Wednesday, 27 October 2021

Market Summary

Market Summary 27 October 2021

Extreme Greed Returns as Bitcoin Dominance Falls

  • The discount on Grayscale’s flagship Bitcoin-based product (GBTC) dropped to ~20% on October 18th due to the anticipation of BITOs launch on the 19th; DCG (Grayscale’s parent company) fired back two quick shots in response to BITOs release.
  • On October 19th, Grayscale Investment LLC and the NYSE filed to convert GBTC into an ETF; Grayscale’s filing starts a window for the SEC to reject or delay the GBTC conversion application. Grayscale CEO Michael Sonnenshein has stated the firm is “100% committed” to turning GBTC into an ETF pending regulator approval.
  • On October 20th, DCG announced the purchase of up to $1 billion worth of GBTC increasing DCG’s prior authorization ($750m) by $250m. Barry Silbert, founder and CEO of DCG, has also had a few interesting takes on BITO over last week via his Twitter account.
  • After rising for a month with ETF anticipation, we’ve seen a slight pullback as the broader crypto market rallied. ETHBTC has surged 12% this week alone, alongside notably strong performance from other L1s (SOL, AVAX, etc.).
  • A word of caution (especially when deploying leverage), the Crypto Fear and Greed Index is back to highs we haven’t seen since early March, officially marking “Extreme Greed” levels. However, this doesn’t mean a deep pullback is guaranteed, especially since momentum is a key input into the index’s calculation. The adage “the market can remain irrational longer than you (or bears) can remain solvent” is especially true in crypto.
  • ETH had its highest daily close ever yesterday, closing at $4,220 on Coinbase, but its latest price rally coincided with new record highs in futures open interest. Binance and FTX still lead the way as the largest two exchanges, currently making up ~41% of ETH open interest.
  • In a previous report, we covered how major L1s are relentless and have been outperforming almost every other category since the June 2021 crypto bottom. This week, this has trickled down to smaller L1 tokens such as SCRT (+98%), ONE (+60%), and FTM (+47%).
  • Despite being outperformed by SCRT and ONE in the last 7 days, FTM has had a monster October so far, almost tripling its token value from $1.20 to $3.20 since the monthly open.


Adobe partners with OpenSea and other NFT marketplaces to display content credentials

  • Adobe is introducing a Photoshop feature that allows users to prepare images as non-fungible tokens (NFTs), which will include content credentials that marketplaces like OpenSea can display on their websites for each asset. 
  • Adobe chief product officer Scott Belsky revealed the so-called “prepare as NFT” option during a conversation with The Verge’s Nilay Patel, via the Decoder podcast. The tool will allow people to see attribution for the creator of the NFT, in addition to who minted it, Belsky told Patel. Adobe will use an open-source method of cryptographically signing the image with the creator’s identity, he added.


Ethereum Supply on Pace to Shrink After ETH 2.0 Upgrade

  • There are currently over 118 million ETH in circulation. And even though there’s no supply cap on the cryptocurrency, don’t expect that number to get too much bigger.
  • According to simulations from Ethereum tracker Ultrasound Money, after the transition to proof of stake, the supply of ETH is set to decline 2% annually. If current rates hold, the blockchain will start burning more Ethereum than it produces with each new block. 


Tesla Confirms It ‘May in the Future’ Resume Accepting Bitcoin: SEC Filing

  • Tesla may start accepting Bitcoin again as payment, the company again confirmed yesterday.
  • The electric car company said yesterday in an SEC filing related to the company’s recent earnings report that it “may in the future restart the practice of transacting in cryptocurrencies (‘digital assets’) for our products and services.”


First tokenized lawsuit fund goes live on Republic, will distribute on Avalanche

  • A law firm and a major investment platform are selling tokenized stake in a California suit. 
  • The “initial litigation offering,” or ILO takes its inspiration from initial coin offerings, but instead opens up retail investment in litigation finance, a primarily private field that some expect to reach $20 billion in revenue in a matter of years. 
  • Law firm Roche Freedman LLP and investment platform Republic are behind the new initiative, which they say will help the public access litigation finance — a traditionally private area of investment.


NEAR Integrates with The Graph For Better Web3 Support

  • NEAR is thrilled to announce its beta integration with The Graph, the indexing and query layer for the decentralized web.
  • The NEAR integration enables developers to build subgraphs on the NEAR network using The Graph, allowing web3 infrastructure to support even more dapps.


DeFi Token Ampleforth Launches on Avalanche

  • Ampleforth is launching its algorithmic unit of account on the Ethereum competitor Avalanche.
  • “With the changing regulatory landscape and uncertainty around what the verdict around stablecoins will be, it’s important for DeFi to have a financial building block that’s decentralized, uncensorable and have some aspect of price predictability or stability,” said Evan Kuo, CEO of Fragments, Inc., the development company behind the Ampleforth Protocol. 

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