ETPs: Deutsche Digital Assets Launches Physically Backed Multi-Asset Crypto ETP on German Exchange

XRP: Ripple CEO Brad Garlinghouse Says Judgement on SEC’s XRP Lawsuit To Come ‘In Weeks Not Months’

Tokenization: Tokenized Securities on Ethereum, Polygon, Gnosis Hit $225M Market Cap

Exchanges: Bitpanda Partners With Coinbase to Help Europe’s Banks Offer Crypto to Customers

CBDCs: Visa, Microsoft and others join Brazilian CBDC pilot

Digital asset markets continued to lose ground this week, extending a grinding downtrend that has been pervasive since early this month. The total market capitalization of all cryptocurrencies remained close to the $1.1 trillion threshold throughout the past seven days, but the unit price of Bitcoin (BTC), the largest digital asset, briefly slipped below $26,000 for the first time in two months. Though BTC recovered to $26,500 by Friday morning and is still up 59.6% in the year-to-date period, its price has fallen -13.1% from 2023 highs near $30,500 in April.

Bitcoin’s May downtrend has not been a particularly volatile one, however. Ecoinometrics notes that BTC’s one-month realized volatility remains within the bottom 20% of the distribution for this halving cycle. As MRP has explained in previous Crypto Wraps, a halving refers to the 50% cut to rewards paid out to miners for “solving” a block of transactions and adding it to the chain of previous blocks (hence, blockchain). Currently, the block reward is 6.25 BTC, but that is down from 12.5 BTC prior to the May 2020 halving. A halving is triggered once every 210,000 blocks, which is approximately four years’ time, and forms the basis for “cycles” in Bitcoin’s history.

The weakness in price volatility coincides with slowing activity and movement of coins by long-term holders. This can be measured by the “liveliness” metric, which increases as addresses that do not transact frequently liquidate positions and decreases when those addresses continue holding onto coins that have not been transacted for some period of time. Glassnode claims network Liveliness descended to its lowest level since December 2020 this week. MacroMicro data indicates the portion of Bitcoin’s supply that has not been transacted in one year or longer reached an all-time high of 68.5% this week.

Liveliness may continue to diminish as more Bitcoin is drawn out of exchanges. The number of BTC deposits on exchanges tracked by Glassnode fell to a three-year low this week, as the two largest daily withdrawals from exchanges this year have occurred just within the last two weeks. CryptoSlate notes that $800 million worth of Bitcoin (equivalent to roughly 26,000 BTC) was taken off Coinbase on May 15 and another $400 million of BTC was drained from exchanges on May 25 – $300 million of which came just from Huobi. Moving funds off exchange into a privately-held wallet device or other form of self-custody solution typically indicates the owner of the assets does not intend to sell them in the near-term, which is why this process is also commonly known as sending to “cold storage”.

Bitcoin remains slightly above its 200-week moving average ($26,237), as well as its realized price ($20,181), the average cost basis at which each unit of BTC was purchased. When Bitcoin is above its realized price, the majority of addresses on the Bitcoin network are in profit, and the further above realized price BTC’s market price goes, the greater that majority is. Though Glassnode data shows the percentage of Bitcoin addresses in profit has fallen to a one-month low in recent days, 65.5% remain in profit.

May 22, 2023: Tether Expands Profits, Dominance, and Bitcoin Holdings as T-Bills and Reverse Repo Become Reserve Standards →

February 22, 2023: Ethereum May Face Contagion from SEC Crackdown on Crypto Exchanges’ Staking Services →

February 14, 2023: Staking Services and Stablecoins in SEC Crosshairs as Crypto Industry Preps for Court Battles →

January 24, 2023: Bitcoin Mining is Back to Profitability, Hash Ribbon Shows Peak Capitulation May Have Finally Passed →

October 18, 2022: Fallout From Ethereum “Merge” Bolsters Bitcoin’s Hash Rate as Some Criticisms Still Linger →

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