Weekly Market Index

All three crypto market indices decreased last week. The price index decreased by -5.30%. However, the volume and volatility indices decreased more drastically, by -24.93% and -72.48% respectively. 

Bitcoin (BTC) dropped close to US$61,000 through the week. Ether (ETH) showed a similar trajectory and settled at near-US$2,900 level over the weekend. The University of Michigan Survey of Consumers sentiment index, which measures consumer confidence levels in the US, tumbled to 67.4 in May, down from 77.2 in April and much lower than the Dow Jones consensus estimate of 76. At the same time, one-year inflation outlook rose to 3.5%, higher than 3.2% in April, reiterating worries of inflation. U.S. weekly jobless claims rose to 231,000, the highest level since August 2023 and up from 209,000 one week before, suggesting signs that the labour market is cooling. 

U.S. Spot Bitcoin ETFs had a week of net inflow totalling US$117 million, compared to last week’s $433 million net outflow. Grayscale Bitcoin Trust ETF’s (GBTC) weekly net outflow settled at $171 million last week, slowing down from a net outflow of $277 million the prior week. H.K. Spot Bitcoin ETFs had a week of net inflow of $2.3 million, while HK Spot Ether ETFs had a weekly net outflow of $1.8 million. 

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Chart of the Week

A significant drop in cryptocurrency trading volume was recorded in April, marking the first decline in seven months. Spot and derivatives markets trading volume fell by 28% month-on-month to $6.58 trillion, as per CCData, with spot volume dropping by 32% and derivatives volume dropping by 26%, respectively. This decline was attributed to escalating geopolitical tensions and slower inflows into U.S.-listed spot ETFs.

Weekly Performance

BTC and ETH both decreased in the past seven days by -3.9% and -6.3%, respectively. The price action for all other selected top market cap tokens were also down. OP led the drop.

All selected key categories were down in terms of market capitalisation in the past seven days, except for Artificial Intelligence.

News Highlights

• The European Union is contemplating integrating crypto assets into its $12.88 trillion mutual fund framework. This initiative aims to expand the eligible assets of Undertakings for Collective Investment in Transferable Securities (UCITS) to include cryptocurrencies.

• Mastercard collaborates with major US banking institutions like Citi, JPMorgan, and Visa to trial tokenised settlements using the Regulated Settlement Network (RSN).

• The Hong Kong Monetary Authority (HKMA) is collaborating with industry representatives and regulators to explore asset tokenisation through the formation of a special community called ‘Project Ensemble Architecture Community’.

• Grayscale Investments has withdrawn its application for an Ethereum futures exchange-traded fund (ETF) with the U.S. SEC, just three weeks before the securities regulator’s pending decision on the ETFs. Additionally, ARK Invest and 21Shares have removed staking plans from their updated Ethereum exchange-traded fund (ETF) proposal.

Recent Research Reports

• Expanding Ethereum’s Frontier: Restaking And EigenLayer’s Ecosystem (An Analysis of Restaking Dynamics): EigenLayer pioneers the ETH restaking narrative, pushing the liquid restaking market to grow to $8 billion TVL. This report delves into EigenLayer’s ecosystem, its restaking mechanism, and the newly launched EIGEN token.

• Tokenisation of RWAs & Yield-Bearing Stablecoins: RWA tokenisation signifies a bridge between TradFi and the digital asset space. We explore the tokenisation of securities and its application in yield-bearing stablecoins, which have both gained much attention recently.

• Alpha Navigator: Quest for Alpha [April 2024]: Asset classes were mostly down in April. Cryptocurrency led the drop. US fighting inflation while ECB signals potential rate cuts.

Recent University Articles

• Reed’s Law: Why the Crypto Space Benefits From Community: Reed’s Law emphasises exponential growth in networks with each new user. Here we explore how this affects cryptocurrency networks and traders.

• Liquidity in Crypto Markets: What It Is and Why It Matters: Discover how liquidity in crypto markets affects market dynamics and trading strategies.

• What Is Render Network and How to Buy the RNDR Crypto Token: Explore how the RNDR crypto token is revolutionising digital content creation through decentralised compute services.

Catalyst Calendar

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