Coin360 Daily Dispatch | Crypto Market Updates & Highlights | May 26, 2023

Crypto Market Update

Written by Van

Table of Contents:

Market Trends and Predictions

• US Debt Ceiling Uncertainty Prompts Bearish Trend for Bitcoin
• Short-Term Holder Metrics Highlight Potential Bitcoin Price Correction
• JPMorgan Strategists Propose Bitcoin Price Correlation with Gold
• Ethereum Supply Declines As Staking Trend Grows
• Bitcoin Blockchain Hits Record-Breaking Network Traffic in May 2023

Corporate and Financial Developments

• TradeBlock Closes Institutional Trading Platform Amid Regulatory Challenges
• Gemini Chooses Dublin for European Headquarters Amid US Regulatory Pressure
• Crypto Firm Unbanked Forced to Shut Down Under US Regulatory Pressure
• Avalanche Plans Massive AVAX Token Distribution to Key Ecosystem Players
• Starbucks to Launch NFT Airdrop for Odyssey Rewards Members

Regulation and Legal Updates

• WEF Calls for Global Coordination in Crypto Asset Regulation
• Gulf Binance Granted Licenses to Operate Crypto Exchange in Thailand

Country-Specific Developments

• Brazil's Central Bank Reveals Participants for Digital Real Pilot

Technological Innovations

• Fantom Ecosystem Rocked by Rumored Multichain Team Arrest
• Etonec and Mina Foundation to Launch Regulatory Compliance Tool for DeFi

US Debt Ceiling Uncertainty Prompts Bearish Trend for Bitcoin

Uncertainty surrounding the US debt ceiling is causing a bearish trend for Bitcoin, which may drop to $25,000 if it continues to decline. Blockchain.com CEO predicts a quick recovery and long-term positivity for cryptocurrencies if the US defaults on its debt. 

A default could result in short-term pain for risk assets, with Bitcoin potentially bouncing alongside gold, while Ethereum could underperform. Traders are increasingly active in the Bitcoin options market, anticipating increased volatility. Lawmakers are expected to eventually reach an agreement.

Short-Term Holder Metrics Highlight Potential Bitcoin Price Correction

Bitcoin has reached a critical point, with short-term holders (STHs) being closely monitored. Metrics such as STH market value to realized value (STH-MVRV) and short-term holder spent output profit ratio (STH-SOPR) indicate a potential correction. The short-term holder realized profit/loss ratio momentum is also retreating. Checkmate emphasizes the need for active participation from hodlers to drive higher prices.

JPMorgan Strategists Propose Bitcoin Price Correlation with Gold

JPMorgan strategists suggest that the rising price of gold could indicate a Bitcoin price of $45,000, given their historical correlation. They propose that Bitcoin may equalize gold in private investors' portfolios. However, JPMorgan considers $45,000 as an upper limit due to limited potential beyond mining costs. 

The upcoming Bitcoin halving event could double its production cost. JPMorgan predicts a 25% return on Bitcoin over the next year but maintains caution due to regulatory crackdowns and other potential risks.

Ethereum Supply Declines As Staking Trend Grows

The number of ETH on exchanges has reached a low not seen since 2016, while staking has absorbed supply from the market. The growing staking trend indicates limited supply and potentially higher prices for ETH. Crypto trading volumes have declined, while the number of Ethereum whales has increased, holding 30.07 million ETH. Institutional investors and whales control a significant portion of ETH's supply, valued at around $70.09 billion.

Bitcoin Blockchain Hits Record-Breaking Network Traffic in May 2023

In May 2023, the Bitcoin blockchain experienced record-breaking network traffic, with daily transactions reaching an all-time high of 682,099. The surge in network activity was driven by transactions using the Bitcoin Ordinals protocol, which are now being used to mint BRC-20 tokens. 

Stably announced the launch of Stably USD, the first USD-backed stablecoin on the Bitcoin blockchain, aiming to facilitate smoother trading. The total number of Ordinals inscriptions exceeded 9 million, with a significant portion minted in May. Bitcoin has become the second-largest chain for trading NFTs, with sales worth over $22 million executed in the last seven days.

TradeBlock Closes Institutional Trading Platform Amid Regulatory Challenges

TradeBlock, an institutional investor-focused subsidiary of Digital Currency Group (DCG), is shutting down its institutional trading platform due to the challenging regulatory environment and the impact of the crypto market downturn. DCG's revenue was down 46% compared to the previous year, and the company's CFO has stepped down. Additionally, DCG-owned crypto lending firm Genesis Global has filed for bankruptcy.

Gemini Chooses Dublin for European Headquarters Amid US Regulatory Pressure

Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, has chosen Dublin as its European headquarters. The Winklevoss twins cited Ireland's robust regulatory system, talent pool, and technology community as reasons for their selection. 

Despite a decline in cryptocurrency ownership among Irish adults, many crypto companies, including Binance and Kraken, have established a presence in Ireland. Gemini plans to expand its team in Dublin following the adoption of new EU regulations. The move comes as regulatory pressure increases in the United States.

Crypto Firm Unbanked Forced to Shut Down Under US Regulatory Pressure

Crypto fintech firm Unbanked is shutting down due to a harsh regulatory environment for cryptocurrencies in the United States. Co-founders Ian Kane and Daniel Gouldman stated that engaging with regulators led to wasted time and excessive costs, as US regulators are actively hindering companies from supporting crypto assets. 

Unbanked had expected a $5 million funding injection but hasn't received it. Other crypto firms like BottlePay, HotBit, Teressa, and TradeBlock have also closed recently, citing various reasons.

Avalanche Plans Massive AVAX Token Distribution to Key Ecosystem Players

Millions of AVAX tokens, the native cryptocurrency of the Avalanche blockchain, will be unlocked and distributed to key players in the ecosystem, increasing the total supply by 1.2%. The tokens, worth around $130 million, will go to the Avalanche Foundation, strategic partners, Ava Labs, and through an airdrop. The tokens are not automatically put to use and their utilization is at the discretion of the Foundation. 

AVAX has remained stable at $14.3. While some people are concerned about token unlocks, the upcoming Avalanche unlock has been anticipated and accounted for by sophisticated actors. Data from Token Insights shows that 96.06 million AVAX tokens remain locked, contrary to their reported figure of 358.55 million.

Starbucks to Launch NFT Airdrop for Odyssey Rewards Members

Starbucks plans to launch an NFT airdrop exclusively for its US-based Odyssey rewards program members. Eligibility requires being a Starbucks rewards member, enrolled in Starbucks Odyssey, completing two "journeys," and owning at least one limited-edition NFT stamp. Participants are not guaranteed their preferred stamp. Starbucks previously released "First Store" NFTs, which performed well on NFT marketplace Nifty Gateway.

WEF Calls for Global Coordination in Crypto Asset Regulation

The World Economic Forum's white paper on crypto asset regulation, created with the help of its Digital Currency Governance Consortium, has called for global coordination to prevent ambiguity and inconsistent enforcement. The paper identified the challenges to regulation, including the lack of fit between crypto-assets and existing regulatory approaches, and the anonymity provided by certain technologies. 

It also suggested a range of regulatory frameworks for comparison, including outcome-based and risk-based regulation, as well as agile regulation. The paper made recommendations to international organisations, regulatory authorities and the crypto industry.

Gulf Binance Granted Licenses to Operate Crypto Exchange in Thailand

Binance's joint venture with Gulf Energy, Gulf Binance, has received digital asset operator licenses from Thailand's Ministry of Finance to operate a crypto exchange regulated by the country's Securities and Exchange Commission. 

The companies plan to launch a new digital asset exchange in Thailand by Q4 2023, combining Binance's expertise with Gulf's knowledge of the local market. Thai regulators are implementing new rules for crypto custody services to protect investors.

Brazil's Central Bank Reveals Participants for Digital Real Pilot

Brazil's central bank has selected 14 participants, including Microsoft, Visa, and Santander, for its upcoming digital real pilot project, testing privacy and programmability functionalities through a single use case. The value of the digital currency will be pegged against the national fiat currency, the real.

Fantom Ecosystem Rocked by Rumored Multichain Team Arrest

The Multichain team's rumored arrest has affected the Fantom ecosystem, with a 5x surge in bridged volume and deposits exceeding withdrawals. The suspension of deposits by Multichain has impacted related companies like Binance. The lack of communication from Multichain is concerning, and the MULTI token's price has dropped by 23%. 

The protocol faced issues with inoperable chain transactions due to a force majeure event, leading to concerns of a possible rugpull. The missing founders and paused deposits have added to the apprehension.

Etonec and Mina Foundation to Launch Regulatory Compliance Tool for DeFi

Crypto payments company Etonec, in collaboration with the Mina Foundation, plans to launch a zero-knowledge proof-powered regulatory compliance tool for decentralized finance (DeFi) and Web3. The tool will address privacy and compliance gaps by offering know-your-customer (KYC) and anti-money laundering (AML) services on the Lumina DEX. It aims to attract institutional investors and cater to various applications in the Web3 space. The tool will help users control their own data and privacy without compromising sensitive personal information. Regulators have been targeting DeFi protocols, and this tool aims to provide compliance solutions.

Top Altcoin Gainers and Losers

Gainers:

Arbitrum ARB (+6.59%)

Casper CSPR (+6.56%)

Stacks STX (+5.02%)

Losers:

Bitget Token BGB (-6.39%)

BitTorrent New BTT (-1.79%)

Radix XRD (-1.72%)

NFT Market Map

The prices of the Milady NFT collection surged by 200% after Elon Musk tweeted about it, but have now dropped back to pre-tweet levels. Similar to Dogecoin, tokens mentioned by Musk experience short-lived spikes followed by sell-offs as traders and bots seek quick profits.

Nike's .SWOOSH Web3 platform has launched its first NFT sneaker collection, generating over $1 million in sales despite technical issues and delays. The sale began on May 15, a week later than initially planned, and experienced website crashes and processing delays. Over 66,000 NFTs have been sold so far, with a price of $19.82 each, and the sale will continue until June 1. Nike aims to expand its Web3 strategy with the release of a .SWOOSH marketplace and plans for virtual experiences, gaming, and 3D files.

Redditors can now claim free Rabbids-themed NFT avatars for their profiles on Reddit. The NFTs feature the Rabbids in different outfits and poses. This follows the success of Reddit's previous NFT launch of "Snoo" avatars, which have a market cap of over $330 million. Both Reddit and Ubisoft are making strategic moves towards digital ownership through NFTs. Ubisoft previously launched a crypto token game with Rabbids for charity and has integrated Rabbids into the blockchain world.

This article has been refined and enhanced by ChatGPT.