Weekly Market Index

All three crypto market indices increased last week. The price and volume indices increased by +8.17% and +18.94%, respectively. The volatility index increased more drastically by +102.81%. All three indices were led by Chainlink (LINK), after the Depository Trust and Clearing Corporation (DTCC) and LINK announced the Smart NAV pilot program with US banks to bring traditional finance fund data onto blockchains.

Bitcoin (BTC) settled above US$66,000 over the weekend while Ethereum (ETH) stayed above $3,050. The U.S. announced lower-than-expected consumer price index (CPI) data, which increased 0.3% month-on-month in April, slightly below the Dow Jones estimate of 0.4%.  In addition, retail sales were unexpectedly flat in April, despite a 0.4% increase estimate, which suggests potential slow down in consumer spending momentum. Finally, the latest CME FedWatch Tool suggests a close to 65% probability for a rate cut in September. 

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Chart of the Week

US Spot Bitcoin ETFs had a week of net inflow totalling US$948 million last week, the strongest in eight weeks. Grayscale Bitcoin Trust ETF’s (GBTC) saw a weekly net inflow of $12 million last week, the first week of net inflow since the ETF launched in January 2024. 

Last week, over 600 professional firms disclosed billions of holdings in US Spot Bitcoin ETFs, based on the firms’ 13F filings with the US SEC in Q1 2024. Among them, the largest investor was Millennium Management, which held a total of $1.9bn spread across five of the ETFs, the largest allocation being BlackRock’s IBIT. In addition, the State of Wisconsin Investment Board held a total of $163 million worth of Bitcoin in BlackRock’s IBIT and Grayscale’s GBTC as of Q1 2024, becoming the first US state to disclose Bitcoin holdings. Other firms include Morgan Stanley, JPMorgan, Wells Fargo, UBS and other hedge funds.

In Asia, H.K. Spot Bitcoin ETFs had a week of net outflow of $48.3 million, while H.K. Spot Ether ETFs had a weekly net outflow of $6.7 million.

Weekly Performance

BTC and ETH both increased in the past seven days by +8.5% and +5.7%, respectively. The price action for most other selected top market cap tokens were also up. LINK led the increase.

Most selected key categories were up in terms of market capitalisation in the past seven days, except for Layer-2. The artificial intelligence category led the increase.

News Highlights

• Ethereum co-founder Vitalik Buterin proposed EIP-7706 to include a new category of gas for transaction calldata, which specifies costs associated with data transmitted in transactions. This is in addition to the two existing types of gas on Ethereum – one for storage and one for execution. 

• The Depository Trust and Clearing Corporation (DTCC) and Chainlink (LINK) announced a pilot program with US banks to bring traditional finance fund data onto blockchains. The program aims to standardise a way to provide funds’ net asset value (NAV) data using Chainlink’s Cross-Chain Interoperability Protocol (CCIP).

• The Hong Kong Monetary Authority and the People’s Bank of China expanded the cross-border digital yuan trial to allow use of e-CNY wallets by Hong Kong residents. The wallets can be used for payments at retailers, but not for person to person transfers. 

• Oklahoma passed a new crypto bill last week to protect state resident’s right to self-custody digital assets. Residents can also mine crypto at home or industrially. The bill will come into effect on 1 November, 2024.

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

• What Is Decentralised Compute? Plus the Most Popular Projects: Decentralised compute is a rising crypto narrative. Learn more about how decentralised compute works and the most popular projects.

• What Are ERC-20 Tokens? All About Ethereum’s Most Important Token Standard: ERC-20 is a token standard for fungible tokens on Ethereum. Learn what it is and how cryptocurrencies can be minted with it.

• What Is DePIN? Plus the Most Popular DePIN Crypto Tokens: DePIN is one of the hottest narratives in crypto at the moment. Learn more about what DePIN means, how it works, and the most popular projects.

Catalyst Calendar

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