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Welcome to MRP's Weekly Crypto Wrap, a look back at news reports, on-chain metrics, and other data that moved digital asset markets over the past week. These reports will be delivered every Friday morning, provided free of charge by MRP, and packed with useful information for those just beginning their research into Bitcoin and other cryptocurrencies, as well as investors with more experience in digital asset markets.
Click here to see everything we covered in the last iteration of the newsletter. |
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THEMATIC SIGNALS Aggregation of key events and breaking stories monitored by MRP |
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Futures: Coinbase Derivatives Exchange set to roll out BTC and ETH futures |
Stablecoins: Tether Surpasses All-Time Market Cap High While Other Major Stablecoin Supplies Shrink
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NFTs: Nike NFTs Will Be Incorporated Into EA Sports Games
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Exchanges: Monthly crypto exchange volume tumbled in May, hitting 32-month low
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DeFi: DeFi Blue Chips Suffer as More Users Stake Ethereum
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ON-CHAIN ANALYTICS Breaking down the most critical trends and transaction patterns on the blockchain |
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Digital asset markets regained a bit of ground this week as the total market capitalization of all cryptocurrencies continued to hang onto the $1.1 trillion threshold. A surge of mid-week momentum sent the unit price of Bitcoin (BTC) in US terms to seven-day highs above $28,400, but that wasn’t enough to stave off BTC’s first monthly loss of the year in May. As of Friday Morning, BTC was trading around $27,000 up 62.7% in the year-to-date period, but down -11.5% from 2023 highs near $30,500 in April.
One of the key drivers of Bitcoin’s disappointing May performance was likely selling pressure from large Bitcoin miners and mining pools. On the final day of the month, Glassnode data showed a horde of 2,000 BTC was sent to Binance by a mining pool known as Poolin. When funds are sent to exchanges, it is likely that the owner intends to sell them sometime in the near term. According to CryptoSlate, Poolin's was the largest one-day Bitcoin transfer from miners to an exchange in two years. Corporate, publicly traded miners are also unloading a large amount of Bitcoin. For example, Canadian BTC miner Bitfarms sold 414 BTC ($11.3 million), representing 90.2% of 459 BTC the company mined in May. According to data from BitcoinTreasuries.net, Bitfarms has drawn down its reserve of BTC held on balance sheet from 3,301 BTC in Q4 2021 (worth $155.8 million at the time) to just 385 BTC (worth $10.4 million at current prices) through Q1 2023.
Miner revenue has been on the rise recently, jumping 13.7% MoM to $916.6 million in May on the back of surging transaction fees. That was the greatest sum of monthly revenue earned in over a year, but the cost of mining continues to rise as well. The costs that miners face are heavily influenced by electricity prices and fluctuations in Bitcoin’s hash rate – the computational power per second being used for mining. The seven-day moving average of the hash rate just hit a new record above 375.4 million terahashes per second (TH/s) on May 31, according to Blockchain.com data.
When hash rate rises, that indicates there are more miners competing for a fixed amount of BTC and expending a greater amount of electricity in that pursuit. In turn, that output pushes up the network’s difficulty calculation, automatically adjusted every two weeks, so that the time to solve a each new block of transactions gravitates toward a moving average of 10 minutes. Bloomberg reports that Bitcoin’s mining difficulty rose to an all-time high on Wednesday. MRP has discussed the dynamics of Bitcoin mining in greater detail throughout several of our Intelligence Briefings.
When costs rise in any business, profit margins can be compressed, which is likely why miners are choosing to offload a majority of the Bitcoin they’re earning in an effort to fund their business, instead of rebuilding their reserves. Though miner revenue was strong in May, a large portion of fees earned can be attributed to a short-lived boom in fees derived from inscriptions. Moreover, the trajectory of Bitcoin’s price was tracking lower – which likely means Dollar-denominated revenue could be headed lower in June if that pattern continues. MRP noted early this year that, for a miner recovery to remain on track, Bitcoin’s price will need to keep rising in tandem with its hash rate, otherwise, miners may face financial stress once again and resort to selling the BTC they mine – which itself risks driving BTC's market price even lower. |
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DIGITAL ASSET DIBs MRP's latest Daily Intelligence Briefings on everything from BTC to DeFi and NFTs |
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THEMATIC SIGNALS: SUMMARIES |
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Exchanges Coinbase Derivatives Exchange set to roll out BTC and ETH futures
On June 1, Coinbase revealed its plans to introduce Bitcoin and Ether futures contracts on June 5 through its Commodity Futures Trading Commission-regulated derivatives exchange. The futures contracts will be targeted toward institutional investors. According to Coinbase, the newly announced institutional-sized contracts will have a specific size of 1 Bitcoin and 10 Ether.
Read the full article from Cointelegraph + |
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Stablecoins Tether Surpasses All-Time Market Cap High While Other Major Stablecoin Supplies Shrink
Tether has surpassed its previous record market valuation of $83.2 billion. It set the earlier record in the bull market of May 2022. Tether’s market cap has increased by roughly 2% over the past 30 days. At the same time, however, other major stablecoins, including USD Coin, Binance USD, DAI, and TrueUSD, have seen losses. USDC’s market cap fell by 5% in the previous month.
Read the full article from BeInCrypto + |
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NFTs Nike NFTs Will Be Incorporated Into EA Sports Games
Nike said it will give more specifics on how its NFTs — which it only refers to as “virtual creations” — will be included into EA’s games “in the coming months". The shoe manufacturing giant launched Polygon-enabled .Swoosh in November 2022, and Blockworks previously reported that users can trade NFTs on the platform as well as gain access to tangible products and events. Read the full article from Blockworks +
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Exchanges Monthly crypto exchange volume tumbled in May, hitting 32-month low
Cryptocurrency monthly exchange volume, which calculates spot market volume across all crypto exchanges, was $439.42 billion in May, down over 27% from $604.88 billion in April, according to data from The Block. Last month’s volume was the lowest level since October 2020 at $222.7 billion, the data showed.
Read the full article from TechCrunch + |
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DeFi DeFi Blue Chips Suffer as More Users Stake Ethereum
Decentralized finance (DeFi) investors have largely lost interest in the blue-chip tokens like Uniswap and Maker, according to blockchain data firm Glassnode. The downturn is largely due to Ethereum seducing investors with its new staking feature, which can give returns of up to 4% APR.
“It is highly likely that the lackluster performance of DeFi tokens over the last two years is a factor or the emergence of native ETH staking yield,” Glassnode said, noting that the DeFi market cap stands at just 12% of its all-time high.
Read the full article from Decrypt + |
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ABOUT THE DIBS AND MCALINDEN RESEARCH PARTNERS
McAlinden Research Partners (MRP) publishes daily and other periodic reports on the economy and the markets.
MRP focuses on identifying change in the global economy and offering an investment thesis whenever an opportunity arises that has not yet been recognized by the market. The DIBs are MRP's compilation of articles and data from multiple sources on subjects reflecting change that have potential investment implications for an industry or group of securities. We share these with our clients who may already have or may be considering exposure in the industries affected. The subjects change daily and constitute an excellent update on featured topics. |
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The information provided in this Report is not to be reproduced or distributed to any other persons. This report has been prepared solely for informational purposes and is not an offer to buy/sell/endorse or a solicitation of an offer to buy/sell/endorse Interests or any other security or instrument or to participate in any trading or investment strategy. No representation or warranty (express or implied) is made or can be given with respect to the sequence, accuracy, completeness, or timeliness of the information in this Report. Unless otherwise noted, all information is sourced from public data.
McAlinden Research Partners is a division of Catalpa Capital Advisors, LLC (CCA), a Registered Investment Advisor. References to specific securities, asset classes and financial markets discussed herein are for illustrative purposes only and should not be interpreted as recommendations to purchase or sell such securities. CCA, MRP, employees and direct affiliates of the firm may or may not own any of the securities mentioned in the report at the time of publication. |
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