Welcome to the latest edition of our Market Roundup, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.
(as of 1:30 AM UTC, July 14, 2023)
A landmark ruling of Ripple Labs’ case against the United States Securities and Exchange Commission determined that the XRP token “is not necessarily a security on its face.” Specifically, the programmatic sales of XRP to public buyers and the token’s distribution to Ripple Labs’ staff were not sales of unregistered securities.
Shortly after the news broke, the price of XRP surged by nearly 60%, with a seven-day difference of nearly 53%. The price of other tokens also climbed. Compared to a week ago, the price of SOL rose by 31%, MATIC by 25%, and ADA by 15%, then continued to rise over the following hours. Overall, markets are responding positively, with token prices rising.
Elsewhere, the crypto space hit a different milestone. Tokenized US Treasurys hit US$614 million earlier in the week. Demand for this form of asset has been growing while yield from American government bonds rose higher than that of decentralized finance protocols.
Notably, wealth management firm Bernstein estimates that real-world-asset tokenization may be a US$5 trillion market within five years.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
Web3 News
- The Association for Financial Markets in Europe (AFME) is advocating for the inclusion of decentralized finance (DeFi) in the regulatory framework of Markets in Crypto Assets (MiCA). AFME believes that failing to regulate DeFi could lead to unintended risks to financial stability and market integrity. The association suggests that regulatory gaps in areas such as smart contracts and decentralized autonomous organizations (DAOs) need to be addressed. AFME proposes providing legal status to DAOs or, alternatively, monitoring and considering self-regulation depending on the DAO’s activities. The association also emphasizes the need for standards in algorithmic trading rules, audits, and disclosures from protocols and protocol teams. AFME underscores the importance of regulating aspects of DeFi that interact with the traditional financial system to mitigate potential impacts on the existing structure. This call for regulation aligns with previous concerns raised by the European Parliament regarding the current regulatory framework’s oversight of DeFi protocols.
- Grayscale, the digital asset manager, has included the Lido protocol’s LDO token as the second-heaviest component in its DeFi Fund. LDO now holds a weight of 19.04% in the fund, following Uniswap’s UNI token at 45.46%. Grayscale adjusted the portfolio by selling certain amounts of existing components and using the proceeds to purchase Lido, in accordance with the CoinDesk DeFi Select Index methodology. Lido is a decentralized liquid staking protocol that enables users to keep staked tokens liquid through an stToken. The addition of Lido to Grayscale’s DeFi Fund highlights its position as the largest liquid staking protocol in terms of Total Value Locked (TVL). However, concerns have been raised about the potential centralization of staked ETH due to Lido’s increasing popularity.
- Circle, the issuer of the USDC stablecoin, has launched a wallet-as-a-service platform for developers, making it easier for them to integrate user-friendly Web3 wallets into their applications. The service enables developers to embed wallets that can be used with any blockchain, providing users with convenient access to NFTs, cryptocurrencies, and other Web3 digital assets. While users currently need to self-custody their private keys, upcoming updates will allow developers to have control over user private keys. Circle’s wallet-as-a-service developer platform is currently in beta testing. USDC, Circle’s stablecoin, ranks second in terms of stablecoin supply, trailing only Tether (USDT).
- The leading meme coins, including Dogecoin (DOGE), Shiba Inu (SHIB), and PepeCoin (PEPE), have experienced losses as new meme coins enter the market. PEPE has seen the highest decline among the top meme coins. The bearish movement of Bitcoin and Ethereum has also contributed to the pressure on meme coins. The launch of copycat projects like PEPE 2.0 and SHIB 2.0 has grabbed traders’ attention, while Wall Street Memes, a new meme coin project, raised over US$13 million in less than a week. However, the market-wide rally may be reversing some of those declines.
Stories You Might Have Missed
- Standard Chartered Bank has revised its bitcoin price target to US$120,000, stating that the cryptocurrency could reach US$50,000 by the end of 2023. The financial services giant cited an increase in miner profitability as a potential catalyst for the appreciation in bitcoin’s price. In April, the bank had previously forecasted a price target of US$100,000. Bitcoin was trading at US$30,865, up 2.3% on Monday, and has gained about 48% since the beginning of the year. Standard Chartered’s upward revision reflects its bullish outlook on bitcoin’s future performance.
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