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digital asset
May 31, 2024
7 min read

DigitalX Weekly Crypto Update: Market Trends and Analysis

19-26 April 2024

This week's latest trends and insights in the digital asset market from our asset management team.

Market Commentary

On 23 May, 2024, the U.S. Securities and Exchange Commission (SEC) approved eight spot Ethereum ETFs. Currently, applicants are finalising S-1 registration statements, a necessary step before trading can commence. Although the timeline for this process remains uncertain, some analysts speculate that trading could begin as early as mid-June. Following the Ethereum ETF approvals, ETH experienced modest price gains, trading between US$3,600 and US$3,900. We anticipate that the market has stabilised and is now heading to a more sustainable long-term rally once these ETFs have officially launched. 

The approval of spot Ethereum ETFs is expected to have a positive impact on Ethereum-based altcoins. The regulatory clarity provided by the ETF approvals will likely increase project development on Ethereum. Existing projects in the Ethereum ecosystem such as Ethereum layer 2 solutions are the first to benefit from this approval. As a case in point, Optimism and Arbitrum have experienced similar price rallies to Ethereum itself over the past two weeks. EVM-compatible projects/ blockchains and Decentralised Finance (DeFi) platforms that use Ethereum as a primary asset will also benefit from increased transactions, trading volume and total value locked.

Since the spot Ethereum ETF approvals, Bitcoin has been traded within a narrow range from US$67,000 to US$70,000, with low volatility. BlackRock’s spot Bitcoin ETF reportedly surpassed the Grayscale Bitcoin Trust (GBTC) as the world’s largest spot Bitcoin ETF. Globally, spot Bitcoin ETFs now hold over one million Bitcoin, valued at over US$68 billion, which accounts for nearly 5.10% of the total circulating supply.

During the week it was reported that U.S. President Joe Biden’s re-election campaign would start engaging with cryptocurrency industry experts for advice on the “crypto community and crypto policy moving forward”. This outreach represents a notable shift from Biden’s previous stance on the industry, indicating a potential positive change in the administration’s approach to cryptocurrency policy.

CEO Comment

The Gap between Bitcoin and the S&P 500 has increased to 19%, from 7% last week.

Please claim your DigitalX Community token – this is a first step in aligning our brand to Web3. We believe it is the customer loyalty tool of the future – watch this space for airdrops and rewards – for now please collect your token AND if you don’t know how, please message me and I can walk you through it. 

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:

  1. We congratulate our strategic partner 3iQ for this big index product announcement – this will broaden accessibility, or the concept of crypto for all beyond just BTC and ETH. Once the methodology has been confirmed it could be an ETF candidate. 
  2. Bitcoin ETF’s have grabbed headlines all year, this 5% number is nothing short of mind blowing – a big theme at Consensus 2024 is the amount of work being done on Bitcoin layer 2’s, which is the latest source of demand. With the combination of Bitcoin and the integrated layer 2’s, it will start to tip the demand supply balance as legacy supply dwindles.

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, drop ever so slightly to circa 42%. 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.

  1. Real world asset tokenisation, in particular scaling, has been another major theme at Consensus 2024 – identity, price validation and Zero Knowledge remain the hot topics.

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

The Shift List

Macro and Regulatory Environment

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.

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