Digital Assets Weekly: September 9th
For a full copy of this report in PDF format please click HERE
Market Analysis
Following a quiet August for Bitcoin price action, the asset sold off from its highs around $12,000 to as low as $9,946 on Saturday, before climbing back above $10,000 support and ending the week around $10,400. For the 7 days ended 8/7, Bitcoin was down 11.2% and now sits around ~$10,250.
Despite its meaningful sell-off, Bitcoin remains well ahead of all other asset classes on a YTD basis. Outside of Bitcoin, nearly all other major asset classes saw price declines last week with oil falling as much as 7%.
Amongst all the majors, Bitcoin was the best performing asset this week (-11.2%), while Litecoin was the worst performing asset (-20.2%).
Bitcoin led all FS Crypto Indices this week. FS Crypto FX 250 was the worst performing index with Maker (-22%) and Synthetix (-37%) representing major contributors to the underperformance.
Despite a 19% decline this past week, Ethereum remained well ahead of all other major crypto assets on a YTD basis and is still up 175%.
Bitcoin’s Mkt Cap/CMR ratio decreased 11.5% week over week from 11.2x to 9.9x
Bitcoin’s Mkt Cap/RV ratio declined 11.3% from 1.9x to 1.7x.
Digital Asset Investment Vehicles & Stocks
Noteworthy this week:
Canaan (NASDAQ: CAN): Canaan plans to repurchase up to $10M of its outstanding American depositary shares. The company plans to fund the repurchases from its existing cash balance and will run from September 22 until the next 12 months. Shares finished the day up about 9%on Tuesday on the news.
Grayscale Investment Trusts: This week, the ETHE premium to NAV fell to a new all-time low of 33% (39% last week) before finishing the period around 55%. The ETHE decline is notable as it listed at a premium of >1,000% and has an average historical premium of ~260%. Grayscale’s newly listed products BCHG and LTCN kept their high premiums finishing the week with premiums of 295% and 750%, respectively.
Overstock (NASDAQ: OSTK): tZERO a subsidiary of Medici Ventures, the blockchain-focused, wholly owned subsidiary of Overstock.com (NASDAQ:OSTK) has made trading free for broker-dealers trading publicly traded digital securities registered with the U.S. regulators, effective September 3rd.
Winners & Losers
Winner
Flexa – The team behind the New York-based digital asset payments company launched its new digital token, AMP, on the Ethereum mainnet this week. This ERC20-compliant token will be used as a collateral token for DeFi applications with the first emergent use case being to secure all payments on the Flexa network. AMP was designed in conjunction with Ethereum development studio, Consensys. Crypto asset custodian and exchange Gemini has announced plans to support AMP.
Loser
SushiSwap – The imitation of the popular automated market maker Uniswap had a rough week. Having surged in use due to its lucrative yield farming numbers, the platform accounted for over 70% of the total value on Uniswap at the beginning of September. This week, Chef Nomi, the pseudonymous founder and leader of SushiSwap, converted a portion of SUSHI tokens allocated for the development in exchange for approximately $13M worth of Ethereum triggering a sell-off as many marker participants viewed the sale as an exit scam. While Nomi insists that he had a right to sell the tokens and did so to focus on technical issues, the price of the SUSHI token has declined precipitously from as high as $8.50 last Tuesday to as low as $2.80 by end of day Monday, or a decline of about 67%. The project is now under new management of Sam Bankman-Fried, the FTX crypto exchange CEO.
Financing & M&A Activity
Noteworthy this week:
Zero Hash – The Chicago-based crypto derivatives exchange formerly known as Seed CX — announced last Wednesday that it closed a Series C fundraising round to help it further build out its settlement-as-a-service business. The firm is hoping the fresh cash injection will help it reach profitability by the end of the year. Investors in the round include broker-dealer Tastyworks, the active trader-aimed options platform led by Tom Sosnoff, as well as The Small Exchange, Bain Capital, Trade Station, CMT Digital and Monday Capital.
Dusk Network – the Amsterdam-based fintech building a security token exchange raised over $1M from iFinex, the owner of the crypto exchange Bitfinex. The Company’s funding comes in addition to a ~$9M private sale conducted in 2018. Luno – DCG acquired the London-based crypto exchange for an undisclosed sum. DCG first invested in Luno in its seed round in 2014. DCG now operates five subsidiaries, including recently-launched Foundry, Grayscale Investments, Genesis, CoinDesk, and Luno.
Recent Research
• David Grider: Digital Assets Weekly: September 1st
• Tom Lee & David Grider: If you missed it, view a recording of the Business Use Cases of the BSV Blockchain Webinar
• FS Digital Strategy Team: Bitwise: Leading Crypto Index Funds & New Alpha Opportunity
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