Crypto markets find a footing after the ETF euphoria

Hola folks!

Happy Monday! Welcome to the cryptosphere. Get on board as we explore the development of crypto in the world over the past week. 

The global crypto market seems to stabilize as it absorbs the impact of spot BTC ETF approval. The BTC saw positive price action just before the weekend, and it's currently hovering around the $42k mark. On the other hand, the Solana rally continues as the Solana ecosystem continues to grow. 

Read on to learn more about the reasons behind the BTC volatility, how other altcoins are performing, and more.

For the crypto market, 2023 was the year of resilience. While the year started off on a somber note, the market picked up significantly towards the end of the year, bringing much-needed cheer to crypto investors. Bitcoin, the most prominent crypto, ended with more than 150 % year-on-year gains. 

How did India’s crypto investors respond to this? What crypto assets were being traded the most, and who were trading them? The video below provides the answers. Click on the link below to know ‘How India Invests in Crypto’ in 2023.

Crypto markets last week traded in a very narrow range as the first week after the approval of the spot bitcoin ETFs, excluding GBTC, saw a total of >100k BTC being accumulated by TradFi giants, signaling huge demand for the product. 

GBTC, however, has seen a massive outflow of >$2.8bn so far (mostly due to its previous illiquidity and high management fees), which has resulted in relentless selling in the spot markets, causing downward pressure on prices. 

Bitcoin, albeit weak, failed to fall below the 40k USD mark through the entire week - although testing these levels multiple times. On the upside, 43.5k USD now remains a level to break for bulls to catch the party again. Amidst the GBTC selling, it must be highlighted that the rate of outflow has slowed down, and as per industry experts, even the forced selling of over $1bn by FTX bankruptcy estate is now behind us! 

With BTC price back above $42k, its market cap dominance too is nearing >50%, driving the overall growth of the ecosystem and raising the crypto market cap to around $1,7trn

Last week also saw the commencement of trading for MANTA token, which is a native token for two of its chains: Manta Pacific - a modular layer 2 solution, and Manta Atlantic, the fastest zero knowledge layer 1 on Polkadot. A total of 50 million MANTA tokens, worth 100 million dollars at the time of launch, were distributed to the early supporters of the network and have since then shot up significantly in price.

With every slight lower move of BTC, altcoins have been bleeding as the ETH/BTC pair, too failed to hold above the 0.06 ratio between the total largest crypto assets. Some of this can be attributed to the delay in the spot ETH ETF approval, which the SEC announced last week. But also causing additional pressure on ETH prices is the rise of alternative Layer-1 competitors.

Solana's SOL led the charge last week, which continues to attract new users, developers, and airdrop hunters. SOL prices moved higher after Solana Labs launched token extensions for the Solana Network's SPL token that augment its original functionality. 

Other Layer-1 platforms with strong positive price action last week include Avalanche's AVAX, which continues to draw new DeFi TVL, and Move-language-based blockchain networks Aptos and SUI, which too have witnessed a surge in activity and new users. In the Layer 2 space, 

Polygon's MATIC's transition to POL is being planned with the launch of a new aggregation layer to capture value.

• BTC $42,001 ⏫ 2.71%

• SOL $96.62 ⏫ 9.75%

• AVAX $35.00 ⏫ 11.43% 

• ETH $2,259 ⏬ 6.26%

(All data here is as of 2.45 p.m., 29 January 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• The BlackRock iShares Bitcoin ETF (IBIT) on Jan. 26 became the first spot Bitcoin product to reach $2 billion in assets under management. Read more here. 

• Polygon Labs will release a new solution called aggregation layer (or AggLayer) to connect blockchains with zero-knowledge proofs. Read more here. 

• Solana Labs has launched a new evolution called token extensions for the Solana Network's SPL token, a series of programs that are comparable to Ethereum's ERC-20 token standard.  Read more here.

Before you get on with your day, don’t forget to flex those brain muscles with our weekly crypto crossword.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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