This week's latest trends and insights in the digital asset market from our asset management team.
Market Commentary
The global cryptocurrency market cap is at US ~$1.6 trillion, up an incredible ~US $550 billion since October last year. Analysts watched the flows and volumes of the 11 spot Bitcoin ETFs which topped 3 times the daily volume of 500 other ETFs launched in 2023 – a resounding success. Experts in the financial sector have speculated that asset manager Charles Schwab will eventually release its own spot Bitcoin exchange-traded product with Bloomberg analysts speculating that Schwab’s delay may allow the firm to offer lower fees than its competitors. “They may shock the world and offer something that is 10-basis-points in a few months.”
The next Bitcoin halving is just ~79 days away – expected to occur on the 22 April. This halving event will see the block reward for miners on the network drop from 6.25 to 3.125 BTC. Bitcoin halvings are programmed to occur automatically every 210,000 blocks, roughly every four years. Once hit, miners will receive 50% less in bitcoin rewards for every block they verify and add to the blockchain.
With 11 spot bitcoin ETFs trading underway, the broader crypto market is now pondering whether a spot Ethereum ETF will follow — and when. There are differing views with firms like Standard Chartered expecting the SEC to approve spot Ethereum ETFs by May 23 2024, whilst others such as TD Cowen anticipating an approval in late 2025 due to US elections in November 2024 and the political climate within several regulatory agencies.
CEO Comment
The Gap between Bitcoin and the S&P 500 shrunk this week to 41%, from 45% last week, volatility will continue with “hangover drivers” such as FTX’s selling of Bitcoin as well as Mt Gox’s supply and demand being driven by continuous new ETF demand.
There is also a second Gap where the broader digital asset market has circa 66% to close so there is a big opportunity here, we see this as a selective opportunity to select and grow our alts portfolio via our “alThematics” work.
As for the shift list, which we define as the major events and announcements facilitating the broader market’s transition to Web3 financial rails or the internet of value, the top three for this week includes:
- New spot Bitcoin ETFs now hold over 3% of the current supply of BTC – that’s a shift, democratisation is happening.
- Vitaliks comments on how ETH fits into the broader ecosystem is a big step for our industry and the shift to Web3 financial rails.
A new feature this week is our “alts shift list featuring shifts in our Alt universe:
- Scaling is the next big shift – this is a great move – Polygon-powered Immutable zkEVM mainnet launches in early access mode – #2024theyearofscalingup
- Interoperability is huge for scaling, so this is great for our Solana holding – Solana-Based Dex Saw More Trading Volume than Ethereum—Briefly
What are our favoured thematics for 2024? We continue to like any infrastructure plays of the shift from Web2 to Web3 financial rails and any plays in the real world asset tokenisation infrastructure, data validation and decentralised storage, and scale up technologies such as ZKrollups – anything Crypto identity realty, we are closely following all the ”de’s” – DeFi, DePin, DeSoc – (want to know what that means? – message us).
Lisa Wade, CEO DigitalX
CRYPTO TOP 20 7 DAY PRICE CHANGE
*All figures throughout are in USD unless otherwise specified 25/01/2024
Market Updates
- Bitcoin price rises back above $43,000 as market expects another Fed rate pause this week
- Solana signups surge to record highs while WEN token airdrop nears close
- Solana-Based Dex Saw More Trading Volume than Ethereum—Briefly
- Magic Eden launches multi-chain wallet for Solana, Bitcoin, Polygon and Ethereum
- US files intent to dispose $117 million in bitcoin seized from Silk Road drug dealer
- German authorities seize 50,000 bitcoin ($2.1bil worth)connected to pirated materials operation
- Binance allowing larger traders to hold funds at Sygnum Bank and FlowBank
- Animoca Brands Collaborates With LightLink to Integrate Gasless Transactions Into Its Games
- Vitalik Buterin details four ways cryptocurrency and AI can overlap: ‘A growing number of use cases’
- Solana monthly transaction volume hits multi-year high
- Ether options trading volume hits all-time high
- Vitalik Buterin reflects on his role, says ‘time for the next generation to take up the mantle’
- Ripple chairman Chris Larsen hacked for reported 213M XRP worth approximately $112.5M
- Celsius exits bankruptcy, commences return of over $3B to creditors
- Bankrupt FTX won’t be restarting, but former customers will get money back in full
- Tether reports profit of $2.9 billion in Q4 attestation, with $5.4 billion in excess reserves
- Bankrupt Genesis settles SEC lawsuit over Gemini Earn program
- JPMorgan says Tether’s increasing dominance is negative for crypto
- Polygon Labs lays off 19% of team after ‘rapid growth’ during crypto’s bull run
- Stablecoins that earn yield could overtake current swathe of stablecoins, says Ondo COO
The Shift List
- INVESCO, GALAXY drop fees on Bitcoin ETF to 0.25%
- Hong Kong SFC receives first spot Bitcoin ETF application
- Analysts predict Charles Schwab will eventually offer its own Bitcoin ETF
- Bitcoin’s price gains push BlackRock’s ETF above $2 billion in assets under management
- Bitwise says bitcoin received to ETF wallet will benefit the fund’s shareholders
- BlackRock and Fidelity spot bitcoin ETFs close in on Grayscale in daily trading volume
- Ether Could Hit $4,000 With Likely Spot ETH ETF Approval in May: Standard Chartered
- Visa enables crypto withdrawals on debit cards in 145 countries
Macro and Regulatory Environment
- Fed holds rates steady, indicates it is not ready to start cutting
- EU begins sorting MiFID-regulated securities out of crypto assets
- Republican House leadership asks CFPB to review proposed payments rule over potential impact on crypto
- Republican French Hill says he’s optimistic about prospect for new crypto legislation in 2024
- Elizabeth Warren renews criticism of illicit finance in crypto amid push for new legislation
- US to collect crypto miner energy use data following ‘emergency’ request citing bitcoin’s price rise as evidence
- Federal Reserve holds its interest rate steady. Here’s what it means