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ARP's Crypto Digest
ARP Digital
November 18, 2024
General Digital Asset Market View:
Source: Farside, ARP Digital Research Team Q4’24
U.S. Bitcoin ETFs ended the second week of November 2024 with a total inflow of $1.8 billion.
Leading the pack was BlackRock’s IBIT fund, which recorded nearly $2 billion in inflows for the week, surpassing the net value of all 11 funds combined. This was due to BlackRock maintaining steady buying momentum, while other funds experienced notable sell-offs during the last two days of the week as investors took profits following Bitcoin’s peak.
Nevertheless, this marks the sixth consecutive week of Bitcoin ETF inflows since early October, with weekly figures of $348.4 million, $2.129 billion, $997.6 million, $2.22 billion, $257.4 million, and the latest $1.8 billion.
Macro:
This week’s key economic indicators include the run of global flash PMIs on Friday, along with inflation from the UK, Japan and Canada. A long list of central bank speakers with ECB President Lagarde speaking twice and BoJ Governor Ueda on the agenda as well. The G20 Leaders’ Summit will take place on 18–19 November in Rio de Janeiro. From an earnings POV, Nvidia is the key reporter while Lulu is also on the calendar and Microsoft goes ex-div. There is USD33bn in UST issuance on the calendar between 10Yr TIPS and 20s.
More Crypto:
Source: Bloomberg
Bitcoin’s price recently surged past $90,000, pushing its market capitalization to over $1.77 trillion, surpassing Spain’s GDP. This increase aligns with a rise in the M2 money supply, influenced by central banks lowering interest rates and implementing quantitative easing, which boosts economic liquidity.
M2, encompassing liquid assets like cash and checking deposits, often correlates with Bitcoin’s price trends. As M2 expands, indicating more available capital, Bitcoin becomes attractive as a hedge against potential inflation, driving its price up. This relationship between M2 expansion and Bitcoin’s price is crucial for investors to monitor for effective market entry and exit strategies.
Source: Kaiko
Bitcoin options trading volumes on Deribit rose sharply at the beginning of the week as the digital asset approached $90,000. On Monday, the daily trading volume of bitcoin options exceeded $8.2 billion, $5 billion of which were call options, reflecting bullish market sentiment.
Since November 6, the day after the U.S. election, there has been a significant increase in demand for calls on Deribit, with strike prices between $90,000 and $120,000 for the December 27 expiry.
Source: Coingecko, Binance
90% of Binance listings in 2024 declined significantly, but with the market in a bull cycle, Binance has started listing coins with market caps above $30 million, which could change the landscape of future listing.
Stablecoins Metrics and News:
Metrics:
Source: Squads Research
Stablecoins emerged as a response to the high volatility of early cryptocurrencies, with the first notable stablecoin, Tether (USDT), introduced in 2014. Since then, the stablecoin market has experienced rapid growth, particularly in emerging markets and developing economies (EMDEs), by addressing acute cross-border payment frictions and fiat instability.
Key milestones in stablecoin history include:
2014: Launch of the first major stablecoin Tether (USDT)
2018: Introduction of USD Coin (USDC)
2019–2021: Rapid growth in stablecoin adoption, particularly in DeFi applications, emerging markets, and developing economies. The total stablecoin market capitalization reaches approximately $5 billion.
2022: Collapse of algorithmic stablecoin TerraUSD, leading to increased regulatory scrutiny.
2023: Stablecoin market capitalization reaches approximately $165 billion, a 33-fold increase from 2019.
As of October 2024: The total market capitalization of stablecoins has reached approximately $178 billion.
The strong demand for digital stable assets is clear, with stablecoins making up nearly 8% of the total digital asset market.
News:
Tether mints $1 billion USDT on Tron, pays zero fees — Link
Stablecoin Issuer Tether Moves Into Tokenizing Stocks and Bonds — Link
USDT, USDC exchange inflows surge — Link
Stablecoin Supply Expands by $5B Since U.S. Election as Investors Pile Into Crypto — Link
A useful framework for understanding stablecoins: Banking history — Link
What Happened This Week:
Pennsylvania lawmakers has introduced a bill to invest in Bitcoin and crypto ETFs as a hedge against inflation.
Franklin Templeton has expanded the trading of its $410M Onchain U.S. Government Money Market Fund (FOBXX) to Ethereum.
sUSDe can now be pledged as collateral to AAVE. Users can borrow other stablecoins at low rates while earning about 29% APY on $sUSDe.
Robinhood Crypto has relisted $SOL $ADA and $XRP — and has also listed $PEPE. Robinhood listed $SHIB in April 2022 and then listed memecoin again more than two years later.
After Elon Musk said on X that “America was saved by a squirrel and a meme coin” Peanut the Squirrel ($PNUT) jumped +290% in a 24h.
What to Look Out For:
Trump said in a statement that Elon Musk and Vivek will lead Department Of Govt Efficiency (D.O.G.E).
Net USDT inflows to exchanges surpassed $1.3 billion, a new all-time high.
At DevCon, Justin Drake introduced a proposal to overhaul Ethereum’s consensus layer, Beam Chain. The roadmap indicates that research and early development will begin in 2025, with testing to follow in 2028–29.
Canary Capital has filed an S-1 document with the U.S SEC for the Hedera Spot ETF.
What we enjoyed reading and listening to:
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