Thursday, 4 November 2021

Market Summary

Market Summary 4 November 2021

NFTs Find New Buyers, Chains, & Niches

  • NFT daily sales volumes have been on a downtrend since early September. Despite that, the number of unique NFT buyers has slowly trended upward, with a recent spike at the end of October.
  • This reduction in volume is in part due to the cool-off we’ve seen across even the biggest NFT collections on secondary markets, some of which have experienced substantial decreases in sales volumes and trading activity over the past couple of months.
  • Another explanation could be lower average ticket prices as less crypto-native buyers enter the fray. With NFT NYC happening right now, the hype around this growing sector has become a mainstay on Twitter, attracting a host of celebrities and even billboard flexes on Times Square.
  • Since late May, ETH and Ronin NFTs have dwarfed other chains in terms of NFT sales volume (note: the above chart is in log scale, so they’re well ahead of the rest).
  • NFTs such as Cryptopunks and Art Blocks were instrumental to the ETH-led “NFT season,” which seems to have peaked in late August/early September. In addition, Axie Infinity’s sidechain Ronin saw a notable explosion in Q2/Q3 following its release.
  • WAX NFTs seem to be worth paying attention to as they have seen sales volumes pick up significantly since the beginning of October. Some games utilizing WAX NFTs have been seeing notable player growth recently such as Farmers World, which explains the sharp increase in sales volumes.
  • OpenSea and SuperRare make up the bulk of daily average NFT sale prices in the $30k-60k range. However, SuperRare stands out when it comes to big-ticket sales.
  • That said, OpenSea still boasts the bulk of NFT market share, representing ~97.8% of total trading volumes among NFT marketplaces (note: this calculation excludes marketplaces like Ronin so it’s not exhaustive).
  • At this point of writing, SHIB and DOGE are contesting for the spot of top dog (coin); SHIB managed to surpass the market cap of its OG peer in the last few days of October. However, nothing is set in stone as the infamous wallet owner that turned $8K into $5B from SHIB has been actively moving funds, which can cause immense selling pressure once distribution begins.
  • Love them or hate them, meme-coins — and dog-coins, in particular — have played an undeniable role in driving attention to crypto markets. With market caps in the tens of billions of dollars, they are nothing to scoff (woof) at, though their utility beyond pure speculation is lackluster to say the least.


SEC seeks comments on Grayscale’s GBTC ETF proposal

  • The Securities and Exchange Commission (SEC) is taking a closer look at Grayscale’s application to convert its Grayscale Bitcoin Fund (GBTC) into a spot bitcoin exchange-traded fund (ETF).
  • NYSE Arca filed a 19b-4 to list the converted GBTC ETF on October 19, starting the clock for the SEC to come to a decision on the product. A decision from the SEC could be in as early as December 24. However, the agency has a history of extensions on bitcoin spot product applications.


Congressmen Emmer & Soto to SEC Chair Gensler: We want BTC Spot ETFs

  • Congressmen Todd Emmer and Darren Soto sent a bipartisan letter to Securities & Exchange Commission Chair Gary Gensler on Wednesday, strongly questioning why the agency has denied approval for the creation of a Bitcoin spot ETF while allowing Bitcoin Futures ETFs to begin trading.
  • In a spot ETF, the fund holds the actual commodity (in this case bitcoin) whereas in a futures ETF fund holds contracts to buy and sell the commodity at a future date at a specified price.
  • In a press release announcing the letter, Minnesota Republican Emmer said: “The SEC’s approach to cryptocurrency regulation has been unacceptable. […] If the SEC cannot outline the perceived material difference in risk profiles, then they should allow ETFs based on spot Bitcoin to be traded.”


KuCoin launches virtual office in the Bloktopia metaverse

  • Crypto exchange KuCoin has announced it will be opening a virtual office inside the skyscraper from the decentralized metaverse Bloktopia.
  • In a Nov. 2 announcement, KuCoin said it would be joining the metaverse by launching an office inside Bloktopia’s platform, designed as a skyscraper. The virtual building has 21 different levels in recognition of the total supply of 21 million Bitcoin (BTC) and is expected to house other content creators including Polygon and Avalanche.
  • According to the exchange, the meta office will allow users to decorate cyberpunks, interact with virtual furnishings, as well as chat and speak to each other in the virtual environment. KuCoin has seemingly adopted a metaverse-friendly business model, offering support for Bloktopia’s native token BLOK as well as the utility token for Dreams Quest (DREAMS), a blockchain-based gaming platform aiming for a metaverse-based economy.


Goldman Sachs boosts tokenization efforts with new partnership

  • American investment bank Goldman Sachs, a backer of major cryptocurrency firm Circle, is strengthening its tokenization efforts by partnering with the blockchain startup Digital Asset.
  • The partnership enables Goldman Sachs to use Daml, a development framework created by Digital Asset to allow financial institutions to build and execute agreements on blockchain, the company announced Wednesday.
  • One of core Digital Asset’s technologies, Daml will help Goldman Sachs develop its own “end-to-end tokenized asset infrastructure” that would support multiple asset classes on private and public blockchains, the announcement reads.


Stablecoins report: SEC won’t lead regulation, Congress urged to act

  • On Nov. 1, the United States President’s Working Group on Financial Markets (PWG) released its long-anticipated report and policy recommendations on stablecoins. The document’s main focus is on prudential risks that “payment stablecoins” — or those meant to maintain a stable value against a reference fiat currency — could pose to users and financial stability.
  • The PWG’s key message is that while stablecoin use is currently largely limited to facilitating digital asset transactions, under certain conditions the asset class could achieve much wider retail adoption, necessitating a comprehensive federal prudential framework to be enacted by Congress soon.


NYSE Arca files with SEC to list Bitwise Bitcoin ETP Trust

  • NYSE Arca, a subsidiary of the New York Stock Exchange (NYSE) Group, wants to list and operate a trust based on Bitcoin (BTC) exchange-traded products (ETP).
  • In a rule-change proposal with the United States Securities and Exchange Commission, NYSE Arca proposed to list shares of the Bitwise Bitcoin ETP Trust.
  • The proposal clarifies that each share of the trust will be represented by fixed “units of undivided beneficial ownership,” allowing the shares on the stock exchange to reciprocate their value in accordance with Bitcoin’s market price.

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