This week's latest trends and insights in the digital asset market from our asset management team.
Market Commentary
US Spot Bitcoin ETF inflows slowed down, as they found an equilibrium – but daily traded volumes continue to be relatively high compared to other ETFs. The Bitcoin ETF story doesn’t stop at the US though; as Hong Kong recently listed six spot Bitcoin and Ethereum ETFs this week which are managed by firms such as China Asset Management, Harvest Global, Bosera, and HashKey. Whilst day 1 volumes on HK ETFs were disappointing, it certainly is a positive development over the long-term as larger pools of capital can now access Bitcoin in a regulated and compliant way. Australia made headlines around potential spot Bitcoin ETF listings also, with the ASX currently expected to approve spot Bitcoin ETFs by the end of 2024 according to a Bloomberg article. The ASX handles around four-fifths of Australia’s equity volumes.
The most anticipated airdrop of the year from EigenLabs was controversial. The restaking protocol, which raised US$100 million from venture capital firm Andreessen Horowitz (a16z), essentially pioneered the concept of restaking – the ability to reuse capital to stake on Ethereum to simultaneously secure other blockchains. Nearly US$16 billion has been locked on the platform, which has been called the single biggest innovation in crypto in years. Many users were annoyed as the airdropped tokens were initially non-transferable and were not awarded to users who interacted with the protocol via VPNs.
The Federal Open Market Committee of the U.S. Federal Reserve left its benchmark fed funds rate unchanged. The FOMC acknowledged that progress on lower inflation has stalled this year and said it wouldn’t be appropriate to trim rates until it has greater confidence inflation is moving “sustainably” towards 2%.
CEO Comment
The Gap between Bitcoin and the S&P 500 has halted its narrowing streak at last week’s 6%, now sitting at 17%. This is to be expected in the current risk-off market and tracking this is proving to be an indicator of sentiment somewhat.
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 shifts for this week include:
- When we previously spoke about the year of scaling up, this is exactly what we meant – RWA’s are starting to gain traction – with US$8 billion and counting – Messari
- Hong Kong’s listing of Bitcoin and Ethereum ETFs may not have been the explosive start that the US ETF’s had, but we believe the listing will prove to be historic in the years to come.
- We were proud to be featured in the attached article with Bloomberg highlighting that the ASX may soon join the Bitcoin ETF conversation.
Our Top “alts shifts” for this week, featuring shifts in our altcoin universe that drive our thematic approach, saw the second gap, or the broader digital asset market, remain flat at circa 40%. I want to reiterate that this is a big opportunity, as mentioned we see this as a selective opportunity to identify and grow our alternatives portfolio via our “alThematics” work. The gaps themselves are proving to be a risk on, risk off proxy and hugely high Beta – volatility is a certainty and an opportunity – the building is happening no matter what.
- In terms of real world asset tokenisation scaling in 2024, this may end up being the smallest deal BlackRock ever does, though a VERY BIG DEAL for RWAT market development
What are our favourite 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, as well as scale-up technologies such as ZKrollups. 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
Market Updates
- BlackRock’s bitcoin ETF inflows halt after 71-day streak, data shows
- VanEck says about $175 billion in Bitcoin held by ETFs, nations and companies
- BlackRock’s USD Institutional Digital Liquidity (BUIDL) Fund hits $375M in AUM
- RWA protocols are closing in on $8B total value locked: Messari
- Hong Kong’s six spot Bitcoin, Ether ETFs see $11 million in volume on first trading day
- Stablecoin legislation could prove bigger than US spot Bitcoin ETFs, Bitwise CIO says
- Eigen Labs drops whitepaper debuting EIGEN token
- MicroStrategy now holds $13.6B worth of Bitcoin, 1% of total circulating supply: Canaccord
- Coinbase rolls out Lightning Network support in collaboration with Lightspark
- Crypto banking firm BCB Group secures digital asset and electronic money license in France
- Tether just obliterated its former net profit record for a single quarter
- Aave Labs debuts V4 roadmap in series of governance proposal
- Circle’s USDC overtakes Tether’s USDT in stablecoin transactions – Visa
- Lido Finance hits 1M validators, fueling the growth of DeFi
- EigenLayer reveals plan for token airdrop with 15% allocation to ecosystem participants
- Tether, USDC and DAI transaction volume surpasses Visa’s 2023 monthly average: Nansen
- Tether buys $200M majority stake in brain-computer interface company Blackrock Neurotech
- Custodia Bank appeals court loss in Fed Master account lawsuit
- Pantera Capital looks to raise $1 billion for new crypto fund V
- Movement Labs raises $38M for rollup based on Facebook’s move language
- Internet Computer founder says crypto has ‘snake-oil’ problem
- Eminem replaces Matt Damon as crypto.com celebrity spokesperson
- Crypto forensics firm Elliptic using advances in AI to detect Bitcoin money laundering
- Worldcoin’s developer wants to partner with PayPal and OpenAI: report
- Immutable launching crypto gaming rewards program worth $50 million
- Jack Dorsey’s Block faces scrutiny from federal authorities over non-compliant crypto services: NBC News
- Binance Labs backs Movement Labs’ mission to bring Facebook’s Move to Ethereum and beyond
- Solana-to-Bitcoin cross-chain bridge aims for Q3 2024 launch
- Dutch exchange Bitvavo taps Figment to expand staking services
- Boda boda blockchain boost: How tech is tracking Africa’s motorbike taxis
The Shift List
- Hong Kong officially debuts Asia’s first spot bitcoin, ether ETFs
- Bitcoin ETF bandwagon heads to Australia after $53 billion haul in US
- BlackRock doubles down on tokenisation via investment in Securitize
- Franklin Templeton lists Ethereum ETF on DTCC
- Ripple breaks ground in Japan, SBI Group to use XRPL for supply chain solutions
- Franklin Templeton upgrades $380M tokenised treasury fund to enable peer-to-peer transfers
- Stripe brings back crypto payments via USDC stablecoin
- Coal miner Alliance Resource dabbles in crypto mining, mines 425 BTC
- Stripe will support Avalanche’s efforts to add funds and users to ecosystem
- Uniswap enables crypto purchases via Robinhood Connect
- Chainlink to join Rapid Addition in building blockchain adapter for institutions
Macro and Regulatory Environment
- Federal Reserve holds policy steady, says progress on inflation has stalled
- US lawmakers introduce bill to clarify taxation of staking rewards
- Prospective stablecoin bill unlikely to be attached to upcoming FAA reauthorisation: Democratic aide
- Crypto was one of the biggest money laundering risks in 2022-23: UK Govt. report
- EU Parliament adopts anti-money laundering rules package, also policing crypto
- Ex-head of China’s Digital Yuan effort facing government probe: Report
- Binance Founder Changpeng Zhao gets 4 months in prison
- Indonesia’s election results may be good for crypto, industry watchers say
- SEC has been investigating ETH for over a year, new court filing shows
- House’s McHenry accuses SEC Chief Gensler of misleading Congress on Ethereum
- Bankruptcy judge signs off on $450M FTX-Voyager settlement
- Thai regulator cracks down on deceptive crypto ads
- Russian Duma considers exchange ban as Beribit clients demand crypto, receive chocolate
- FBI warns Americans against using unregistered crypto money transmitting services
- SEC charges Texas mining firm and co-founders for $5.6 million fraud scheme
- UK law enforcement agencies can now seize crypto more easily as new rules take effect
- DOJ disputes Roman Storm’s characterisation of Tornado Cash operations in new filing
- Warren rival for Senate race John Deaton argues for Coinbase in SEC challenge
- Warren flags crypto ties to child sexual abuse in letter to DOJ, Homeland Security
- South Korea to officialise crypto investigative unit amid surge in crime: report
- States’ backlash against Binance.US continues with 6th license pulled
- Nigeria restricts fintech onboarding to stop KYC-evading crypto investors
- US Justice Dept charges Roger Ver with tax a fraud, a long-time Bitcoin investor
About DigitalX
DigitalX Ltd (ASX:DCC) is a leading ASX-Listed Bitcoin and digital asset funds management business. The Company has a 9 year track record mining Bitcoin, blockchain and smart contract development. DigitalX Asset Management is the investment manager of digital asset investment products that provide qualified investors with highly secure and streamlined access to digital asset exposure. To learn more contact the team at [email protected] or visit our website https://digitalx.fund/.
Disclaimer:
DigitalX Asset Management Pty Ltd is a corporate authorised representative (CAR) of Boutique Capital Pty Ltd (AFSL 508011), and True Oak Investments Ltd (AFSL 238184). To the extent to which this document contains advice it is general advice only and has been prepared by the CAR for individuals identified as wholesale investors for the purposes of providing a financial product or financial service. The information herein is presented in summary form and is therefore subject to qualification and further explanation. The information in this document is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account personal investment objectives, financial circumstances or particular needs. Recipients of this document are advised to consult their own professional advisers about legal, tax, financial or other matters relevant to the suitability of this information. Past performance is not indicative of future performance.
