Ethereum Fees at One-Year Highs, Coinbase Earnings Beat
Market Update
- Stocks and crypto are rising today as regional bank shares stabilize. BTC is up 2.0%, and the S&P gained 1.3% after Apple’s beat on earnings and improved sentiment on regional bank stocks. A note from JP Morgan upgraded Western Alliance, Zions Bancorp, and Comerica to overweight, stating all three looked “substantially mispriced.” Regional banking ETF, KRE 0.85% , is up 4.66% at writing. Among the largest 100 cryptos, the top performers were meme coins PEPE (+159%) and FLOKI (+58%), which popped after Binance announced they would list both tokens. PEPE has left skeptics in disbelief as it trades at a $1.7bn market cap despite not having any clear utility. While this may seem like a drawback on the surface, our team has written about distinct characteristics specific to meme coins that have driven outperformance over serious projects in the past. These include their tendency to induce FOMO, virality, reflexivity, unit bias, and community.
- ETH is outperforming BTC, gaining 3.89% as speculation on meme coins triggered by the success of PEPE have caused network fees to surge to 1-year highs. The trading volume for PEPE has surpassed that of Wrapped Bitcoin (WBTC) and USDT stablecoin volumes. Copycat meme coins have also emerged, and smart contracts for meme coins such as SPONGE, TURBO, BOB, and TRBNR are currently among the most active on Ethereum. The rise in Ethereum transaction fees has led to all-time-high gas fees on layer-2 transactions. Zero-knowledge proof (ZK)-based rollups have been hit worse than optimistic rollups, with fees surging between $2 to $11 for swapping tokens on ZK-based scaling solutions. Ethereum’s supply issuance becomes deflationary in times of high activity as the network’s base fee burn rate increases with higher activity levels. The last day has seen over ~10,000 ETH burned out of circulation ($19.9m), putting ETH on track to deflate its supply by 3% annually at current activity levels.
- Coinbase, the leading US cryptocurrency exchange, reported a Q1 loss of $79 million but outperformed analysts' expectations, posting a loss of $0.34 per share compared to the expected $1.45. Revenue was down YoY, but up 22% QoQ, with growth in trading, subscriptions, and services. The number of monthly transacting users decreased YoY but showed a slight uptick compared to 2022 averages, indicating an increase in digital asset prices has improved appeal among retail traders. Coinbase also saw growth in revenue from custody services and staking due to the bump in Bitcoin and Ethereum prices. Shares of COIN 4.06% rose 16% today to trade at $57.35.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Today’s push to multi-day highs is significant and bullish for ETH which should result in prices pushing higher to test and exceed recent highs at 2141 up to targets near $2400. Recent stabilization in prices occurred right near the 38.2% Fibonacci retracement level of the prior rally from March into mid-April. Friday’s gains (5/5) are now carrying prices to the highest close since 4/20 which should spearhead the next rally back to highs. ETH has been outperforming BTC since May got underway, and this uptick in relative strength looks likely to continue into mid-May. Momentum remains negatively sloped but converging towards a bullish crossover by MACD. Overall, Ethereum’s consolidation since mid-April appears like a minor speedbump only and did not take away from the ongoing bullish structure. ETH looks like an attractive risk/reward technically at current levels and should be favored for gains back to test and exceed recent highs. Only a pullback down under $1800 would serve to postpone this advance.
Daily Important Metrics
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All metrics as of May 5, 2023 1:25 PM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $574B | $29,624 | ↑ 2.56% | ↑ 79% | |
 ETH | $240B | $1,992 | ↑ 5.78% | ↑ 66% | ↓ -13% |
 ADA | $14B | $0.3950 | ↑ 1.44% | ↑ 60% | ↓ -19% |
 DOGE | $11B | $0.0794 | ↑ 1.15% | ↑ 13% | ↓ -66% |
 MATIC | $9.3B | $1.00 | ↑ 1.70% | ↑ 32% | ↓ -47% |
 SOL | $9.0B | $22.76 | ↑ 4.07% | ↑ 130% | ↑ 51% |
 DOT | $6.9B | $5.87 | ↑ 3.18% | ↑ 35% | ↓ -44% |
 LINK | $3.7B | $7.21 | ↑ 2.79% | ↑ 30% | ↓ -49% |
 NEAR | $1.7B | $1.88 | ↑ 1.22% | ↑ 47% | ↓ -31% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -37% | $16.91 | ↑ 2.21% | ↑ 104% | ↑ 25% |
| BITW | ↓ -58% | $11.17 | ↑ 2.95% | ↑ 108% | ↑ 29% |
| ETHE | ↓ -49% | $9.83 | ↑ 6.73% | ↑ 107% | ↑ 28% |
| BTCC | ↑ 0.04% | $5.45 | ↑ 2.44% | ↑ 80% | ↑ 1.05% |
News
QUICK BITS
CryptoSlate US presidential candidate supports Bitcoin, criticizes CBDCs U.S. presidential hopeful Robert Kennedy Jr. has supported Bitcoin (BTC) while speaking against central bank digital currencies (CBDCs) in a May 5 Twitter threa... |
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MARKET DATA
Coin Telegraph Memecoin hype drives Bitcoin transaction fees to multi-year highs Despite the latest spike in Bitcoin transaction fees, the current BTC transaction cost is still far from the all-time ... |
The Block Pepe memecoin tops $1 billion market cap even as Binance flags lack of utility The gains in pepe, a crypto token styled on the Pepe the Frog cartoon meme, have pushed it into the ranks of the top 50 most valuable tokens. ... |
Bitcoin.com VC Darling Crypto Sui Makes Waves With Market Debut, Price Sinks 37% From All-Time High A buzz has been generated around a new layer one (L1) proof-of-stake blockchain initiative named Sui, following the network’s mainnet debut on May 3, 2023. The ... |
Decrypt.co Coinbase Reports Q1 Revenue of $736M, Up 23% From Q4 The San Francisco-based exchange beat analysts' profit and revenue expectations. |
REGULATION
CoinDesk New York Attorney General Seeks New Crypto Powers for State Regulators: Report The bill follows legal suits taken by Letitia James in connection to crypto companies like Celsius, CoinEx and Nexo. |
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