Crypto Market Update

Today’s Producer Price Index (PPI) came in at 0.2%, above the consensus forecast of 0.1%, initially sending rates higher, but that move was quickly faded. Rates and the DXY moved more decisively lower following the release of the latest consumer sentiment survey, which came in at 66, below the market forecast of 68.5. In equity markets, we are seeing a continuation of the rotation trade, with IWM outpacing the SPX for a second consecutive day. Crypto markets are in the green as the German government hastily reduces their holdings. BTC 0.99% has reclaimed $58k, while ETH 0.02% is attempting to move back above $3150, and SOL 2.41% is trading just under $140. ETH 0.02% beta names such as MKR -2.46% and LDO -2.47% are outperforming on the day, likely due to positioning ahead of possible movement on the ETF front. Additionally, STX -0.54% is up nearly 5% following news that the SEC is dropping a long-running investigation into the token.

Good News for STX

The SEC has ended its investigation into Hiro Systems, formerly known as Blockstack. This investigation was initiated following Hiro’s 2019 Regulation A offering of Stacks (STX -0.54% ) tokens, which were initially treated as securities. According to Hiro, the SEC’s latest action is the result of successfully arguing that the launch of the Stacks 2.0 blockchain and efforts to decentralize the Stacks ecosystem mean that STX -0.54% tokens no longer qualify as securities under the Howey test, as there was no central managerial role expected to drive returns for token holders. This led to the SEC dropping the investigation, providing regulatory clarity and allowing Hiro to focus on expanding Bitcoin’s Layer 2 solutions without the ongoing burden of securities regulations. This is great news for STX -0.54% , as it reduces regulatory risk for both developers and users. It may also result in greater liquidity for the token, as more exchanges provide access to it in regions that are more scrutinous towards projects being investigated by the SEC.

Germans Almost Out of BTC

The German state of Saxony is nearing the end of its Bitcoin liquidation, having transferred all but 3,846 BTC 0.99% , worth approximately $221 million, to various crypto exchanges and brokers as of Friday morning. This is less than 8% of the original 50,000 BTC 0.99% it began selling three weeks ago. At the current pace, the Germans could exhaust their BTC 0.99% supply by the end of the day today or early next week. It is important to note that partner exchanges often send a portion of BTC 0.99% back to the German government’s cold wallets toward the end of each trading day, presumably due to not being able to fill OTC orders at the desired price or size. This is certainly a positive for the market as it demonstrates the ease with which the market is able to absorb quick influxes of supply, and it could reduce the impact when the Gox coins start to move on-chain. For more information regarding our thoughts on how to approach the sources of supply overhang from the Germans, Mt. Gox, and the US government, please see yesterday’s weekly strategy note, in which we describe our views in more depth.

Technical Strategy

Following a steep 40% correction over the last couple of months, Bitcoin Cash has shown a few signs of stabilizing which might lead to an oversold bounce.  As shown, prices fell to test the area right near prior peaks from Summer 2023 which intersected near $329.  The decline in BCH 1.45% took the shape of two sharp corrective declines which were nearly equal in price points lost since early April.  Today’s bounce has been helpful in moving back to multi-day highs.  However, at $352, this hits the current downtrend from early June and is not yet strong enough to claim an upside breakout has been achieved.  Moreover, the area at the early May lows at $399 will prove to be the more important area to surpass, and when that happens, than a rally back to near $500 can get underway.  At present, any failure to get above $399 might result in a final pullback under $200 into August.  However, BCH looks interesting as a risk reward given this recent decline but will need to show more strength to be convincing of a larger low in place.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.11T $-55.6B(-2.57%) BTC Dominance 53.47 % (-0.19%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$112B (0.10%) In Exchanges +$20B (0.03%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$3.0M (0.16%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +0.5281(-0.2278) Binance +0.9989(0.2869) Bitfinex +2.0616(1.8077) Bitmex +0.5432(-0.2478) ByBit +0.7039(-0.2961) Deribit +0.0332(-0.1221) Huobi +1.0000(1.0000) Kraken +0.0692(-0.2002) Mean +0.5281(-0.2278) OKex -0.1905(-0.5283) Sentiment BMI : 33 (100.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $57,365(-2.63%) Spot Basis +$198(0.35%) Volume 663,025(12.34%) Open Interest 294,333(2.71%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 24,041(48.05%) Open Interest 237,140 (2.82%) Vol. Put/Call Ratio 0.6901 (-27.94%) OOI Put/Call Ratio 0.5055 (-0.08%) All metrics as of 2024-07-12 12:00:22 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.15T $58,401 0.93% 38.28% ETH $378B $3,142 0.31% 38.08% -0.14% SOL $64B $139 0.31% 36.64% -1.19% DOGE $423,906 $0.0004 -16.53% -99.52% -99.66% All prices as of 2024-07-12 18:39:47 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -32.38% $34 0.47% 47.85% 6.93% ETHE -0.36% $29 0.82% 51.37% 9.47% News Quick Bits CoinDesk OKX Picks Malta Over France as Europe Hub to Comply With EU's MiCA Crypto Rules: Sources The Block SEC drops its probe into Hiro’s Stacks Blockchain, according to a regulatory filing The U.S. Securities and Exchange Commission has dropped its probe into Hiro Systems PBC, according to a regulator filing posted on Friday. CoinDesk MakerDAO's $1B Tokenized Treasury Investment Plan Draws Interest from BlackRock's BUIDL, Ondo, Superstate MakerDAO's competition to allocate funds will open next month, and would give a big boost for the $1.8 billion tokenized real-world asset space. Market Data The Block Bitcoin and ether slide as equities sell-off despite rising rate-cut expectations Bitcoin, ether and other major altcoins fell further on Friday alongside equity indices, despite indicators boosting the odds of a Fed rate cut. The Block Spot bitcoin ETFs log $79 million in net inflows, reaching fifth consecutive day of positive flows BlackRock’s IBIT, the largest spot bitcoin ETF by net asset value, recorded the largest net inflows of the day with $72.09 million. Dose of DeFI CoinDesk DEX Aggregator Rage Trade to Issue Token on Buzzy New Layer 1 Blockchain Hyperliquid Decentralized exchange aggregator Rage Trade has announced plans to issue a new token via a liquidity generation event and a token sale on layer-1 blockchain Hyperliquid. Fundraising and M&A CoinDesk Morgan Creek Digital to Raise up to $500M for New Web3 Venture Capital Fund The new fund will target early stage opportunities in AI, blockchain technology, chips and data. The Block JPMorgan, Standard Chartered-backed blockchain payment network Partior raises $60 million The fresh capital will help the firm develop its ledger-based interbank rails for real-time clearing and settlement. The Block After launching Telegram clicker game, Pixelverse raises additional $2 million Pixelverse has raised a total of $7.5 million and the project's backers include Delphi Ventures, Merit Circle, and Mechanism Capital. Mining The Block Bitcoin miner Bitfarms sets vote date on Riot’s attempted takeover step On Oct. 29, Bitfarms’ shareholders will vote on reconstituting its board, the latest step in Riot's attempted takeover.