Friday, 25 August 2023

Market Summary

Market Summary 25 August 2023

Bitcoin Price: US$ 26,146.65 (+0.01%)
Ethereum Price:
US$ 1,661.16 (-1.10%)  


During a recent market downturn, prominent holders of Ethereum (ETH), colloquially known as “whales,” strategically amassed $94 million worth of ETH in the span of a week, as per data from Lookonchain. These crypto behemoths, renowned for their influence on market dynamics, made these acquisitions while ETH experienced its lowest price point since June, plummeting to $1,547 due to cascading liquidations. Concurrently, large Bitcoin investors also capitalised on reduced prices, adding $309 million in BTC to their portfolios since August 17, according to crypto analytics firm Santiment. In the context of growing interest in cryptocurrency exchange-traded funds (ETFs), ARK Invest and 21Shares have jointly submitted applications for two Ethereum futures ETFs, “ARK 21Shares Active Ethereum Futures ETF” (ARKZ) and the “ARK 21Shares Active Bitcoin Ethereum Strategy ETF” (ARKY), with ARKZ aiming to allocate at least 25% of its assets to cash-settled Ethereum futures contracts. This development follows the SEC’s increased scrutiny of ETF applications and a recent push for surveillance sharing agreements among applicants. Additionally, Num Finance, headquartered in Argentina, has launched a stablecoin named nCOP, pegged to the Colombian peso and built on the Polygon network. Designed with a focus on the remittance market, nCOP incorporates the “Num yield feature,” offering rewards in nCOP to users. Colombia, a significant recipient of remittances in Latin America, stands as a promising market for this tokenisation of remittances. Num Finance has previously introduced stablecoins tied to the Argentinian peso and the Peruvian sol and is contemplating similar offerings linked to the Brazilian real and Mexican peso. Moreover, the Colombian central bank is exploring the issuance of a central bank digital currency (CBDC), potentially enhancing remittance mechanisms while instituting safeguards to protect the local financial system.

In the second quarter of 2023, multichain wallet provider Exodus reported a revenue of $12.4 million, with a slight 4% year-over-year decrease, while achieving a net income of $1.9 million. The primary revenue driver was its exchange aggregation business, contributing $11.6 million, with fiat onboarding revenue surging 220% from 2022 to $561,000. Despite a 6% decrease in monthly active users to 772,839, the company’s financial position was fortified through cost reductions of 6% year-over-year, totaling $7.1 million, attributed to workforce optimisation and reduced cloud infrastructure spending. Notably, administrative and marketing allocations were slashed by 65%, resulting in expenses of $4 million. As of June 30, Exodus held $55 million in cash reserves and $46.2 million in Bitcoin, positioning itself as one of the few public entities with a significant Bitcoin treasury holding exceeding 1,000 coins. The company also introduced key enhancements, including collaborations with Robinhood Connect, support for Arbitrum, Optimism, and Matic staking, while exploring opportunities to provide its technology to other enterprises. In parallel developments, ARK Invest and Glassnode proposed a novel Bitcoin economic analytics framework called Cointime Economics, introducing the “coinblock” metric to assess the state of the Bitcoin network, aiming to offer improved valuation metrics and analytical tools for measuring Bitcoin activity. Additionally, Meta AI unveiled “Code Llama,” a community-licensed AI coding tool, trained for generating and discussing computer code, catering to a wide range of coding needs, and available in varying parameter sizes to operate in diverse computing environments, providing a potential solution for businesses and individuals in the AI-driven coding domain.

Developers of the Base and Optimism networks have announced a revenue-sharing and governance-sharing agreement, emphasising decentralised control mechanisms. Smart contracts on Base can only be upgraded through a two-of-two multisignature wallet account controlled jointly by Base and the Optimism team, preventing centralisation. Base will pay either 2.5% of its revenue or 15% of its profits to the Optimism Collective, receiving up to approximately 118 million OP Tokens for a voice in protocol governance. Coinbase, the parent company of Base, pledged neutrality, promising not to control user assets on Base or misuse any non-public information, addressing concerns of centralisation. In the crypto venture capital sector, inflows dropped by 10.26% in July, reaching $700 million due to macroeconomic factors impacting investment decisions. However, there is optimism about the potential approval of spot Bitcoin exchange-traded funds in the U.S., which could revitalise the industry. Web3 and infrastructure projects attracted notable investments, while Balancer warned of a $2.8 million vulnerability, urging affected users to withdraw their funds.

The Cayman Islands, renowned for its picturesque beaches, is embarking on a novel venture to attract Bitcoin enthusiasts as potential residents. Bitcoin banking firm Ledn, authorised as a virtual assets service provider (VASP) by the Cayman Islands Monetary Authority, is introducing a groundbreaking opportunity for Bitcoin holders to employ their cryptocurrency as collateral for real estate investments in the region. This innovative approach opens a path for individuals to secure permanent residency by investing over $2.4 million in Cayman Islands real estate. In partnership with local real estate agency Parallel, Ledn is spearheading this pioneering initiative, endorsing and facilitating cryptocurrency-backed loans for property purchases, allowing investors to circumvent the need to liquidate their digital assets. In other news, Binance’s recent announcement to modify its zero-fee Bitcoin trading program starting September 7 has raised concerns of a potential market downturn, akin to the significant trading volume decline witnessed when Binance ceased zero-fee trading in March. The changes will affect BTC/TUSD spot and margin trading pairs, with taker fees being introduced based on user VIP levels. Although maker fees will remain absent, this adjustment might inadvertently trigger selloffs. Furthermore, this shift could indicate a waning enthusiasm for the TrueUSD (TUSD) stablecoin. Binance will still offer zero fees for BTC trading within the First Digital USD (FDUSD) spot and margin trading pair, albeit less frequently traded. Additionally, Binance’s decision to halt crypto debit card services in Latin America and the Middle East has raised questions, with some social media responses removed, although the exchange asserts it will impact only a small portion of users.




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