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digital asset
August 30, 2024
11 min read

DigitalX Weekly Crypto Update: Market Trends and Analysis

23-30 August 2024

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

Market Commentary

With the increase in the price of Bitcoin at the beginning of the week following Jerome Powell’s indication that rate cuts are ahead and crypto-friendly RFK Jr. lending his name to Trump, the price still closed out the week below $59k. Falling as low as US$58,200, the price of Bitcoin was largely impacted by NVIDIA’s slide ahead of earnings – adding to the risk-off sentiment in the market. Further, Ethereum ETFs continued to struggle after seven days of net outflows at the beginning of the week, with analyst David Glass from Citi citing that this trend has “coincided with relatively muted search interest and subdued network activity”. The US-based Bitcoin ETFs however have reversed their recent negative trend, after logging US$252 million worth of inflows at the beginning of the week – the highest single-day value since July – continuing a seven-day streak of positive net inflows. Unsurprisingly, BlackRock’s IBIT product gained the most, with only Grayscale’s GBTC seeing negative net flows.

HashKey Exchange lists AVAX and LINK for retail trading following Bitcoin and Ethereum ETFs. Previously available to professional investors only as part of HashKey’s global platform among several other cryptocurrencies, AVAX and LINK are now the first crypto assets to be approved for retail trading by Hong Kong regulators on licensed crypto exchanges. This comes after the Hong Kong Securities and Futures Commission launched a new licensing regime for crypto exchanges in June 2023. For investors, deposits and withdrawals for AVAX will be available via the Avalanche-C network, and LINK via the Ethereum network. Additionally, HashKey plans to release its own ERC-20 utility token dubbed HSK later this year to initiate community airdrops and build a comprehensive Web3 economic network.

Tokenised treasury funds have surpassed US$2B in market cap. According to OKX, the ever-increasing presence from institutional investors in the space has driven rampant demand, mostly consisting of US-denominated ultra-short money market funds in tokenised form. Subsequently, the market cap for stablecoins has hit an all-time high, with representatives from BTC Markets stating that “a rising stablecoin market cap may indicate that crypto is attracting more institutional investors”. This reflects the utility for stablecoins acting as the conduit between traditional finance and crypto, further allowing institutional investors to garner exposure into this emerging asset class. This trend has been spearheaded by BlackRock’s BUIDL fund, as well as Ondo Finance’s USDY and OUSG offerings (which has US$95M allocated to BUIDL as a reserve). Both these issuers capture more than half the market cap for tokenised treasuries.

 

CEO Comment

The Gap between Bitcoin and the S&P 500 has slightly increased to 17% from last week’s 16%. It will be interesting to see how this gap fares in a potential rate cut cycle.

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. This explosion in the market cap of Tokenised Treasury Funds, which surpassed US $2B, shows how quickly RWA’s with product market fit can take off. This will be a seismic shift for the investment management industry over the coming years.
  2. The rise of stablecoins is nothing short of phenomenal. Hitting a new all time high this week is a testament to how many dollars are coming on-chain for commerce – the news that Coinbase will enable 1:1 conversions between the Euro and MiCA-compliant stablecoin EURC will see this continue.

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 sits at circa 71%. The TIME for this trade is the bullish set-up for BTC looks more promising, this gap could start to close quickly. The shift to close the gap can happen very quickly and will correlate to the next up move in BTC – the building is happening.

  1. Chain Abstraction is something you will be hearing a lot more about from us – this is a scaling tool which is needed for broader adoption as it removes friction.

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

Tinkering with Tokenisation

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:

The information in this document is prepared by DigitalX Asset Management Pty Ltd (ACN 629 653 121) (DigitalX).

DigitalX is a corporate authorised representative (CAR) (CAR No. 1270748) of Boutique Capital Pty Ltd (AFSL 508011) and True Oak Investments Ltd (AFSL 238184). Boutique Capital is the Trustee of the DigitalX Fund and the DigitalX Bitcoin Fund. True Oak Investments is the Trustee of the DigitalX Asset Reference Token Fund (DxART). All three funds are open to wholesale investors only.

DigitalX is also a corporate authorised representative (CAR) of K2 Asset Management Ltd (ABN 95 085 445 094 AFSL 244 393) (K2), a wholly owned subsidiary of K2 Asset Management Holdings Ltd (ABN 59 124 636 782). K2 is the Responsible Entity and Issuer of the DigitalX Bitcoin ETF (ASX: BTXX) (ARSN 650 945 216) which is open to retail investors. Offers to invest in the DigitalX Bitcoin ETF (BTXX) will only be made in the product disclosure statement (PDS) and this material is not intended to substitute the PDS which outlines the risks involved and other relevant information. You should also consider the Target Market Determination (TMD) issued when ascertaining if the product is appropriate for your needs. A PDS & TMD for BTXX can be obtained at https://www.digitalx.com/funds/bitcoin-etf/. You should consider the PDS & TMD before making a decision to acquire an interest in BTXX.

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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