Monday, 30 October 2023

Market Summary

Market Summary 30 October 2023

Bitcoin Price: US$34,525.89 (+1.31%)
Ethereum Price: US$ 1,795.14 (+1.07%)  


Gemini has filed a lawsuit against Genesis Global, its former partner, seeking control of over 60 million shares of the Grayscale Bitcoin Trust (GBTC) that were pledged as collateral. Gemini claims that taking control of these shares would secure the claims of every Earn customer affected by Genesis’s decision to freeze withdrawals. Genesis filed for bankruptcy earlier this year. This lawsuit comes in the wake of the New York Attorney General suing both Gemini and Genesis, alleging fraud of over $1 billion. Both Gemini and Genesis dispute accusations from the SEC that Earn was an unregistered security. 

Asset manager VanEck has filed an amended application for a spot Bitcoin exchange-traded fund (ETF) with the U.S. SEC, highlighting that a seed capital investor purchased Seed Creation Baskets, with Bitcoin prices determined by MarketVector Bitcoin Benchmark Rate. This approach to fund seeding differs from other spot Bitcoin ETF proposals that use cash. Spot Bitcoin ETFs directly invest in Bitcoin, making them an attractive option for investors seeking Bitcoin exposure. Several asset managers, including VanEck and Bitwise, have amended their ETF applications, indicating progress in negotiations with regulators. 

In Brazil, the adoption of Tether (USDT) has surged, accounting for 80% of all cryptocurrency transactions in the country, while Bitcoin transactions made up the remaining 20%. The data, sourced from Brazil’s revenue service agency, shows that USDT transactions amounted to $271 billion Brazilian reais ($55 billion), nearly double the volume of Bitcoin transactions, which were $151 billion reais ($30 billion). The adoption of stablecoins has increased since 2021, with USDT surpassing Bitcoin’s volume for the first time in July 2022. Brazil’s revenue agency has a system for tracking crypto-related activities using AI and network analysis. Additionally, they are targeting crypto investments held by Brazilian citizens overseas, with new tax rules taking effect in January 2024.

Ripple’s CEO, Brad Garlinghouse, has publicly criticised former SEC Chair Jay Clayton for his recent comments on the regulatory approach of the SEC. Garlinghouse took the opportunity to highlight the questionable legal basis of the SEC’s lawsuit against Ripple, emphasising that it was filed without strong legal grounds and subsequently dismissed without prejudice. In other news, exchange-traded funds (ETFs) linked to Bitcoin have experienced a surge in trading volume, primarily driven by expectations of forthcoming regulatory changes in the United States. Notably, Grayscale Bitcoin Trust (GBTC) has seen a notable reduction in its discount relative to the Bitcoin spot price, reflecting growing investor interest. 

Lastly, within the DeFi (decentralised finance) ecosystem, the Uniswap DAO conducted a temperature check on a proposal to allocate $12 million worth of UNI tokens to decentralised exchange Ekubo. This investment would secure a 20% stake in Ekubo’s future governance token, aiming to foster the decentralisation of Uniswap’s protocol development. Despite substantial support for the proposal, it faced criticisms, particularly regarding the valuation and the rapid decision-making process.

The cryptocurrency industry is experiencing a renewed wave of enthusiasm and activity, with companies that remained relatively quiet in 2023 now expressing interest in discussions and sharing market insights amid Bitcoin’s climb past $35,000. However, Binance, a major player in the space, has seen its market share gradually decline over the past year, dropping from 74% in December 2022 to 50% in the current month due to a series of challenges, including executive exits, regulatory scrutiny, and legal issues involving the Commodities Futures Trading Commission and the US Securities and Exchange Commission. This has prompted some trading firms to reduce their activities on the exchange, with Binance’s market share plummeting nearly to zero on October 23, coinciding with a surge in OKX’s market share. In contrast, the broader cryptocurrency market is witnessing a resurgence in trading volumes, reaching levels not seen since spring, driven by anticipation of a spot Bitcoin exchange-traded fund and increased market volatility. Additionally, the interoperability protocol LayerZero has come under criticism for its integration of wstETH, highlighting the need for open bridge standards in the interoperability space. Lastly, in the derivatives market, the Bitcoin put-call options ratio signals bullish sentiment, supported by factors such as an elevated skew for call prices and an increasing basis.




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