Market Commentary

• Crypto investors are anxiously waiting for a decision on an Ethereum ETF approval ahead of today’s first final deadline. Congress wrote a letter to Gary Gensler yesterday urging him to maintain a consistent and equitable approach for the Ethereum application, as well as for “other digital asset-backed ETPs.” ETH -5.50% continues to lead the market, gaining 1.51% to $3,795 while BTC -4.98% has dropped 2.10% to $67.7k. ETHBTC has risen 3.61% to .056, its highest level since March, as it attempts to break a near two-year downtrend (more analysis below). Nvidia reported earnings yesterday, beating on both the top and bottom lines and announcing a 10-1 stock split. NVDA 26.41% has surged 10.46% to $1,050, failing to keep indices positive on the day in light of hot flash PMI data. The SPY -0.45%  and QQQ -0.12%  have lost 0.58% and 0.31%, respectively, while rates are rising in response to the PMI figures and slightly soft jobless claims.
• The U.S. House of Representatives voted 279-123 in favor of the Financial Innovation and technology for the 21^st Century Act (FIT21), a broad-based digital asset market structure bill. The approval is a significant moment for the crypto industry and represents one of the largest regulatory wins to date. FIT21 saw notable bipartisan support with 71 Democrats and 208 Rebulicans voting in favor. President Biden issued a policy statement noting issues with the bill, but did not issue a veto warning like he did with SAB121, and he included language claiming that the administration looks forward to collaborating with congress to develop digital asset legislation – a significant change in tone towards the industry. If approved, FIT21 would set clear guidelines for digital asset regulation, putting the CFTC as the leading regulator and defining what constitutes a token as a commodity or security. The bill will now head to the Senate where it will likely face a higher level of opposition, but still is an overwhelmingly positive development for the industry.
• Grayscale has announced two new digital asset trusts: the Grayscale Near Trust and the Grayscale Stacks Trust. The first focuses on NEAR -4.33% , an alt-layer-1, and the second focuses on one of our Core Strategy Constituents, STX 4.22% , a bitcoin layer-2 network. In a press release, Grayscale stated that they continue to see demand for diversified digital asset exposure and Near and Stacks are two innovative products addressing blockchain scalability and fostering industry adoption. The new trusts are open for subscriptions by eligible individual and institutional accredited investors. The trusts will operate similarly to their other single-asset trusts. The timing of the launch coincides with Congress’ forementioned letter to the SEC about approving digital asset products and Grayscale is likely trying to strike while the iron is hot.

Technical Strategy

• Despite the big rise in Ethereum relative strength this past week, there hasn’t been any material breakout in ETHBTC just yet. This has managed to recoup the last 10 weeks of losses in just one week but will require a break above its ongoing downtrend to argue for the start of a larger rally. Looking back, the downtrend in ETHBTC has persisted since Fall of 2022. Daily ETHBTC charts show the ongoing downtrend along with the area of Ichimoku resistance directly above. Until this can be exceeded, it’s thought that Bitcoin remains preferred over Ethereum. However, the uptick in momentum as a result of this week’s rally does look compelling towards helping a longer-term breakout finally be achieved. Such a move might happen on further clarity of the Spot ETF being approved. For now, this area near 0.056 looks worth keeping a close eye on in the days/weeks ahead.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.61T +$26B(1.02%) BTC Dominance 52.76 % (-0.95%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$112B (0.35%) In Exchanges +$19B (0.25%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$2.3M (0.02%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +1.2773(0.1571) Binance +0.9694(-0.0222) Bitfinex +0.7032(0.7206) Bitmex +1.1020(0.1020) ByBit +1.4323(0.4323) Deribit +1.8428(0.4382) Huobi +1.0000(1.0000) Kraken +3.3415(0.9044) Mean +1.2773(0.1571) OKex +1.1251(-0.4013) Sentiment BMI : 45 (0.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $70,200(-0.16%) Spot Basis +$675(0.97%) Volume 485,120(-27.40%) Open Interest 269,867(0.65%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 24,721(-28.08%) Open Interest 269,266 (0.71%) Vol. Put/Call Ratio 0.5639 (19.06%) OOI Put/Call Ratio 0.4851 (3.00%) All metrics as of 2024-05-23 17:45:25 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.33T $67,699 -3.08% 60.29% ETH $456B $3,798 1.46% 66.91% 4.13% SOL $78B $174 -3.56% 71.03% 6.70% DOGE $229,304 $0.0002 20.06% -99.74% -99.84% All prices as of 2024-05-23 13:55:20 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -0.32 $36 -5.49% 53.82% -4.04% ETHE -0.07 $33 0.10% 69.21% 5.56% News Quick Bits The Block Ethereum Layer 2 Taiko announces ‘genesis airdrop’ ahead of mainnet Taiko, an Ethereum Layer 2 rollup project, plans a 'genesis airdrop' distributing 5% of its 1 billion token supply ahead of its mainnet launch. Crypto Infrastructure The Block StarkWare unveils new ZKThreads framework in its ‘fractal scaling’ arsenal StarkWare, in collaboration with Cartridge, has introduced a new scaling framework named ZKThreads. Regulation CoinDesk Crypto Infrastructure Firm Ramp Network Secures Ireland Registration It plans to make Ireland its European headquarters and secure a license as a Crypto Asset Service Provider. The Block US House passes market structure bill to regulate the crypto industry The U.S. House of Representatives passed a crypto market structure bill that aims to regulate the industry at large. Product Updates and Partnerships Bitcoin.com Metamask Aims to Add Bitcoin Support: A New Chapter for the Popular Ethereum Wallet Metamask, the popular ethereum wallet, is reportedly planning to add support for bitcoin (BTC) in the next month or so, according to sources cited by Coindesk. While details are scarce, the integration could initially begin with basic features and expand over time. This move would significantly expand Metamask’s reach beyond the Ethereum ecosystem, which it […] Decrypt.co ‘Stepn Go’ Puts a Social Twist on the Solana Move-to-Earn Game FSL is releasing a new version of move-to-earn game Stepn, called Stepn Go, packing in various social elements on iOS and Android. Investment Products CoinDesk BlackRock, Grayscale, Bitwise File Updated 19B Forms in Rush for Ethereum ETF All the updated forms removed the provisions for staking ether, which some say was causing a regulatory roadblock. Decrypt.co Grayscale Launches Trusts for Bitcoin Layer-2 Stacks, Near Protocol Asset manager Grayscale announced two new trusts, giving certain investors exposure to the Bitcoin layer-2 Stacks and Near Protocol.