Thursday, 25 April 2024

Market Summary

Market Summary 25 April 2024

Bitcoin Price: US$ 64,332.51 (-3.25%) 
Ethereum Price: US$ 3,140.80 (-2.44%) 

Bitcoin miners are currently grappling with squeezed profits due to a high network hash rate and lower revenues, leading to the average revenue per performed hash dropping to its lowest since October 2023. However, the total network hash rate has remained stable despite the reduction in rewards from the Bitcoin halving event, indicating that Bitcoin mining is still profitable at current prices. In a significant development, Hong Kong’s financial regulator has approved the first wave of spot Bitcoin and Ether exchange-traded funds (ETFs) to commence trading on April 30. These ETFs, inclusive of offerings from China Asset Management, are set to provide a safer and more convenient avenue for both retail and institutional investors to invest in the underlying digital assets within a regulated framework. The introduction of the first ETFs in Hong Kong could potentially trigger a fee war, as issuers may race to offer the lowest fees to customers. It’s noteworthy that the structures of Hong Kong’s spot Bitcoin and Ether ETFs, slated for an April 30 launch, will be remarkably different from their United States counterparts. 

Chainlink’s Cross-Chain Interoperability Protocol (CCIP) has recently entered general availability, with the goal of fostering increased cross-chain connectivity. This allows developers to utilise CCIP for cross-chain token transfers and smart contract messaging across various blockchain networks. Despite the inherent vulnerabilities of cross-chain bridges, Chainlink, a leading firm in cross-chain interoperability, has launched Transporter. This cross-chain messaging app, underpinned by CCIP, is available on nine blockchains and aims to assist financial institutions in unlocking the $500 trillion opportunity in tokenised assets. In parallel, a new stablecoin-focused bill, the Lummis-Gillibrand Payment Stablecoin Act, has been introduced to the U.S. Senate. This could potentially encourage U.S. banks to enter the stablecoin market, posing challenges for large non-U.S entities that issue stablecoins, such as Tether. The act proposes a $10 billion issuance limit on non-bank stablecoin firms and mandates stablecoin issuers to hold one-to-one cash or cash-equivalent reserves. This could provide banks with a competitive edge, reduce demand for Tether, and boost U.S.-issued stablecoins. Meanwhile, in Canada, nearly 40% of institutional investors reported having direct or indirect exposure to crypto assets in 2023, a significant increase from 31% in 2021, according to a survey conducted by accounting firm KPMG. The survey revealed that one-third of these institutional investors have allocated 10% or more of their portfolios to crypto assets. Furthermore, half of the institutional investors surveyed reported having crypto asset exposure through Canadian ETFs, close-ended trusts, or other regulated products. 

Australia has recently achieved a significant milestone in the crypto space, reaching 1,000 active crypto-fiat machines. This accomplishment positions it as the third country, following the U.S. and Canada, to reach this landmark, and it is now well-poised to surpass Europe, which currently holds 4.3% of all active Bitcoin ATMs. Despite its historical inactivity in the crypto ATM market, Australia has seen an exponential increase in adoption since the end of 2022, largely due to the participation of private firms. In another development, dozens of crypto whale wallets, including one associated with Ethereum co-founder Vitalik Buterin, have substantial assets, ranging from six to seven figures, stuck on multiple decentralised finance (DeFi) bridge contracts. Some of these assets have remained unclaimed for over two years. Arkham Intelligence, a crypto analytics firm, has reached out to the whales linked to these stuck and forgotten funds, urging them to retrieve their assets. This serves as a reminder to the community about the potential issues that can arise due to the nature of cross-chain bridges. Meanwhile, Renzo Protocol’s restaked Ether token (EZETH) experienced a price depeg, likely triggered by a wider sell-off following the conclusion of Renzo Protocol’s season 1 airdrop. This led to mass liquidations on leveraged protocols. Despite this setback, Renzo Protocol has managed to attract increased interest after its incoming token (REZ) was added to the Binance launch pool on the same day the protocol announced its incoming airdrop. In the wake of Renzo’s depegging incident, crypto trader czsamsunsb.eth managed to make a profit of 121.65 ETH, worth over $396,000, in just two hours, according to on-chain intelligence firm Lookonchain. This highlights the volatile and dynamic nature of the crypto market, where fortunes can be made or lost in a matter of hours. 


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