Wednesday, 7 September 2022

Market Summary

Market Summary 7 September 2022

Bitcoin Price: US$ 18,790.61 (-5.08%)
Ethereum Price: US$ 1,559.01 (-3.63%) 

 

ETH Exchange Outflows Outweigh Inflows In Anticipation of ETH-PoW Airdrop

  • ETH outflows from exchanges outweigh inflows, blockchain gaming continues to attract investors, and Binance aggregates stablecoins under BUSD to concentrate liquidity. Today, we have a notable data excerpt from our recent Delphi Pro report, NFT Game Platforms: Through the Eyes of Founders.
  • Binance will stop supporting USDC, USDP, and TUSD as trade-able assets on the platform. Users can still deposit and withdraw these assets, but they will be aggregated into BUSD while trading.
  • Ethereum successfully completes the Bellatrix upgrade, part one of the two-part process for the upcoming Merge.
  • Poolin, one of the largest Bitcoin mining pools, suspends withdrawals from its wallet service. The CEO cited liquidity issues and assured user assets are safe.
  • STEPN sets up its first physical office in Hong Kong’s government-owned Cyberport.
  • Solana adds support for Move, a programming language based on Rust developed by Meta Platforms.
  • Large amounts of ETH have continued to leave exchange wallets, despite the declining ETH price. Since March 15th, ETH outflows have outweighed inflows, as more than 323k ETH has left exchange wallets.
  • On August 29th, exchanges saw an outflow of over 476k ETH. This has been the third largest outflow of ETH since March. The largest outflow occurred when over 555k ETH was transferred out on July 7th.
  • This can be attributed to the upcoming Merge, which is currently scheduled to occur between September 13th-15th. The Merge is divided into two stages, beginning with a network upgrade called Bellatrix, which was successfully completed today.
  • Later, the Paris upgrade will shift the network from proof-of-work to proof-of-stake. This will occur on September 15th when the Terminal Total Difficulty reaches a value of 58750000000000000000000. Find a countdown for time until the Merge here.
  • Following the Merge, one or more forks that retain proof-of-work on Ethereum may emerge. If a canonical fork emerges, users who hold ETH in non-custodial wallets like Metamask will be airdropped forked ETH-PoW tokens based on their ETH balance just before the Paris upgrade.
  • To collect the most amount of ETH-PoW tokens, users are likely withdrawing ETH balances from centralized exchanges to non-custodial wallets, leading to an increase in the net outflow of ETH from exchanges.
  • Crypto gaming received $3B in private market investments in 2021. This year, crypto games received $1.7B in investments in Q1 and $1.2B in Q2. The investments in these two quarters accounted for 56% and 59% of investment in the entire gaming industry, respectively.

 

Binance Ditched a Bunch of Stablecoins. Even a Newly Banished Issuer Was OK With It

  • While some market participants were initially shocked that the world’s largest crypto exchange by volume ended its support of a slew of stablecoins, others are praising the move – including the issuer of the largest stablecoin that’s getting ousted.
  • Binance announced Monday that USD coin (USDC), Paxos dollar (USDP) and trueUSD (TUSD) will no longer be traded at the exchange, and deposits will automatically be converted to Binance USD (BUSD) – the exchange’s own token – starting in late September.
  • The decision touches a core part of the crypto ecosystem. Traders use stablecoins – cryptocurrencies whose prices are anchored to an asset such as the U.S. dollar – as a bridge between traditional government-issued (fiat) currencies and blockchain-traded digital assets. The combined market capitalization of stablecoins mushroomed to $160 billion from less than $20 billion two years ago.
  • In the last 24 hours, four-fifths of all bitcoin (BTC) and three-fifths of all ether (ETH) traded on exchanges were done against U.S. dollar-denominated stablecoins, according to data compiled by CryptoCompare.

 

Pantera Capital’s Exodus Broader Than Previously Reported: Sources

  • Senior executive departures from Pantera Capital, a major cryptocurrency hedge fund and venture capital investor with $4.7 billion in assets, are wider than previously reported, according to people familiar with the matter.
  • Chief Technical Officer Terence Schofield is leaving after joining the company early this year, the sources said. Also exiting, according to the sources, is John Jonson, head of the capital formation team, a fundraising group within Pantera.
  • They aren’t the only ones to leave recently. Last week, CoinDesk broke the news that Chief Operating Officer Samir Shah, a 12-year JPMorgan Chase veteran, abruptly left Pantera after barely two months on the job. Legal counsel Joe Cisewski left to become chief of staff for Christy Goldsmith Romero, a commissioner at the Commodity Futures Trading Commission, and Brian Flaherty, a finance manager, left in May after just over a year at Pantera, according to his LinkedIn page.

 

Crypto Investment Slowdown Will Continue Rest of 2022, KPMG Predicts

  • Global investments in cryptocurrency companies pulled back to $14.2 billion in the first half of 2022 from a record $32.1 billion last year, a slowdown that’s expected to continue, according to a new report from global audit and consulting firm KPMG.
  • “Despite the crypto space collapsing significantly since midway through Q1 22 due to the unexpected Russia-Ukraine conflict, rising inflation and the challenges experienced by the Terra crypto ecosystem, investment at midyear remained well above all years prior to 2021,” KPMG noted in its report. “This highlights the growing maturity of the space and the breadth of technologies and solutions attracting investment.”
  • The top deals in the first half of the year were venture capital investors putting $550 million in crypto custody firm Fireblocks, $450 million in Ethereum infrastructure builder ConsenSy and $400 million into crypto exchange FTX.
  • In the second half of the year, KPMG expects investors to move away from companies offering coins and non-fungible tokens (NFTs) and toward blockchain infrastructure projects, particularly those that involve the use of blockchain in updating financial technology. The firm sees a growing focus on compliance and transaction traceability-related products and increased corporate interest in stablecoins as a lower-risk path to investing in crypto.

 

Australian Treasury consults public on Bitcoin foreign currency tax exclusion

  • Australia’s ministerial department of Treasury reached out to the public to seek consultation regarding draft legislation that would exclude cryptocurrencies from being taxed as a foreign currency if passed.
  • In a press release, Assistant Treasurer Stephen Jones highlighted the Australian government’s intent to exclude crypto assets from being regarded as a foreign currency for tax purposes. However, the legislation would have no impact on the collection of capital gains taxes on crypto held as investments.
  • The public has been provided with 25 days, from Sept. 6 to Sept. 30, to share their opinion on the proposed legislation.
  • If signed into law, the legislation will see the amendment of the existing definition of digital currency in the Goods and Services Tax (GST) Act — effectively excluding crypto assets from the definition of foreign currency. GST is a broad-based tax levied on goods, services and items sold or consumed in Australia.
  • The Treasury noted that the respondent’s personal information, including name and address, will be made public if not proactively opted out from the same.

 

Glassnode:

Our latest #Bitcoin video analysis is live for Week 36. – youtube

We assess:

  • Prevailing regime of distribution
  • Whale-to-exchange inflows increasing
  • The macro market detox
  • Short-term Holder stress

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