ETF Decisions Deferred, DeFi Scores A Huge Win in the Courts
Market Update
- In July, the core personal consumption expenditures (PCE) index increased by 0.2% month-over-month and 4.2% year-over-year, meeting economists' projections. This led to a significant pullback in rates and a bond market rally. Surprisingly, the Dollar Index (DXY) also surged, likely exerting downward pressure on cryptoasset prices. Amid these market dynamics, major equity indices experienced slight gains. BTC retraced its earlier post-Grayscale rally gains, a trend also seen in Ethereum and other altcoins. The exception was Maker (MKR), which rose around 10% without an identifiable catalyst. As the week progresses, investor focus is shifting toward the non-farm payroll data due out on Friday, with economists forecasting 170k job additions.
- In a move that aligns with market expectations, the SEC has deferred its rulings on several Bitcoin spot ETF applications, specifically those from WisdomTree, Valkyrie, and Invesco. Meanwhile, decisions on other applications from VanEck, Bitwise, Fidelity, and BlackRock are still pending and are due shortly, as per the schedule. The prevailing sentiment suggests that all ETF proposals are likely to face delays until at least the next key deadline, making October a significant month for potential updates. While Bitcoin experienced a minor dip following the announcements, the market's overall reaction was relatively muted, indicating that the news did not come as a major shock.
Source: Bloomberg Intelligence via James Seyffart
- As discussed in our latest strategy note, a significant legal ruling has come down in favor of Uniswap Labs, which was facing a class-action lawsuit. The plaintiffs had accused the decentralized exchange of enabling scam tokens, leading to financial losses. Judge Katherine Polk Failla, who is also presiding over a similar SEC case against Coinbase, dismissed the lawsuit. She argued that existing federal securities laws should not be used to hold Uniswap Labs accountable for third-party scams, suggesting that these regulatory gaps are better addressed by Congress. The ruling has far-reaching implications for the DeFi industry. It sets a legal precedent, indicating that DeFi platforms may not be held liable for third-party scams. Additionally, the judge's involvement in both the Uniswap and Coinbase cases adds another layer of importance to this decision, potentially signaling how she might approach regulatory issues in the Coinbase case. The ruling underscores the need for legislative, rather than judicial, action to tackle the unique challenges posed by the rapidly evolving DeFi sector.
Source: Risley v Uniswap
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
ETHBTC has largely traded sideways since bottoming in late June and hasn’t given a clear directional signal for over two months. However, despite thoughts of ETH likely beginning to outperform after a steep slide in June, the lack of rally actually points to the opposite for the weeks/months to come. Daily ETHBTC charts show just fractional stabilization as part of a larger downtrend. Until/unless ETHBTC can regain $0.068, this recent churning is thought to have a higher likelihood of breaking down to new monthly lows. This could coincide with a possible favorable ruling on a spot Bitcoin ETF, but at present, the near-term consolidation is more neutral than bullish or bearish. Breaks of $0.061 should allow for a pullback to $0.055-$0.0575 and would coincide with much better relative strength in Bitcoin. Overall, despite a lack of movement, the odds increasingly favor a breakdown to new lows for ETHBTC.
Daily Important Metrics
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All metrics as of August 31, 2023 4:43 PM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $508B | $26,070 | ↓ -4.38% | ↑ 57% | |
 ETH | $198B | $1,651 | ↓ -3.08% | ↑ 38% | ↓ -20% |
 DOGE | $9.0B | $0.0637 | ↓ -2.86% | ↓ -9.18% | ↓ -67% |
 ADA | $8.9B | $0.2541 | ↓ -4.13% | ↑ 2.96% | ↓ -54% |
 SOL | $8.0B | $19.70 | ↓ -5.32% | ↑ 99% | ↑ 42% |
 DOT | $5.2B | $4.27 | ↓ -6.08% | ↓ -1.71% | ↓ -59% |
 MATIC | $5.1B | $0.5489 | ↓ -4.37% | ↓ -28% | ↓ -85% |
 LINK | $3.1B | $5.84 | ↓ -1.81% | ↑ 5.27% | ↓ -52% |
 NEAR | $1.1B | $1.16 | ↓ -3.90% | ↓ -9.24% | ↓ -67% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -20% | $18.71 | ↓ -5.07% | ↑ 126% | ↑ 68% |
| BITW | ↓ -43% | $12.45 | ↓ -3.07% | ↑ 132% | ↑ 74% |
| ETHE | ↓ -31% | $11.05 | ↓ -2.86% | ↑ 132% | ↑ 75% |
| BTCC | ↓ -0.14% | $4.80 | ↓ -3.42% | ↑ 58% | ↑ 1.05% |
News
QUICK BITS
Coin Telegraph Arkham IDs Robinhood as 5th largest ETH holder Arkham said the wallet contains approximately $2.54 billion worth of ETH and these funds are under custody for user ba... |
MARKET DATA
CoinDesk Scores of Friend.tech Users Remain Active Even as Trading Volumes Drop 95% Falling revenues have led some market commenters to say the platform has “gone dead.” But has it? |
CoinDesk Bitcoin Holdings on Crypto Exchanges Dwindle to 2M, Fewest Since January 2018 The number of BTC held in wallets tied to crypto exchanges has declined by 4% this month, data tracked by CryptoQuant show. |
CoinDesk Aerodrome Fanatics Deposit $150M to Base Blockchain on First Day Its creators hope to emulate the apparent success of Velodrome, one of Optimism network’s most used platforms which holds over $288 million in locked value. |
DOSE OF DEFI
Coin Telegraph $16M in crypto lost to hacks in August — Report Four security incidents took place on Coinbase's layer-2 solution Base shortly after its launch. ... |
REGULATION
CoinDesk U.S. Court Calls ETH a Commodity While Tossing Investor Suit Against Uniswap A New York judge declined to "stretch the federal securities laws to cover the conduct alleged" in a proposed class action complaint seeking to hold Uniswap acc... |
FUNDRAISING AND M&A
Decrypt.co Stroom Raises $3.5M to Bring Liquid Staking to Bitcoin Lightning Network Bringing liquid staking to Bitcoin will help solve Lightning Network’s liquidity challenges, argues the team behind the Stroom Network. |
WEB 3.0
Decrypt.co Argent, Starknet Foundation Tag 'Several Millions' for New Startup Studio With infrastructure and UX solved, Argent and the Starknet Foundation are teaming up again to fund builders looking to launch on Starknet. |
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