The rally in bitcoin and altcoins continued this week amid a rebound in spot trading volumes on centralized exchanges, with many cryptoassets jumping to their highest levels since early 2022. Bitcoin is now up more than 120% year to date, far outpacing traditional asset classes. In other risk assets, US equities also had a good week, with the S&P 500 up 1.5% and Nasdaq Composite gaining 1.7% while commodities fell, led by a 8% drop in crude oil. Elsewhere, Moody’s lowered its outlook on the US’s credit rating to “negative” from “stable”, pointing to a sharp rise in interest costs and “entrenched political polarisation”. On the day before, a sale of $24 billion in bonds by the United States government saw little demand. As a result, the 30-year US Treasury yield rose to more than 4.8% from 4.655%. After the long-duration bonds received far less demand from investors than expected, primary dealers who are obligated to finance the Treasury auction’s portion that is not purchased by other investors, bought almost a quarter of the issuance. Despite the unsuccessful Treasury auction, Fed chair Jerome Powell said it was premature for the central bank to declare a conclusive end to its historic interest-rate hikes.
Against the backdrop of the current rally in cryptoassets, publicly listed companies such as MicroStrategy, Coinbase and most Bitcoin miners registered double-digit gains this week. The crypto-focused equities often track bitcoin’s price, albeit with a significantly higher beta. Although most mining stocks have not recouped their price levels seen in the second quarter, they saw strong gains across the board, led by Riot Platforms and Marathon Digital. The latter reported net income of $64.1 million in Q3 after posting net loss of $72.5 million during the same period last year. Marathon’s revenues came in significantly higher year-over-year at $97.8 million during Q3 this year vs. $12.7 million in Q3 2022. The company attributed this rebound to a 467% surge in bitcoin production along with a 32% increase in average bitcoin prices over the period. The company expects its 2023 mining power to reach 26 EH/s, which would make it the largest publicly listed bitcoin mining firm in terms of hashrate. Likewise, Riot reported total revenue of $51.9 million during 3Q – up from $46.3 million for the same period in 2022. The increase was driven by both an expansion in bitcoin production and higher average prices. Riot also raised $230 million in equity during the period to build out its Bitcoin mining infrastructure.
Elsewhere, Justin Sun’s crypto exchange Poloniex appears to have suffered from a major hack affecting more than $100 million in crypto assets. Suspicious outflows from its hot wallet suggest the incident affected a large sum of its funds, although the exchange has yet to confirm the amount. Justin Sun wrote on X that “The Poloniex team has successfully identified and frozen a portion of the assets associated with the hacker’s addresses. At present, the losses are within manageable limits, and Poloniex’s operating revenue can cover these losses.” Sun also offered a 5% whitehat bounty to the attacker on the condition of a complete fund return, setting a seven-day deadline before initiating legal proceedings with law enforcement.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $1.47 trillion – compared with $1.34 trillion last week, with bitcoin accounting for about 49%. Among the Top 30 cryptoassets by market cap, Cronos (CRO) outperformed, gaining about 78% over the week. The price of bitcoin (BTC) rose by 7.1% to $37,163 while the price of ether (ETH) increased by 13.8% to $2,084. The total value locked (TVL) in DeFi is sitting at roughly $47 billion, with Ethereum (excluding Layer 2s) currently accounting for about 55% of TVL.
This Week’s Headlines
- Nasdaq files for BlackRock‘s proposed iShares spot Ethereum ETF
- SEC said to open talks with Grayscale on spot Bitcoin ETF push
- USDC stablecoin issuer Circle mulls IPO in 2024, Bloomberg reports
- US Majority Whip Tom Emmer criticizes SEC Chair Gary Gensler as “ineffective”
- CFTC Chair Rostin Behnam says the US Congress needs to play a more pivotal role in how agencies regulate crypto
- Michael Saylor’s Bitcoin bet crosses $1 billion in unrealized profit
- Celsius to emerge from bankruptcy with repayment plan approved
- HSBC to launch tokenized securities custody service with Ripple-owned Metaco
- Robinhood plans EU crypto trading expansion as Q3 revenue fell short of estimates
- Kraken to seek partner to help build its own Layer 2 blockchain network
- Coatue Management marks down stake in OpenSea by 90%, The Information reports
- Magic Eden and Yuga Labs launch Ethereum NFT marketplace to enforce royalties
Notable Deals and Fundraising
- European crypto tax platform Blockpit acquires rival Accointing
- Decentralized AI compute platform Ritual closes $25 million fundraise
- UK Web3 infrastructure firm Pimlico raises $4.2 million in a seed round led by a16z crypto
- Smart contract governance platform Llama raises $6 million in seed funding
- Ethereum scaling startup Stackr raises $5.5 million in a seed round
- Definitive raises $4.1 million to make DeFi more accessible for institutional investors
- Crypto analytics firm Block Scholes raises $3.3 million
- Euro stablecoin startup StablR raises €3.3 million in a seed round
- Payment startup Due raises $3.3 million in a seed round to develop a blockchain-based platform
- Lightspeed Faction launches $285 million inaugural crypto venture fund
- Crypto VC Maven 11 targets $100 million for third fund
- Standard Chartered’s SC Ventures and SBI Holdings plan to invest $100 million in crypto startups
- Polygon Labs launches Polygon Village, a $90 million fund for ecosystem development
- Ninety Eight launches $25 million ecosystem fund to support Web3 startups in Asia
