Recent reports that crypto mining will not face a state crackdown in China, together with comments by a spokesman for the Chinese Ministry of Commerce who said China and the US have agreed to roll back tariffs on each other’s goods in phases as they work toward a deal between the two sides, failed to support the positive sentiment. The market traded generally lower on Thursday but even in the midst of this sea of red, a few green shoots have emerged. In particular, Tezos (XTZ) rallied over 20% in reaction to the news that Coinbase has expanded access for staking cryptocurrency. As a guide, staking lets customers passively earn income with their crypto by holding funds in a cryptocurrency wallet to support the operations of that tokens’ network.
Ethereum Classic also continued to trend higher, touching on its highest level since late September, as market participants positioned for the upcoming hard fork which is due to take place early next year. The upgrade also presents yet another opportunity for relative value plays to capture spread tightening vs Ethereum and for contrarians to bet that some miners will switch away from Ethereum.
Heading into the closing stages of week, sentiment is showing no signs of recovery, volatility remains suppressed and smaller caps are showing better performance on the back of this. However, as pointed out in the past, the ongoing contango trade, amid somewhat soft spot market, points to a potential breakout and surge in volatility.
The market focus may be on Bitcoin and the block reward halving due to take place next May, but it is also worth remembering that Ethereum is about to enter a crucial stage of its own. The team lead at the Ethereum (ETH) Foundation Péter Szilágyi has confirmed Dec. 4 as the expected date for the network’s forthcoming Istanbul hard fork, at block 9069000. He provided Geth mainnet node operators with a link to a new maintenance release designed to begin the hard fork’s initialization. Geth is the name given to one of the two most popular clients used to operate nodes on the Ethereum network — the other being Parity.
Elsewhere, Maker (MKR) rallied over 10% after the Maker Foundation Interim Risk Team placed an Executive Vote proposal into the voting system to lower the Dai Stability Fee to 5% and, more importantly, to raise the debt ceiling to 120 million. After bottoming out at 1.2%, the amount of Eth locked in the credit ecosystem has gradually risen to 1.67%, helped by the actioned reduction in the stability fee which has hiked aggressively amid fears of de-pegging. Looking at the DeFi Pulse, the amount of ETH locked in continues to climb higher and is on path to reach 2.5mln, while Maker dominance is just above 50%, at 52.24%.
Silvergate Bank, a crypto-friendly bank, officially began selling shares on the New York Stock Exchange. Roughly a year after it first filed for its initial public offering, Silvergate began its “IPO day” on the NYSE, according to the stock exchange’s Twitter account. The news comes a day after Silvergate received a “notice of effectiveness” from the U.S. Securities and Exchange Commission, indicating its long-running IPO bid had been accepted. The bank currently serves more than 750 firms in the crypto space, including exchanges, investors and others, according to an updated IPO prospectus filed in September 2019.
Thank you for reading,
The BeQuant’s Analytics team