Cryptocurrency Market Overview 31.10.2023
News block
1. Bitcoin ETF: seed rounds launch
Asset management company VanEck has supplemented its application to launch a spot bitcoin ETF, which is currently under consideration by the U.S. Securities and Exchange Commission (SEC). Like the investment company BlackRock, VanEck intends to start raising funds for its fund as part of the seed round. Lawyer Scott Johnson noted that VanEck expects to receive bitcoins from investors, while BlackRock collects funds in cash.
As part of the seed round, the bank or broker-dealer provides the company with financing in exchange for fund units that can be sold on the open market on the day of listing the product on the stock exchange.
Johnson positively assessed this event as part of VanEck's preparations for the launch of the bitcoin fund, but urged not to overestimate the significance of this amendment, which may be a mere formality.
In the case of VanEck, the initial investor must either already own BTC, or buy an asset for subsequent investment. At the same time, the application does not specify which companies are participating in the round.
2. UK: the final plan for cryptocurrencies
On Monday, the UK Treasury released the final proposals for the regulation of crypto assets and stablecoins.
The government intends to implement the rules in stages, starting with the supervision of stablecoins secured by fiat payments. And already at the next stage, a broader sector of crypto assets will be considered.
These proposals came after a consultation published in February on the future structure of financial services regulation for crypto assets in the UK. Numerous companies and stakeholders actively participated in the consultations, offering ideas to clarify the approach proposed by the Government.
The proposed rules will place stablecoins backed by fiat currency under the supervision of the Bank of England, the Financial Supervision Authority (FCA) and the Payment Systems Regulator (PSR).
The Treasury plans to adopt legislation as soon as possible, focusing on the beginning of 2024, depending on the schedule of the parliament.
3. Zodia Custody launches its services in Hong Kong
Zodia Custody, a cryptographic security firm owned by the British banking giant Standard Chartered, is launching its services in Hong Kong.
Founded in 2020, the company Zodia Custody helps financial institutions to safely store their cryptocurrency.
Julian Sawyer, CEO of Zodia, said that Hong Kong is a market where the demand for cryptocurrency is determined by institutions, not retail customers, adding that this is the ideal clientele for Zodia.
Currently, Zodia is aggressively expanding in Asia. In recent months, the company has opened its services in Japan, Singapore and Australia.
Overview of the crypto market
🔸 The current capitalization of the crypto market is $1.315 trillion
🔸 Trading volume for the last day is $61.53 billion
🔸 BTC dominance 50.8%
🔸 Fear and greed index:
- today 66, yesterday 68, a week ago 72
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).
While the BTC price continues to be in a narrow trading range, the greed of market participants is gradually falling — today the Index shows a mark of 66 points (a week ago it was 72 points).
Exactly 15 years ago, on October 31, 2008, an official document about bitcoin was published – the Whitepaper. This coincided with the bankruptcy of Lehman Brothers and other large companies. The stock market was falling, and governments and central banks were trying to contain the catastrophe.
According to Satoshi Nakamoto's idea, the world needed a peer-to-peer system to move money and replace the giants of Wall Street, because they cannot be trusted. But as we can see now, it is the financial titans of Wall Street who are increasingly crushing bitcoin, which was created in opposition to them.
Growth of institutional activity
The positive caused by the news about the imminent approval of the spot bitcoin ETF has increased the appetite for BTC not only among retail investors, but also among financial institutions. So IntoTheBlock analysts note in their report: "Previously, transactions worth more than $ 100 thousand rose sharply at the end of June, when it became known that Blackrock was submitting its application for an ETF, and now they are even higher":
"The current growth in institutional activity may be a harbinger of what will happen in 2024," IntoTheBlock analysts added.
Absolute records Base
The Base blockchain has reached 50 million unique addresses in 134 days. This is an absolute record for all leading blockchains:
Recall that the leading American crypto exchange Coinbase is responsible for the development of this network.
Even earlier on August 13, the volume of transactions in the Base network reached 617,330, exceeding the indicators of Arbitrum (544,575 transactions) and Optimism (438,559 transactions) for the same day. Subsequently, Arbitrum and Optimism regained the lead, but this episode pointed well to the potential of Base.
Currently, in terms of blocked cost (TVL), the Base network ranks 9th:
The Base network does not have its own token and most likely will not (the Coinbase exchange operates in an American jurisdiction and the launch of the token carries a lot of regulatory risks). However, two projects benefit from the rapid growth of Base:
- Optimism (OP). The Base network is built on the OP Stack, a set of software components developed by Optimism. Therefore, there is an agreement between the projects under which Base will pay Optimism either 2.5% of its income or 15% of its profit, depending on which indicator is higher. In return, the Base team will receive "up to approximately 118 million OP tokens", which will allow it to have a voice in the management of the Optimism protocol.
- Ethereum (ETH). Base is designed to help the Ethereum blockchain solve its main problems — slow and expensive transactions. All in-network commissions in Base are paid in ETH.
Developer activity in October
Several analytical platforms monitor such an indicator as the activity of developers on crypto projects. As a rule, data on the number of changes (commits) made to the project code on Github are used to compile the rating, excluding planned updates.
Taking into account the activity of developers is one of the factors influencing the compilation of a cryptocurrency investment portfolio.
The top 10 for October looks like this:
