Coin360 Daily Dispatch | Crypto Market Updates & Highlights | August 3, 2023
Crypto Market Update
Written by Van
Table of Contents:
Regulatory and Licensing Updates
- Hong Kong Grants Licenses to HashKey and OSL
- ASIC Files Lawsuit Against eToro
- U.S. Lawmakers Urge IRS to Regulate Crypto Taxes
- SEC Receives Applications for Ethereum ETFs
Market and Currency Insights
- Litecoin Faces Decline After Halving Event
Global Interest Rates Impact Crypto and Traditional Markets
- Upbit Surpasses Coinbase in Trading Volume
Company Collaborations and Partnerships
- Gala Games Partners with Elixir Games
Trading Platforms and Revenue
- Robinhood Sees 18% Dip in Crypto Trading Revenue
- Ethereum DeFi Tokens Drop After Curve Finance Hack
- BlockFi Receives Conditional Approval for Bankruptcy Plan
Cryptocurrency Projections and Purchases
- ETH Liquid Staking Derivatives Market Growth Projected
- Huobi Co-Founder Acquires CRV Tokens from Curve Founder
- Tether Acquires Bitcoin, Challenging MicroStrategy
Platform and Network Launches
- Coinbase to Launch Layer 2 Network, Base
- Decline in Ethereum Gas Usage on NFT Marketplaces
- NFT Market Sees Significant Decline in July
- Beeple Buys CryptoPunk, Makes Top Sales of the Week
- Web3 Development Report Shows Growth in Smart Contracts
- VeeFriends and Reebok Collaborate on Sneaker Release
Hong Kong Grants Licenses to HashKey and OSL
Hong Kong has granted licenses to digital asset firms HashKey and OSL, allowing them to offer cryptocurrency trading services to retail investors. HashKey has obtained Type 1 and Type 7 licenses, enabling it to operate a virtual asset trading platform and provide automated trading services.
OSL has also received an uplift to its existing license, allowing it to offer Bitcoin and Ether trading to retail investors. These developments aim to increase transparency and boost investor confidence in the industry.
ASIC Files Lawsuit Against eToro
The Australian Securities and Investments Commission (ASIC) has filed a lawsuit against eToro, alleging that the online trading platform violated financial regulations related to cryptocurrency derivative products, leading to two-thirds of CFD traders losing funds.
ASIC claims that eToro defined its CFD target market too broadly and that its screening tests for retail investors were ineffective. Over 60% of eToro's investors lost money.
U.S. Lawmakers Urge IRS to Regulate Crypto Taxes
Democratic lawmakers including Senators Elizabeth Warren and Bernie Sanders are urging the IRS and Treasury to publish tax reporting guidelines for cryptocurrency brokers and diligently enforce them.
The lawmakers argue that the rules are urgently needed to address tax evasion in the crypto industry, which they estimate costs the IRS at least $50 billion annually. The rules, which were included in the infrastructure bill passed in August 2021, are expected to be implemented this year.
The lawmakers are concerned that without proper regulation, tax evaders will continue to exploit loopholes and siphon off billions of dollars from the US government.
SEC Receives Applications for Ethereum ETFs
The US Securities and Exchange Commission (SEC) has received seven applications for Ethereum exchange-traded funds (ETFs) in the past few days, indicating a potential shift in its stance towards digital assets.
Asset management firms such as Bitwise, Grayscale, VanEck, Roundhill, and ProShares have rushed to apply for Ethereum ETFs, with analysts suggesting that the ETFs have a "very good chance of getting approved." The surge in applications comes after the SEC appeared to discourage applicants as recently as May.
Litecoin Faces Decline After Halving Event
However, there is speculation that the whale may be selling to minimize losses as they anticipate LTC's price to drop further. On a positive note, LTC has gained adoption as a payment method, ranking second on BitPay.
Upbit Surpasses Coinbase in Trading Volume
South Korean cryptocurrency exchange Upbit surpassed Coinbase and OKX in trading volume in July, with a 42.3% increase to $29.8bn. Upbit is now the second-largest platform, after Binance. Binance's market share declined for the fifth consecutive month to 40.4%, its lowest point since August 2022, as it faces regulatory scrutiny and executive departures.
Gala Games Partners with Elixir Games
Gala Games and Elixir Games have partnered to bring Gala Games titles, such as Town Star and Spider Tanks, to the Elixir Games Launcher. The partnership will also include weekly gaming nights, exclusive prizes, and a dedicated node on the Gala Network. Elixir Games will expand its gaming catalog to include more Gala Games titles.
Bitcoin and Altcoins Sees Low Volatility Amid Rising Global Interest Rates
Bitcoin is up 0.55% at $29,300 as altcoins XRP, ADA, SOL, and DOGE also see less volatility. The Bank of Japan's intervention failed to halt the rise of the 10-year Japanese Government Bond yield to a nine-year high. Global interest rates continue to increase, causing pressure on risk assets.
Rising yields are observed in Europe and the U.S., with the 10-year U.S. Treasury yield reaching its highest level of 2023 at 4.175%. The Bank of England increased its benchmark lending rate by 25 basis points to 5.25%. These developments are impacting both traditional and cryptocurrency markets.
Robinhood Sees 18% Dip in Crypto Trading Revenue
Robinhood, the online trading platform, experienced an 18% decrease in crypto trading revenue in Q2, with revenues falling to $31m. Overall transaction-based revenues dropped 7% to $193m.
The dip in crypto trading revenue reflects the wider state of the crypto market, which has been impacted by events such as the implosion of Terra and ongoing regulatory issues. However, Robinhood's total second-quarter net revenues increased 10% to $486m. The company plans to launch its services in the UK by year-end.
Ethereum DeFi Tokens Drop After Curve Finance Hack
The recent hack on Curve Finance, the second-largest decentralized exchange for stable swaps on Ethereum, has led to a downturn in leading Ethereum-based DeFi tokens. The DeFi Blue-Chips Index dropped 6.7% from its three-month high, and the DeFi Pulse Index traded 7.3% lower since last week.
Some of the biggest losers include Curve DAO (CRV), down 20.5%, Compound (COMP), down 18%, Synthetix Network (SNX), down 17%, and Aave (AAVE), down 14%. Notably, Aave token holders face potential risk due to CRV loans.
BlockFi Receives Conditional Approval for Bankruptcy Plan
BlockFi has received conditional approval for its bankruptcy plan, which aims to return crypto to its clients. However, other bankrupt firms, including Alameda Research, FTX, and Three Arrows Capital, oppose the plan. BlockFi has also announced that it will waive all rights and causes of action against its clients.
Customers who moved less than $250,000 from their accounts and creditors with claims under $3,000 will receive partial cash settlements.
ETH Liquid Staking Derivatives Market Growth Projected
The ether (ETH) Liquid Staking Derivatives (LSD) market could reach a total value locked (TVL) of $24 billion over the next two years, according to a report by HashKey Capital. The report also states that the market capitalization of all LSD projects has already reached $18 billion.
Staking yields may reduce due to increased investor participation, but this could be mitigated through the use of decentralized finance (DeFi) protocols. The authors argue that liquid staking protocols are a levered bet on ETH and will take market share from solo and CEX staking.
Huobi Co-Founder Acquires CRV Tokens from Curve Founder
Jun Du, co-founder of Huobi, has acquired 10 million CRV tokens from Curve Finance founder Michael Egorov for $4 million. Du plans to lock up the tokens as veCRV, giving him voting rights on the Curve platform.
He expressed support for Curve and believes the industry will benefit from collective support. Egorov incurred a debt of approximately $60 million in stablecoins due to the exploitation of the protocol. CRV prices crashed by 30% following the exploit.
Tether Acquires Bitcoin, Challenging MicroStrategy
Tether has acquired 1,529 bitcoin in Q2 2023, following its plan announced in May to allocate up to 15% of quarterly profits to bitcoin. This move could challenge MicroStrategy's Michael Saylor, who recently added $14.4 million worth of BTC to the company's treasury. The increasing institutional interest in bitcoin, as seen by BlackRock's filing for a spot bitcoin ETF, is seen as bullish for the market.
Coinbase to Launch Layer 2 Network, Base
Coinbase's Layer 2 network, Base, will launch its mainnet on August 9, hosting over 50 leading brands including Coca-Cola and Atari. Coinbase will support Base across its products, and the network will celebrate with daily NFT drops.
Coinbase is also set to enhance its L2 network Base with the launch of an Ethereum bridge. Base experienced a surge in activity and briefly ranked as the third-most active Layer 2 network before experiencing a decline due to rug-pulls and exploits.
Base will launch OnChain Summer, offering grants and prizes to encourage development on the network. Users can also earn up to $50 in crypto through quests and activities.
Top Altcoin Gainers and Losers
FLEX FLEX (+11.14%)
XDC Network XDC (+8.32%)
Kaspa KAS (+7.70%)
FTX Token FTT (-4.71%)
Compound COMP (-4.50%)
Synthetix SNX (-3.54%)
NFT Market Map
Decline in Ethereum Gas Usage on NFT Marketplaces
Gas usage on NFT marketplaces like OpenSea and Rarible has declined significantly, reaching a low not seen in the past two years. Currently, NFT transactions contribute only 1.85% of the total gas consumption on the Ethereum network, compared to a high of 28.69% in January 2022. This decline suggests a potential shift in the NFT landscape.
NFT Market Sees Significant Decline in July
According to a report from DappRadar, in July 2023, the NFT market experienced a significant decline with a 29% drop in trading volume and a 23% decrease in sales compared to the previous month. The floor prices of popular collections like Bored Ape Yacht Club and Azuki reached two-year lows.
However, Gods Unchained and CryptoPunks saw minor increases in floor prices. From January to July 2023, NFT sales decreased by 49% and trading volume fell by 45%. The Polygon network dominated sales with 27% of all trades, but Ethereum remained the top blockchain by trading volume.
Yuga Labs' Bored Ape Yacht Club collection retained its position as the most traded, but only two Yuga Labs collections made it into the top 10 in July. Azuki also had three collections in the top 10 but is still recovering from fallout in June. Pudgy Penguins and DeGods performed well in terms of trading volume.
Beeple Buys CryptoPunk, Makes Top Sales of the Week
As per Alchemy’s latest Web3 Development Report, NFT trading volume fell 41% in Q2, but 5.9 million smart contracts were deployed across Ethereum Virtual Machine-compatible networks, according to Alchemy's latest Web3 Development Report. The number represents a 302% increase since Q1 and a 1,107% increase since Q2 2022. Ethereum's price has increased 12% since last year despite the bear market.
Web3 Development Report Shows Growth in Smart Contracts
Beeple, the creator of a record-breaking $69 million NFT, has purchased his first profile picture NFT (PFP) from the popular CryptoPunks collection. He bought CryptoPunk #4593 for ETH 113.69 ($208,463). Beeple described CryptoPunks as an innovative artwork that has influenced the NFT space significantly. The purchased CryptoPunk has a rare trait - a red nose.
This acquisition places it among the top sales for the week. Beeple's previous NFT sales include "Everydays: The First 5,000 Days" and "HUMAN ONE." He also collaborated with Solana on immersive 3D NFTs and opened his own studio in South Carolina.
VeeFriends and Reebok Collaborate on Sneaker Release
Entrepreneur Gary Vaynerchuk's NFT collection, VeeFriends, has announced a collaboration with shoe company Reebok. The collaboration will feature the release of the Aspiring Alpaca Classic Nylon shoes, inspired by a VeeFriends character.
Holders of Aspiring Alpaca NFTs will have a free claim on the sneakers, which can also be purchased online. VeeFriends aims to scale the business and make its characters recognized worldwide. The VeeFriends Series 1 NFT collection has a floor price of 1.96 Ethereum.
This article has been refined and enhanced by ChatGPT.