Coin360 Daily Dispatch | Crypto Market Updates & Highlights | September 18, 2023

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Sep 18 2023

last year4 minutes read

Markets360

Crypto Market Update

Written by Van

Banking and Regulatory Updates

Citi Unveils Blockchain Service for Institutional Clients
NYDFS Tightens Crypto Listing Guidelines
SEC Probes Binance.US Over Customer Asset Custody
Ether's Undervaluation and Bullish Market Signals

Market Trends and Price Analysis

Bitcoin and Ether React to Market Forces
Crypto Funds See Fifth Week of Outflows
Whale Activity in Chainlink Raises Eyebrows

Country-Specific Developments

South Korea Targets OTC Crypto Market
JPEX Halts Trading Amid Hong Kong Regulatory Scrutiny

Business Strategy and Investments

Ant Group Exits Crypto, Shifts Focus to AI

Crypto Exchanges and Platforms

Coinbase's Layer 2 Network Outshines Solana
Blockchain Capital's Record Fundraising for New Ventures
ApeCoin DAO Considers NFT Acquisition Strategy

Citi Unveils Blockchain Service for Institutional Clients

Citigroup has developed a permissioned blockchain platform called Citi Token Services, which will enable institutional clients to interact with digital assets. The platform will provide access to tokenized deposits, cross-border payments, and automated trade finance solutions 24/7.

Citi's partnership with Maersk in a pilot program demonstrated the ability to provide instantaneous payments to service providers via smart contracts, and the platform also aims to improve liquidity for premier banking clients. Citi appears to have beaten JPMorgan in launching a similar private blockchain service.

NYDFS Tightens Crypto Listing Guidelines

The New York Department of Financial Services (NYDFS) has proposed updated guidelines that will impose stricter restrictions on crypto coin listings, particularly if targeting retail clients. Licensees will need to assess legal, reputational, and market risks and provide a plan for de-listing tokens.

The NYDFS has previously sanctioned companies including Coinbase and Robinhood and has updated its list of approved coins to include bitcoin, ether, and stablecoins issued by PayPal and Gemini. Some crypto firms, such as Kraken, have pulled out of New York in protest.

SEC Probes Binance.US Over Customer Asset Custody

The SEC has requested an inspection of Binance.US and its custody of customer assets, after the company failed to provide certain information. The regulator accused BAM, the company behind Binance.US, of slow-rolling small productions of documents and stonewalling on entire categories of information.

The accusations came ahead of a hearing in the U.S. District Court for the District of Columbia, months after the SEC sued the exchange and its founder Changpeng "CZ" Zhao for violating multiple federal securities laws.

Ether's Undervaluation and Bullish Market Signals

According to RxR's blended Metcalfe law-centric valuation model, the Ethereum market cap is undervalued, with ETH trading at a 27% discount to its fair value. The model takes into account the active user adoption of layer 2 scaling networks in addition to the Ethereum layer 1. This suggests that traditional models that focus solely on Ethereum layer 1 adoption may be misleading.

By incorporating layer 2 activity, the model puts ETH's valuation at $275 billion, with no further user growth assumed. The increasing activity on layer 2 networks is an important factor to consider in accurately valuing ether.

A whale has traded nearly 92,600 ETH call option contracts worth $150 million on Deribit, indicating bullish expectations for Ethereum's price. The trade was concentrated in out-of-the-money calls at strike levels above the current market price. This implies institutional activity and comes after Ethereum's recent price drop and subsequent rebound.

Bitcoin and Ether React to Market Forces

While Bitcoin soared to its month-to-date high at $27,400, crypto price trends indicate that Ether successfully maintained its support levels. However, interest-rate decisions expected this week could put downward pressure on prices.

The rise could be traced back to rumors that BlackRock, one of the world's largest investment management firms, may have purchased 12,200 Bitcoin, signaling increased institutional adoption.

Bitcoin has regained its dominant position in the cryptocurrency market, accounting for over 50% of the total market capitalization. When it comes to crypto coin prices, altcoins like Ethereum, BNB, and XRP are finding it challenging to match Bitcoin's stellar performance. This trend aligns with historical patterns, as Bitcoin tends to spike during bear markets.

Crypto Funds See Fifth Week of Outflows

Last week, crypto investment products at asset managers like Grayscale and Bitwise saw outflows of $53.5 million, marking the fifth consecutive week of declines. Year-to-date net inflows decreased to $51 million, with the U.S. market being the primary driver behind the negative sentiment. Bitcoin funds dominated the outflows, while Solana, Cardano, and XRP funds experienced inflows.

Whale Activity in Chainlink Raises Eyebrows

Large transactions volume in Chainlink has spiked recently, with whales depositing $350 million worth of LINK into exchanges. This could be a bearish sign, indicating potential selling by these investors. However, despite this activity, Chainlink's price has not been negatively impacted so far.

South Korea Targets OTC Crypto Market

South Korea is focusing on regulating the over-the-counter (OTC) crypto market due to concerns about its use in illegal activities. The value of unlawful foreign exchange transactions made using digital currency was estimated to be worth $4 billion last year. The country's financial regulators are monitoring trading in the OTC crypto market and there is a need to regulate these companies involved in undeclared virtual asset trading businesses.

JPEX Halts Trading Amid Hong Kong Regulatory Scrutiny

In the wake of Hong Kong’s Securities and Futures Commission investigation, JPEX has halted trading after being accused of operating without a license, sending ripples through cryptocurrency charts. JPEX blamed third-party market makers for restricting liquidity and freezing funds. Hong Kong police have received 83 complaints about the exchange and have arrested influencer Joseph Lam Chok in connection with the platform.

Ant Group Exits Crypto, Shifts Focus to AI

Ant Group, a Chinese fintech giant, is divesting from the crypto market by selling its $100 million stake in A&T Capital. This move comes amid market turbulence and Ant Group's increasing focus on AI. It is uncertain whether A&T Capital will close down or seek new funding without its major investor.

Additionally, venture capital funding in the crypto sector has been declining, with June experiencing a record low. Ant Group has recently shifted its attention to the AI market.

Coinbase's Layer 2 Network Outshines Solana

Coinbase's Layer 2 network, Base, has outperformed notable blockchains such as Solana, with its Total Value Locked (TVL) reaching $407 million. Base has also surpassed Solana in terms of transaction volume and number of unique addresses. The growth can be attributed to Base's social app, Friend.tech. Base was created to provide faster transactions, improved scalability, and lower gas fees on Ethereum.

Blockchain Capital's Record Fundraising for New Ventures

Blockchain Capital has raised $580 million for two new investment funds, marking the company's largest raise in its ten-year history. One fund is an early-stage fund while the other is an Opportunity Fund. The Opportunity Fund is designed to pursue financing opportunities at the later stage, taking advantage of the current barren fundraising environment for late-stage crypto companies.

Blockchain Capital has invested heavily in infrastructure, gaming, DeFi, and consumer and social sectors over the past 20 months, with a focus on scalability and exploring opportunities for democratizing digital ownership.

Top Altcoin Gainers and Losers

Gainers:

eCash XEC (+11.84%)

Chainlink LINK (+7.85%)

Stacks STX (+6.35%)

Losers:

Rollbit Coin RLB (-8.60%)

Kava KAVA (-1.36%)

Maker MKR (-1.22%)

NFT Market Map

ApeCoin DAO Considers NFT Acquisition Strategy

A proposal to establish a sister DAO and allocate 750,000 APE to acquire influential NFTs has received over 70% approval in early ApeCoin DAO voting. The proposed NFTs include Bored Ape Yacht Club, Mutant Ape Yacht Club, Cool Cats, World of Women, and Pudgy Penguins.

The sister DAO would lease the NFT IPs to APE holders, benefiting the ApeCoin ecosystem. The proposal is currently being voted on and, if approved, further steps will be taken to implement it.