Crypto Market Update

BTC continues to trade in a tight range, hovering just above $58K after retesting $60K over the weekend. Similarly, ETH is moving sideways, currently just under $2,600, while SOL is trading just over $142 after revisiting the mid-$130s late last week. Using perpetual futures funding rates as a gauge for market sentiment, it seems market participants remain cautious, with BTC’s open interest-weighted funding rate flipping negative again early this morning (chart below). Meanwhile, in traditional markets, the soft-landing trade continues to outperform, with IWM 0.73%  and RSP 1.28%  outperforming ^SPX 0.41%  and QQQ 0.19% . On the macro front, the DXY has moved to below 102 for the first time since January. It’s a big week for Fed policy, with FOMC minutes set to be released on Wednesday and numerous Fed speeches on deck. However, all eyes will be on Fed Chair Powell’s keynote speech at Jackson Hole on Friday, where the market hopes to gain clarity on the path of future rate cuts.

BitVM2 Whitepaper Released

The new “BitVM2” paper from Robin Linus and his team, an update from their previous BitVM paper, represents a potentially significant advancement in making Bitcoin more programmable. A BitVM Bridge allows users to safely transfer their Bitcoin to a rollup and withdraw it, with shorter lock-up periods and smaller upfront capital requirements. A key feature in the BitVM2 update is “permissionless challenging,” which allows anyone to question suspicious transactions, as opposed to a fixed set of operators. Most BTC bridges are controlled by multisigs that require a t-of-n honest majority, whereas the BitVM architecture has a 1-of-n security model, because anyone can challenge a malicious action and prevent theft. BitVM2 also reduces the amount of collateral operators need to lock up and shortens the time it must be held, with the verification process falling from 70 to just 3 on-chain transactions.

Bitwise Expands into Europe

Bitwise has expanded its presence into Europe with the acquisition of London-based crypto ETP issuer ETC Group, which manages over $1 billion in assets. This move adds nine European-listed crypto ETPs to Bitwise’s portfolio, including the largest physically backed Bitcoin ETP, as well as products for ETH, SOL, and XRP. With this acquisition, Bitwise’s total assets under management surpass $4.5 billion, building on a successful year marked by the launch of two major spot Bitcoin and Ethereum ETPs. Bitwise plans to strategically grow ETC Group’s platform in Europe, further cementing its role as a leading global crypto asset manager.

Technical Strategy

As Mark Newton is on break, there will be no Technical Strategy section for today. Mark will be returning on Tuesday, August 20th.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.07T $-31.5B(-1.50%) BTC Dominance 55.88 % (-0.52%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$117B (0.00%) In Exchanges +$20B (-0.18%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$3.0M (0.02%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +0.0657(-0.5089) Binance +0.7310(-0.2634) Bitfinex +0.4494(0.4494) Bitmex -0.3449(-0.8440) ByBit +0.2460(-0.4740) Deribit +0.5805(-0.0566) Huobi +0.4984(0.4984) Kraken +0.1762(-0.1257) Mean +0.0657(-0.5089) OKex +0.4564(-0.2943) Sentiment BMI : 46 (100.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $58,910(-1.80%) Spot Basis +$198(0.34%) Volume 354,294(93.09%) Open Interest 287,566(0.53%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 6,818(-2.83%) Open Interest 278,942 (0.95%) Vol. Put/Call Ratio 0.6457 (-24.32%) OOI Put/Call Ratio 0.4867 (-1.86%) All metrics as of 2024-08-19 15:50:58 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.16T $58,545 -2.22% 38.62% ETH $311B $2,583 -3.36% 13.53% -18.10% SOL $67B $144 -1.26% 41.55% 2.11% HNT $1.2B $7.44 -1.73% -80.28% -85.77% DOGE $182,677 $0.0002 -5.44% -99.79% -99.85% All prices as of 2024-08-19 12:03:36 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -23.85% $33 -2.23% 41.16% 1.83% ETHE 1.03% $22 -1.44% 12.69% -18.71% News Quick Bits The Block Bernstein notes growing investor interest in bitcoin miners pivoting to AI Bernstein analysts noted that there is strong investor interest in bitcoin miners to consider a shift to AI. Market Data The Block Pump.Fun nears $100 million cumulative revenue within eight months of launch The memecoin generator on Solana is poised to surpass $100 million in cumulative revenue in the next few days. Regulation CoinDesk Coin Center Wins Right to Sue U.S. Treasury, IRS Again Over Controversial Tax Reporting Rule Crypto think tank Coin Center will get another shot at suing the U.S. Treasury Department over what it says is an “unconstitutional” amendment to the tax code that would require Americans to disclose the details of certain crypto transactions to the Internal Revenue Service (IRS). Fundraising and M&A CoinDesk Bitwise Acquires London-Based ETP Provider ETC Group to Enter Europe The acquisition of ETC Group's $1 billion in assets under management takes Bitwise's AUM above $4.5 billion. CoinDesk Fabric, Startup Building 'VPU' Chips for Cryptography, Raises $33M Web 3.0 CoinDesk Crypto's Bet on Election Betting Expands to Solana Perpetuals trading hub Drift protocol is adding a Polymarket-style prediction market – with some DeFi twists. The Block HashKey partners with Telegram game Catizen to extend GameFi reach HashKey said that potential collaborations with Telegram mini game Catizen include a joint HSK airdrop campaign. The Block Tether expands USDT stablecoin to Aptos blockchain Stablecoin issuer Tether said that it is bringing the USDT stablecoin to the Aptos blockchain, providing wider ecosystem support.