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Singapore Dollar Tested on Polygon, Silk Road’s Stolen 50K Bitcoins Seized, and More!
Markets entered another week of resistance, with Bitcoin closing at $20.6K on Monday, close to where it started a week before. Despite a brief jump over the $21K and $1.6K marks that lasted for three days, Bitcoin and Ethereum barely moved over the past week, increasing by 0.5% and decreasing by 0.2% respectively. The biggest winner of last week’s rally was Polygon, which increased in returns by 43% after getting monumental institutional recognition as JPMorgan traded tokenized cash deposits on the Polygon blockchain last week, which we’ll delve deeper into in the DeFi section. Other winners, as seen in the figure below were Binance Coin and Lido which increased in returns by nearly 4% and 13% respectively.
Figure 1: TVL and price development of major crypto sectors
Source: 21Shares, Coingecko, DeFi Llama
Key takeaways
• Binance Acquires FTX
• The Fed seized more than $3B in Bitcoin stolen from the Silk Road in 2012.
• Hetzner kicks one-fifth of Solana validators off the cloud hosting platform
• JPMorgan and Singapore’s Central Bank testing DeFi’s Infrastructure
Spot and Derivatives Markets
Figure 2
Source: Glassnode
The chart above plots the average funding rate (in %) set by exchanges for perpetual futures contracts. A negative funding rate means that short positions have to pay long positions periodically and usually indicates a bearish sentiment since more short traders are dominant, and vice versa. As seen in Figure 2, the funding rates of most exchanges have risen above the zero mark over the past week, except for those of Kraken and FTX, who are currently at a down downtrend, with the latter getting acquired by Binance.
On-chain Indicators
Figure 3
Source: Glassnode
The amount of Ethereum powering smart contracts are on the rise, as shown in Figure 3. Nearly 30% of the total supply of Ethereum is held in smart contracts. This indicates that the utility behind Ethereum’s value is intensifying, which means that the cryptoasset’s dollar figure will in turn follow suit.
Next Week’s Calendar
Read full report here
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.
• Global crypto asset adoption rates are significantly higher than previously estimated.
• The data generally suggest that both the US and Europe may be at the cusp of mass retail adoption – a situation often referred to as “Hyperbitcoinization” in the context of Bitcoin.
• Chances are that the growth of adoption will surprise to the upside due to the fact that we are most likely at the inflection point from ”Early Adopters” to ”Early Majority”.
Trump recently made a public statement implying that 50 million Americans already held ”crypto”. The most recent surveys among US consumers seem to support this number.
It is no surprise that cryptoassets have become a major topic during the US presidential election as the parties have become increasingly aware that cryptoasset users could play a significant role at the ballot.
Both Trump and Robert Kennedy Jr. are scheduled to deliver a pro-Bitcoin speech at the upcoming Bitcoin conference in Nashville over the weekend.
It seems as if cryptoasset users are not a small minority anymore that can be ignored.
Here are some recent US bitcoin and crypto adoption surveys for comparison (% of total population in brackets):
• Security.org: 93 mn (28%)
• Unchained: 86 mn (26%)
• Statista: 53.6 mn (16%)
• Morning Consult: 44.2 mn (13%)
• Finder: 38.4 mn (11%)
In general, cryptoasset adoption has been on the rise globally.
A recent global survey among institutional investors conducted by Fidelity even implies that 51% of surveyed institutional investors have already invested into cryptoassets such as Bitcoin.
Another recent consumer survey by Statista implies that approximately every 5th person (21%) worldwide has already invested into cryptoassets.
However, it’s important to highlight that among the top 10 regions with the highest adoption rates, 8 regions are developing countries.
So, cryptoasset adoption rates are even significantly higher among developing countries than in developed countries that often suffer from chronically high inflation rates and weak domestic currencies.
That being said, the data generally suggest that both the US and Europe may be at the cusp of mass retail adoption – a situation often referred to as “Hyperbitcoinization” in the context of Bitcoin.
The reason is that technological adoption in general tends to accelerate at the threshold from the so-called “early adopters” to the “early majority” which is around 16% adoption rate based on the model of technological adoption famously put forth by Rogers (1962).
Global adoption rates are already at 21% while adoption rates in the US and Europe are at around 16% and 14%, respectively. So, there is a strong case for an acceleration of adoption rates in these regions and globally over the coming years.
Recent political developments in the US also imply that Bitcoin and cryptoassets are gradually becoming mainstream.
Trump has recently endorsed domestic Bitcoin mining in the US and both Democrats and Republicans have started accepting crypto payments for campaign financing.
The big success of the spot Bitcoin ETFs this year and the fact that additional types of spot crypto ETFs are being launched marks a significant shift in sentiment among US regulators in this regard.
In short, chances are that the growth of adoption will surprise to the upside due to the fact that we are most-likely at the inflection point from ”Early Adopters” to ”Early Majority”.
Bottom Line
• Global crypto asset adoption rates are significantly higher than previously estimated.
• The data generally suggest that both the US and Europe may be at the cusp of mass retail adoption – a situation often referred to as “Hyperbitcoinization” in the context of Bitcoin.
• Chances are that the growth of adoption will surprise to the upside due to the fact that we are most likely at the inflection point from ”Early Adopters” to ”Early Majority”.
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