The markets recovered shortly after Genesis’ bankruptcy and a law enforcement action against Bitzlato, accused of laundering $700M, with Binance being the last destination for the funds. Bitcoin and Ethereum increased by 9% and 4%. The biggest outlier this week was the staking-as-a-service platform, Lido, which increased by 26% over the past week; users have been allocating billions to collect rewards. Increasing by 25%, Optimism came as the outlier in last week’s rally amongst scalability solutions. Cardano also stood out within the layer 1s last week, increasing by 9%. The jump could be attributed to the announcement of a new Cardano upgrade, SECP, capitalizing on interoperability and secure cross-chain deployment of decentralized applications (dApps). SECP is scheduled to tentatively launch on February 14.

Figure 1: Weekly TVL and Price Performance of Major Crypto Categories

Source: 21shares, CoinGecko, DeFi Llama. Data as of January 23 (close price).

Key takeaways

• A CFTC commissioner urges the world for a global standard for regulating crypto.

• Polkadot upgrades its interoperability protocol, Fantom unveils its decentralized ecosystem funding initiative.

• Circle, the issuer behind USDC, switches auditors from Grant Thornton to Deloitte.

• Panelists in the World Economic Forum predict a tokenized future and Seoul to fully launch a public metaverse for its public services in 2026.

Spot and Derivatives Markets

Figure 2: Bitcoin Long/Short Ratio

Source: Coinglass

The chart above can depict the current market sentiment in the futures market, which has been conservatively bullish over the past few weeks. Investors between buying long and selling short futures contracts have been at a tight rivalry this week, with the exception of January 20 when the appetite picked up, leaning towards longing Bitcoin by 52.46%.

On-chain Indicators

Figure 3: Inflation Rate of Bitcoin versus Ethereum

Source: Glassnode

Since the Merge of September 15 last year, Ethereum’s supply change is now nearing -3K ETH, according to data collected by Ultra Sound Money. That means that ETH is gradually becoming a deflationary asset, thanks to a post-Merge mechanism that removes a portion of ETH that has been spent on transaction fees. That is in comparison to its rival cryptoasset, which has also progressed on the deflating front on the back of Bitcoin’s halving slated to happen next year.

Next Week’s Calendar

Source: Forex Factory, CoinMarketCal

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Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

Disclaimer

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.