Election Day in the US as Bitcoin hovers around $70k
Election Day in the US as Bitcoin hovers around $70k
Weekly Market Update #48
Before diving into this week’s overview, be sure to check out some of our recently released research content:
Major developments for the week:
Bitcoin Spot ETFs experienced a $2.22 billion inflow week
USDT was officially launched on the Aptos blockchain
Swell Network began migrating its Layer 2 operations to Optimism
Stacks implemented its Nakamoto upgrade
ConsenSys laid off 20% of its workforce
dYdX reduced its core team by 35%
Coinbase revealed a $1 billion share buyback plan alongside its Q3 earnings report
GetGrass.io moved to Stage 2 of its network rollout
Unichain introduced a new validation network
Swell Network scheduled its Token Generation Event for 7th November
Citi and Fidelity showcased an on-chain proof-of-concept for real-time forex swaps
On 30 October, IBIT received a significant inflow of $872.0 million, indicating strong investor interest, while ARKB saw a smaller inflow of $7.2 million. The trend continued positively on 31 October, with IBIT attracting another $318.8 million, and other ETFs like BRRR and BTC recording modest inflows.
Cumulative flows reached a high of $893.3 million on 30 October before gradually decreasing, reflecting a peak in investor engagement at the month's close. In contrast, funds like GBTC and FBTC experienced mixed flows, with GBTC seeing a minor outflow of $31.1 million on 31 October. For the 5 trading days, total inflows amounted to an impressive $2.22 billion, accounting for almost half of the total inflows for October.
In other Bitcoin related news, Deutsche Telekom, the largest telecom provider in Europe, has launched a pilot project named “Digital Monetary Photosynthesis” to trial Bitcoin mining using surplus renewable energy. The initiative seeks to utilize excess energy to reduce environmental impact and support grid stability. The project will be operated by Deutsche Telekom’s subsidiary MMS in partnership with Bankhaus Metzler, hosted at Riva GmbH Engineering’s facility in Germany. This step aligns with the global shift towards sustainable mining and could strengthen Europe’s role in the cryptocurrency industry.
Stacks activates its Nakamoto upgrade
For our final bitcoin related update of the week, Stacks confirmed the activation of its Nakamoto upgrade. This upgrade is aimed at significantly reducing transaction times and enhancing transaction finality to match Bitcoin’s irreversibility.
This upgrade also lays the groundwork for the upcoming launch of sBTC later this year. As one of the most established layer-2 projects on Bitcoin, Stacks holds a notable position amid over 80 similar projects that have emerged recently.
Moving back to the ETF flows, ETHE recorded notable outflows, with $8.4 million withdrawn on 28 October, followed by a larger outflow of $36.6 million on 31 October, and $11.4 million on 1 November. This resulted in a total net outflow of $62.4 million for ETHE. On the other hand, ETHA showed substantial inflows, with $13.6 million on 29 October and $49.6 million on 31 October, accumulating a total inflow of $65.5 million. Other ETH ETFs displayed more restrained movement. FETH received steady inflows, including $5 million on 28 October and $5.3 million on 30 October, totalling $10.3 million. CETH recorded a single inflow of $2.7 million on 30 October, while QETH and ETH funds saw little to no activity. Overall, the cumulative flows for these Ethereum ETFs reached $13 million, with varied performances across individual funds.
Citi and Fidelity announce on-chain money market fund proof-of-concept
We saw yet another sign of continued institutional adoption last week as it was announced that Citi and Fidelity International have introduced a proof-of-concept for an on-chain money market fund (MMF) incorporating a digital foreign exchange swap solution that enables real-time settlement. Developed under Singapore’s Monetary Authority’s Project Guardian, this innovation seeks to boost liquidity and streamline financial markets through asset tokenization. It facilitates smoother treasury management, accelerates transaction speeds, and improves efficiency by using smart contracts to coordinate FX swaps with MMF token processes. This solution is set to be presented at the Singapore FinTech Festival 2024.
Swell migrates to Optimism’s Superchain
In other news, Swell Network has announced its migration of Layer 2 operations to the Optimism Superchain, utilizing the OP Stack to enhance scalability and integration. This strategic pivot involves moving away from the previously intended use of Polygon’s Chain Development Kit (CDK). By leveraging Optimism’s infrastructure, Swell will use ETH as its gas token and introduce a “Proof of Restake” protocol to improve transaction efficiency and bolster network security. This shift aligns Swell with major DeFi players like Coinbase and Uniswap within the Optimism ecosystem.
Swell Network is also preparing for its TGE on 7th November 2024, a key milestone that will allow early participants to claim SWELL, the platform’s native utility token, at an initial price of $0.09.
At the time of writing, Swell currently has approximately 52,000 unique depositors and roughly $1 billion in TVL. The composition of this TVL can be further broken down as illustrated below.
dYdX and Consensys significantly cut their workforce
For the final update, dYdX has reduced its workforce by 35% as part of a strategy to streamline operations and align resources with long-term objectives. CEO Antonio Juliano indicated that, despite the layoffs, dYdX will continue recruiting for critical roles. The decision occurs amidst challenging market conditions and growing competition within the DeFi sector.
Similarly, Consensys announced a 20% reduction in its workforce, impacting over 160 employees across all divisions. This restructuring move responds to macroeconomic challenges and regulatory pressures, including ongoing disputes with the SEC. CEO Joseph Lubin cited regulatory uncertainties and legal expenses as primary reasons for the decision, as ConsenSys aims to transition toward a decentralized “network state” while advancing products such as MetaMask.
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Disclaimer: This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.