💸 Stablecoin market capitalisation reached a two-year high; Crypto.com Exchange was the top crypto exchange with USD support by spot trading volume in July

Stablecoin market capitalisation reached a two-year high; Crypto.com Exchange was the top USD crypto exchange by spot trading volume in July; Grayscale Bitcoin Mini Trust began trading on 31 July.

Quick Take

• Stablecoin market capitalisation reached a two-year high; Crypto.com Exchange was the top crypto exchange with USD support by spot trading volume in July; Grayscale Bitcoin Mini Trust began trading on 31 July.
• US spot Ethereum ETFs saw a US$169 million net outflow last week, while spot Bitcoin ETFs had a weekly net outflow of $81 million.
• On the macro side, a few interest rate decisions were announced last week. The US Fed kept interest rates unchanged in the July meeting. UK’s BoE cut interest rates by 0.25% to 5%, its first cut since March 2020. Japan’s BoJ raised the short-term policy rate from 0-0.1% to 0.25%, the highest level since 2008. The latest CME FedWatch Tool showed a 100% probability of a September rate cut in the US. US jobs data announced last week also came in weaker than expected; nonfarm payrolls increased by 114,000 in July, while unemployment rate increased to 4.3% in July. This coincided with a drop in the broader equity and cryptocurrency markets.
• Notable updates: Compound cancelled Proposal 289; GalaChain Testnet went live on 30 July; the Crypto.com App listed Render (RENDER) and Layer3 (L3).
• Notable events in the coming week: Interest rate decision from Australia, US PMI data.

Weekly Market Index

All three market indices dropped last week. Price, volume, and volatility indices decreased by -13.82%, -3.32%, and -0.85%, respectively. The downtrend coincided with the US government moving 29,800 BTC (~$2 billion) from seized Silk Road funds, weaker-than-expected US jobs data, and a drop in the broader equity markets. The price decrease was led by ONDO (-29.67%).

Chart of the Week

Stablecoin market capitalisation reached $164 billion in late July 2024, a two-year high since the collapse of Terra’s UST in 2022. According to DefiLlama, as of 31 July 2024, USDT and USDC take up 70% and 20% of market capitalisation, respectively. 

PayPal’s stablecoin, PYUSD, has surpassed $620 million in market capitalisation within its first year of launch. This expansion of stablecoin adoption and liquidity indicates that more capital is flowing into the broader crypto economy.

Weekly Performance

BTC and ETH decreased by -13.0% and -13.6%, respectively, in the past seven days. Price action for all other selected top market capitalisation tokens was down. INJ (-29.4%) led the drop.

Key categories were all down in market capitalisation in the past seven days. The artificial intelligence category led the drop.

News Highlights

ETFs and Funds

• Grayscale Bitcoin Mini Trust (BTC), a spin-off of Grayscale Bitcoin Trust (GBTC), began trading on NYSE Arca on 31 July. The Mini Trust was established by distributing 10% of GBTC’s underlying Bitcoin to the Mini Trust.
• Fidelity International launched Fidelity Physical Bitcoin ETP (FBTC) on the London Stock Exchange. FBTC is available to professional investors in the UK, providing a convenient way for them to gain spot exposure to Bitcoin.  

Regulations

• Swiss regulator FINMA issued new guidance for stablecoin issuers. The guidance mentioned that stablecoin issuers are considered a financial intermediary and have to be subject to the same Anti-Money Laundering  obligations as traditional financial institutions. This includes requirements for verifying the identity of stablecoin holders. 
• Russia passed a bill to allow authorised companies to conduct international settlements with cryptocurrencies. The law is expected to be effective in September. In addition, Russia also legalised cryptocurrency mining in the country from 1 November 2024. 

Others

• Crypto.com Exchange became the top crypto exchange with USD support by spot trading volume in July. According to the Block, Crypto.com had a 38.5% market share of spot crypto trading volume, ranking number one. The growth was primarily driven by the acquisition of new clients on the platform, including large institutions and advanced retail traders.
• Tokenisation platform OpenEden announced it will start offering tokenised US treasury bills on XRP Ledger (XRPL), a decentralised blockchain by Ripple. OpenEden will collect investor funds to purchase US treasury bills, which will be converted into TBILL tokens stored on XRPL. Ripple will allocate $10 million to TBILL tokens. 
• The US government moved 29,800 BTC (worth around $2 billion) from seized Silk Road funds, according to Arkham Intelligence. The funds have moved to another unknown wallet. As of 29 July, the US government held more than 183,000 BTC (~$12 billion), according to Arkham Intelligence. 
• The Bank for International Settlements (BIS) and Bank of England released the results of Project Pyxtrial to monitor reserves of asset-backed stablecoins and tokenised assets. The system is still a proof of concept, but is an important first step. 
• Slovenia launched the first digital sovereign bond in the European Union via BNP Paribas. The bond was issued as part of the European Central Bank’s wholesale central bank money settlement experimentation programme. The bond has a €30 million nominal size and a 25 November maturity date.
• Nomura’s Laser Digital and Dinero partnered to launch an institutional liquid staking token offering exposure to ETH. The institutional pxETH token (lpxETH) is backed by Dinero’s liquid staking token, pxETH, providing investors with convenient access to ETH staking yields.

Recent Research Reports

• Alpha Navigator: Quest for Alpha [June 2024]: Equities and Fixed Income were up in June, while Cryptocurrencies dropped. Fed remains cautious on rate cuts, while ECB cuts rates for the first time in five years.
• New Developments in GameFi: Play-to-Airdrop and Prediction Markets: Both play-to-airdrop and prediction markets have blurred the boundaries between Web2 and Web3. Our latest report looks into new developments in GameFi by delving deeper into these two trends.
• Research Roundup Newsletter [June 2024]: We present our latest issue of Research Roundup, featuring our deep dives into ETH ETFs, GameFi, and New Layer-2s.

Recent University Articles

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• What Is Toncoin (TON)? What to Know About Telegram’s Cryptocurrency and How to Buy It: Toncoin (TON) is Telegram’s initiative to merge cryptocurrency with its extensive messaging platform. Here’s how it works.
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Catalyst Calendar

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