ARP's Crypto Digest

Author

ARP Digital
July 29, 2024

ARP’s Crypto Digest

General Digital Asset Market View:

Source: ARP Digital Research Team Q3’24

Blackrock’s $IBIT emerged as the standout performer, consistently attracting substantial inflows and ending the week with notable positive net flows. Despite some mid-week fluctuations, $IBIT maintained a strong upward trajectory, concluding several days with impressive gains such as $524M and $70M. Conversely, Grayscale’s $GBTC faced considerable outflows throughout the week, repeatedly recording negative figures. Mid-week, noteworthy outflows were observed in other ETFs, reflecting a broader trend of reallocation within the market. 

The launch of ETH ETFs generated significant interest, capturing $106M on its first day, which was about 1/6 of Bitcoin’s first-day inflows. Grayscale experienced a massive outflow of $484M in its ETH holdings, and it does appear that there was a rotation in Bitwise from BTC to ETH and also from ETHE to new ETFs. Interestingly price of Bitcoin unchanged while Eth was down 1%.

More Crypto:

Bitcoin has historically exhibited exponential gains during bull cycles, but each cycle has also seen numerous large drawdowns. 

The current cycle has seen: 

  • Eight drawdowns between 5%-20% 

  • Two drawdowns between 20%-30% 

  • No drawdowns greater than 30%

Blackrocks IBIT has reached a new all-time high, capturing 67% of the spot Bitcoin ETF volume market share, surpassing its previous record of 61%. Despite this, its daily trading volume remains average at $1.2 billion. This suggests other Bitcoin ETFs may be seeing reduced activity. 

BlackRock’s dominance with IBIT is attributed to its strong reputation, distribution network, and marketing, making it a preferred choice for investors in the crypto ETF market.

What Happened This Week:

  • Grayscale’s $ETHE saw a $346.2M outflow on the third day. They are selling ETH about 3x faster (13% vs 4.3%) than BTC, amid lower liquidity summer conditions.

  • AAVE founder Marc Zeller proposed a fee switch for buyback of Aave tokens from the secondary market.

  • Bitstamp started distributing Bitcoin and Bitcoin Cash to Mt Gox creditors on July 25.

  • Ethena proposed allocating part of its reserve to RWA. BlackRock’s BUIDL fund applied for $34M to provide RWA yields to Ethena.

  • Bitwise announced using ENS domain for its custody addresses.

What to Look Out For:

  • Drift will launch official prediction markets very soon.

  • The Jito Foundation has released the code for Jito Restaking, a next-generation hybrid staking, restaking, and LRT module.

  • Stargate DAO has proposed to revamp staking mechanism, potentially broaden pcarticipation throughout.

  • Pstake has teased a big announcement is coming soon.

  • Thorchain has teased that RUNEPool is set to launch as early as this week.

What we enjoyed reading and listening to:

  • Revisiting Aggregation Theory in the Age of Web 3  — Link

  • What makes a good solver? — Link

  • What is Ethereum? Succinct brief — Link

  • Vitalik: Against choosing your political allegiances based on who is “pro-crypto” — Link

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