While the crypto market experienced a general decline, with bitcoin dropping 5.6% and ethereum falling 4.4%, roughly six crypto tokens managed to stand out over the past week. Weekly Crypto Report: Bitcoin and Ethereum Drop, Numerous Tokens See Major Losses As of this writing, the global crypto market capitalization stands at .39 trillion, reflecting a […]
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FDUSD Supply Shrinks by 29% Amid Stablecoin Supply Shifts
The stablecoin market has experienced modest growth over the past two weeks, with valuations increasing by approximately 0 million. Among the top five U.S. dollar stablecoins, Ethena’s USDE saw the largest supply growth, rising 17.5%. In contrast, First Digital’s FDUSD experienced a 29% supply decrease. Stablecoin Valuations Adjust With Diverse Market Movements in May Since […]
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Stablecoin Storm — Gemini’s GUSD Shrinks 93% Amidst Market Turbulence
Over the past few years, the stablecoin market has significantly slowed, particularly since mid-2022, following the collapse of Terra’s stablecoin. Additionally, last year, the New York Department of Financial Services (NYDFS) instructed Paxos to cease the issuance of BUSD. Beyond these setbacks, the supplies of three other stablecoin assets have drastically reduced, now garnering minimal attention. For example, Gemini’s stablecoin GUSD has seen a staggering 93% reduction in its supply.
Dollar-Pegged Tokens Navigate Turbulent Waters Amid Plummeting Supplies and Shifting Ranks
As of June 2023’s close, Gemini’s stablecoin GUSD ranked as the ninth largest stablecoin by market capitalization. In the same period, it earned an A grade from the independent, nonprofit stablecoin rating firm Bluechip. Nevertheless, the report pointed out that GUSD is “not widely used in the crypto markets, and hence lacks significant liquidity on exchanges.” At that time, GUSD’s market capitalization stood at approximately 4.86 million, but it has now plummeted 93.10% to .93 million.
To illustrate the scale, Gemini’s stablecoin now represents a mere 0.0423% of USDT’s hefty .10 billion market cap. Moreover, GUSD’s global trade volume over the past day barely exceeded a million dollars, dwarfed by USDT’s .51 billion. Consequently, GUSD’s ranking slipped from the ninth largest stablecoin to the 24th, and it’s currently placed 667th among 12,000 crypto assets. While the primary exchange for GUSD is Gemini, it’s also traded on Coinbase and Curve.
This year has also seen a diminution in another stablecoin, Paxos’ pax dollar (USDP), which boasted a market valuation of a billion dollars until the end of June. Presently, USDP’s market cap has diminished to 9 million, reflecting a 63% downturn or a 1 million loss. Despite this decline, USDP retains its position as the ninth largest stablecoin by market valuation, though it ranked as the seventh largest back in June 2023. The contraction of BUSD issued by Paxos was anticipated, yet the subsequent shrinkage of USDP was unexpected.
Nonetheless, Paxos recently received approval from NYDFS and is strategizing to broaden its stablecoin’s presence on Solana. Conversely, the stablecoin has only managed a global trade volume of .87 million, a figure significantly overshadowed by titans like USDC, which saw .49 billion in trades over the past day. Another digital currency pegged to fiat, magic internet money (MIM), created by the defi project Abracadabra Money, has receded in the stablecoin hierarchy. Before Terra’s downfall, MIM ranked as the sixth largest stablecoin.
Currently, MIM has descended to the 21st spot, plummeting from a market valuation of .81 billion in April 2022 to today’s million. Earlier this year, particularly around the end of February, MIM’s market cap was twice its present size before experiencing a sharp contraction. With a trading volume of approximately 9,079, MIM’s activity is notably low, even when compared to smaller trade volumes. Presently, MIM is most actively traded on Trader Joe, with other notable platforms including Camelot and Uniswap V3, primarily paired with wrapped avalanche (WAVAX).
GUSD, USDP and MIM have seen stark descent over the past 12 months evoking a sense of impermanence in the market. MIM’s downward flywheel started after Terra’s UST saw its value evaporate, while GUSD’s and USDP’s downturns took place in 2023. The failure of UST shook the crypto industry and even USDC saw a depegging incident take place when Silicon Valley Bank collapsed in March 2023. With memories of these turbulent waters, the stablecoin market is seemingly at a crossroads. While things look cautiously optimistic in the world of stablecoins, no one knows what the tides may bring.
What do you think about GUSD, USDP, and MIM’s descent over the past year? Share your thoughts and opinions about this subject in the comments section below.
New York Shrinks List of Pre-Approved Crypto — DOGE, XRP Among Coins Removed
New York’s financial regulator has significantly reduced the number of pre-approved cryptocurrencies that licensed crypto trading platforms can list. XRP, dogecoin, litecoin, and ethereum classic are among the coins removed from the Greenlist. The regulator also proposed new crypto guidance that “heightens risk assessment standards for coin-listing policies and tailors enhanced requirements for retail consumer-facing businesses.”
New York Updates Crypto Greenlist
On Monday, New York State Department of Financial Services (DFS) Superintendent Adrienne A. Harris issued an update on the department’s “ongoing initiative to strengthen DFS oversight of virtual currencies.” The DFS also published an updated list of cryptocurrencies approved for all licensees to list or custody.
Any entity licensed or chartered by the DFS to conduct virtual currency (VC) business activity in New York “may list coins on the Greenlist without having a separate DFS-approved coin-listing policy,” the regulator detailed, noting that if a crypto entity decides to list a coin on the Greenlist, it must notify DFS at least 10 days prior to offering the coin in New York.
The list published on Monday comprises bitcoin (BTC), ethereum (ETH), Gemini dollar (GUSD), GMO JPY (GYEN), GMOUSD (ZUSD), Pax Gold (PAXG), Pax dollar (USDP), and Paypal dollar (PYUSD).
The DFS greenlist was previously much longer and included cryptocurrencies that were only approved for custody, listing, or both. In July, the greenlist comprised 0x (ZRX), aave (AAVE), bancor network token (BNT), basic attention token (BAT), Binance USD (BUSD), bitcoin (BTC), bitcoin cash (BCH), chainlink (LINK), dogecoin (DOGE), ethereum classic (ETC), ethereum (ETH), Gemini dollar (GUSD), GMO JPY (GYEN), kyber network (KNC), litecoin (LTC), livepeer (LPT), lumens (XLM), omisego (OMG), Pax gold (PAXG), Pax dollar (USDP), Ripple (XRP), synthetix (SNX), wrapped bitcoin (wBTC), and z.com USD (ZUSD).
The announcement further details:
Today’s proposed guidance for coin-listing and guidance on the general framework for Greenlisted Coins enhances the original framework issued by the Department in 2020.
According to the DFS, the guidance published on Monday “heightens risk assessment standards for coin-listing policies and tailors enhanced requirements for retail consumer-facing businesses.” It also “requires licensees to develop and submit to DFS for approval a coin-delisting policy that is compliant with this proposed guidance” and “updates the DFS Greenlist, the list of coins and tokens approved for all licensees to list or custody, and Greenlist process.” The proposed guidance is open for public feedback until Oct. 20, the announcement concludes.
What do you think about the updated list of greenlisted coins? Let us know in the comments section below.
Top Stablecoins See Steady Decline Over Past Month as Dollar-Pegged Token Economy Shrinks
The top stablecoins have continued to see redemptions over the past 30 days as the dollar-pegged crypto economy currently hovers at 7.32 billion on July 12. The stablecoin BUSD’s supply has dropped below the 4 billion mark as the token’s number of coins in circulation has fallen 16.7% over the last month.
Dollar-Pegged Cryptos Feel the Pinch as Supplies Shrink Steadily
During the past ten days, the stablecoin economy shrank by 0 million after dropping from 8.21 billion to today’s 7.32 billion. Statistics show that the net value of the top dollar-pegged market capitalizations shrunk a great deal since the start of 2023.
On March 26, 2023, the stablecoin economy was worth 5.08 billion, which means .76 billion has been removed from the dollar-pegged token economy over the past 108 days.
30-day statistics paint a similar story as four out of the top five stablecoins saw redemptions shrink their supplies. Tether (USDT) saw a slight drop of 0.3%, while usd coin’s (USDC) supply was reduced by 3.9%.
Makerdao’s DAI saw a 5.6% reduction last month and BUSD’s supply dropped by 16.7%. Trueusd’s (TUSD) supply is still up 41.7% for the month but it has dropped under the 3 billion range to 2.88 billion tokens. Over the past 24 hours, the stablecoin economy recorded .42 billion in global trade volume.
With BUSD’s supply dropping 16.7%, the supply is now under the 4 billion range with an approximate supply of 3,997,265,401 at the time of writing. Current data shows that Binance holds 3,623,828,575 BUSD in six different wallets.
Furthermore, out of the 2.88 billion TUSD tokens circulating today, 2.45 billion TUSD is also held by Binance. This means 90.65% of the BUSD tokens today are held by the world’s largest exchange and 85.06% of the TUSD supply is controlled by Binance.
With major stablecoins like BUSD and DAI seeing significant supply reductions recently, how long do you think this downward trend will continue? Share your thoughts and opinions about this subject in the comments section below.
Binance US Market Share Shrinks Amid Legal Battle With SEC
The market share of the U.S. subsidiary of Binance has declined amid an ongoing crackdown by America’s securities regulator. According to new data, leading U.S. crypto exchange Coinbase, also sued by the Securities and Exchange Commission (SEC), is taking a hit, too.
Binance US Market Share Drops to 1.5%, According to Kaiko
The litigation with the SEC is taking a toll on Binance US, the American unit of the world’s largest cryptocurrency exchange. The platform’s share is now only 1.5% of the weekly trading volume on exchanges in the United States, according to digital assets market data provider Kaiko.
That’s down from 8.2% at the beginning of 2023, the research indicated. The significant decline comes in a difficult moment for Binance’s subsidiary in the U.S. which is dealing with customers withdrawing funds and payment partners cutting off support, Bloomberg noted in a report.
The latest troubles began when the securities regulator sued the operators of the American exchange, BAM Trading Services and BAM Management US Holdings, and Binance founder Changpeng Zhao (CZ), accusing them of violating U.S. securities laws, misleading investors, and mishandling user assets.
Thanks to a deal with the SEC that requires Binance to repatriate all U.S. customer funds, Binance US managed to avoid an asset freeze that would have crippled its business. However, according to Clara Medalie, director of research at Kaiko, “What we are seeing here is sort of the collapse of Binance US.” She elaborated:
Can Binance US survive in a post-SEC world? I think the jury is still out on that, but looking at the data, I think it’s very unlikely.
Meanwhile, the market share of Coinbase has also shrunk, to 51% in late June from 56.5% at the start of the year. The SEC filed a lawsuit against the largest U.S. crypto exchange as well, alleging that the San Francisco-based company was also infringing upon securities laws.
Kaiko pointed out that the market shares of other crypto exchanges, such as Lmax, Bitstamp, and Kraken, are expanding in the United States. U.S.-based Kraken has grown its market share in Europe, from 41% at the beginning of this year to 53% this month. In 2023, Binance’s global platform lost more than half of its market share in euro-denominated crypto trades.
announced last week it’s leaving the Dutch market as it was unable to register as a crypto service provider in the Netherlands. Earlier, its entity in Cyprus applied to be removed from the country’s register of digital asset service providers and Binance’s unit in Britain canceled its U.K. regulatory authorization.
What future do you expect for Binance US and other major crypto exchanges in the U.S. and Europe? Share your thoughts on the latest developments in the sector in the comments section below.
Dollar Reliance Shrinks — China’s LNG Deal With Qatar Challenges ‘Frenemy’ Status With US
This week, China and Qatar strengthened their bond through a significant development on Tuesday. China National Petroleum Corporation (CNPC) and Qatarenergy inked a 27-year deal, outlining China’s commitment to procure liquefied natural gas (LNG) from Qatar on an annual basis. Under the agreement, China will import a substantial four million metric tons of LNG per year from the Gulf nation. Moreover, CNPC will also obtain an equity stake in Qatar’s North Field LNG project, further solidifying their collaboration.
China and Qatar Sign 27-Year LNG Deal Further Solidifying Relationship Between Both Nations
China is making steady progress in diversifying its currency deals and lessening its dependence on the U.S. dollar, and that includes fewer natural gas imports from the United States. Alongside various other BRICS nations, the Asian nation has been strategically maneuvering to reduce the prominence of the greenback in international trade.
In a noteworthy development at the end of March, China entered into a bilateral agreement with Brazil for the procurement of liquefied natural gas (LNG), with the settlement of the transaction taking place in yuan, facilitated by a French company.
On June 20, Reuters reported that Qatar and China have reached a substantial deal for LNG, with the two countries agreeing to collaborate for 27 years. Similar to the United Arab Emirates (UAE), Qatar is an emerging economy. Both regions were upgraded by the financial markets and benchmark firm MSCI in 2014 and joined the emerging BRICS economies.
According to the report, Qatarenergy signed a multi-year partnership with CNPC, enabling China to acquire four million metric tons of LNG annually. The news came after Qatar and the UAE announced the resumption of their diplomatic ties on Monday.
Simultaneous to the agreement with CNPC, Saad al-Kaabi, Qatarenergy’s chief, also signed an identical deal with China’s petroleum and petrochemical enterprise group Sinopec. “Today we are signing two agreements that will further enhance our strong relations with one of the most important gas markets in the world and key market for Qatari energy products,” Kaabi stated.
‘Right Now, China Is a Frenemy,’ Says Louisiana Senator
American officials are divided on the matter, as an editorial published by The Cradle explains that U.S. House speaker Kevin McCarthy praised China’s previous reliance on U.S. LNG reserves but questioned its necessity, citing a Politico interview. Thecradle.co also quotes Louisiana senator Bill Cassidy, someone who believes that China’s purchase of natural gas is a win-win situation.
“China gets guaranteed shipments at a certain price by providing upfront capital,” Cassidy said. “That, in turn, helps U.S. companies build export terminals, which drives demand for more U.S. drilling in places like Louisiana and Texas.” Cassidy further insisted China is a friendly rival. “Right now, China is a frenemy. If they — just like India, South Korea, Japan, the EU — are purchasing or buying, helping to pay for the capitalization of LNG export terminals, well, that’s a good thing.”
Will China’s strategic partnerships and efforts to diversify its energy imports disrupt the dominance of the U.S. in global trade, or is it merely a temporary ‘frenemy’ dynamic? Share your thoughts and opinions about this subject in the comments section below.
Stablecoin Economy Shrinks by $7.3 Billion in 2023, USDC and BUSD Record Mass Redemptions
From the beginning of this year, the crypto economy has surged by 41.77%, reaching a current market capitalization of .17 trillion. However, amidst this growth, the stablecoin economy experienced a substantial loss of .3 billion within a span of 140 days.
Stablecoins Experience a Significant Shift
As per the latest data, the stablecoin economy has witnessed a .3 billion decline in value in 2023. Archived records indicate that on January 6, the stablecoin economy stood at a valuation of 8.12 billion, but as of today, it has dwindled to 0.79 billion. Notably, numerous stablecoin projects experienced substantial redemptions in the past four months, with USDC alone shedding over billion. Similarly, BUSD suffered redemptions exceeding billion since the first week of January, while DAI faced redemptions amounting to 1 million.
While USDC and BUSD experienced redemptions exceeding .3 billion in 2023, a few other stablecoin projects managed to counterbalance these losses with growth. Take TUSD, for instance, which started the year with a market capitalization of approximately 6.57 million. Today, this stablecoin boasts a market valuation of .04 billion, indicating a growth rate of 140.97%.
Similarly, tether (USDT) witnessed a substantial increase in its market cap. Back in the first week of January, USDT stood at .29 billion, but it has since surged by over 25%, reaching .95 billion. Back on January 6, 2023, the stablecoin economy recorded .11 billion in 24-hour trade volume. However, fast forward to May 21, 2023, and the volume of the dollar-pegged token market has dipped considerably, settling at a comparatively modest .77 billion.
Although the current volume may appear smaller, the .77 billion worth of stablecoin trades still represents a significant portion, accounting for 57.9% of the total 24-hour trading volume within the entire crypto economy. On the other hand, when the dollar-pegged token volume reached .11 billion, it accounted for 81.36% of the day’s global trade volume (on Jan. 6, 2023) across the 12,775 listed crypto assets on coingecko.com at that time.
What do you think about the stablecoin economy in 2023 and the mass redemptions over the past four months? Share your thoughts about this subject in the comments section below.
Bitcoin Transaction Backlog Shrinks, but Over 289,000 Still Await Confirmation
Although Bitcoin’s network transaction fees have decreased and a portion of the unconfirmed transfer backlog has diminished, the protocol still grapples with over 289,000 transactions awaiting confirmation. As of this writing, more than 218 blocks must be processed to fully alleviate this congestion.
Bitcoin’s Lingering Transaction Backlog
Data collected on May 20, 2023, at 1:35 p.m. Eastern Time reveals approximately 289,385 unconfirmed BTC transactions lingering in the backlog. This is slightly lower than the figure recorded nine days earlier on May 11, when just over 300,000 transactions were pending miner confirmation. However, fees have fallen since then; at that time, a high-priority fee was per transaction.
Currently, mempool.space statistics indicate that a high-priority fee stands at .81 per transaction, while a medium-priority fee costs .62. A low-priority transfer, according to the site’s data, will amount to .47 per transaction on Saturday afternoon. Meanwhile, metrics from bitinfocharts.com show the average BTC transaction fee as 0.00023 BTC per transaction, or .07. Concerning median-sized transaction fees on the Bitcoin network, bitinfocharts.com reports a fee of around 0.00013 BTC or .55 per transfer.
The persistence of Bitcoin’s unconfirmed transfer backlog has led some to speculate that demand may eventually wane. Yet others argue that demand could endure for an extended period owing to Ordinal inscriptions and BRC20 tokens‘ existence. Presently, about 8,128,158 inscriptions can be found on the Bitcoin blockchain. Moreover, the current value of the 24,677 BRC20 tokens in existence is an estimated 2 million.
Despite the ongoing inscription and token trend occurring on Litecoin and Dogecoin blockchains as well, minting and transactions linked to inscriptions and BRC20s have not decelerated on the Bitcoin network. Furthermore, the Lightning Network (LN) capacity has consistently declined since our last report on the issue, which indicated the LN held 5,415 BTC on May 14. That figure has since contracted to 5,367 BTC.
What are your thoughts on Bitcoin’s ongoing transaction backlog and its potential impact on the network’s scalability? Share your insights and opinions in the comments section below.
Bitcoin Volatility Shrinks To All-Time Lows – What To Expect
The Bitcoin price is currently so stable that some experts are already jokingly comparing it to a stablecoin. However, from a historical perspective, this low volatility level carries a lot of risk. As Glassnode reports, BTC is trading in an incredibly small range of 9, separating the weekly low and high by just 4.6%.
Glassnode looks at these bearish risks but also bullish opportunities in its new weekly report. Periods of extremely low volatility have been very rare in Bitcoin’s history. Ultimately, there has either been an extremely strong move up or down.
The Bear Case For The Bitcoin Price
On the bear side, historically low on-chain usage reveals some parallels to 2018’s bear market.
The growth rate of non-zero balance addresses has stagnated since August. Transfer volume in USD has also slumped to .2 billion per day, below the December 2017 transfer volume peak and only slightly above the May-July 2021 lows.
As Bitcoinist reported yesterday, miner capitulation is currently the biggest intra-market risk. According to Glassnode, the hash price has fallen to an all-time low of .5k/day per exahash deployed.
With Hash Price now falling below the post 2020 halving lows, despite coin prices being ~2x, this demonstrates just how extreme the recent increase in hashrate competition has become.
In addition, Glassnode estimates that miners’ balances have increased 10-fold since 2019 and now total 78.2k BTC, which equates to .509 billion at a price of .3k.
The current evolving combination of miners on the brink of profitability and an enormously high inventory of BTC with thin order books, historically low demand, and ongoing macroeconomic uncertainty make for an explosive cocktail that should not be underestimated.
The Bull Case
However, there are also good arguments for a bull case. First and foremost, HODLers continue to show very strong conviction and have reached an all-time high in coin ownership while “steadfastly” refusing to put coins on the market.
Reserves held on crypto exchanges are also shrinking relentlessly and are currently at January 2018 levels, while more than billion per month in stablecoin buying power is flowing in.
Likewise, other on-chain data points to a continued period of accumulation. Both smaller investors (< 1 BTC) and whales (up to 10,000 BTC) have changed their behavior to net accumulation and increase.
The same is true when looking at Short-Term Holders (STHs). The volume of coins passing to new buyers at prices between ,000 and ,000 is increasing significantly. Glassnode concluded it bullish thesis by saying:
The bullish case for Bitcoin at present is one of unwavering conviction, and persistent balance growth by the HODLer cohort. Liquid coins continue to flow out of exchanges, relative stablecoin buying power is increasing, and extreme volatility and severe downside has thus far failed to shake out Bitcoins most die-hard believers.
At presstime, BTC continued to trade in its incredibly narrow range.