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ETFS 21Shares Crypto Monitor - 27th July 2022

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This Week in Crypto

The overall cryptoassets market declined by 9.37% over the past seven days, according to data gathered by CoinMarketCap. Bitcoin declined by 5.7% over the past week, while Ethereum also dropped by 10%. UK inflation hit a 40-year high of 9.4%, with the main contributors being soaring energy prices which are expected to further increase in October. While the Bank of England is scheduled to hike interest rates in August, the European Central Bank (ECB) has already gone ahead with a 50 BPS interest rate hike, its first since 2011. The rate rise puts interest at 0% bringing an end to the eight years that Europe had been experimenting with negative rates. ECB will most probably introduce another rate hike in September.

In its quarterly earnings report filed to the Securities and Exchanges Commission (SEC), Tesla revealed that it had sold 75% of its Bitcoin holdings, worth $936M. As revealed in their earnings reports, Bitcoin’s 59% dip in Q2 cost Tesla, MicroStrategy, and Block $5B collectively. However, this figure is not scaring any of the affected CEOs who have continuously tweeted about their eagerness to buy more BTC.

Figure 1: Bitcoin Network Value to Transactions Ratio

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Source: Glassnode

As more tech companies hand in their earnings reports, it’s important to keep an eye on on-chain indicators such as the Net Value to Transactions Ratio (NVT). As shown above, a high NVT ratio indicates that the price of Bitcoin is overvalued, whereas downtrends like the one seen on July 24 indicate that investors are buying Bitcoin at a discount. If the ratio starts moving sideways, that means the cryptoasset entered a growth trend.

Key Takeaways:
  • The first insider trading case involving cryptoassets

  • Ethereum exchange balances reaching lowest point since July 18

  • Sushi molding into an interoperable DEX

  • Opensea competes with Solana’s Magic Eden

  • A new era for Ethereum’s scalability is upon us with zkEVMs

Macro, Regulations; Spot, and Derivatives Markets

In the US, the SEC has been investigating insider trading within crypto exchanges and only last week have we started seeing the fruits of their labour. A former Coinbase product manager and two other individuals have been arrested for wire fraud in the first insider trading case involving cryptoassets. On that