Crypto Market Update

BTC -1.00% has bounced back above $66k in the past 24 hours, likely supported by a sinking DXY and a rebound in equities. ETH 2.01% is slightly outperforming again, following a day of net ETF inflows—the first since the ETH ETFs launched—and is now trading just north of $3,300. Meanwhile, SOL -3.79% is lagging, dropping below $180. Notably, AAVE -3.36% , a constituent of our Liquid Ventures basket, has been the top performer over the past seven days, driven by momentum from the recent fee switch proposal. Major equity indices are up today, with a significant bounce in tech names and broad participation across most sectors. The main event today is the FOMC press conference, where we will gain more insight into the pace and extent of future interest rate cuts. The DXY is moving lower, likely due to factors external to the FOMC. The Bank of Japan raised rates to 0.25% and reduced scheduled JGB purchases, causing the JPY to strengthen against the USD. Additionally, the Employment Cost Index report revealed soft job data and cooler wage growth once again. The Treasury also announced the second part of their quarterly refunding, with no significant changes to coupon sizes but an increase in the treasury buyback program limit from $15 billion to $30 billion.

Ethena Competitor Launches

Elixir has launched a new synthetic dollar asset, deUSD, aiming to compete with Ethena’s USDe. Both stablecoins are fully collateralized and operate within the DeFi ecosystem, with deUSD using #stETH as collateral to short ether in a delta-neutral position. Elixir claims deUSD offers a truly decentralized alternative with verifiable on-chain proofs, transparency, and resilience, not reliant on centralized entities. The project has $1 billion in liquidity support and has partnered with DeFi platforms like Pendle, which tokenizes Elixir’s Apothecary initiative. This initiative, which tracks user contributions, has accumulated over $300 million in total value locked since March. Elixir recently completed an $8 million Series B funding round, bringing its valuation to $800 million ahead of its September mainnet launch. The is clearly a strong indication of demand for yield bearing stablecoins, as USDe has amassed a circulating supply of over $3 billion after just launching to the public in February.

Details on Lummis BTC Reserve Bill Emerge

According to media outlets that have viewed a draft of the bill, U.S. Senator Cynthia Lummis’s proposed legislation aims to establish a Strategic Bitcoin Reserve in the United States. The draft bill outlines a “Bitcoin Purchase Program” to acquire up to 200,000 BTC annually over five years, totaling 1 million BTC. This initiative would be financed by setting aside $6 billion from net earnings remitted by the Federal Reserve to the Treasury and reducing the Federal Reserve banks’ discretionary surplus funds. Additionally, it would be partially funded by revaluing the Federal Reserve’s gold certificates to reflect their market value. The purchased Bitcoin would be stored in a decentralized network of secure facilities across the U.S. and held for at least 20 years, with strict limitations on future sales. The plan also includes using existing U.S. government Bitcoin holdings from criminal forfeitures as part of the reserve’s core. The strategic reserve’s primary goal is to provide a secure, diversified asset base for the U.S. government, with potential uses limited to paying off federal debt.

Technical Strategy

Some encouraging gains out of Stellar which looks to be starting its next leg higher, following through on its breakout back in early July.  Just as the rise above $0.089 was important earlier this month, the move back over $0.1010 was also significant in breaking this minor downtrend that had been in place since 7/17.    Movement to test $0.112 looks likely and moving over this level should result in XLM -3.75% pushing up to $0.133, representing a 100% extension of the initial rally off the July lows.  Eventual intermediate-term targets lie near $0.163 from March 2024 as part of a gradual bottoming out process that has been ongoing since 2022.  Overall, the July progress in XLM has been constructive towards expecting additional gains back to this year’s highs, and it’s thought that today’s rally is yet another part of this process.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.38T $-8.0B (-0.33%) BTC Dominance 54.79 % (-0.09%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$114B (0.00%) In Exchanges +$19B (1.06%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$3.1M (0.76%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +0.7564 (0.2613) Binance +0.9989 (0.0000) Bitfinex +1.8918 (1.3563) Bitmex +0.5076 (0.1569) ByBit +1.0000 (0.0000) Deribit +0.1799 (0.1523) Huobi +1.1757 (1.1757) Kraken +0.2235 (0.1743) Mean +0.7564 (0.2613) OKex +0.7406 (1.0978) Sentiment BMI : 67 (100.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $66,630 (-0.38%) Spot Basis +$527 (0.80%) Volume 573,289 (-35.02%) Open Interest 311,503 (-0.79%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 30,749 (-35.86%) Open Interest 252,556 (1.77%) Vol. Put/Call Ratio 0.3416 (-36.07%) OOI Put/Call Ratio 0.4252 (-2.04%) All metrics as of 2024-07-31 12:38:37 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.31T $66,338 0.22% 57.07% ETH $398B $3,307 -0.41% 45.33% -7.48% SOL $84B $180 -0.55% 77.22% 12.83% DOGE $281,580 $0.0003 -2.36% -99.68% -99.80% All prices as of 2024-07-31 11:59:31 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -30.44% $36 1.83% 53.00% -2.59% ETHE -0.30% $28 0.87% 44.10% -8.26% News Quick Bits The Block Grayscale Bitcoin Mini Trust begins trading on Wednesday morning following SEC approval Grayscale Investment's mini version of its Grayscale Bitcoin Trust (GBTC) began trading on Wednesday, the firm announced. The Block Lava Network launches public mainnet and airdrops 55 million tokens The VC-backed “data access” project is being used by firms from NEAR to Google Cloud to incentivize building out blockchain nodes. CoinDesk Terra Blockchain Restarts After $4M Exploit A reentrancy attack earlier Wednesday briefly halted the network. It restarted after an “emergency” chain upgrade. Market Data CoinDesk Bitcoin, Ether ETFs Record Outflows as Trump Speech Euphoria Fades The crypto-Trump trade appears to be softening. The Block Bitcoin dominance hits highest level since April 2021 The rise in BTC dominance occurred despite the main headlines focusing on ETH and its ETFs. Regulation CoinDesk Coinbase Concerned About “Ongoing Regulation By Enforcement” in Australia Coinbase (COIN) is concerned about “ongoing regulation through enforcement” which is not “helpful to the overall direction of the industry” in Australia ahead of expected draft legislation, senior executives of the cryptocurrency exchange told CoinDesk. Fundraising and M&A The Block Coinbase, Google veterans raise $5 million for a blockchain alternative to LinkedIn: Fortune Blockchain-based LinkedIn-style project Icebreaker has secured $5 million in seed funding led by CoinFund, according to Fortune. Mining CoinDesk Russia Legalizes Crypto Mining and Brings an Experimental Regime Russia's lower house of the Federal Assembly, known as the State Duma, has passed two crypto-related laws on Tuesday, a Russia based policy expert told CoinDesk and Ria Novosti, Russia's state-owned domestic news agency reported.