Crypto Market Update

U.S. equities are moving sharply lower amid China trade fears after the Biden administration stated it’s considering imposing severe restrictions on chipmakers if China continues receiving access to advanced semiconductor technology. The SPY 0.77%  has dropped below $560 while the QQQ 0.45%  is showing more pronounced losses, falling to $484. Crypto is relatively flat, with BTC 2.61% trading near $65k. Bitcoin ETF flows continue their positive streak, posting the eighth consecutive day of inflows on Tuesday, totaling $422.5 million. ETH 7.86% is slightly positive, with ETHBTC gaining approximately 0.40%. Worldcoin (WLD) has been a top performer this week as Tools for Humanity, the lead development group, has extended the unlock schedule of 80% of its tokens from three to five years. The unlock period is set to begin next week, with tokens vesting linearly from then until 2029.

Grayscale Decentralized AI Fund

Grayscale has announced the creation of the Grayscale Decentralized AI Fund, seeking to provide investors with exposure to protocols in the crypto artificial intelligence sector. Grayscale believes decentralized AI leveraging blockchain technology can help mitigate the risks emerging with the proliferation of centralized AI services by distributing ownership and governance. The fund will consist of decentralized AI assets falling into three categories: protocols building decentralized AI services such as chatbots and generative AI, projects attempting to solve centralized AI problems like deep fakes and misinformation, and underlying infrastructure critical to AI development, including data marketplaces and storage solutions. The current assets included in the fund include Bittensor (TAO 9.51% ), Filecoin (FIL 7.14% ), Livepeer (LPT 6.43% ), Near (NEAR 8.91% ), and Render (RNDR), with each asset’s weighting seen below.

CFTC and FTX Estate Agree to $12.7 Billion Settlement

After months of negotiations, the CFTC and FTX Bankruptcy Estate have agreed to a $12.7 billion settlement, pending approval from a judge. The CFTC has agreed to receive nothing from the estate if FTX complies with its reorganization plan, foregoing the pursuit of a monetary penalty in light of FTX insiders’ convictions and its desire to accelerate FTX’s emergence from Chapter 11. Of the $12.7 billion, $8.7 billion is defined as restitution, with the other $4 billion serving as disgorgement, subordinated to prior payment of all creditors. The settlement allows the estate to focus on its May reorganization plan, in which creditors would receive at least 118% of their reported claims upon court approval. Some creditors have opposed the plan, favoring receiving lost assets in-kind, which would likely equate to higher amounts, with all creditors’ votes due by August 16th. A hearing regarding the proposed settlement is set for August 6th, and a court decision on the repayment plan is due in October.

Technical Strategy

LDO 9.69% has begun to show encouraging signs of stabilizing following the push back above prior June lows at $1.774. Its decline from mid-May into July managed to hold May lows before beginning its most recent technical bounce this past week.  Structurally, given the success in reclaiming last month’s $1.774 bottom, a push back higher to test $2.20 looks possible in the weeks ahead. However, until $2.20 can be surpassed, LDO still remains within a five-month downtrend and requires strength sufficient to exceed this current downtrend before projecting higher in the months to come. While minor consolidation might occur again ahead of a trend breakout, it’s important to hold $1.50 in the weeks to keep it’s stabilization attempts intact.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.37T +$37B (1.59%) BTC Dominance 53.75 % (-0.09%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$113B (0.32%) In Exchanges +$20B (-0.90%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$3.0M (-0.08%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +0.2779 (0.3011) Binance +0.9989 (0.0000) Bitfinex -0.0054 (-0.4603) Bitmex -0.3652 (-0.1648) ByBit +0.8242 (0.9988) Deribit +0.6589 (0.4102) Huobi -0.2632 (-0.2632) Kraken +0.3221 (-0.3309) Mean +0.2779 (0.3011) OKex +1.1250 (0.5737) Sentiment BMI : 58 (100.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $64,930 (1.46%) Spot Basis $-196 (-0.30%) Volume 883,010 (7.62%) Open Interest 287,815 (-0.97%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 44,783 (-5.81%) Open Interest 248,698 (5.04%) Vol. Put/Call Ratio 0.3705 (-52.99%) OOI Put/Call Ratio 0.4790 (-3.17%) All metrics as of 2024-07-17 12:00:24 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.28T $64,899 0.33% 53.67% ETH $415B $3,450 -0.45% 51.61% -1.34% SOL $74B $159 0.72% 56.70% 1.97% DOGE $387,698 $0.0004 -0.49% -99.56% -99.72% All prices as of 2024-07-17 11:50:10 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -32.38% $38 -1.81% 60.94% 4.74% ETHE 0.42% $32 -2.30% 64.47% 7.03% News Quick Bits The Block Grayscale launches new fund for decentralized artificial intelligence The fund will finance three key areas: AI services, addressing problems related to centralize AI use and developing AI-related infrastructure. The Block Deribit to launch bitcoin and ether options to bet on US election The trading products will go live on Thursday. The Block Trump says he wants US in charge of crypto before China, teases another NFT launch Trump said in a Bloomberg interview that the US crypto industry has a 'good foundation' despite still being in its infancy. CoinDesk Crypto Trading Firm XBTO Establishes Tokenization Team to Focus on Real World Assets The tokenization platform will soon offer an “e-note” for hemp and CBD producer AgroRef. The Block Stripe enables Bitcoin, Ether and Solana crypto purchase options in EU: report Online vendors in the region can reportedly now add a widget on their sites for users to purchase cryptocurrencies. Market Data CoinDesk Bitcoin ETF Inflows Hit Six-Week High of $422.5M BTC's price has recovered 23% since hitting lows near $53,500 on July 5. Regulation The Block Hong Kong releases consultation results, paving way to require licenses for stablecoin issuers The regulators plan to require all fiat-referenced stablecoin issuers to obtain a license from the Hong Kong Monetary Authority. Fundraising and M&A The Block Alan Howard-backed Elwood to sell OTC business to Standard Chartered’s Zodia Markets The acquisition of Elwood Capital Management grants Zodia Markets licenses in the British Crown Dependency of Jersey. Product Updates and Partnerships The Block OKX Wallet adds support for TON blockchain, marking 100th mainnet integration Crypto exchange OKX announced today that its wallet service has added support for The Open Network — marking its 100th mainnet blockchain integration.