Alts Steal the Show in a Crypto Rally Amid Eastern Delight over Progress

• SEC seeks feedback on proposed bitcoin ETFs by Franklin Templeton, Hashdex
• Interactive Brokers launches retail crypto trading in Hong Kong with OSL
• Circle and SBI Holdings collaborate to boost USDC adoption in Japan

Beyond bitcoin, alts led the charge in market surge

The cryptocurrency markets witnessed a surge this week, registering a 5.2% increase in the overall market capitalization. The dominance of bitcoin continued to hover below the 52% threshold. Noteworthy blue-chip cryptocurrencies demonstrated positive performance, with bitcoin rallying by 5.6% and ether posting a weekly gain of 5.8%. In the latest developments related to ETF applications, on Tuesday, the Securities and Exchange Commission (SEC) stated its intent to actively seek fresh input from the public. This pertains to both the proposed spot-bitcoin ETF by asset manager Franklin Templeton and the bitcoin-futures ETF put forward by Hashex.

A recent report from Bitfinex revealed that the proportion of circulating bitcoin currently in a profitable state reached a peak of over 83% this week. This marks the highest level since November 2021 when bitcoin's market capitalization reached an all-time high. The report also notes a historically low bitcoin velocity, indicating a reduced frequency of trading or usage in transactions. Such findings suggest a noteworthy shift in sentiment compared to the last bear market cycle. According to the report, the low-velocity level implies that holders of the digital asset are currently disinclined to sell, while buyers are actively seeking new sources of supply.

Among the prominent Layer 1 coins, Solana and AVAX demonstrated notable outperformance within the sector, recording gains of 11.9% and 8.4% respectively over the course of the week. While Solana has consistently impressed investors with its remarkable performance throughout the year, the protocol achieved a significant milestone by reaching a new 12-month high in total daily transaction count earlier this week. Similarly, AVAX maintained its upward momentum, establishing a new all-time high in daily transactions, signaling a considerable surge in network activity. Notably, the ecosystem received a substantial boost from its developer and accelerator, Colony Lab, which recently announced a $10 million investment dedicated to fostering the sustained expansion of the AVAX network. Over the past few months, the company acquired more than 500,000 AVAX tokens valued at $8 million. These funds will be directed towards the establishment of a validators program designed to enhance the benefits for AVAX holders.

Within the DEX (decentralized exchanges) landscape, Sushiswap experienced a notable surge of 29.1%, while Uniswap exhibited an impressive rally of 26.1% over the week. Sushiswap recently introduced a new proposal aimed at addressing various challenges within the DEX platform. The proposal outlines the deployment of Algebra Integral, presenting a streamlined core with essential functionalities and adaptable plugins to effectively tackle these challenges. The proposal emphasizes that the incorporation of new plugins will open avenues for increased stakeholder engagement, thereby expanding revenue streams for the DEX. The strategic use of plugins allows for the implementation of new features without necessitating a liquidity shift, ensuring that Sushiswap (SUSHI) can maintain its competitive edge. Meanwhile, data from the Dune Analytics dashboard indicates that the aggregate trading volume of Uniswap X surpassed the $1 billion mark earlier in the week. Uniswap's team launched Uniswap X in July with the mission of providing trading services across various Automated Market Makers (AMMs) and liquidity providers within the framework of a permissionless trading protocol.

The gaming token sector was also heavily bid this week with Axie Infinity leading the front with a standout 22.8% rally this week. Developer Sky Mavis made several noteworthy announcements over the past week that include the reintroduction of the original Axie Infinity monster battling experience, known as Axie Classic, and the release of the first wave of official Axie merchandise. In an innovative move, it opened commercialization rights for rare Axie NFT owners, enabling them to translate virtual assets into tangible products and projects, elevating the token's attractiveness. Axie's resurgence is also underpinned by the growing momentum surrounding Ronin, its Ethereum sidechain network tailored for blockchain gaming, with the recent launch of the game “Pixels” contributing to its increased adoption.

Among the other majors, the decentralized blockchain oracle network arena Chainlink experienced a notable weekly growth of 7.3%. Yesterday marked a significant milestone as Chainlink introduced an enhanced iteration of its native staking mechanism, designated as Chainlink Staking v0.2, featuring an augmented pool size of 45 million LINK. Commencing yesterday, a nine-day "priority migration" phase was initiated to facilitate the seamless transition of existing v0.1 stakers, allowing them to transfer their staked LINK and accrued rewards to the upgraded version. Subsequently, accessibility will progressively expand to other participants through early access starting on December 7 and in general access from December 11. In accordance with the official statement, users will have the opportunity to stake up to 15,000 LINK during these stages. In parallel developments, Dogecoin demonstrated strength in the meme coin market with an uptick of 12.3%, as reported by The Block. Notably, on November 27, the number of addresses holding Dogecoin (DOGE) surpassed five million.

The Eastern promise, positive narratives from the East

Circle disclosed the finalization of a memorandum of understanding (MOU) with SBI Holdings on November 27, signifying a pivotal step in the strategic expansion of USDC into Asian markets. This development aligns with the revisions made by the Japanese government to the Payment Services Act in June, aimed at establishing regulatory frameworks for stablecoins. In pursuit of introducing USDC into Japan, SBI Holdings is actively pursuing registration as an electronic payment instruments service, a process contingent on approval from Japanese authorities.

Interactive Brokers, a prominent global brokerage firm, has extended its crypto trading services to retail clients in Hong Kong. As of the November 27 announcement, this service is offered in partnership with OSL, one of the first crypto exchanges to secure a Virtual Asset Service Provider (VASP) license in Hong Kong. Last week, Interactive Brokers shared news of obtaining a license for retail virtual asset trading in Hong Kong. Notably, at present, the current license permits the firm to broker trades only in bitcoin and ether.

Macro pulse 

In traditional financial assets, US equities rose by 0.4%, as dovish remarks from the Federal Reserve's Waller reinforced the belief that the Fed has concluded its cycle of interest rate cuts. The US Dollar index dropped 0.8% and the 10-year US Treasury yields slipped by 7 bps while the Gold & Silver index rallied 6.9% week on week. Meanwhile, the Oil futures sustained a weekly decline of 1.9%, driven by mounting investor concerns over the effectiveness of OPEC+ production cuts in mitigating challenges posed by non-OPEC production and a dimmer demand outlook.

*Note: Weekly (7 calendar day) performance figures are as of 8am SGT on November 29, 2023 

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