Weekly Rollup - November 19, 2024

• Bitcoin reached another all-time high of US$93,318 before retracing.
• XRP is trading at three-year highs, with open interest reaching US$2 billion.
• Tether launched Hadron, an asset tokenisation platform.
• Bitfinex hacker Ilya Lichtenstein was sentenced to five years in prison.

Macro Market Updates:

Markets retraced slightly this week, handing back some of the gains seen as the U.S. presidential election result was decided the week prior. Across both the traditional finance (TradFi) and crypto markets, prices stagnated and slid in the second half of the week, presumably due to U.S. Federal Reserve Governor Jerome Powell’s commentary around the trajectory of interest rates in the U.S. With inflation cooling and employment data remaining strong, Powell indicated that the strength of the economy necessitates some patience about future rate cuts. The ten-year yield hovered around a four-month high of 4.4% on the news.

In other macro news:

• The core U.S. Consumer Prince Index (CPI) for October came in at 2.6% for the 12 months to 30 October 2024.
• U.S. unemployment claims came in better than forecast at 217,000.
• Australia’s employment change for October came in lower than forecast at 15,900.
• The United Kingdom’s Gross Domestic Product contracted 0.1% in September.

Crypto Market Sectors:

With an average of 5% growth across the crypto market sectors this week, store of value, real world assets and generation 1 smart contracts experienced the highest growth. This is reflected in the coins that made the biggest gains, such as Stellar and XRP, which gained 98.4% and 95.3%, respectively. Smart contract gains were dominated by Mantra (OM), which almost doubled in value, growing by 198.4% on the week. More on these coins below.

The Bitcoin ecosystem and staking services were this week’s biggest losers, decreasing by 9.6% and 7%, respectively. These losses are presumably due to growth occurring in other parts of the market and, in the case of staking services, investors deleveraging or taking profit from liquidity pools in the second half of the week as markets pulled back slightly.

Bitcoin built on the recent upward momentum to start the week. The largest cryptocurrency opened the week at US$80,366 and rallied over 16% to reach a new all-time high of US$93,318 on Wednesday, 13 November. It even overtook silver as the world’s eighth-largest asset, with a market cap of US$1.75 trillion. Price has since stagnated around US$90,000, presumably due to news about the U.S. Federal Reserve's interest rate trajectory and that bitcoin miners are taking profit following last week’s price surge. In the last 48 hours, miners have sold over 3,000 BTC, valued at around US$273 million.

Inflows of US$1.48 billion went into bitcoin asset investment products this week. Short-bitcoin products gained US$49 million. This brings year-to-date inflows for bitcoin investment products to US$30.9 billion.

Goldman Sachs submitted its Q3 13F filing with the U.S. Securities and Exchange Commission (SEC), revealing that the firm holds US$710 million across numerous bitcoin exchange-traded funds (ETFs). At the time of filing, its largest holdings are BlackRock’s iShares Bitcoin Trust (IBIT), with 12.7 million shares worth US$461 million. This makes Goldman Sachs the second-largest holder of IBIT, behind hedge fund Millenium Management.

Bitcoin ETF options got one step closer to being approved for trading this week. The U.S. Commodity Futures Trading Commission (CFTC) released a notice stating that bitcoin ETF options are cleared. The next step is for the Options Clearing Corporation to provide approval.

It was a tough week for Ethereum. After a rally of almost 9% on Monday, 11 November, price found resistance at US$3,385, broke US$3,220 to the downside and has since tested this level as resistance.

This week’s price declines came as on-chain activity surged. Data from on-chain analytics firm IntoTheBlock found that US$1 billion of Ether was moved out of crypto exchanges. Activity like this typically indicates that investors are looking to hold their crypto assets throughout the next leg of the bull run, withdrawing them from centralised exchanges for more secure long-term storage.

Ethereum asset investment products saw inflows of US$646 million this week. The inflows are presumably due to political certainty following the U.S. presidential election result and Ethereum researcher Justin Drake’s proposal to redesign Ethereum’s consensus layer.

Drake’s proposal, “Beam Chain,” outlines a suggested redesign of the consensus layer. He said the upgraded layer should include the “latest and greatest” ideas from the Ethereum roadmap and be organised into a single upgrade package. Other proposed changes include how blocks are produced and how the network manages staking and zero-knowledge cryptography.

After tokenising its crypto investment options on different blockchains, Franklin Templeton launched the On-Chain U.S. Government Money Fund (FOBXX) on the Ethereum network. FOBXX enables investors to buy U.S. government securities, cash, and repurchase agreements and hold them in digital wallets. FOBXX is also available on Avalanche, Stellar and Aptos, plus Arbitru, Polygon and Base (Ethereum scaling networks). The move to launch on the Ethereum network is the first time that Franklin Templeton has launched anything on the Ethereum mainnet.

Smart contract gains

• Mantra (OM) gained 198.4%, taking its market cap to US$3.8 billion. The layer 1 blockchain for real-world assets found support around US$1.40, coinciding with the 50-day moving average. The gains are presumably due to growing investor interest in tokenising real-world assets, the well-received Mantra-sponsored Cosmoverse conference, and announcements such as the network’s new partnership with Pyse Earth to tokenise electric motorcycle ownership in the UAE.
• Casper Network (CSPR) gained 119%, which takes its market cap to US$241.7 million. The layer 1 blockchain that’s configured for builders soared after a number of positive announcements over the weekend. The announcements included CSPR becoming available to buy directly in the Ledger Live app, the launch of the Outlaw Dogs NFT project on the network, and more.
• Hedera (HBAR) gained 94.5%. This takes its market cap to US$4.1 billion. The open-source, leaderless proof-of-stake network has been rallying since Tuesday, 5 November, presumably due to U.S. election momentum. The continued rally is likely due to updates, such as Hedera being included in Coinbase’s COIN50 and positive sentiment at the Hedera Forum that took place in Miami this week.

DePIN delight

• AIOZ Network (AIOZ) grew by 57.9%, taking its market cap to US$931.6 million. The decentralised physical infrastructure network (DePIN) has gained almost 120% in recent weeks. The gains are presumably due to the wider market rally, growing investor interest in and the increasing capability of AI, and AIOZ Network’s collaborations on real-world projects, including using 3D printing to reconstruct surgical tools.

Crypto without borders

• Stellar (XLM) grew by 98.4%, taking its market cap to US$6.6 billion. Trading volume has grown since the golden cross occurred, surging to US$2.96 billion on Sunday, 17 November. The gains are also thought to be driven by XLM’s close correlation to XRP’s price action. The former co-founder of Ripple, Jed McCaleb, co-founded Stellar, and the projects share many similarities.
• XRP (XRP) gained 95.3%. This takes its market cap to US$65.6 billion. XRP reached a three-year high of US$1.30 on Wednesday, 13 November, before retracing to around US$1.15. The coin has seen strong upward momentum since Donald Trump was elected, with open interest in the futures market hitting just under US$2 billion, according to CoinGlass. High open interest typically indicates an uptick in speculative trading and bullish sentiment as positions are leveraged to amplify traders’ gains.

The post-election upward momentum saw US$1.98 billion of inflows into digital asset investment products. This marks the fifth consecutive week of inflows into these products, while year-to-date inflows reached a record-breaking US$31.3 billion. The U.S. presidential election result, monetary easing and near-term political certainty are presumably the reason for this week’s inflows, much like the bullish price action seen across the crypto market.

• Solana (SOL) broke above US$200 for the first time since April, marking a three-year high. Throughout the week, the fourth-largest cryptocurrency gained 30% and reached a market cap of almost US$100 billion. Solana’s previous all-time high came before the network’s app, pump.fun, where people buy meme coins, launched. On Thursday, 7 November alone, 32,000 meme coin tokens were launched on pump.fun, demonstrating that the Solana network and meme coins may see further gains throughout the next leg of the crypto bull market.
• Muneeb Ali, the co-creator of Stacks (STX) and CEO of Trust Machines, announced that Stacks’ upcoming sBTC token may be released in December. sBTC aims to solve the challenge of writing data to Bitcoin’s main blockchain. The new token will allow smart contracts to send sBTC to an address where it can be pegged as BTC. Stacks’ decentralised two-way peg is designed to provide an alternative to wBTC and cbBTC, which are both provided by centralised custodians.

• Detroit is going to start accepting crypto payments for taxes and fees from the middle of 2025. Residents will be able to pay the city using a PayPal-managed platform that enables crypto payments. The development is part of Detroit’s strategy to modernise its municipal services and improve financial inclusivity, especially for people who have limited access to traditional banking channels.
• Former FTX Founder Gary Wang has asked a judge that he not serve a prison sentence after FTX’s former Chief Engineer, Nishad Singh, avoided prison by cooperating as a key witness in legal proceedings against FTX. Wang’s lawyers argued that he faces the fewest criminal counts and was one of the first within FTX’s team to admit wrongdoing. He pleaded guilty in December 2022.