Gryphsis Cryptocurrency Weekly: Spot ETFs and Bitcoin’s Global Dominance
Welcome, dear reader, to Gryphsis Academy’s weekly cryptocurrency digest. We bring you key market trends, in-depth insights on emerging protocols, and new industry dynamics, all designed to enhance your expertise on cryptocurrency and Web3. Follow ourTwitterandMediumGet deeper research and insights. Happy reading!
Market and Industry Snapshot:
Layer 2 Overview:
In the Layer 2 space last week, Arbitrum and Optimism grew TVL by 9% and 5.99% respectively in line with the positive sentiment across the market, while Bae, zkSync and Starknet all showed negative TVL changes over the weekend. Protocols like Dexilla, Interport, Yearn, SuperLauncher, and CairoFi demonstrate TVL growth percentages worth watching.
LSD Sector Overview:
For the LSD space, the growth rate of ETH staking continues to stagnate with no significant changes. From a market share perspective, sfrxETH has grown while the others have remained stable.
RWA Sector Overview:
The real world assets (RWA) sector has seen significant growth in both market capitalization and trading volume, driven by optimism in the wider market. In addition, both active private credit value and tokenized treasury have also seen growth. Top gainers to watch include $POLYX, $DETF, and RIO. Notably, no coins experienced significant losses.
Main Topics
Macro overview:
US Stock V.S. Crypto
Big news this week:
IBTC and BTC new ATH in high inflation countries
Weekly Agreement Recommendations:
Vertex
Weekly VC Investment Focus
Shrapnel ($ 20 M)
Nocturne ($ 6 M)
Twitter Alpha:
@wacy_time 1 on Arbitrum Ecosystem
@stacy_muur’s protocol list
@DeFiMinty free dashboard
@TheDeFISaint Layer 2 roundup
Macro Overview
Cryptocurrency markets witnessed a wave of gains last week, driven by the appearance of IBTC at the Depository Trust and Clearing Corporation (DTCC), especially BTC, which ended the week with a 10% price increase. On the other hand, the stock market continued its downward trend, with the SPX performing weaker than the NASDAQ. In the coming week, watch for key developments such as CB consumer confidence, crude oil inventories, initial jobless claims and the unemployment rate.
Big news this week
Spot ETFs and Bitcoin’s Global Dominance
Over the past time, major market events have continued to revolve around Bitcoin. We saw BlackRock’s iShares Bitcoin ETF (IBTC) briefly listed on the Depository Trust and Clearing Corporation’s (DTCC) website, then disappear, then reappear. The surprise appearance quickly sent Bitcoins price soaring to new yearly highs, highlighting the crypto markets heightened sensitivity to institutional action, especially related to potential ETF listings. However, the craze was short-lived. The removal of the IBTC ticker from the DTCC website resulted in a rapid market correction, with Bitcoin losing nearly 3% of its value. The DTCC later clarified that the listing was a preparatory move in August and did not hint at any imminent regulatory ruling. This situation vividly demonstrates the critical role of institutional actions and the broader mainstream cryptocurrency adoption narrative in influencing market sentiment.
https://twitter.com/EricBalchunas/status/1716529570759704832
As Bitcoin struggles with the complexities of ETF listings and institutional participation, its role as a powerful financial bastion in the global landscape is becoming increasingly apparent. Last week, Bitcoin reached unprecedented valuations against a range of depreciating fiat currencies, including the Argentinian peso, the Nigerian naira, the Turkish lira and others, reaching all-time highs in these countries. Bitcoin’s meteoric rise is both a testament to the dramatic devaluation of these currencies and Bitcoin’s own inexorable rise.
https://x.com/milesdeutscher/status/1717418953025159563?s=20
In a country facing hyperinflation, cryptocurrencies, led by Bitcoin, are carving out a possible safe zone for themselves. Nigeria, for example, which was initially resistant to the appeal of digital currencies, showed a more accepting attitude by the end of 2022, calling cryptocurrencies legitimate “investment capital.” Meanwhile, Argentina, facing an inflation rate of 138% and an upcoming presidential election, finds itself at an economic crossroads. Bitcoin’s growing role in such an economy cannot be ignored, while its potential as a beacon amid financial instability continues to be strengthened.
However, the journey has not been smooth sailing for all countries. Despite Turkey’s population’s strong inclination towards cryptocurrencies, the country has restricted their use in daily transactions. However, to ease its economic woes, Turkey is considering launching its own digital currency.
In summary, as the cryptocurrency world awaits regulatory clarity and responds to the challenges and opportunities presented by global economic woes, one thing is certain: Bitcoin’s influence, whether as a reflection or reaction to broader financial movements, is is unconquerable. The events of the past week have demonstrated Bitcoin’s profound impact on global financial dynamics and its growing importance in the modern world of financial turmoil.
Weekly Agreement Recommendations
The Vertex protocol stands out as a groundbreaking decentralized exchange (DEX) protocol on the Arbitrum network. As a holistic application, Vertex offers a comprehensive array of financial instruments, including spot trading, perpetual contracts and a unified currency market. Fundamentally, Vertex is based on a collaborative model that combines a central limit order book (CLOB) with a built-in automated market maker (AMM). This arrangement ensures that liquidity drawn from the Pairwise LP market supports the order book, enriching the trading landscape for users. Additionally, the underlying Arbitrum Layer 2 (L2) simplifies gas fees and reduces miner extractable value (MEV), ensuring transactions that are both efficient and economical.
Vertex has three basic elements: an offline sequencer (order book), an online Automated Market Maker (AMM) and a dedicated online risk engine. The order book and AMM serve as the systems integrated liquidity reserve, aggregating liquidity from API-based market makers and online liquidity contributors. At the same time, the risk engine is designed to facilitate rapid liquidation. By leveraging these two liquidity sources, traders can expect to obtain more favorable trading prices through their synergistic capabilities. The effectiveness of this model is confirmed by the steadily increasing transaction volume on Vertex.
Another important feature of Vertex is its cross-margin system, which offers numerous benefits to both advanced and retail traders. First, it significantly reduces margin requirements. For example, a Vertex trader holding a long position in $ETH spot margin and a short position in $ETH perpetual contracts may have a reduced cumulative margin requirement compared to an isolated margin account. The system also automates risk management, calculating and transferring margin between open positions to maintain required levels, which is a boon in times of high market volatility. Additionally, it allows for risk/return optimization, allowing traders to adjust the leverage of a position to suit personal risk appetite. Another noteworthy feature is portfolio margining, where unrealized profits from one position can offset the margin requirements of another position, improving capital efficiency. For example, if the value of a long $ETH spot margin position declines, unrealized profits from a short $ETH perpetual contract position can be used to maintain required margin levels and prevent liquidation.
Our Insight
Vertex continues to outperform in the very competitive decentralized exchange space, consistently capturing 10-30% of daily trading volume. Considering the tough competition against established players like GMX, Gains and Kwenta, its performance is commendable.
This coming November 13, Vertex is gearing up for another milestone: the initial launch of its VRTX token via a Liquidity-Boosted Auction (LBA). This seven-day event, which will end on November 20, 2023, is designed to allow the market to price VRTX organically and truly reflect investor interest. During the first five days of the auction, participants can participate with $VRTX trading rewards or $USDC.e. Proceeds will fund the VRTX-USDC.e liquidity pool on Vertex. In addition, those participating in the auction will share an incentive pool containing 10 million VRTX (1% of the total supply), which will be gradually released over 120 days. During this period, liquidity providers will enjoy the dual benefits of trading fees and VRTX rewards.
Given Vertexs strong track record, the VRTX token is worth keeping an eye on. However, caution must be used when approaching. We recommend not rushing into LBA or making immediate secondary market purchases before making any investment decisions, but rather monitor the event, price dynamics, and Vertexs operations post-launch.
Weekly VC Investment Focus
Welcome to our weekly Investing Spotlight, where we reveal the biggest venture capital developments in the crypto space. Each week, we’ll spotlight the protocols that received the most funding.
Shrapnel
Neon Machine Game Studio, the upcoming blockchain-based video game"Shrapnel"has successfully raised $20 million in funding."Shrapnel"with popular"Call of Duty"The series has many similarities and is expected to become a significant player in the crypto gaming space. The funding round, led by Polychain, highlights the growing interest and investment in the convergence of gaming and blockchain technology. As the gaming industry continues to explore the potential of Web3 and blockchain integration, companies like"Shrapnel"Games like this are at the forefront, demonstrating the possibilities of combining traditional game mechanics with a decentralized gaming experience.
https://x.com/TheBlock__/status/1717168022769619041?s=20
Nocturne
Nocturne Labs, a protocol dedicated to enabling on-chain private accounts on Ethereum, has successfully raised $6 million in a seed funding round co-led by Bain Capital Crypto and Polychain Capital. The round also saw participation from Ethereum co-founder Vitalik Buterin and entities like Bankless Ventures. Nocturnes innovative approach combines stealth addresses, zero-knowledge proofs, and account abstraction to provide private accounts for public blockchains, solving Ethereums transparency challenges. The funding will accelerate the deployment of the Nocturne protocol and support its legal and integration efforts aimed at enhancing on-chain privacy and compliance in the Ethereum ecosystem.
https://x.com/nocturne_xyz/status/1717150278749725127?s=20
Protocol update
DYdX Chain to distribute all network fees
Solana adds incubator to spur growth
LayerZero introduces omnichain token
Polygon's POL cryptocurrency contracts deployed on Ethereum mainnet
Maestro Telegram bot suffers a contract exploit
Worldcoin to pay orb operators in WLD
Gnosis Chain's TVL doubles to $ 150 M after Spark Protocol's deployment
GRVT to debut as first 'hyperchain' in zkSync ecosystem
Industry events
Circle partners with Taiwan’s BitoGroup and FamilyMart
Vitalik invests in Nocturne Labs
Fireblocks taps former New York regulator to step up compliance
Deutsche Bank and SC Ventures complete first stablecoin swaps on UDPN
Brazil's Central Bank plots next moves in adoption of CBDCs
North America leads world in crypto usage
Bitmain plans to unveil mining rigs for Aleo blockchain
Bitfinex's Ardoino expects 'quantum leap' in Bitcoin scaling solution adoption
Twitter Alpha
Theres a lot of alpha in crypto Twitter, but navigating thousands of Twitter threads can be difficult. Each week, we spend hours doing research, curating threads full of insight, and curating your weekly picks list. Let’s dive in!
https://x.com/stacy_muur/status/1715350047766741250?s=20
https://x.com/TheDeFISaint/status/1718390609931637027?s=20
https://x.com/wacy_time1/status/1716091707534545104?s=20
https://x.com/DeFiMinty/status/1717215235382128948?s=20
next week events
News sources/references:
https://www.theblock.co/post/258041/blackrocks-spot-bitcoin-etf-appears-on-dtcc-website-with-ticker-ibtc
https://www.coindesk.com/markets/2023/10/24/bitcoin-tumbles-3-as-blackrock-spot-etf-ticker-pulled-from-dtcc-website/
https://cointelegraph.com/news/blackrock-bitcoin-etf-ibtc-relisted-dtcc
https://www.nasdaq.com/articles/bitcoin-surges-to-all-time-highs-in-turkey-and-nigeria
https://cointelegraph.com/news/bitcoin-price-all-time-highs-across-argentina-nigeria-turkey
https://www.coindesk.com/tech/2023/10/25/bain-capital-polychain-lead-6m-funding-round-for-privacy-protocol-firm-nocturne-labs/
https://finance.yahoo.com/news/nocturne-raises-6m-seed-round-120000748.html
https://cryptonews.com/news/nocturne-raises-6m-from-vitalik-buterin-polychain-bankless-bain-capital-crypto-enable-private-accounts-ethereum.htm
https://www.theblock.co/post/259283/call-of-duty-style-crypto-video-game-shrapnel-raises-20-million?utm_source=twitter&utm_medium=social
https://decrypt.co/203208/shrapnel-game-studio-neon-machine-raises-20-million-led-polychain
https://cointelegraph.com/news/neon-machine-raises-20-m-series-a-web-3-blockchain-based-call-of-duty-competitor-shrapnel
That’s all for this week. Thank you for reading this weeks newsletter. We hope you benefit from our insights and observations.
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This weekly report is provided for informational purposes only. It should not be relied upon as investment advice. You should conduct your own research and consult independent financial, tax or legal advisors before making any investment decisions. And the past performance of any asset is not indicative of future results.
