In markets

Bitcoin has been trading in a narrow range around $14,000 for most of the week, but overnight took a quick leg up to trade above $14,700 at the time of writing. It’s 3.9% up on this time last week. Other big projects were up too, including Ether (7.9%), XRP (2%), and Stellar (4.5%). However, Chainlink (1.1%), Litecoin (1.2%), Bitcoin Cash (0.5%) and Bitcoin SV (1.1%) ended the week close to where they began, while EOS actually lost 2.6%.

Market Update 20200915

In headlines

New listings SNX and PMGT

Trading has just gone live for Independent Reserve’s two newest coins Synthetix (SNX) and Perth Mint Gold Token (PMGT). Synthetix (SNX) is considered by many to be a ‘blue-chip’ DeFi project – certainly in comparison to the wave of yield farming meme coins. It’s a liquidity protocol for derivatives on Ethereum that enables both the issuance and trading of synthetic assets. The ‘Synths’ can be as simple as sUSD, which is tied to the price of $1 USD, or more complicated, such as the sDEFI token which tracks the price of a basket of DeFi assets. Perth Mint Gold Token (PMGT) allows you to conveniently buy, trade and hold digitised gold on the blockchain. It’s government-guaranteed and fully redeemable into physical bullion.

100,000 BTC on ETH

Bitcoin and Ethereum have become friends, with $1.46B (US$1.06B) of Bitcoin now residing as tokenised Bitcoin on the Ethereum network – that’s just a shade under 100,000 BTC. The amount surged by 20X the entire value locked in the entire Lightning Network over the past week.

$1B more USDT on ETH

Tether (USDT) actually works on eight blockchains, but most of the demand is on the Ethereum network. Now $1B more USDT is being migrated from TRON over to Ethereum to keep up with demand after a “tier 1 exchange” requested the swap. The same thing happened last month with another $1B of USDT and a different exchange.

Big increase in volumes

Cryptocurrency trading volumes for August increased 75% month on month. It was the largest increase since February 2018, according to The Block. August’s volume clocked in at US$191.2 billion compared to $109.3 billion in July and the spot exchange volume was the third-highest monthly figure since 2017.

Big increase in volumes

September blues

Kraken Intelligence’s monthly Bitcoin volatility report points out that September is invariably the worst month of the year for the Bitcoin price with an average 7% loss. The report suggests that as BTC has underperformed its average returns this year, the loss might be even greater. Bitcoin is currently 9.4% down in the past 30 days, so the prediction is looking in better shape than the report’s prediction last month of an imminent price surge up to 200%.

Developer activity = 10X price

Delphi Data has released a report showing that developer activity is strongly correlated with the price for low market cap coins. “Low market cap projects which went onto achieve greater than 10x price growth had on average 2.5 times more daily active developers and 3.5 times more daily commits than projects with negative returns,” the report says. Using this insight as the basis of a strategy to identify investments, they claim that $205,000 invested in September 2018 using the strategy would be worth $4.1 million today, outperforming Bitcoin by 1215%.

Developer activity = 10X price

DeFi is the investment opportunity of the decade

Former Messari Head of Product Qiao Wang believes the nascent DeFi sector has enormous growth potential, which he likens to “BTC pre-2013 and ETH pre-2015”. “DeFi pre-2021 is once-in-a-decade (opportunity) IMO … If you’ve missed the first two don’t miss the latter.” However, Messari founder Ryan Selkis took the opposite viewpoint and believes DeFi is currently in a yield-farming Ponzi-scheme led bubble.

Bitcoin strategy goes macro

US-listed company MicroStrategy made waves when it allotted US$250m (A$343m) of its strategic capital into Bitcoin last month. Now it looks as if they are doubling down with a new filing announcing the company’s new Treasury Reserve Policy that says Bitcoin will serve as the “the primary treasury reserve asset on an ongoing basis… As a result of this new Policy, the Company’s holdings of bitcoin may increase beyond the $250 million investment that the Company disclosed on August 11, 2020.”

Final ETH 2.0 testnet plus one

Medalla, the ‘final’ multi-client testnet for Ethereum 2, will be joined by a supplementary testnet called Spadina for three days later this month. It’s being set up to avoid disrupting the work on Medalla so devs can test deposits and the genesis block launch. “If all goes well, it should give us greater peace of mind before we jump into the real deal later this year,” said coordinator Danny Ryan. Whales have been accumulating Ether ahead of the launch of ETH 2.0. Santiment figures show that the share of wallets with more than 1 million Ether has grown 1.82x in a year, from 7.85% in September last year to 14.29% today.

Until next week, Happy Trading!