Friday, 7 October 2022

Market Summary

Market Summary 7 October 2022

Bitcoin Price: US$19,960.67 (-0.98%)
Ethereum Price: US$ 1,352.06 (-0.01%) 


The Rise of Renga NFTs

  • Top executives at bankrupt crypto lender Celsius withdrew between $17-23m in crypto during the months before the company suspended withdrawals.
  • The Bank of Russia and the Ministry of Finance agree to approve the use of crypto in international trade. Elsewhere, Russia blocks access to crypto exchange OKX.
  • On the other hand, the EU tightens sanctions on Russia with a ban on crypto payments from Russia and a ban on providing crypto services to Russians.
  • MakerDAO allocates $500m for investment in US treasury bills (80%) and investment-grade corporate bonds (20%).
  • Greyscale partners with Foundry to launch a fund that will purchase distressed bitcoin mining assets.
  • In the last 30 days, floor prices for Renga NFTs have increased more than 900% from a low of 0.26 ETH to a high of 2.7 ETH. Currently, the floor price sits at 2.08 ETH.
  • Renga Black Box NFTs, which holders can burn to mint a Renga NFT, have also charted a similar trajectory. In the last 30 days, floor prices for the Black Box NFTs have also increased more than 900% from a low of 0.47 ETH to a high of 4.72 ETH. Currently, the floor price sits at 4.18 ETH.
  • Renga is a PFP collection created by the artist DirtyRobot. The artist has previous NFT experience and has sold several NFTs for double-digit ETH prices. Renga Black Box NFTs were airdropped to holders of his first NFT collection.
  • In the last 7 days, the combined volume of Renga and Black Box NFTs on OpeaSea has been greater than the combined volume of CryptoPunks, BAYC, and Art Blocks.
  • Renga has cultivated a community that genuinely enjoys the artwork. The collection has received a large amount of attention from various Twitter influencers as well.
  • The collection does not have a clear roadmap, and its future will be largely decided by the team and the community’s preferences.


EU’s Russian Crypto Ban Confirmed as Bloc Tightens Sanctions

  • The European Union has confirmed a sweeping ban on providing crypto services to Russians as it tightens sanctions in the wake of what it calls “sham” secession votes in four Ukrainian regions. The news was first reported by CoinDesk last week.
  • The bloc introduced an eighth set of economic and political measures against Russia after the invasion of Ukraine in February, tightening a previous rule that limited crypto payments to European wallets to 10,000 euros ($9,900).
  • “The existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet,” the European Commission said in a statement on Thursday, after proposals it made last week were signed off by EU governments.


Grayscale’s New Venture Aims to Capture Bear Market Opportunities in Bitcoin Mining

  • Crypto asset management firm Grayscale is forming an investment vehicle that will help investors take advantage of the low prices of bitcoin mining infrastructures amid a continued crypto winter.
  • The private co-investment vehicle, Grayscale Digital Infrastructure Opportunities (GDIO), will partner with digital asset mining and staking infrastructure firm Foundry for its day-to-day operations, according to a statement. Grayscale and Foundry are both subsidiaries of Digital Currency Group (DCG), which is the parent company of CoinDesk.
  • The crypto winter has clearly been rough for the miners, who have seen profit margins shrink as bitcoin prices plunged more than 50% this year while power prices soared and capital dried up. This has directly hurt prices for infrastructures required for bitcoin mining, including the highly specialized computers, which were in high demand during last year’s bull run, driving up prices to all-time-highs, according to an index maintained by Luxor Technologies. Prices for the mining machines have since crashed near their 2020 lows this year and in some instances, even the largest manufacturers, such as Bitmain, are offering large discounts to sell their mining rigs.


Bitcoin Mining Is About to Get Tougher With Difficulty Primed for Another Sharp Rise

  • Bitcoin miners are about to face another tough challenge in an already depressed market as the difficulty of mining a bitcoin (BTC) block is set to see another large increase early next week, weighing further on profit margins.
  • The metric adjusts automatically to keep the time required to mine a bitcoin block to roughly around 10 minutes, depending on the network hashrate, that is, amount of computing power committed to mine and secure the Bitcoin blockchain. The higher the hashrate, the higher the difficulty, which lowers miners’ profitability.
  • The network’s hashrate is currently at all-time high, hovering just over 250 exahash per second (EH/s), according to data from analytics firm Glassnode. More efficient mining machines and cooler weather are among the reasons for this sharp increase in hashrate, said Ethan Vera, chief operating officer at mining services firm Luxor Technologies.
  • “A combination of high-efficiency machines such as the S19XP getting delivered, cooler temperatures heading out of summer, lower power costs in the U.S. and old ETH-mining power capacity being reallocated has led to a sharp increase in network hashrate,” he told CoinDesk.


Lido’s stETH Token Expands to Layer 2 Networks Optimism and Arbitrum

  • Lido, the leading liquid staking system on Ethereum, said Thursday it will support a wrapped version of its popular staked ether (stETH) token to Ethereum layer 2 networks Arbitrum and Optimism.
  • Each stETH token represents an ether (ETH) token staked with Ethereum’s network, meaning it helps to secure the network in exchange for rewards. stETH, which has a market cap near $5 billion, trades around the price of ETH and has become an extremely popular asset in Ethereum’s budding decentralized finance (DeFi) scene.
  • Arbitrum and Optimism allow users to transact in the Ethereum ecosystem without falling prey to the network’s historically high fees and slow speeds. These so-called optimistic rollups process transactions on networks separate from Ethereum’s congested main chain, bundle those transactions up and pass them back to Ethereum where they are added to its ledger.


MakerDAO to Invest $500 Million in US Government Bonds

  • MakerDAO, the world’s largest decentralized finance (DeFi) lending protocol, announced on Thursday a plan to invest $500 million in short-term US treasury bonds and investment-grade corporate bonds. 
  • The plan—which was approved by MakerDAO members in a community-wide, months-long vote—will see $400 million of the organization’s asset reserves put towards US treasury bonds, and $100 million invested in corporate bonds.
  • A pilot transaction of $1 million has already been completed, with the rest to soon follow. 


Bitcoin’s Correlation With Gold Hits Highest Level in Over a Year

  • Bitcoin’s reduced tendency to move in tandem with U.S. stocks has refocused analysts on a correlation that’s suddenly strengthening: the cryptocurrency’s connection to gold.
  • The two assets’ merging paths follow a recent trend, branching away from stock prices, which have sunk dramatically this year, and buttressing arguments by bitcoin evangelists that so-called digital gold offers the same safe-haven advantages as the real stuff. But the correlation remains only mildly strong, leaving open the question whether BTC and gold will continue to travel in sync.
  • “We could be seeing a slight decoupling of crypto and equity markets, which is reflected in BTC’s rising correlation with gold,” said Clara Medalie, head of research at crypto research group Kaiko.


Binance Smart Chain Halts After ‘Potential Exploit’ Drains Estimated $100M in Crypto

  • Binance Smart Chain hit the brakes Thursday after the blockchain with ties to the world’s largest crypto exchange suffered what it called a “potential exploit” that on-chain evidence suggested could have targeted hundreds of millions of dollars in crypto.
  • “Due to irregular activity we’re temporarily pausing BSC,” BNB Chain tweeted from its official account, later confirming that the activity was a “potential exploit,” that it characterized as contained.
  • Initial token movements suggested that up to two million BSC tokens were targeted by an attacker late Thursday, but the true losses may be much lower. BNB Chain estimated $100 to $110 million in assets were moved off chain but said in a tweet that $7 million was already frozen.

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