349 to as excessive as $3,078, showcasing an inverse correlation between ETH reserves on exchanges and costs. 

 

Canadian regulators warn against ‘gambling style’ advertising and marketing in guidelines for crypto companies

  • The Canadian Securities Administrators, or CSA, and Investment Industry Regulatory Organization of Canada, or IIROC, have issued guidelines for crypto trading platforms operating in the country to avoid “advertising and marketing materials that could mislead investors.”
  • In a Thursday publication, the Canadian regulators’ guidelines warn crypto companies not to advertise “gambling style” promotions in which an investor is encouraged to sign up within a given time limit to take advantage of a reward or opportunity. Though the guidance was seemingly vague on restrictions concerning social media posts, the regulators recommended trading platforms designate an individual to review and approve communications and set up a system to ensure all messages are in compliance with regulatory guidelines.

 

Coinbase seeks new exec to debate with policymakers

  • Coinbase (NASDAQ:COIN) is looking for a new hire to manage the exchange’s sour relationship with policymakers.
  • The United States-based crypto exchange aims to swell its legal and compliance team ranks. The company is looking for more than 350 new hires, with 24 job openings within the legal and compliance team.

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