Polygon Launches New Token, Crypto Terrorist Financing Overblown
Market Update
- U.S stocks have continued to decline, with the S&P falling 0.6% and the Nasdaq down 1.2% at writing. This week, lackluster earnings and outlooks from the tech sector have negatively impacted the market, with firms like Alphabet and Facebook not performing well post-earnings announcements. On a brighter note, the U.S economy exceeded expectations in the third quarter, growing at an annualized rate of 4.9%. The dollar has turned higher, trading at 106.8, while long-term yields are still near recent highs. BTC is seeing its first daily decline in a week, pulling back 2.4% to trade at $34k. ETH is similarly pulling back 1.6% to $1.78k. Crypto investors are venturing further on the risk curve as meme coin DOGE outperforms in the top 10 (+3.8%). PEPE has outperformed among the top 100, rising 85.2% over the last week. One known heuristic for finding near-term tops is seeing which kinds of projects are outperforming, with BTC known to lead initial impulses and the market rotating to meme coins toward the end of a move.
- The POL token's smart contracts have been activated on the Ethereum mainnet, marking a step towards Polygon's transition to its 2.0 version. This move comes after a suggestion for a token upgrade from MATIC to POL, aiming to unify all Polygon-based networks under a single token. This new token will be central to various networks, including the main Polygon blockchain, Polygon zkEVM network, and other application-specific blockchains. The switch from MATIC to POL is facilitated by a simple technical procedure where MATIC tokens are sent to an upgrade smart contract, which returns an equivalent amount of POL. Although the POL token contract has been moved to the Ethereum network to replace MATIC eventually, current users don't need to exchange their MATIC for POL yet. The launch of POL is a precursor to further developments in the Polygon 2.0 roadmap, such as introducing a new staking layer, upgrading the existing proof-of-stake network to zkEVM layer-2, and initiating a shared liquidity protocol. However, POL is currently not in use for any systems within the Polygon network, with staking and gas fee payments still being done via MATIC. The overarching aim is to enhance transaction validation through zero-knowledge proofs in the proposed layer-2 ecosystem, which will rival other systems like the Optimism ecosystem by Optimism Labs.
- Exaggerated reports initially claimed Hamas received substantial cryptocurrency donations, causing a stir in Washington. However, Elliptic, the data firm cited, clarified that this was a misinterpretation, stating that the amounts were actually "tiny." Despite an earlier story by a Wall Street Journal reporter attributing over $90 million in crypto to terrorist groups based on Elliptic's data, the firm emphasized that Hamas's digital-asset fundraising was minimal compared to other sources. A pro-Hamas organization, Gaza Now, has only garnered $21,000 in crypto donations since October 7, with many funds frozen due to the vigilance of crypto entities and researchers. These clarifications by Elliptic have quelled some of the initial concerns, although the U.S. Department of the Treasury acknowledged a certain extent of crypto connection to terrorism in the region. The discourse also led to a response from the Blockchain Innovation Project to address the claims made by lawmakers regarding crypto's role in funding terrorism.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Bitcoin's relative strength vs. Ethereum looks to be nearing its first major area of resistance technically speaking into early November which should allow ETH the ability to finally play catch-up on this recent surge in Bitcoin. Weekly charts of ETHBTC show the steady decline in this ratio since last September finally having reached prior lows from June 2022. Moreover, DeMark indicators on ETHBTC will officially show TD Buy Setup patterns on weekly charts potentially as early as next week for the first time since this peaked last Fall. These Setup counts have been important at prior turns for ETHBTC and were present at peaks last Fall along with the Summer bottom in 2022. Thus, it looks right to favor ETHBTC into November, expecting a bottoming out and turn back higher in the weeks to come. On an absolute basis, any rise back over $1900 would be important towards signaling an absolute breakout for ETHUSD and allow for strength up to likely $2400.
Daily Important Metrics
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All metrics as of October 26, 2023 2:38 PM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $663B | $33,982 | ↓ -1.93% | ↑ 105% | |
 ETH | $215B | $1,784 | ↓ -0.42% | ↑ 49% | ↓ -56% |
 SOL | $13B | $31.47 | ↓ -4.62% | ↑ 218% | ↑ 113% |
 ADA | $10B | $0.2861 | ↑ 1.64% | ↑ 16% | ↓ -89% |
 DOGE | $10B | $0.0711 | ↑ 4.29% | ↑ 1.37% | ↓ -104% |
 LINK | $5.9B | $10.51 | ↓ -5.38% | ↑ 89% | ↓ -16% |
 MATIC | $5.8B | $0.6266 | ↓ -0.95% | ↓ -18% | ↓ -123% |
 DOT | $5.3B | $4.21 | ↓ -1.87% | ↓ -3.12% | ↓ -108% |
 NEAR | $1.2B | $1.18 | ↑ 3.32% | ↓ -7.33% | ↓ -112% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -14% | $25.58 | ↓ -4.50% | ↑ 209% | ↑ 103% |
| BITW | ↓ -34% | $17.53 | ↓ -3.79% | ↑ 226% | ↑ 121% |
| ETHE | ↓ -22% | $13.11 | ↓ -5.07% | ↑ 175% | ↑ 70% |
| BTCC | ↑ 0.12% | $6.22 | ↓ -2.20% | ↑ 105% | ↑ 0.15% |
News
QUICK BITS
CoinDesk After Hamas' deadly attacks in Israel, media reports linked the terrorist group with tens of millions in crypto donations, but that data was misinterpreted and ... |
CryptoSlate Elliptic counters WSJ report on the scale of Hamas’ crypto fundraising Crypto analytics firm Elliptic said in an Oct. 25 blog post that, contrary to mainstream reports, terrorist groups have not received significant crypto donation... |
MARKET DATA
Coin Telegraph Bitcoin dominance hits 54% — Highest in 2.5 years as BTC halving approaches BTC market dominance hovered around 80% during the 2017 bull market but slumped to the 50%–60% range during the 2021 b... |
CoinDesk FTX Cold Wallets Move $19M in Solana, Ether to Crypto Exchanges The debtor group in control of FTX assets has conducted various on-chain transactions in the past few weeks. |
CoinDesk Dollar/Yen Trading Volume Surpasses Bitcoin on DeFi Platform Gains Network Gains Network, initially released on Polygon and later on Arbitrum, allows users to trade financial derivatives of cryptocurrencies, foreign exchange and commod... |
THOUGHTS AND OPINIONS
TrustNodes Fed’s Balance Sheet is “Highly Inflationary” Says BlackRock’s CEO Larry Fink, the CEO of one of the world's biggest asset manager, BlackRock, has argued that we're in an inflationary environment in the Davos in the Desert, a g... |
Decrypt.co Blockchain Tech 'Stuck in the Eighties': Fantom's Andre Cronje With the release of Sonic's testnet yesterday, Andre Cronje is hoping to bring Fantom and blockchain technology back to the future. |
FUNDRAISING AND M&A
The Block Solana adds incubator to spur growth and woo founders away from rival chains By launching a startup incubator, Solana Labs is hoping to foster the development of more applications on its Layer 1 blockchain. |
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