Cryptocurrency Market Overview 13.09.2023
News block
1. Franklin Templeton submits an application for a spot bitcoin ETF
Franklin Templeton Investment Fund has become the latest financial giant to join the Bitcoin ETF race.
The company, which manages assets worth almost $1.5 trillion, announced that it intends to place its fund on the Cboe BZX exchange.
The document notes that the Franklin Bitcoin ETF will be a "series" within the Franklin Templeton Digital Holdings Trust. The shares of the ETF will be backed by BTC. Coinbase Custody Trust Company is listed as the custodian of assets.
The Franklin Templeton application now joins a long list of similar applications that are currently under consideration by the Securities and Exchange Commission (SEC).
2. The Global Cryptocurrency Adoption Index for 2023
The blockchain analytical company Chainalysis has published the report "2023 Global Crypto Adoption Index", showing that Central and South Asia, as well as the wider regions of Oceania, dominate in the implementation of cryptocurrencies. The three leaders of this index were led by India, Nigeria and Thailand.
The index highlights that lower-middle-income countries (according to the World Bank classification) are showing the strongest massive recovery in interest in digital assets, after the collapse of 2022. At the same time, these countries have a growing industry and account for more than 40% of the world's population.
As a result, Chainalysis analysts conclude: "If low— and middle-income countries are the future, then the data show that cryptocurrency will be an important part of this future."
Overview of the crypto market
🔸 The current capitalization of the crypto market is $1.069 trillion
🔸 Trading volume for the last day is $40.89 billion
🔸 BTC dominance 47.2%
🔸 Fear and greed index:
- today 41, yesterday 30 a week ago 41
where 0 is extreme fear (may be a sign that investors are too scared - often it's a good time to buy), and 100 is extreme greed (the market needs correction).
Liquidity drought
Liquidity in the digital asset market continues to dry up, and trading volumes have reached a historic low. The market has returned to a surprisingly narrow trading range, experiencing a mode of reduced volatility. In general, it can be argued that today extreme apathy and boredom best describe the prevailing mood.
In March 2022, the capitalization of stablecoins was at its peak and amounted to 163 billion, since then it has fallen by 43 billion, which represents an overall decrease of 26%:
At the same time, the dynamics of the three largest stablecoins is strikingly different:
- USDT reserves increased by 13.3 billion;
- USDC showed a decrease of 16.7 billion, which is partly a reflection of the fact that US-based institutions moved capital to markets with higher interest rates;
- BUSD (Binance exchange's stablecoin) plummeted by 20.4 billion (-89%), mainly due to measures taken by the SEC.
USDT currently accounts for 69% of the stablecoin market (in June 2022, the share was 44%).
Despite the surge in volatility that occurred during bitcoin's recent drop to $26k, and then during Grayscale's successful lawsuit against the SEC in court, realized volatility remains surprisingly low. And critically low values of this indicator are usually a harbinger of increased volatility in the future:
This low liquidity and low volatility are also reflected in the volumes of BTC coins changing hands. Currently, this volume is estimated at $2.44 billion per day, which corresponds to the level of October 2020:
Turning to the derivatives markets, we see that futures trading volumes have also reached a historic low of $12 billion per day. The only period with less trading volume was a lull at the end of 2022, when the BTC price was trading in a narrow range for more than two weeks:
At the same time, trading volumes in the options markets increased significantly in 2023 and currently amount to $437 million per day.
The chart below shows the percentage of short-term holders who are now in profit. This is only 16.3%:
Summary and conclusions
Volatility, liquidity, trading volumes and BTC volumes changing hands are at historic lows today. This increases the likelihood that the market has entered a period of extreme apathy and exhaustion. At the same time, the group of long-term holders remains stable and practically does not sell its assets.
