Crypto Market Update

Yesterday, we sent out a note discussing how favorable inflation and jobs data would be key to increasing crypto investor confidence. Today, we are seeing some of that with the Coinbase premium rising in the morning hours following favorable PCE revisions and jobless claims data. Rates are moving lower across the entire curve, and the DXY N/A% is sharply lower, back below 105. Most sectors are in the green, but major equity indices are being weighed down by tech underperformance, with XLK down nearly 2% thus far today. BTC 0.19% is back above $68k and is outperforming the wider crypto market. ETH -0.60% briefly made a move toward $3800, now trading around $3750, and SOL -3.24% is still working to make its way above the $170 level, currently trading around $168. AR -7.88% is a major outperformer today on the back of a token airdrop announcement from AO, an application built on the Arweave network (more on this below).

Arweave Outperforms on AO Update

Arweave is a decentralized storage network designed to provide a permanent, tamper-proof data storage solution. AO, built on the Arweave network, is an actor-oriented computing environment that supports parallel processes and scalable, trustless computation. The AO token will launch through a 100% fair distribution model with no pre-mine, pre-sales, or preferential access; tokens will be minted by bridging to AO, holding Arweave’s native token (AR 2.25% ), or contributing to the AO ecosystem. The total supply is capped at 21 million tokens, with a four-year halving cycle for issuance. The recent rally in AR’s price can be attributed to the announcement of the AO token airdrop to AR holders, generating excitement and increased demand for AR.

ETH ETF Progress

BlackRock has filed an amended S-1 registration statement for its proposed Ethereum ETF, disclosing details about its seed capital investor. This move follows the SEC’s approval of 19b-4 forms for eight Ethereum ETFs, including BlackRock’s iShares Ethereum Trust. The amended form revealed that an affiliate of the sponsor purchased 400,000 shares at $25 each, totaling a $10 million seed investment. Bloomberg ETF analyst Eric Balchunas praised the amended S-1 as a positive sign, suggesting a potential launch by the end of June, though he maintains a July 4th over/under date. The SEC’s review process of the S-1 forms is ongoing, and it is uncertain how long it will take before trading can begin.

Technical Strategy

Arweave has managed to jumpstart its push back to all-time highs following Thursday’s 12% rally to multi-day highs. The act of pushing back above $42.50 is a bullish technical development and should spur on a rally back to test and exceed May highs just under $50. The formation since March has been very constructive in its base-building efforts and will be labeled a reverse Head and Shoulders pattern on any weekly close back over $50 in the weeks/months to come. Such a formation typically can allow for above-average upside follow-through, when confirmed, and it’s expected that Thursday’s rally should represent the end of the pullback from early May and allow for an AR -7.88% rally to proceed in the weeks to come. Support lies near $41.50-$42, representing an excellent risk/reward to buy dips if given the chance. However, any act of closing today near the highs of its range likely proceeds uninterrupted to challenge May highs.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.52T $-25.0B (-0.98%) BTC Dominance 52.94 % (1.14%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$112B (0.00%) In Exchanges +$20B (0.44%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$2.3M (0.01%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +0.9259 (-0.6543) Binance +0.9949 (0.0016) Bitfinex -0.0209 (-0.0359) Bitmex +1.0084 (-0.4048) ByBit +1.1125 (-0.2727) Deribit +0.0579 (-2.5149) Huobi +1.0000 (1.0000) Kraken +1.5564 (-1.5944) Mean +0.9259 (-0.6543) OKex +0.6245 (-1.7994) Sentiment BMI : 33 (-3.03%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $67,890 (-0.05%) Spot Basis $-28 (-0.04%) Volume 417,326 (-27.52%) Open Interest 280,873 (2.83%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 15,677 (-44.22%) Open Interest 283,071 (0.96%) Vol. Put/Call Ratio 0.7665 (-16.81%) OOI Put/Call Ratio 0.4908 (-0.11%) All metrics as of 2024-05-30 15:56:12 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.37T $69,433 3.07% 64.40% ETH $458B $3,811 1.48% 67.50% 1.88% SOL $79B $172 1.48% 68.82% 2.69% DOGE $216,367 $0.0002 26.32% -99.76% -99.85% All prices as of 2024-05-30 13:53:15 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -32.38% $37 3.62% 59.66% -2.89% ETHE -1.84% $36 1.63% 83.19% 11.43% News Quick Bits The Block Fidelity’s spot ether ETF appears on DTCC under ticker FETH The fund, named Fidelity Ethereum FD Beneficial INT, was included on the list under the ticker FETH as a domestic ETF. CoinDesk BlackRock Amends Ethereum ETF Application; Bloomberg’s Balchunas Sees ETF Going Live By June A 'Seed Capital Investor' has purchased 400,000 shares of the proposed filing, BlackRock revealed in its document. Market Data The Block BlackRock’s IBIT continues to lead net inflows in spot bitcoin ETFs The 11 funds continued to log their 12th consecutive day of inflows, marking the longest streak since the last week of February. Regulation The Block Biden campaign ramps up crypto industry outreach in surprising tone ‘shift’ President Joe Biden’s re-election campaign has begun reaching out to key figures in the cryptocurrency industry, seeking guidance on "crypto community and crypto policy moving forward," sources told The Block. Fundraising and M&A The Block Banking giant HSBC leads Series A funding in Marketnode Marketnode aims to use the funding to build a multi-asset ecosystem starting in the Asia-Pacific, according to the release. The Block Citi-backed crypto unicorn Talos acquires DeFi platform Skolem Crypto trading software provider and unicorn Talos has made its third acquisition by buying Skolem, which offers a DeFi access platform. CoinDesk Bitcoin Staking Project Babylon Raises $70M Led by Paradigm The funding round included contributions from Polychain Capital and the venture arm of crypto exchange and CoinDesk parent company Bullish. Web 3.0 The Block Galxe to release alpha mainnet of Layer 1 blockchain in June using Arbitrum Nitro Web3 credentials platform Galxe plans to launch a new Layer 1 blockchain named Gravity, aimed at streamlining cross-chain interactions.