LBank Labs Weekly Digest (December 3- 9) #24
*All on-chain data is dated as of 12:00 a.m. EST on Sunday, December 10th.
Welcome back to LBank Labs Weekly Digest! Here we list all you need to know about crypto market in the past week(Dec.3–9).
Author: LBank Labs Research team — Hanze, Johnny
Keywords: #Employment #ETF #Layer2
1 Macro Market Overview
U.S. Stocks hit highest levels of 2023 as payrolls report backs soft-landing narrative. According to WSJ, Markets ticked higher to end the week after closely watched jobs data came in slightly hotter than expectations. U.S. employers added 199,000 jobs in November, the Labor Department said, a slowdown from earlier in the year but more than economists expected. The unemployment rate slipped to 3.7%. The S&P 500 closed 0.4% higher to post a weekly gain, its sixth straight. The Nasdaq and Dow Jones Industrial Average also added 0.4%. All three major indexes closed at their highest level of the year. Now, traders are pricing in rate cuts from the central bank next year, with the first coming as soon as March. Traders see a roughly 50% chance of a rate cut at the Fed’s March meeting, according to the CME FedWatch Tool. Treasury yields rose after the jobs report, with the yield on the benchmark 10-year note hitting 4.244%, from 4.129% Thursday. Adding to the good news, Americans were more upbeat about the economy this month and their expectations for inflation over the next 12 months dropped, according to a preliminary December reading of a University of Michigan survey.
Last week, the three major U.S. stock indices continued their overall upward trend. The Dow Jones Industrial Average experienced a slight decline of 0.01%, the S&P 500 increased by 0.21%, and the technology-focused Nasdaq Composite Index rose by 0.70%, driven by gains in the technology sector. Stocks related to Web3 experienced another significant surge in the past week. The stock of the cryptocurrency exchange Coinbase Global rose by 9.6%, reaching its highest level since April 2022. The exchange’s stock price followed the upward trend of Bitcoin, which has seen a substantial increase in the past month. MicroStrategy (MSTR) increased by 13.6%, while MARA continued its impressive growth, surging by 22.6% once again.
Macro indexes
Total nonfarm payroll employment increased by 199,000 in November, and the unemployment rate edged down to 3.7 percent, the U.S. Bureau of Labor Statistics reported last week. Job gains occurred in health care and government. Employment also increased in manufacturing, reflecting the return of workers from a strike. Employment in retail trade declined. The news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry.
The U.S. Dollar Index (DXY) saw an increase last week, closing at 103.983 on Friday, reflecting a rise of 0.77%. This marks the end of the continuous decline in the DXY observed in the previous two weeks.
According to the Federal Reserve Watch tool from the Chicago Mercantile Exchange Group, the probability of the Federal Reserve maintaining interest rates (EFFR) between 5.25% and 5.5% in December has decreased to 97.1%. This is slightly lower than the 98.8% probability observed in the same period last week. Additionally, there is a new 2.9% belief that the Fed will continue to tighten monetary policy and raise rates in the meeting one week later.
After the release of last week’s employment report, U.S. Treasury yields increased, with the benchmark 10-year Treasury yield (US10Y) rising from 4.129% on Thursday to 4.229%. This represents a slight increase compared to the 4.197% observed last week.
US bitcoin ETF issuer talks with SEC have advanced to key details -sources. Regulators and asset management companies seeking approval for Bitcoin ETF listings have progressed to crucial technical discussions, indicating potential approval of these products soon. According to six industry executives and SEC public memos, the SEC has been engaging with issuers on substantive details, some of which are typically discussed as ETF application processes near conclusion. The SEC must make a final decision on ARK’s application by January 10, the earliest decision date. Insiders suggest that the advanced nature of discussions indicates that the SEC might approve ARK’s application in the new year and potentially approve some of the other 12 applications.
Additionally, last week, Bloomberg analyst James Seyffart tweeted that BlackRock has once again submitted a revised S-1 document (prospectus) for a Bitcoin spot ETF to the SEC. The SEC appears to have issued similar or very similar instructions to multiple issuers. Bitwise had also submitted a second revised S-1 document earlier. This suggests that the SEC and these issuers are actively addressing issues, and these filings are likely the result of numerous discussions and significant efforts from both sides.
2 Crypto Market Pulse
Market Data
The cryptocurrency market continues its upward trend, reaching a total market capitalization of $16.4 trillion, with a 10.1% increase over the past seven days. Bitcoin climbed to over $42,000 in Monday’s trading, marking its highest level since the Federal Reserve initiated its policy tightening in April 2022. Exchange-traded funds (ETFs) linked to spot Bitcoin may soon receive approval, potentially contributing to the rise in Bitcoin prices. As of midnight on December 10th, the price of Bitcoin is $43,830, representing an 11.4% increase from last week. Ethereum, the second-largest cryptocurrency, is currently priced at $2,349, reflecting a 9.0% growth. Furthermore, Bitcoin maintains its dominant market share at 52%, with a market capitalization of $853.6 billion. Ethereum’s market share has slightly decreased to 17.1%, with a market capitalization of $280.6 billion.
$BTT, $BONK, and $HNT emerged as Top 3 gainers, while $IOTA, $THDYDX, and $KAS were Top 3 losers. $BTT (BitTorrent Token) emerged as the top gainer last week, and it is a blockchain-based digital currency designed for decentralized file sharing. The price of $BTT is subject to significant fluctuations, partly due to overall market volatility in the cryptocurrency space. However, the price movement of $BTT is also closely tied to its development stages. The upward trend in $BTT’s price correlates with the continuous introduction of new features and use cases. Recently, the price fluctuations of $BTT have been primarily influenced by the launch of new products. Additionally, $BTT has been engaging in global marketing activities to attract more users. $BONK is a cryptocurrency themed around dogs on the Solana blockchain. $BONK’s outstanding performance in recent weeks can be attributed to various factors. The anticipation of a Bitcoin spot ETF has fueled a generally bullish sentiment in the cryptocurrency market, with BTC reaching $45,000 this week, potentially contributing to $BONK’s rise. Furthermore, $BONK reflects the optimistic sentiment within the Solana ecosystem, where the $SOL token has risen by 511% year-to-date. Positive exchange listings and development may also facilitate the rise of $BONK. Helium ($HNT) is a decentralized network launched in 2019 that has seen significant gains over various timeframes, making it one of the best-performing networks in the cryptocurrency market. The recent surge in price is associated with Solana’s significant 56% increase in the past 30 days, along with other protocols built on the Solana network. The recent spike in $HNT’s price can be attributed to an announcement by the Helium network on December 5th. The network revealed that users across the United States can now enjoy unlimited data, voice, and text services for a monthly fee of $20 through its newly launched mobile service. This move comes at a time when major carriers are implementing data restrictions, increasing contractual obligations, and raising prices, making Helium’s product particularly attractive to users seeking more flexible and cost-effective options. As for the top losers, most of them have experienced selling pressure due to recent market volatility, accompanied by pullbacks following overbought conditions.
Last week, the total supply of stablecoins continued to exhibit a significant growth trend, surpassing $124.5 billion. Over the past few weeks, the total supply of stablecoins has consistently shown an upward trajectory, with the net supply increasing and remaining at elevated levels, indicating an increasing influx of funds into the cryptocurrency market. Simultaneously, observing the net position data of stablecoins on exchanges over the past week, the overall trend still indicates a significant net inflow. This once again highlights the growing demand from investors in the cryptocurrency asset market.
In the derivatives market, the open interest for perpetual futures contracts of Bitcoin and Ethereum remains relatively stable compared to previous periods. The total open interest in the past futures market does not show a clear upward trend, indicating a lack of significant new capital inflows into the derivatives market. However, observing the liquidation data from the past week indicates an increase in liquidation compared to earlier periods, still showing a fluctuating trend. Following a surge in Bitcoin and Ethereum prices last Monday, both cryptocurrencies experienced a wave of liquidations, primarily dominated by short positions. This trend was particularly evident in the case of Bitcoin liquidations.
In the DeFi market, the total value locked (TVL) increased last week, reaching $523 billion, marking a growth of 6.7%. Over the past seven days, decentralized exchange (DEX) trading volumes saw a significant increase, reaching $291 billion, a 51% increase from the previous week. Despite this, the market share gap between decentralized exchanges (DEXs) and centralized exchanges (CEXs) has narrowed to within 20%, with DEXs now accounting for 18% of the total trading volume on CEXs. Among the top ten blockchain platforms by TVL, all experienced a net increase in TVL over the past seven days, with Cardano and Solana leading the gainers with increases of over 47% and 29%, respectively.
Last week, the NFT market value grew by 7.1%, reaching a total of $8.8 billion. Over the past seven days, the total trading volume continued to increase, with a growth of 9.9%. In the top NFT collections, the floor prices and average prices exhibited relatively minor fluctuations. The floor price of Bored Ape Yacht Club (BAYC) decreased by 3.4%, while the average price increased by 0.8%. Mutant Ape Yacht Club (MAYC) saw a 6.6% decrease in the floor price and a 0.3% decrease in the average price.
LBank Labs Recap
The recent aggressive bidding activity in the cryptocurrency market has subsided this week, leading to a stabilization of BTC prices. Although ETH and other altcoins experienced upward movement later in the week, lower-cap tokens find themselves predominantly in the red, reflecting a decrease in retail buying power. We anticipate that BTC prices will likely trade within a 5% range for the following reasons:
- The approaching holiday season is causing institutional investors to take profits and reduce their trading activity, limiting significant upward movements.
- The anticipation of “BTC spot passing in January” remains intact, providing support from below.
Observing the Binance Spot, it appears that substantial bids from major players are once again present, but the market dynamics differ from the past, characterized by a more liquid supply.
Key price levels to watch:
- $45K is actively defended as a crucial market supply point.
- $43K may be emerging as a new active demand zone.
All eyes are on the CME futures opening and the 1-week close/open for further market direction.
The Solana ecosystem has garnered significant attention, with the newly launched Binance JTO token generating substantial wealth for ecosystem participants. Even the smallest airdrop beneficiary received over $1 million in USD value. Additionally, SOL is on the verge of surpassing BNB in total market capitalization.
Public chains like ADA and MATIC have witnessed an uptick in trading volume and price. However, this surge is expected to be short-lived, as these tokens are not the preferred choice for both institutional investors and avid crypto enthusiasts.
In an interesting development, BIGTIME has adjusted token distribution rates, reducing it from the previous 3 million to 1.4 million in a single day.
After several weeks, new projects have rekindled partnerships with DWF, signaling potential developments in market-making activity.
- BTC price optimistic: $44500 — $47500
- BTC price neutral: $43000-$44500
- BTC price pessimistic: $41500 — $43000
3 Major Project News
[Ethereum] Ethereum’s latest meeting discussed the goal of activating Dencun in January, with the expectation of setting a date for the Goerli fork in early next year. Tim Beiko.eth, a core Ethereum developer, summarized the 176th All Core Developers’ Ethereum (ACDE) meeting on social media. The developers discussed the status of Dencun, the timeline for the testnets, and the planning for the upcoming network upgrade. According to the meeting discussions, Devnet #12 was launched last week, and almost all clients are running on it. Errors were discovered and fixed in several clients, including Reth and Lighthouse. Meanwhile, the development team is ready for a fork testnet and plans to conduct a large-scale Goerli shadow fork in the coming weeks. Developers unanimously agreed that, if everything goes smoothly, the Goerli fork date will be set in early 2024, with the goal of activating Dencun on the network in January.
The Starknet Foundation plans to distribute 1.8 billion tokens as user rewards and transaction rebates, with specific details still under development. The foundation will hire various entities or “committees” to oversee the broader distribution of these tokens. One specific committee, the “Allocation Committee,” will be responsible for rewarding users, including community members, with token incentives. This committee will distribute 9 billion Starknet (STRK) tokens in phases to reward users and community members for past and future contributions. In addition to rewards, the foundation also plans “user rebates” to subsidize or refund transaction fees. According to the foundation, the second committee will distribute 9 billion tokens to cover transaction fees for network users. Furthermore, the third organization, the “DeFi Committee,” will initially allocate 50 million STRK to encourage activity within DeFi protocols on the network, with the goal of “boosting liquidity.”
Earlier, the Starknet Foundation stated that the eligibility deadline for the airdrop has been determined, and the airdrop plan will be announced after its finalization. The total supply of STRK token contracts is 10 billion tokens, with 50% reserved by the organization, and the remaining distributed to core developers, ecosystem contributors, and the community.
[Layer2] The Arbitrum Foundation proposes that ApeChain adopts Arbitrum technology for development.
The Arbitrum Foundation proposes ApeChain to adopt Arbitrum technology for development, in collaboration with Horizen Labs and Offchain Labs. The suggestion is to build ApeChain using Arbitrum Orbit chain developed with AnyTrust technology and utilize APE as the native Gas token. The discussion also proposes ecosystem growth leadership by Horizen Labs.
Additionally, Rug Radio, a Web3 media platform, announced a collaboration with Arbitrum on the X platform. Together, they plan to build a technology stack to facilitate the development of decentralized media, advertising technology, and user rewards.
[Layer2] Paradigm researcher: Collaborated with Blast to design a new timelocked upgrade system, scheduled to go live next week. Paradigm researcher Dan Robinson announced on the X platform that they have collaborated with Blast to design a new timelocked upgrade system, set to go live next week. In his post, Dan Robinson stated, “To set a better precedent for future projects who may try to emulate them, we worked together with Blast to design a new timelocked upgrade system that they will upgrade to next week. The code is open sourced here and free for anyone to use.”
[Layer2] Flipkart to Launch Polygon CDK-Powered Chain to Scale FireDrops. Flipkart, one of India’s leading digital commerce entities, is launching a dedicated chain built with Polygon Chain Development Kit (CDK) to scale its FireDrops Web3 loyalty program. FireDrops 2.0, powered by Hang’s loyalty platform, aims to transform user engagement with brands by offering millions of Flipkart users with rewarding experiences, incentivizing brand loyalty through gamification. FireDrops envisions a future where a loyalty layer allows users who have a track record with a brand to unlock larger rewards, get early access to discount pricing for products in high demand and allow for more interesting and creative ways for users to earn rewards from their favorite brands.
[Cosmos] Cosmos has released the CometBFT V1 Alpha version to reduce bandwidth consumption and achieve modularity. Last week, Cosmos officially announced the release of CometBFT V1 Alpha version on social media. The features of this version include reducing bandwidth consumption, achieving modularity, enhancing the experience for integrators, and improving development speed. Additionally, the Cosmos Hub initiated a vote for “allocating 900,000 ATOM to the Osmosis stATOM/ATOM pool.” The proposal aims to increase the liquidity of ATOM by allocating 900,000 ATOM to the stATOM/ATOM pool. The proposal suggests allocating 90% of the funds to Osmosis’s static liquidity position and 10% to the upcoming stATOM/ATOM Dynamic S+ vault in Quasar to enhance long-term benefits. The LP’ing strategy mentioned above will generate income for the Cosmos Hub community pool based on exchange fees.
4 Key Fundraising Data
Last week witnessed a total of 26 financing events, raising a substantial amount of over $254.8 million*. Compared to last week, the number and total amount of financing activities continue to remain at recent active levels. The Chain sector has the highest number of financing events, with a total of 4, amounting to $25.8 million, representing 10% of the total financing amount. In contrast, the CeFi sector has only one financing event, but the funding amount reaches $165 million, accounting for 65% of the total. This financing event is led by Swan Bitcoin, a developer of bitcoin investment software that aims to simplify bitcoin purchases. Swan Bitcoin provides the option for automatic weekly, monthly, or paycheck-based bitcoin purchases, steadily converting dollars into crypto savings. Users can receive automatic delivery of bitcoin to their wallets or storage for free, facilitated by a secure, licensed, and regulated custodian. More detailed information is provided below.
*8 events of unknown amount are included, which have been excluded from the remaining data.
Below, we listed the most noteworthy fundraising deals for you:
Swan, the Bitcoin financial services company, has announced the completion of a $165 million equity financing round in 2023. Out of this, $125 million will be allocated for private equity and venture capital, while $40 million will be used to expand into Bitcoin-backed lending and other institutional products. Swan founder Klippsten stated that Swan plans to raise an additional $150 million in 2024 to fund further expansion. Through its lending products, Swan users can use Bitcoin as collateral and obtain USD-denominated loans at a “low double-digit” interest rate, securing approximately 50% of the loan value. Swan will source lenders, charge an origination fee, and generate a spread based on its borrowing and lending rates. Klippsten mentioned that the lending product will be launched in the coming weeks, with $20 million in funding already deployed.
- Official Link: https://www.swanbitcoin.com/
2. [Chain] QANplatform Signs $15M VC Deal for Its Quantum-Resistant Layer 1 Blockchain.
QANplatform will be the first EVM-compatible, quantum-resistant Layer 1 hybrid blockchain platform where developers can code smart contract, DApp, DeFi, DAO, token, NFT, Metaverse, CBDC, tokenized asset, and robust Web3 solutions on top of the QAN blockchain platform in any programming language. The announcement was held at the Qatar Science & Technology Park (QSTP) — Qatar’s premier hub for applied research, technology innovation, incubation, and entrepreneurship — by H.E. Sheikh Mansoor Bin Khalifa Al-Thani, Founder and Chairman of MBK Holding, Jevgenia Kim, CEO of QANplatform, and Johann Polecsak, Co-Founder and CTO of QANplatform.
Besides the $15 Million technology-focused investment commitment, MBK Holding offers growth services to facilitate global market access and expansion for QANplatform. MBK Holding’s focus extends to various regional markets, including Qatar, Saudi Arabia, United Arab Emirates, Turkey, and United Kingdom while also encompassing other global opportunities. MBK Holding recently signed a strategic partnership with the Ministry of Investment of Saudi Arabia to support entrepreneurial growth and innovation in Saudi Arabia by developing growth services that seek to create market-leading investment opportunities.
- Official Link: https://www.qanplatform.com/en
3. [Infrastructure] Bitcoin Project Babylon Raises $18M to Bolster Development of Staking Protocol.
Bitcoin-focused project Babylon raised $18 million in an investment round led by Polychain Capital and Hack VC. Babylon is a marketplace offering bitcoin (BTC) as a staking asset, allowing proof-of-stake chains to acquire funding from the swells of capital stored in the largest cryptocurrency. Babylon will use the funds to advance the development of the staking protocol, according to an emailed statement shared with CoinDesk last Thursday.
The aim of the project is “to build a Bitcoin-secured decentralized world” by converting all 21 million BTC that will ultimately exist into a decentralized staking asset, Babylon said. Almost 19.6 million bitcoins are currently in circulation.
- Official Link: https://babylonchain.io/
Animoca Brands Corporation Limited, the company advancing digital property rights for gaming and the open metaverse, last week announced a second tranche of funding of US$11,888,888 for Mocaverse, following a first tranche investment of US$20 million announced previously. Participants in this second tranche of funding for Mocaverse included Block1, OKX Ventures, Foresight Ventures, Polygon Ventures, Dapper Labs, and others. In both tranches Animoca Brands raised funds via the issue of new ordinary shares at a price per share of A$4.50; as part of each raise, the company granted investors in each round a free-attaching utility token warrant on a 1:1 dollar basis.
The Company views the funding announced as further validation of the vision of Mocaverse to establish and serve as the empowerment layer for Web3 culture and entertainment, facilitating seamless onboarding and sustained growth for Web3 projects. As part of this vision, Mocaverse is creating the Web3 Frequent Player Program, a loyalty system powered by Mocaverse loyalty points (“Realm Points”).
- Official Link: https://www.mocaverse.xyz/
See you next week! 🙌
🎙Forum: Feel free to leave your comments on our official LBank Labs Twitter account, and don’t hesitate to ask questions about the tokens or projects that interest you. We will diligently gather them and discuss them in the recap section of our weekly digest!
📢 Disclaimer: The weekly crypto market insights are provided for informational purposes only and should not be considered as financial advice. The cryptocurrency market is highly volatile and unpredictable. Prices and trends can change rapidly, and past performance is not indicative of future results. Always conduct thorough your own research and consult with a qualified financial professional before making any investment decisions.
