Wednesday, 8 May 2024

Market Summary

Market Summary 8 May 2024

Bitcoin Price: US$ 62,361.72 (-1.31%) 
Ethereum Price: US$ 3,005.69 (-1.86%) 

The bankrupt crypto exchange FTX has announced plans to repay all its creditors, with 98% of them slated to receive up to 118% of their claims, while the rest are set to be fully repaid plus billions in compensation. This ambitious plan is backed by the total value of property collected for distribution to creditors, estimated to be between $14.5 and $16.3 billion. Meanwhile, in the ETF landscape, Grayscale has surprisingly withdrawn its application for an Ether futures ETF just three weeks before the SEC was due to make a decision. Despite this withdrawal, the SEC continues to weigh its decision on the spot Ether ETFs, with decisions on applications from various firms due in the coming months. In other news, the quantitative trading firm Susquehanna International Group has made a substantial investment in the cryptocurrency market, purchasing more than $1 billion worth of shares of Bitcoin ETFs in the first quarter of 2024. However, this significant investment represents only a small fraction of the firm’s portfolio, which ended the first quarter valued at more than $575.8 billion. 

The SEC has recently countered Terraform Labs’ assertions that their fraudulent activities took place outside the US, arguing that neither Terraform nor its co-founder Do Kwon ever presented this argument in court. The SEC, dismissing their arguments as a misapplication of the law and a misrepresentation of facts, plans to seek $3.6 billion in disgorgement from Terraform and Kwon, a stark contrast to Terraform’s suggestion of a $1 million civil penalty and no disgorgement. Meanwhile, the Hong Kong Monetary Authority (HKMA) is taking strides in the digital currency realm by forming a special community, “Project Ensemble Architecture Community,” to develop tokenisation standards and foster the growth of tokenisation projects in Hong Kong, with an initial focus on establishing a mechanism for seamless interbank settlement of tokenised deposits through wholesale central bank digital currencies (wCBDCs). On a similar note, the Australian Taxation Office (ATO) is reportedly seeking personal data and transaction details from up to 1.2 million cryptocurrency exchange users in an effort to identify traders who may have neglected their tax obligations on their crypto trades, a move that coincides with a significant rally in the crypto market where Bitcoin has surged over 44% since the beginning of the year, Ether has risen 32% year-to-date (YTD), and the market capitalisation of the top altcoins, excluding Bitcoin and Ether, has also increased by over 27% YTD. 

Bancolombia, the Colombia’s largest bank, has launched a crypto exchange called Wenia and a stablecoin pegged to the Colombian peso. Despite the risks associated with trading digital assets, the bank is committed to facilitating the adoption and use of digital assets and blockchain technology, with the platform being registered in Bermuda and subject to its legislation. Meanwhile, Grayscale, a crypto asset manager, has seen inflows into its Bitcoin exchange-traded fund (ETF), the Grayscale Bitcoin Trust (GBTC), for the second day in a row, breaking a four-month outflow streak and bringing its total inflows to $66.9 million. This is despite the net outflow of $17.4 billion from GBTC, and the fact that overall spot Bitcoin ETFs in the U.S. maintain a positive balance sheet, even as the U.S Securities and Exchange Commission (SEC) recently delayed its decision to approve or deny spot Ether ETF applications from several providers. On the other side of the Atlantic, Revolut, a fintech company and global neobank, has introduced a specialised crypto trading platform for retail customers in the United Kingdom called Revolut X, offering easy access for users and charging minimal fees. Despite scaling back its crypto offerings in the U.K. and the United States due to regulatory hurdles, the company is taking a “compliance first” approach and aims to comply with the legal and regulatory requirements in all jurisdictions where it offers services. 

In a bid to extend the capabilities of the Ethereum blockchain and improve privacy and scalability, Polygon has launched an alpha version testnet of its latest zero-knowledge rollup (ZK-rollup) solution, Miden. However, despite this technological advancement, Polygon’s native token, MATIC, experienced a 3.7% drop on the day of the launch, trading at $0.704. In contrast, Bitcoin’s 200-day moving average reached an all-time high of $50,178, indicating a bullish long-term outlook, further supported by analyst Willy Woo’s WooCharts price models which show the 200-week moving average also at an all-time high of just over $34,000. This positive trend in Bitcoin was mirrored by the Grayscale spot Bitcoin exchange-traded fund (ETF) which posted its first inflows on May 3, seeing an inflow of $63 million. Parallel to these developments, the Starknet Foundation announced a new grant program with $5 million worth of USDC to support emerging projects on its network, aiming to back at least 200 promising teams. This initiative seems to be paying off as Starknet has been successful in attracting an increasing number of developers to its ecosystem, with total monthly developers rising to over 22,400 in December 2023, marking an impressive growth of over 113% in the past three years. 


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