The market continued to squeeze higher and for the upside to continue, Bitcoin needs to make a convincing break through $10.9 - 11K levels, otherwise it's back to range trading into the low $9K area. The Contango delta has widened as the week progressed and, given the downward trend in USDC rates, it will be interesting to see how that continues to play out.
The Commitment of Traders (COT) report by the CME shows a steady unwind of shorts in the “other reportable” category, with short positions falling from their June peak of 1,967 to 1,131 in the latest report, whereas longs are also down from 490 to 309. In the end, it all comes down to timing, especially since in the very near future the main topic of conversation will be next year’s halving and the implications it will have for the market. Miners that want to make the most of the run-up will have to invest time and money now, or else risk falling behind…
Looking elsewhere, the USD value locked in DeFi is about to break back above the $500M level, with Synthetix, the derivatives platform showing strong gains. Synthetix recently launched its first index token, a digital-asset that replicates holding a basket of tokens, and in this case, a basket of exchange tokens. Synthetix founder Kain Warwich said that’s just the start. More index tokens are coming and the next one, to launch in two to three weeks, will replicate holding a basket of DeFi tokens. He also talked about new leverage tokens launching soon, which will replicate going 2x and 3x long and short Bitcoin, and about a major upgrade to the platform, which will introduce futures trading.
In terms of news flow, American asset management firm Franklin Templeton Investments has filed a preliminary prospectus with the United States Securities and Exchange Commission (SEC) for a government money market fund with a focus on blockchain-based shares. Franklin Templeton has chosen the Stellar network to record the ownership of the fund’s shares. The document further explains that clients will be able to buy and redeem shares of the fund through a special app, where each investor will receive a blockchain wallet and a corresponding pair of public and private keys after an account is created.
Elsewhere, Ethereum Classic Labs, a core Ethereum Classic development and acceleration organization, announced partnerships with social media dApp iZbreaker and blockchain infrastructure developer Second State. The partnerships “will bring high-impact enhancements into the ETC ecosystem” and are intended to create an open-source toolchain and runtime software that powers the next generation of Ethereum-compatible blockchains. As a reminder, Ethereum Classic’s hard fork, the Atlantis hard fork, is scheduled for September 17 or at block 8,772,000 on the blockchain. Atlantis, paired with a later upgrade called Agharta, is intended to boost chain interoperability between the Ethereum Classic (ETC) and Ethereum (ETH) networks.
Thank you for reading,
The BeQuant’s Analytics team