Tuesday, 3 October 2023

Market Summary

Market Summary 3 October 2023

Bitcoin Price: US$ 27,494.51 (-1.78%)
Ethereum Price: US$ 1,662.40 (-4.12%)  


Bitcoin ended the U.S. trading day below $28,000 after giving up some gains due to the U.S. 10-year Treasury yield spiking to its highest level in over 16 years, raising concerns about potential market downturns. Ether futures exchange-traded funds (ETFs) had a lacklustre debut, with low trading volumes reported on their first day, with ether trading around $1,670, and the CoinDesk Market Index (CMI) recording a 1.6% increase over 24 hours. The sustainability of the crypto market’s recent rally is questioned, and there are concerns about shifts in demand and historical data suggesting potential downturns. Amid this, the U.S. government faces the possibility of a shutdown, which could impact the legislative agenda related to cryptocurrencies. Additionally, a report highlights that Silvergate Bank underwent a transformation into a crypto-focused institution, while its Federal Reserve examiners failed to demand appropriate risk protections and supervision, ultimately leading to its voluntary wind-down. While ETFs for ether futures were launched, they witnessed low trading volumes on their first day, with a comparison to the impressive debut of the ProShares Bitcoin Strategy ETF (BITO) last year.

Despite the crypto winter and strict crypto asset prohibitions in China, Hong Kong’s over-the-counter (OTC) crypto market remained active, generating $64 billion in volume, while China’s OTC market reached $86.4 billion over the past year. Chainalysis suggests that the presence of significant OTC markets, particularly in Hong Kong, indicates Beijing’s growing tolerance for cryptocurrencies. Hong Kong excels in large institutional crypto transactions, with 46.8% of its annual crypto trades exceeding $10 million, while retail trades under $10,000 constitute only 4% of the city’s volume. In other news, Chainlink has introduced “Data Streams” to reduce network latency, starting with early access on Arbitrum. This product combines low-latency market data with automated execution for faster and user-friendly derivatives products. Additionally, Grayscale Investments has filed for approval with the SEC to convert its Grayscale Ethereum Trust (ETHE) to a spot Ethereum exchange-traded fund (ETF), following a court victory over the SEC in the summer.

Crypto exchange Coinbase has secured a payment institution license from the Monetary Authority of Singapore, permitting it to expand its digital payment token services in the country as part of its growing presence in the region. Meanwhile, a significant portion of the funds stolen in last year’s $600 million attack on FTX, an exchange that filed for bankruptcy, has been on the move, with 15,000 Ether (ETH) being transferred through privacy tools and bridges, potentially landing up at Thorchain and Railgun privacy wallet destinations. In another development, investors have voluntarily dropped a class-action lawsuit against Terraform Labs and co-founder Do Kwon, following allegations of fraud related to the collapse of Terraform Labs, which was a catalyst for a major crypto market downturn, as legal challenges continue to evolve within the crypto industry.

Volatility Shares has cancelled its plan to launch an Ether futures ETF, citing changes in the market and a lack of opportunity at this time, though it remains open to launching one at a later date. The company was initially positioned to be the first firm to offer an ETH futures ETF in the U.S., but several other firms have already begun trading ETH futures ETFs. Meanwhile, the U.S. Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam highlighted the agency’s increased enforcement actions in the crypto space, with 45 of the actions this fiscal year involving digital asset-related misconduct, accounting for over 34% of such actions brought by the commission since 2015. Behnam also discussed the need for up-to-date legislation in light of the evolving crypto landscape. Additionally, Swiss bank UBS has launched a pilot of a tokenised money market fund on Ethereum as part of Project Guardian, an initiative led by Singapore’s central bank, marking a milestone in understanding fund tokenisation and exploring improved market liquidity and access for clients.





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