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SPIRIT Blockchain – Weekly Wrap-up 7/8/2022

Here’s what happened in blockchain and crypto this week.

Crypto markets had a fairly strong week, with bitcoin hitting its highest price in more than three weeks. BTC is now up more than 24% from its June 18 low when it dropped to about $17,600. Yet, many investors remain cautious and are closely watching whether BTC can reclaim key price levels such as the $23,000 resistance while also monitoring on-chain indicators to gauge the network’s fundamentals. Meanwhile, publicly-listed miners announced that they recently sold large amounts of their BTC treasuries. Elsewhere, the once fast-growing crypto lending industry continues to be in consolidation mode amid a number of potential acquisitions and bailouts. 
 
Investors continue to monitor price levels to identify buying opportunities for bitcoin and other cryptoassets. Recently, BTC’s 200-week simple moving average (SMA) line has been a closely-watched trading indicator given that the price of bitcoin dropped below this key level. Historically, the 200-week SMA has served as a very strong support level for the bitcoin price. A number of market participants have argued that BTC could enter uncharted territory in the absence of a rebound above the SMA.
 
Another closely-watched bottom indicator is “miner capitulation”. This week, miners such as Core Scientific, CleanSpark, and Argo Blockchaincontinued to sell all or part of the BTC they mined in June. Miners typically keep some or all of their bitcoin in order to sell them at higher prices during bull markets. The miner capitulation theory holds that as the price drops and some miners are forced off the network, they will sell their treasury reserve BTC which in turn causes the price to drop further.
 
Meanwhile, headlines surrounding troubled crypto lenders continue to rattle the industry. Crypto broker Voyager Digital filed for Chapter 11 bankruptcy this week, days after halting trading, deposits and withdrawals. It remains unclear whether FDIC insurance will protect customer USD depositsfrom the firm’s bankruptcy. Singapore-based Vauld, another crypto lender, announced a restructuring plan after suspending withdrawals. The company reportedly signed a term sheet with competitor Nexo for a potential acquisition.

FTX CEO Sam Bankman-Fried told Reuters that the worst of the crypto crisis has passed and that his company had “a few billion” that could be deployed to stabilize other crypto companies. FTX recently provided funding and credit lines to firms such as BlockFi with an option to acquire the lender

Market Overview
The global cryptoasset market capitalization currently amounts to $988 billion –  up from $903 billion since Friday last week, with bitcoin accounting for 41.5%. Among the Top 30 cryptoassets by market cap, Cosmos Hub (ATOM) outperformed, gaining 21% over the week. During the same period, the price of bitcoin (BTC) rose by 9.5% to $21,500 while the price of ether (ETH) increased by 14.7% to $1,213. The total value locked (TVL) in DeFi sits at $77.8 billion – down from $71.5 billion last week – with Ethereum accounting for about 63% of TVL.

 

This Week’s Headlines

 

Notable Deals and Fundraising

  • Hidden Road raises $50 million in a Series A round
  • Web3 gaming firm Planetarium Labsraises $32 million in Series A funding
  • DeFi platform Ondo Finance raises $10 million in public token sale
  • Bitmark raises $5.6 million launches interoperable NFT wallet
  • DeFi staking protocol Tenderize raises $3 million in seed funding
  • CoinShares acquires Paris-based Napoleon Asset Management
  • WonderFi closes acquisition of crypto trading platform Coinberry
  • Konvoy Ventures launches $150 million fund targeting web3 gaming
  • TON Foundation raises $90 million for new ecosystem fund

 

Manuel Trojovsky, Head of Crypto Investments & Research

 

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