Weekly Market Update #25
Bitcoin reclaims $40,000 as GBTC outflows subside
Crypto Developments of the Week:
Last week, digital asset investments faced $500 million in outflows, with Grayscale outflows reaching $2.2 billion. Bitcoin ETFs since their January 11th, 2024 launch have attracted $5.94 billion, including $1.8 billion in the last week alone
The United States government announced its intention to auction off $130 million worth of Bitcoin, which was confiscated from the Silk Road
Harvest Hong Kong applied for a Bitcoin spot ETF with the Hong Kong Securities and Futures Commission on January 26th. This marks the first time a Hong Kong institution has sought approval for a Bitcoin spot ETF.
The SEC has postponed the review of the spot Ethereum ETF applications from both Grayscale and Blackrock. Bloomberg’s James Seyffart remarked that the “Next significant date is May 23rd” in relation to these applications.
Starting January 29th Google will allow crypto trusts and ETF ads
DYDX v3.0 goes live
Eigenlayer has rescheduled their upcoming restaking event for February 5th
Tomorrow (Tuesday the 30th of January), Optimism will release 2.5 percent of the circulating supply, which is equivalent to $74.17 million
Jupiter ($JUP) to airdrop its token on January 31st
Aevo to undergo its token generation event on the February 1st
Bitcoin ETFs Experience $1.8 billion of Inflows
Our previous weekly reports have consistently focused on Bitcoin ETF inflows and outflows, particularly examining Grayscale. With the conclusion of another week, we've gathered more data regarding these specific flows. Since January 11th 2024, Grayscale has seen significant outflows amounting to $5 billion in total. Just last week, the outflows reached $2.2 billion yet there was a noticeable trend of gradual reduction as the week advanced.
The newly launched US ETFs have been attracting significant interest, with $1.8 billion in inflows last week and a total of $5.94 billion since their inception. This brings the net inflow, including Grayscale's figures since the launch, to $807 million.
This tapering off of selling in the latter half of the week is reflected in the cumulative return by session, with US hours beginning to converge with its EU and APAC counterparts.
Data from Bloomberg’s James Seyffart reveals that although GBTC outflows have slowed, GBTC remains the #1 Bitcoin spot ETF by volume, trading $110 million more than Blackrock’s IBIT on Monday.
Eigenlayer has rescheduled their upcoming restaking event for February 5th 2024
Continued attention continues to surround EigenLayer as the new window for raising liquid staking token caps quickly approaches.
Significant updates have been announced regarding the capital raise and staking parameters for EigenLayer Liquid Staking Tokens (LSTs) . The introduction of three new LSTs (sfrxETH, mETH, and LsETH) expands the EigenLayer restaking ecosystem. Notably, the removal of the 200k ETH caps on all existing LSTs aims to stimulate organic restaking demand. A new allocation method for restaking points, capping distributions at 33% of future issuance, reinforces a commitment to decentralization. These changes, which do not affect payments from actively validated services to LSTs, have resulted in a one-week delay in the liquid staking token addition schedule. The restaking window is now live from February 5th - 9th at 12 PM PT.
Below is a snapshot of the existing assets under management for each respective liquid staking protocol:
Best/Worst Performers of the Week
Ethereum and Ethereum Beta were amongst some of the weaker performers last week amidst the sell off experienced by the market. Newly launched coins such as Manta proved to fare well indicating continued appetite by individuals to participate in new launches.
Sui is also within the top performers of the week following an announcement that they have expanded its partnership with Alibaba Cloud. This collaboration is set to introduce a suite of new services, designed to support both existing and emerging developers on the Sui network, as stated in their official announcement. Key features of this joint initiative include the integration of AI in the development environment, the launch of university training programs, the organization of public events and the translation of essential documentation into a broader range of languages.
Optimism will undergo a $74.17 million unlock on January 30th, 2024
Lastly, the primary unlock event this week features Optimism. Scheduled for January 30th, $OP plans to release 2.5% of its circulating supply. This comprises $39.27 million for Core Contributors and $35.14 million for Investors. As of time of writing, $OP is 21% vested, with the goal of this vesting schedule being completed by August 28th 2027.
Note: The content in this weekly report has also been utilized in our weekly collaborative series with stock/crypto trading platform eToro.
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