Market Update

Equity indices are relatively flat in Tuesday’s trading, with the SPY 0.56%  and QQQ 0.55%  decreasing about 0.10%. Crypto is showing slight declines, with BTC -4.90% trading around $57k and ETH -7.96% trading in the mid $2,300s. TON 130.21% has been a top performer this week as founder and CEO Pavel Durov has been released from French authorities, and he delivered a statement addressing the situation. TON 130.21% has gained 9.17% so far this week. Investors will be watching tonight’s first Presidential debate, potentially providing a catalyst for a directional move in prediction market odds, which could have an outsized effect on crypto prices. Similarly, August CPI data is set to be released tomorrow morning, with an upside miss potentially calming recession fears and cementing a 25bps rate cut at next week’s FOMC meeting.

Polygon Investing in Custom ZK Chips

Polygon Labs is partnering with crypto hardware manufacturer Fabric Cryptography to develop custom zero-knowledge chips to accelerate ZK adoption. Fabric produces Verifiable Processing Units (VPUs), reportedly the first custom chips designed exclusively for cryptography processing and highly programmable to change alongside proof systems. Polygon and Fabric have been working together since the beginning of the year to codesign Plonky2 and Plonky3 proof systems that utilize Fabric’s VPU instruction set. ZK proofs are generally computationally heavy, making them slow and expensive, but Polygon thinks Fabric’s technology could cut ZK adoption timelines down from 3-5 years to just 6-12 months. Additionally, it will accelerate Polygon’s development of AggLayer and improve its efficiency. Polygon is set to acquire $5 million worth of VPU-based server systems to implement with the Polygon ecosystem. Polygon migrated its MATIC token to POL last week and is flat in today’s trading following the announcement.

State Street and Galaxy Digital Partner for Active ETFs

State Street has announced the introduction of three actively managed crypto ETFs sub-advised by Galaxy Digital. Not all investors have the appetite for single-asset exposure, given the high volatility associated with crypto. State Street believes the next step for the market is a diversified strategy appealing to a broader range of investors. State Street and Galaxy have created three actively managed ETFs to provide diversified exposure to investors interested in the sector:

• SPDR Galaxy Digital Asset Ecosystem ETF (DECO 2.34% ): DECO provides exposure to an actively managed portfolio of companies well positioned to benefit from the growth of the digital asset industry, as well as crypto exposure through ETFs and futures.
• SPDR Galaxy Hedged Digital Asset Ecosystem ETF (HECO 1.83% ): HECO is similarly structured to DECO but designed to manage volatility through the incorporation of covered call options and protective put options on portfolio investments.
• SPDR Galaxy Transformative Tech Accelerators ETF (TEKX 2.19% ): TEKX targets the value chain supporting disruptive technologies including blockchain infrastructure and artificial intelligence companies. TEKX is designed to help investors pursue long-term secular growth driven by economic benefits from new innovations. 

State Street hopes its robust ETF infrastructure and Galaxy’s industry expertise will position it to drive long-term value to investors.

Technical Strategy

Following four sharp days of gains, optimism has finally given some indication of having bottomed out this week. The lengthy downtrend from March into July began to stabilize two months ago and morphed into a neutral range-bound consolidation pattern right above $1.00. This pattern began to constrict into September ahead of this week’s minor breakout of the flat six-week downtrend from July highs. If Tuesday’s close manages to exceed $1.615, this would represent the highest OP -9.20% close since late July. Thus, some gradual pickup in momentum from the lows is being seen, coinciding with some technically constructive pattern improvement.  Rallies up to $1.98 look likely initially, with movement above this leading to a more meaningful rally which could reach $2.52, then $2.97 on gains.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.00T +$48B(2.47%) BTC Dominance 56.04 % (0.36%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$118B (0.15%) In Exchanges +$21B (0.31%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$3.0M (-0.09%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate -0.0732(0.0072) Binance -1.0946(-1.2666) Bitfinex +0.4444(0.1374) Bitmex -0.4321(0.1968) ByBit +0.8792(0.1156) Deribit +0.1674(0.1477) Huobi -1.0812(-1.0812) Kraken +0.3280(0.7526) Mean -0.0732(0.0072) OKex -0.3340(-0.3676) Sentiment BMI : 44 (100.00%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $56,885(2.33%) Spot Basis +$82(0.14%) Volume 727,141(89.73%) Open Interest 299,604(-0.25%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 30,177(249.87%) Open Interest 281,853 (1.50%) Vol. Put/Call Ratio 0.6941 (-42.23%) OOI Put/Call Ratio 0.4899 (-1.81%) All metrics as of 2024-09-10 13:49:30 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.12T $56,620 2.11% 34.06% ETH $280B $2,329 1.59% 2.37% -23.64% SOL $63B $134 4.58% 32.02% -1.52% HNT $1.3B $8.21 1.51% -78.24% -83.77% DOGE $169,427 $0.0002 4.90% -99.81% -99.86% All prices as of 2024-09-10 12:05:09 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -31.92% $28 -0.99% 20.34% -10.23% ETHE -0.38% $20 -0.55% 1.86% -24.02% News Quick Bits CoinDesk Tron, Tether and TRM Labs Start Financial Crime Fighting Force The T3 Financial Crime Unit (T3 FCU) is looking to clean up USDT issued on Tron, a blockchain favored by bad actors. Market Data The Block Japan’s Metaplanet buys additional $2 million in bitcoin, raising total holdings to $26 million The Tokyo-listed firm said that it bought an additional 38.464 bitcoin, bringing its total bitcoin holdings to 398.832 BTC. The Block US spot bitcoin ETFs return to positive flows, adding $28 million Fidelity’s FBTC led the pack of inflows on Monday with $28.6 million, followed by Bitwise’s BITB, which saw $21.99 million in inflows. Crypto Infrastructure BTC Manager Ramp Network expands crypto purchases to all U.S. states Ramp Network, a U.K.-based crypto payments infrastructure provider, has expanded its services to all 50 U.S. states. The fintech startup announced the expansion of its payment rails to 17 more U.S. states, bringing Bitcoin (BTC) and other digital assets to… The Block Polygon Labs and Fabric Cryptography unveil custom ZK chips to fast-track AggLayer development The Verifiable Processing Units collaboration aims to cut zero-knowledge-proof adoption timelines from years to months. Regulation The Block North Carolina passes anti-CBDC bill, overrides governor’s veto The North Carolina Senate passed a bill on Monday that bans state participation in CBDC testing sponsored by the Federal Reserve. Fundraising and M&A The Block Nansen acquires staking firm StakeWithUs to diversify services The onchain data analytics firm aims to become an investment platform as it expands its services through the acquisition of StakeWithUs. Mining Coin Telegraph Bitfarms postpones ‘special meeting’ over Riot’s board change demand Bitfarms delayed its special shareholders’ meeting to address Riot’s demand for board changes, aiming for an informed decision. Bitcoin (BTC) mining firm Bitfarms rescheduled its October shareholders “special meeting” to Nov. 6 in response to calls for changes to the company’s board of directors from its largest shareholder, Riot Platforms.On Sept. 3, Riot issued an open letter to Bitfarms shareholders detailing its ongoing efforts to “address Bitfarms’ broken governance,” which includes appointing Ben Gagnon as CEO and a member of the Bitfarms Board.However, Gagnon joined the board following the departure of two Bitfarms co-founders, Emiliano Grodzki and Nicolas Bonta. Riot recommended a more proactive approach to preserve shareholders’ interests:Read more The Block Core Scientific eyes $25-$30 billion valuation with new AI data center contracts: Bernstein Core Scientific CEO Adam Sullivan sees the firm potentially becoming a $25 to $30 billion company in the next few years via AI services.