DigitalX Weekly Crypto Update: Market Trends and Analysis

Market Commentary

After a strong rally to kick off the week, the price of Bitcoin has pulled back, driven by heightened tensions in the Middle East and declines in U.S. stock futures, reflecting a reduced risk appetite amongst investors. Despite producing its largest single day inflows since June, the US-based spot Bitcoin ETFs ended an eight-day streak with a significant US$242.6 million outflow on Tuesday — the largest since the 3rd of September. Similarly, Fidelity’s spot Ethereum ETF (ETHE) experienced its largest daily outflow since inception, contributing to a combined US$48.6 million in outflows from all US-based spot Ethereum ETFs.

Bitwise has officially filed with the SEC for a spot XRP ETF, making it the first asset manager to pursue an ETF that singularly holds XRP. The ETF would hold XRP directly, similar to Bitwise’s existing Bitcoin and Ethereum ETFs. Bitwise CEO Hunter Horsley stated “at Bitwise, we believe blockchains will usher in new, apolitical monetary assets and permissionless applications for the 21st century”. While the filing represents continued progress in the general adoption of digital assets as investment products, the SEC Chair Gary Gensler has yet to signal support for ETFs beyond Bitcoin and Ethereum. This move follows VanEck’s filing for a Solana ETF earlier this year.

Digital Asset’s Canton Network successfully tokenises gold, Eurobonds and gilts in pilot project. In partnership with Euroclear and the World Gold Council, the project brought together 27 unnamed market participants, including 11 observers, on the Canton testnet, conducting asset tokenisation for collateral usage in over 500 real-time atomic transactions split into six categories. The report established tokenisation as a more cost-effective trading system, estimating it could save 35-65% across the settlement value chain. Following the current pilot, Digital Asset plans to collaborate with interested market participants to develop a production solution based on the same infrastructure.

CRYPTO TOP 20 7 DAY PRICE CHANGE

*All figures throughout are in USD unless otherwise specified

Market Updates

• Cryptocurrencies continue to outperform the stock market: Canaccord
• Bitcoin hits $65K for first time since early August, renewing investor interest in spot ETFs
• US spot Bitcoin ETFs log highest inflow day since June, two-month high in total value
• Bitcoin ETFs bleed $242.6M, biggest outflow since Sept. 3
• Fidelity Ethereum ETF records largest daily outflows since launch
• Bitcoin should be treated as a commodity, like gold – Cantor Fitzgerald CEO
• BlackRock’s spot Ethereum ETF surpasses $1 billion in value for the first time
• Ethereum transaction fees surge as blockchain activity ramps up: Coinbase
• MicroStrategy 2x leveraged ETF sees massive inflows in first week of trading as MSTR outperforms Bitcoin
• Base’s total value locked crosses $2 billion for the first time amid sustained user activity
• No, FTX distribution payments do not begin on September 30
• Fed’s dovish move will slash $625M in interest income for stablecoins
• Bolivia reports 100% rise in virtual asset trading since lifting Bitcoin ban
• Trump-backed World Liberty Financial opens up KYC verification on website
• Ethereum Foundation has sold over $10 million worth of Ether this year
• South Korean crypto exchange Bithumb considers Nasdaq listing: report
• Matrixport acquires Swiss asset manager, expands in Europe
• Crypto exchange Gemini to close all customer accounts in Canada

The Shift List

• Kasikorn Bank launches first licensed Thai digital asset custodian
• Taiwan opens digital asset ETF market to professional investors
• Circle signals plans to bring USDC to Australia with venture capitalist Mark Carnegie
• Bitwise files SEC paperwork to launch spot XRP ETF
• Hashdex files amended S-1 for Nasdaq Crypto Index US ETF

Tinkering with Tokenisation

• Digital Asset’s Canton Network tokenises gold, Eurobonds, gilts
• Franklin Templeton adds Aptos blockchain to support tokenised money market fund
• Robinhood is mulling a potential stablecoin launch: Bloomberg
• SBI DM partners 21X to list tokenised securities on EU DLT exchange
• Guggenheim Treasury issues commercial paper on public blockchain
• HSBC issues HK$1 billion digital bond using Orion DLT
• Digital asset manager Kin launches $100m tokenised real estate fund on Chaintai network
• Paxos Gold’s $500 million milestone highlights increasing TradFi interest in gold-backed crypto
• Australian bank joins Project Guardian to explore RWA tokenisation
• Bank of England and FCA launch Digital Securities Sandbox
• Börse Stuttgart, ECB cut settlement time in blockchain test
• Swiss-based Taurus and Chainlink partner to drive tokenised asset adoption
• Sparkasse Dortmund issues digital savings bond as part of ECB DLT settlement trials
• Russia updates digital ruble rollout, including obligation to accept CBDC

Macro and Regulatory Environment

• China goes big on stimulus to recover from stagnation
• Former Chinese finance minister urges crypto study after US Bitcoin ETF shift
• Republican control of Senate would benefit digital assets, says Sen. Lummis
• John Deaton vows to fight federal CBDC, calls it ‘a hill to die on’
• Crypto legislation unlikely to gain traction before end of the year: TD Cowen
• European blockchain sandbox onboards 41 regulators in second cohort
• Top SEC enforcement official Gurbir S. Grewal steps down
• MiCA threatens crypto firm exodus to Middle East: regulatory expert
• Hong Kong to align crypto OTC derivative rules with European standards
• Binance founder Changpeng ‘CZ’ Zhao is a free man
• Tornado Cash co-founder Roman Storm to face trial as US judge rejects dismissal
• Crypto PACs dominate Ohio Senate race, spending $40M on Sherrod Brown’s foe
• Global effort disrupts Russia linked network using crypto to evade sanctions, U.S. charges two Russians
• Mango Markets to destroy MNGO tokens following SEC settlement
• US Foreign Affairs Committee passes resolution demanding Binance exec Tigran Gambaryan’s release in Nigeria
• Canada crypto exchanges get more time for stablecoin compliance
• Man pleads guilty to illegally operating crypto ATM network in the UK

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.