Price Point
Bitcoin exhibited a relatively stable performance over the weekend, fluctuating within a narrow range of $11,000 to $12,000. Meanwhile, Ether is trading around $430, aiming to build on a four-week streak of gains that have nearly seen its value double. In the broader financial markets, U.S. equity futures and European stocks showed positive movement, buoyed by the Chinese central bank’s significant injection of approximately $100 billion into the banking sector.
Market Moves
Hope is on the horizon for the underperforming cryptocurrency litecoin (LTC), often likened to silver in comparison to bitcoin’s gold status. This year has proven more favorable for bitcoin (BTC), which has outperformed gold by a substantial margin, while litecoin has only recently managed to align more closely with silver’s value. Some market participants are predicting a potential rally for litecoin, particularly as a significant upgrade approaches and blockchain activity shows signs of growth.
This upgrade aims to implement a privacy protocol called Mimblewimble, designed to enhance the anonymity of litecoin transactions by concealing the identities of both senders and recipients, in addition to boosting the network’s transaction capacity. A test version of Mimblewimble, under development for nearly a year, is scheduled for rollout by the end of September. Current market data suggests that this upcoming addition is generating excitement: the daily confirmed transactions on litecoin’s blockchain have more than doubled this year, achieving a seven-day average of 48,948 last week, marking the highest volume since February 2018, according to Glassnode.
Litecoin advocates are optimistic that the enhanced privacy features from the Mimblewimble upgrade may draw users away from established privacy coins like Monero (XMR) and Zcash (ZEC), which carry their own risks, including potential dilution from new token issuance. The expectation is that this upgrade could help litecoin, which has increased approximately 50% this year to around $63, catch up with bitcoin’s 64% rise. “The upcoming Mimblewimble upgrade for litecoin has resulted in a notable increase in transactions and active addresses,” stated Matthew Dibb, co-founder of Stack, a cryptocurrency tracking and index futures provider.
Bitcoin Watch
Despite bitcoin being confined to a tightening price range, interest in futures on the Chicago Mercantile Exchange (CME) is on the rise, indicating growing institutional demand. Open interest, representing the number of open contracts, reached a new record of $864 million on Friday, surpassing the previous week’s mark of $841 million, according to Skew. The CME has recently ascended to become the third-largest bitcoin futures exchange by open interest.
However, the growth in futures trading volume has plateaued over the past two weeks, which could be a positive sign: a combination of rising open interest alongside low trading volumes typically implies that investors are holding their positions. This trend often suggests the market may continue its previous upward trajectory, which has been the case since bitcoin’s recovery from July lows below $9,000. Currently, bitcoin is trading at approximately $11,870 on major exchanges.
Token Watch
Investor interest in Ether (ETH) futures and options surged, reaching new heights as the cryptocurrency’s price climbed to its highest level in 25 months. Open interest in Ether futures, representing the total value of outstanding contracts, soared to $1.73 billion on Friday, according to data from Skew. Ether’s price has more than tripled this year, now hovering around $430.
In another development, it appears that Chainlink (LINK) developers have begun to take profits, as reported by Trustnodes. Estimates suggest that around $40 million worth of LINK tokens have been sold this month, with approximately 500,000 LINK tokens being transferred weekly to exchanges such as Binance. The “oracle” token has gained significant popularity in 2020 due to its potential applications in rapidly growing decentralized finance (DeFi) trading and lending systems, boasting a tenfold increase in value this year, making it the top-performing digital asset with a market capitalization of at least $1 billion.
Curve (CRV) has launched amid another exciting moment in the DeFi space. Following the recent excitement surrounding Compound’s COMP tokens and the previous week’s buzz around YAM tokens, the performance of the latest DeFi offering remains unpredictable. The drama began when an anonymous user deployed Curve Finance’s Decentralized Autonomous Organization (DAO) and token smart contracts without the team’s approval. In response, Curve Finance stated that they had “no choice but to adopt it,” and further noted that it appeared to be an acceptable deployment with the correct code.
Tweet of the Day
Bitcoin tokenization is outpacing its mining, with 1,043 more bitcoins being tokenized through Wrapped Bitcoin since Sunday than those produced by miners, highlighting the ongoing fervor in the DeFi sector. Meanwhile, large enterprises remain hesitant to engage with DeFi, despite its rapid growth and potential utility. In the backdrop of traditional economies facing stagnation, non-fungible tokens (NFTs) and decentralized finance (DeFi) are emerging as promising avenues forward amidst one of the most profound recessions on record.
