LBank Labs Weekly Digest (November 19–25) #22

LBank Labs
15 min readNov 27, 2023

*All on-chain data is dated as of 12:00 a.m. EST on Sunday, November 26th.

Welcome back to LBank Labs Weekly Digest! Here we list all you need to know about crypto market in the past week(Nov.19–25).

Author: LBank Labs Research team — Hanze, Johnny

Keywords: #ETF #Layer2

All three major indexes were on pace for their best monthly performance in more than a year. PHOTO: BRENDAN MCDERMID/REUTERS

1 Macro Market Overview

U.S. Stocks rise for fourth consecutive weeks. According to WSJ, stocks solidified a fourth consecutive week of gains, after bouncing between small gains and losses Friday. The S&P 500 rose 0.1%, while the tech-heavy Nasdaq Composite fell 0.1%. The blue-chip Dow Jones Industrial Average gained 0.3%, or 117 points. Friday’s trading session was shorter than usual due to the Thanksgiving holiday, with relatively light trading volume. All three major indexes are on pace for their best monthly performance in more than a year. A survey of purchasing managers from S&P Global released on Friday found that businesses cut jobs in November because of softer demand and cost pressures, the latest sign that the economy is cooling. Recent government data showing slowing job growth and easing inflation has built hopes that the Fed can bring inflation to heel without causing a recession. The three major U.S. Stock indices all saw gains last week, with the technology-heavy Nasdaq index rising by 0.9%, the Dow Jones Industrial Average increasing by 1.3%, and the S&P 500 index recording a 1.0% gain. Stocks related to web3 outperformed the broader market, with MSTR achieving a 6.7% increase, while COIN and MARA posted gains of 16.4% and 13.6%, respectively.

Left: Three Indexes, Right: Nasdaq, COIN & MARA & MSTR (Source: Yahoo Finance)

Macro indexes The U.S. Dollar Index (DXY) fell by 0.34% to 103.415, nearing the two-and-a-half-month low reached earlier this week. Following a 1.9% decline last week, DXY posted back-to-back weekly losses, poised to deliver its worst monthly performance in a year. This trend is attributed to increasing expectations that the Federal Reserve (Fed) is nearing the completion of interest rate hikes and is likely to begin lowering rates next year.

DXY (Source: TradingView)

According to the CME Group’s FedWatch tool, the probability of the Federal Reserve maintaining interest rates within the current range of 5.25% to 5.5% in December has decreased to 95.5%, down from the 100% probability observed during the same period last week.

Left: EFFR, Right: Target Tate Probabilities for 13 December 2023 Fed Meeting (Source: Federal Reserve Bank of New York, CME FedWatch Tool)

The yield on the benchmark 10-year U.S. Treasury note (US10Y) edged higher as bond prices fell. It settled Friday at 4.472%, snapping a run of five consecutive daily declines.

US10Y (Source: TradingView)

Grayscale Updates GBTC to BTC in Latest Bitcoin ETF Filing. James Seyffart, an ETF analyst at Bloomberg, has shared insights on the X platform, revealing that Grayscale has submitted a new S-3/Prospectus for the conversion of GBTC to an ETF. The most significant update in the filing is the plan to change the code from GBTC to BTC, confirming Grayscale’s ongoing negotiations with the SEC. The changes to their product documentation come after discussions and feedback from the SEC.

In a previous post on the X platform, Seyffart reported that Grayscale had a meeting with the SEC’s Trading and Markets division, responsible for approving or rejecting 19b-4 filings, the day before. Rumors suggest that other potential Bitcoin spot ETF issuers have also met with the SEC in the past week.

(Source: Twitter@JSeyff)

US Is Seeking More than $4 Billion From Binance to End Case. The world’s largest cryptocurrency exchange, Binance, and its CEO, Changpeng Zhao (often referred to as “CZ”), have reached a significant settlement with the U.S. Department of Justice. CZ has pleaded guilty to charges related to violating U.S. anti-money laundering laws. As part of the settlement, he has stepped down from his position as CEO of Binance. Binance has agreed to pay a fine exceeding $4 billion, and CZ has acknowledged the failure to establish effective anti-money laundering procedures within Binance. Currently, CZ faces undetermined criminal consequences and is prohibited from participating in Binance operations for three years.

(Source: U.S. DEPARTMENT OF THE TREASURY)

2 Crypto Market Pulse

Market Data

The total market capitalization of the cryptocurrency market continues its upward trend, reaching $1.44 trillion. Recent data released in the United States indicates a reduction in employment positions by businesses in November, coupled with government data revealing a slowdown in job growth. This serves as the latest sign of an economic slowdown, which is viewed as a positive factor for the cryptocurrency market. Despite the recent final regulatory verdict for Binance, the world’s largest exchange, the overall crypto market remains on an upward trajectory. As of the early hours of November 26th, the price of Bitcoin stands at $37,720, marking a 2.8% increase from the previous week. Ethereum, holding its position as the second-largest cryptocurrency, currently has a price of $2,074, reflecting a 5.7% increase. Furthermore, Bitcoin maintains a market share of 51% across the entire market, with a market capitalization of $738 billion. Ethereum’s market share has slightly risen to 17.3%, with a market capitalization of $249.7 billion.

Left: Market Cap, Right: BTC&ETH Price (Data: CoinMarketCap)

$BLUR, $GMT, and $MINA emerged as Top 3 gainers, while $TIA, $MATIC, and $ORDI were Top 3 losers. $BLUR has experienced a significant surge in price, almost 80%, becoming the biggest winner among the top 100 projects in market capitalization last week, largely influenced by the recently launched profit-generating Layer2 Blast. Equally noteworthy is the new “Gas Hero” game introduced by the STEPN team. This game not only upholds the excellent traditions of the STEPN team but, more importantly, chooses $GMT as the main in-game token instead of introducing a new token, undoubtedly bringing new growth potential to $GMT. $MINA is also making strides, with a price increase of 31.85%, and a rapid rise in 24-hour trading volume, reflecting increased investor interest and market activity. As for the top losers last week, including $TIA, $MATIC, $ORDI, most of them experienced pullbacks after significant gains, indicating an overall upward trend in the market.

Top 10 Gainers & Losers (Data: CoinMarketCap, LBank Labs)

Last week, the total supply of stablecoins continued to significantly increase, surpassing $123.6 billion. According to estimates from Bloomberg’s intelligence division, the potential development of physically-backed Bitcoin exchange-traded funds (ETFs), with the participation of heavyweight companies like BlackRock, Fidelity, and Invesco, could grow to a scale worth $100 billion. The development of ETFs has greatly heightened investor demand for the cryptocurrency market. Simultaneously, observing net position data for stablecoins on exchanges over the past week, a consistent and expanding trend of net outflows has been evident. This indicates a continuous influx of new funds into the cryptocurrency market.

Stablecoins Market Cap (Data: Glassnode)

In the derivatives market, the total open interest of Bitcoin futures contracts continues to decline, while the total open interest of Ethereum futures contracts has seen a slight increase. Over the past few weeks, there hasn’t been a significant increase in the total open interest of Bitcoin and Ethereum futures contracts, indicating that the derivatives market has not witnessed a notable influx of new funds. On the other hand, examining the clearing results from last week reveals an overall trend of minor fluctuations. Around the 22nd, the short-term volatility in the prices of Bitcoin and Ethereum led to the liquidation of a considerable number of long positions, suggesting that the current market still maintains a certain level of volatility.

Left: BTC & ETH Open Interest, Right: BTC & ETH Total Futures Liquidations (Data: Glassnode)

In the DeFi market, the total locked value (TVL) saw an increase last week, reaching $47.7 billion. Over the past seven days, the trading volume of decentralized exchanges (DEXs) continued to significantly rise, reaching $34.8 billion, a 24.5% increase from the previous week. Furthermore, the market share gap between DEXs and centralized exchanges (CEXs) remains over 20%, with DEXs now accounting for 21.2% of the total trading volume on CEXs. Among the top ten blockchain platforms ranked by TVL, there were varied performances in the past seven days. Ethereum continued to lead in the maximum TVL growth, with a 5.5% increase last week. On the other hand, BSC experienced the largest decline, dropping by 1.7%, likely influenced by recent judgment outcomes.

Left: TVL & Volume, Right: Top 10 chains (Data: DefiLlama)

Last week, the NFT market saw a 4.7% increase in market value, reaching the current total of $7.0 billion. The total trading volume surged by over 40% in the past seven days. Among the top NFT collections, the floor price of Bored Ape Yacht Club (BAYC) increased by 8.0%, while the average price decreased by 3.6%. Mutant Ape Yacht Club (MAYC) experienced a 5.9% increase in floor price, with an average price decrease of 2.6%.

Market Cap & Volume, 7D (Data: NFTGo)

LBank Labs’ Recap

BTC’s valuation, influenced notably by perp and the CME activity, is exhibiting a noteworthy surge in trading volume. This uptick strongly suggests that institutional players are positioning themselves optimistically, anticipating positive news hitting the market soon. Concurrently, the perpetual long positions on Binance and Bitfinex are diminishing as the market gradually hovers around the $38,000 mark. With spot buying volume is healthy in comparison to the corresponding price increments. This indicates a healthy demand at current levels. Consequently, our assessment leans towards a bullish outlook for BTC prices in the foreseeable future.

In terms of market sectors, our focus will be concentrated on areas where market news and significant advancements in symbolic projects are likely to attract increased participation from retail investors. Specifically, sectors such as AIGC, gaming/entertainment, DeFi, and layer 2 solutions are anticipated to draw heightened attention.

Additionally, the landscape of AI-related tokens is evolving dynamically. Tokens like FET and OCEAN are experiencing increased speculative interest, particularly fueled by the impact of OpenAI news entering the market. Notably, Grok is demonstrating commendable progress, contributing to the overall positive sentiment within the market.

4 tokens example and BTC price estimates

  • BTC price optimistic: $38000 — $39500
  • BTC price neutral: $35500-$38000
  • BTC price pessimistic: $33500 — $35500
  • $MANA (Gaming)
  • $GALA (Gaming)
  • $OXT (DePIN)
  • $WLD (AI) The current bull market focus is on gaming. Be cautious of short-term pullback risks and consider buying post a potential retracement. $WLD looks promising in the long run. Short-term, consider buying after a possible pullback. But be cautious of the potential for a pullback due to BTC’s recent failure to break through $38,000.

3 Major Project News

[Ethereum] Ethereum ACDE Meeting: Goerli Validators to Cease Operations After Dencun Upgrade. During the recent Ethereum All Core Developers Executives (ACDE) meeting, key decisions were highlighted. Ethereum core developer Tim Beiko reported that the team is actively implementing the latest CL specification changes and addressing any bugs. Ben Edgington urged the release of Devnet 12, even if some teams aren’t ready by next week. Notably, there was an emphasis on the Goerli shutdown. After the Goerli Dencun upgrade goes live, all client teams and EF developers will discontinue running Goerli validators either 3 months post-Goerli Dencun upgrade or 1 month post-mainnet Dencun upgrade. Following this, a month-long chaos testing, including slashing, will be conducted on the network. Dencun will mark the final upgrade to go live on the testnet. In summary, for anyone utilizing Goerli as a stable testnet, migration is recommended.

(Source: Twitter@abcoathup)

[Layer2] The Pragma oracle service is now live on the Starknet mainnet. According to Starknet’s future roadmap, the network plans to introduce STRK as a new fee token outside of ETH. This mechanism relies on an oracle to provide real-time price feeds for STRK — ETH. In the short term, Starknet plans to use the semi-decentralized Pragma oracle as a temporary solution, while a long-term decentralized solution will be implemented through future governance.

(Source: Twitter@PragmaOracle)

[Layer2] Movement Labs has launched Ethereum Layer 2 (L2) M2 based on Move. It aims to modularize the data availability layer for scalability and expedite the development of high-performance consumer DApps. The Move VM is optimized for high throughput, featuring a native fee market and embedded support for formal verification. M2 further extends its capabilities through Blobstream, facilitating the transfer of Celestia’s modular DA (Data Availability) with high throughput to Ethereum for integration by Layer 2.

In earlier news, Movement Labs announced the completion of a $3.4 million Pre-Seed funding round. The investment was led by Varys Capital, dao5, Blizzard The Avalanche Fund, Borderless Capital, and their cross-chain fund focused on the Wormhole ecosystem. Other participants include Colony, Interop Ventures, Elixir Capital, and BENQI.

(Source: Twitter@movementlabsxyz)

[Layer2] Founder of Blur Launches L2 Network “Blast,” Securing $20 Million in Funding with Participation from Paradigm. It has been reported that Blast, a Layer 2 network created by Pacman, the founder of Blur, along with a team experienced in MakerDAO, MIT, Yale University, and Seoul National University, has successfully raised $20 million in funding, with participation from investors such as Paradigm. Blast highlights that existing Layer 2 networks have a baseline interest rate of 0%, whereas Blast is an Ethereum Layer 2 with native yields in both ETH and stablecoins. Users participate natively in ETH staking on Blast, and the staking rewards are distributed to users and DApps on Layer 2. On Blast, the user balances automatically compound, earning additional Blast rewards. Blast believes that this advantage alone can attract $20 billion in liquidity.

Blast’s early access program is already live and is limited to invited participants, all of whom will receive Blast Points rewards. Users granted access can earn returns (4% in ETH, 5% in stablecoins) and Blast Points before the mainnet launch scheduled for February 2024.

(Source: Twitter@Blast_L2)

[Kava] Kava Network has officially announced that the Kava 15 mainnet will launch on December 7th. A new feature is set to be implemented, wherein the KAVA token inflation rate will be permanently reduced to zero at midnight on December 31st (UTC). At that time, the circulating supply of KAVA will be set to the maximum limit, preventing the creation of new KAVA coins, and KAVA tokens can only be burned. All KAVA inflation mechanisms will be zeroed out or removed from the chain protocol, reinforcing Kava’s commitment to a stable and predictable ecosystem.

After December 31st, the operation of the Kava chain will transition to a sustainable mode, driven by transaction fees, emissions from native projects, and temporary allocations from the Kava Foundation. This model aims to maintain and generate a net surplus of KAVA through on-chain activities. The Kava community will have the authority to decide whether to burn this surplus or reinvest it to promote further adoption, enhance security, and foster decentralization within the network.

(Source: kava.io)

[Chainlink] Chainlink Staking V0.2 Set to Launch in 3 Days with Priority Migration Starting on November 28th. According to official announcements, Chainlink Staking V0.2 is scheduled to launch within the next 3 days, with priority migration commencing from noon on November 28th (Eastern Time). Stakers from V0.1 have a 9-day window to migrate their staked LINK and accrued rewards to V0.2 while ensuring their continued access.

In a previous update on the X platform, Chainlink announced the imminent release of Chainlink Staking V0.2. This upgrade focuses on providing stakers with greater flexibility through a new unbonding mechanism, enhancing security for oracle services by reducing exposure, and implementing a modular architecture for seamless future upgrades. Additionally, it introduces a dynamic reward mechanism with support for new reward sources in the future.

(Source: Twitter@chainlink)

4 Key Fundraising Data

Last week witnessed a total of 18 financing events, raising a substantial amount of over $130.5 million*. Compared to last week, both the number and total amount of financing activities have significantly decreased. Interestingly, unlike previous weeks, the NFT sector attracted the most attention with only one financing activity. However, the total financing amount reached 40 million dollars, accounting for 30.7% of the overall financing. This surpassed the financing led by the Blur project, making it the largest fundraising activity of last week. Blur is the NFT marketplace for pro traders. More detailed information is provided below.

*7 events of unknown amount are included, which have been excluded from the remaining data.

Top Left: Stats in Areas; Top Right: Stats in Rounds; Bottom: All Events (Data: Cryptorank, Foresights, LBank Labs)

Below, we listed the most noteworthy fundraising deals for you:

  1. [NFT] Founder of Blur: NFT Space Needs Layer 2, Raises $40 Million for Blur Ecosystem to Drive Development.

Pacman has announced that it has raised $40 million (including financing from Blast) to contribute to the Blur ecosystem. These funds will be used to build L2 applications for NFTs and continue advancing NFTs on the Ethereum L1. Pacman will oversee the development of BLUR and BLAST. With the formation of the Blast team, BLUR will undergo testing on Blast and deploy its own L2 applications (NFT perps) on Blast, with Blast rewarding the Blur community in return.

2. [Chain] Blur founder’s Ethereum Layer 2 Blast goes live in early access after $20 million raise.

Ethereum Layer 2 Blast has gone live in early access mode following a $20 million investment from Paradigm and Standard Crypto, among others. Blast announced the launch in a post on X last week, aiming to become the first Ethereum Layer 2 to introduce a native yield model. Flashbots strategy lead Hasu, Delegate CEO Foobar and members of investment group eGirl Capital also participated in the round.

Blast was built by Tieshun Roquerre, the founder of the NFT marketplace Blur, also known as “Pacman.” Roquerre previously doxxed himself in February, outlining plans for the platform to become the “Binance of NFTs.” Roquerre will oversee the development of both Blur and Blast, adding that he had raised another $40 million to contribute to the Blur ecosystem, including Layer 2 apps for NFTs. Blast plans to airdrop tokens to community members and developers, with half the tokens allocated for each of the two groups. The airdrop will be based on the number of points each member has earned. The developer airdrop is scheduled for January 2024 when the testnet launches while the airdrop for community members will be in May.

3. [GameFi] Game Studio Behind Matr1x Fire Raises $10 Million for NFT Mobile Shooter.

Matr1x, an NFT gaming company based in Singapore, has raised another $10 million in funding for its mobile gaming projects, the firm announced Thursday. Folius Ventures led the latest A-2 round, with fellow crypto VC firm SevenX named as a co-lead investor. ABCDE Capital, Jambo, Initiate Capital, and Find Satoshi Lab — makers of Stepn and the upcoming Gas Hero game — also invested, according to a statement. Matr1x has now raised $20 million in VC funding overall, with Thursday’s round doubling the game studio’s $10 million raise completed in 2022.

“Matr1x has real potential in exploring the uncharted for this industry,” Folius Ventures founder Jason Kam said in a statement. Referring to the broader downturn in the crypto industry, he added, “It strikes an elegant balance that may — in the best case — help it achieve critical scale, appeal to the mass market, become sustainably lucrative while side-stepping the Web3 death spiral altogether.”

4. [Service] Data privacy solution Privy has announced the completion of an $18 million Series A funding round.

Data privacy solution Privy has completed a $18 million Series A funding round, led by Paradigm with participation from Sequoia Capital and others. As reported by BlockBeats earlier, on April 21, 2022, Privy announced the completion of an $8.3 million seed funding round, led by Sequoia Capital and Blue Yard Capital, with participation from Electric Capital, Archetype, BoxGroup, and Protocol Labs. Privy aims to address the conflict between poor user experience for multi-wallet users and privacy risks associated with integrated logins through Web3 solutions. The proceeds from this funding round will be used to build the team and continue creating use cases that meet customer demands.

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.

--

--