Opening bell │ #39 │ 11th December

Report highlights:

1. Institutional demand for ETH ETFs is outpacing staking inflation by over five times.
2. A historic trendline challenges the S&P 500 upward ascent next year.
3. Stablecoin supply nears $200bn.
4. Tokenized government securities soared 330% this year, projected to surpass $10 billion by 2025.
5. Bitcoin saw record greed levels post-US elections, signaling significant institutional participation.

Supply demand dynamics 

Ethereum begins to reap fundamental rewards from institutional pockets.

Cash flows into Ethereum ETFs after a disappointing launch are now outpacing its own inflation from staking rewards by multiples, marking the network token as a fundamentally more attractive proposition. Nearly 100k ETH has been added to the supply this year; however, ETFs have bought more than five times that so far since the US elections. The average weekly growth of ETH ETFs stands at 3.2%. Meanwhile, an average of 44,000 ETH is being staked daily. All said and done, Ethereum’s inflation has turned almost moot, with demand coming from various directions.

Historical trends 

Stocks getting uncomfortably touchy on near 100-year-old trendline.

While Bitcoin is just slightly positive for the month of December, the S&P 500 can’t claim the same. Slightly down for the month after returning over 26% year-to-date, the index could have hit a potential top if it can’t break past a nearly 100-year-old trendline (see chart). How this might affect crypto remains a challenging assessment. While the narrative of Bitcoin competing with gold has become mainstream after commentary from Jerome Powell and the US Treasury this month, the question remains whether BTC is still a risk asset if markets face turbulence in the coming year.

RWA

Supply of stablecoins and yielding coins hit record, just shy of $200bn.

Stablecoins have been heralded as the super app of the decentralized and blockchain space this year—and not without reason. The circulating supply of stablecoins is now higher than in 2021. With yielding stablecoins coming into play and their acceptance at various exchanges as collateral, the capital efficiency of fractionalized asset baskets is being fully leveraged by cryptocurrency investors and traders. Ethena’s USDe, with lucrative double-digit returns, saw 90% growth just this past month, breaking the $5 billion mark alone.

RWA

Tokenized government securities break $2bn in growth segment of the year.

Tokenized government securities saw 330% growth this year in a market segment that is unlikely to wane. Between the fractionalized ability of tokenization and the resulting capital efficiencies, the real-world-asset segment is growing at scale. At this year’s growth rate, tokenized securities could break the $10 billion mark by the end of 2025. This growth could be accelerated by greater acceptance of these tokens as collateral across exchanges in the year ahead. Who doesn’t want to earn yield on sitting collateral for open positions?

Technical indicators 

Bitcoin’s most greedy year by far.

Allow us to be a little cliché and uninventive in our last issue of the year by quoting Gordon Gekko—perhaps serving as a reminder that Wall Street is now staking sats: “Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.” Not only has Bitcoin hit a record continuous streak in greed this year based on the Fear and Greed Index, but it has also reached its highest numbers by far since the US elections.

Our closing note: The institutions have arrived. And there is a lot more money, friend.

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