Quick Take

• Crypto.com introduced the initial version of its AI Agent SDK; Ethena Labs is developing a USTB stablecoin backed by BlackRock’s BUIDL; Visa is set to help banks issue fiat-backed tokens on Ethereum.

• US spot Ethereum ETFs saw a US$85 million net inflow last week, while spot Bitcoin ETFs had a weekly net inflow of $1,107 million.

• On the macro side, the US personal consumption expenditures (PCE) price index rose 2.2% year-over-year, the lowest since February 2021 and moving closer to the Fed’s 2% target. The latest CME FedWatch Tool showed a 100% probability of a November rate cut in the US (58% 25bps cut, 42% 50bps cut). In China, the central bank unveiled a stimulus package to boost the economy, which includes cutting the seven-day reverse repurchase rate by 20 bps to 1.5% and the reserve requirement ratio (RRR) by 50 bps. The package is expected to release CNY1 trillion (~$143 billion) of long-term liquidity into the market. 

• Notable updates: The Crypto.com App listed Hamster Kombat (HMSTR), UXLINK (UXLINK), and Moonwell (WELL). 

• Notable events in the coming week: Fed Chair Powell’s speech, US ADP employment change, EU core harmonised index of consumer prices 

Weekly Market Index

The price index increased by +5.38% last week. Volume and volatility indices decreased by -7.32% and -66.53%, respectively. The volatility drop was led by APT (-76.26%) and BTC (-69.01%).  

Check price

Chart of the Week

The US Federal Reserve announced a 0.5% interest rate cut in the September 2024 meeting, which coincided with a price rally for BTC. While rate cuts lower the cost of capital and generally push investors toward higher-risk investments like cryptocurrency, the relationship between cuts and BTC price action is not a straightforward one. Historically, rate cuts don’t always lead to positive price movement for BTC in the short term period (e.g. 7 days):

• In July 2019, the rate was cut to the range of 2% to 2.25%, and BTC’s price dropped by ~2% in a seven-day period.

• From September to October 2019, the rate dropped into the range of 1.75% to 2%, and BTC’s price rose by 26% in a seven-day period.

• In March 2020, the rate was cut in response to COVID-19, and BTC’s price dropped by 30% month-over-month.

Weekly Performance

BTC and ETH increased by +4.9% and +3.5%, respectively, in the past seven days. Prices for all other selected top market capitalisation tokens increased. SHIB (+32.8%) led the increase.

Key categories were mostly up in market capitalisation in the past seven days except the NFT category. The meme category led the increase.

Notable Token Updates

News Highlights

Adoption

• The Crypto.com App now supports CFDs (Contracts for Differences), a new derivatives trading feature. Users can go long or short with up to 20x leverage for CFDs, and there are contracts for over 40 different cryptocurrencies. The feature is available in select jurisdictions In addition, Crypto.com DeFi Wallet now enables users to buy crypto directly with their Crypto.com App Fiat Wallet. 

• Crypto.com introduced its initial version of the Crypto.com AI Agent SDK — an artificial intelligence (AI) powered software development kit that can integrate natural language to blockchain functions across Crypto.com’s services and various blockchain protocols. The Crypto.com AI Agent SDK is now available in its beta version and will continue to be developed over time.

• Ethena Labs is developing a new stablecoin, USTB, in partnership with BlackRock and Securitize. It will be backed by the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), giving it a value of $1 per token. The stablecoin is separate from USDe, a synthetic dollar stablecoin issued by Ethena.

• Visa introduced the Visa Tokenised Asset Platform (VTAP) to help banks issue fiat-backed tokens on the Ethereum network, further enhancing the exchange of real world assets. Spanish bank BBVA will use VTAP and is expected to launch a live pilot in 2025. 

• Franklin Templeton announced plans to launch a mutual fund on Solana. At the same time, Citi Group is exploring using Solana for smart contracts and cross-border money transfers.

• PayPal announced that PayPal Business accounts can now directly buy, sell, and trade crypto. The function is available to US merchants except those in New York.  

• Guggenheim Treasury Services, a subsidiary of Wall Street giant Guggenheim Partners, and blockchain platform Zeconomy issued $20 million of tokenised commercial paper on Ethereum. 

• Blockchain solutions provider Digital Asset and the Depository Trust & Clearing Corporation (DTCC) completed the US Treasury Collateral Network pilot project on the Canton Network. The project used tokenised US Treasury assets to satisfy margin calls and optimise collateral.

Regulations

• The US Securities and Exchange Commission (SEC) approved listing and trading of options for BlackRock’s spot Bitcoin ETF, with ticker symbol IBIT, on 20 September. 

• Australia’s regulators are reportedly preparing new guidelines to require cryptocurrency exchanges to obtain financial services licenses. Draft guidance is expected to be updated in the coming months. 

• Hong Kong’s financial regulators announced their intent to adopt reporting requirements set by European Securities and Markets Authority (ESMA) for crypto over-the-counter (OTC) derivatives. The reporting requirements are expected to be in place by September 2025.

• The US SEC postponed its decision on BlackRock and Bitwise’s spot Ethereum ETF applications. The ruling will now be on November 10. 

Recent Research Report

• Research Roundup Newsletter [August 2024]: We present to you our latest issue of Research Roundup, featuring our deep dives into asset allocation with crypto, the decentralised perpetuals market, and the prediction market.

• Alpha Navigator: Quest for Alpha [August 2024]: Cryptocurrencies were down in August; Fixed Income and Equities were up. New Zealand and Canada reduced interest rates; China and Australia kept interest rates unchanged.

• Asset Allocation With Crypto: Adding BTC to portfolios helps increase yield by up to 2% annually without significant impact on volatility. The Modern Portfolio Theory is adopted to compile portfolios including TradiFi, BTC, and ETH.

Recent University Articles

• Solana Staking: A Guide to Staking SOL: Learn how to make the most of your SOL through Solana staking, with current return rates.

• Solana Seeker: What to Know About the Web3 Mobile Smartphone: SeedVault wallet, dapp store, Genesis token — here’s what to expect from the Solana Seeker smartphone created for the decentralised web.

• What Crypto CFDs Are and How to Trade Them: Learn how to trade a crypto CFD in the Crypto.com App and its advantages.

Catalyst Calendar

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