Cryptocurrency Market Overview 05.09.2023
News block
1. London Stock Exchange introduces blockchain
The London Stock Exchange (LSE) group plans to create a blockchain-based platform that will offer traditional financial assets.
According to the Financial Times, the company has been exploring the potential of a blockchain-based trading platform for a year. Murray Roos, head of capital markets at LSE Group, said the company's efforts to explore blockchain had reached a point where they decided to push their plans forward.
Roos also explained that the company will not build anything around cryptocurrencies. They will use the existing blockchain technology to increase the efficiency of storing, buying and selling traditional assets.
According to Roos, their idea is to use digital technology to create a process that will be "smoother, cheaper and more transparent" for traditional assets. The LSE Group will also regulate this process.
When the plan is implemented, the LSE Group will become the first major global stock exchange to offer investors a comprehensive ecosystem based on blockchain.
Unfortunately, there is no information about which public blockchains the LSE Group is experimenting with. However, recall that on August 31, 2023, Swift published the results of a new series of experiments that show that its infrastructure can seamlessly facilitate the transfer of tokenized assets through a variety of public and private blockchains:
As can be seen in the diagram, Swift experimented with such public blockchains as Ethereum (ETH) and Avalanche (AVAX), and the Chainlink CCIP interconnection protocol (LINK) was responsible for full compatibility between blockchains.
2. OKX is close to obtaining a license in Hong Kong
The OKX cryptocurrency exchange is in the final stage of obtaining a license for a virtual asset service provider (VASP) in Hong Kong. Final approval may follow by March 2024.
Li Chikai, global commercial director of OKX, said that the company is already actively engaged in dialogue with banks and is carrying out a number of other preparatory work.
In 2023, Hong Kong became a jurisdiction supporting the crypto industry and allowed companies to offer their services to retail customers. Although initially more than 80 crypto firms showed interest in opening an office in the country, so far only two of them (HashKey and OSL) have received the necessary license to work with cryptocurrency.
At the same time, the Singaporean company HashKey Capital presented a fund a month ago, for which it intends to raise $ 100 million to invest in digital assets. This fund has already attracted wealthy individuals and investment firms serving wealthy Asian families as clients. Interestingly, less than half of the fund's investments will fall on BTC and ETH, while the majority will be invested in altcoins.
Overview of the crypto market
🔸 The current capitalization of the crypto market is $1.08 trillion
🔸 Trading volume for the last day is $31.19 billion
🔸 BTC dominance 46.4%
🔸 Fear and Greed Index:
- today 40, yesterday 40 a week ago 49
where, 0 is extreme fear (may be a sign that investors are too scared - it's often a good time to buy), and 100 is extreme greed (the market needs correction).
Bitcoin has been trading in a narrow range over the past 24 hours, remaining between $25.8k and $26.0k after a price jump last week when the cryptocurrency reached the level of $28.0k. Stellar (XLM) was the only major digital asset that showed a noticeable increase on Monday, adding 10% for the day.
For the first time in the history of the first cryptocurrency, BTC withdrawals from exchanges exceed deposits for three months in a row:
What can this mean? Here are some hypotheses:
- Investors prefer to hold their BTC rather than trade them;
- Investors transfer their bitcoins to personal wallets for additional security, which indicates less trust in exchanges;
- Fewer investors are now interested in selling their bitcoins, which can reduce the pressure of sellers in the market.
Ethereum: reduced risk appetite
Currently, the value of Ethereum has fallen back to August lows. At the same time, a steady decline in liquidity is observed not only in derivatives markets, but also in spot markets, which suggests that investors are in no hurry to return to the crypto market.
Thus, the overall activity in the Ethereum futures and options markets in 2023 is noticeably lower than the level observed in 2021 and 2022. The average daily volume of trade in both markets decreased to just $14.3 billion per day, which is about half of the average volume over the past two years. And last week, volumes fell even more, to $8.3 billion per day:
On the other hand, if you look at the activity of users inside the Ethereum network, the picture is much more positive. So in early September, the number of active unique addresses exceeded 467 thousand in one day, which is the highest since June 16, when news about bitcoin ETFs appeared:
The growth of the utility of the network is often a necessity to increase the value of ETH and other native coins of the first-level blockchains.
