Weekly Insights #25

April 2: The crypto market greatly increased this week. The largest price movement occurred on Tuesday, with bitcoin increasing by more than 15% in a 24-hour period. This kind of price dynamic has not been present for quite some time. In other news, the Bithumb exchange lost a large amount of assets in a hack, Coinbase Custody introduced support for consensus staking and governance participation, and Bitmain’s IPO application expired. Below, we also explore factors for the recent surge of Tezos.

 


NOTEWORTHY NEWS

Crypto Exchange Bithumb Hacked in Suspected Insider Job—Mar 30, Coindesk

South Korean exchange Bithumb was hacked on March 29. The exchange suspects it was an insider job since no evidence of an external exploit has been found. According to the latest information, 3.07M EOS and 20.2M XRP were lost. Bithumb stated that the lost assets were owned by the exchange and user assets are still safe in cold storage.

Coinbase Custody Launches Staking Support for Tezos, MakerDAO governance to follow—Mar 29, Coinbase

Coinbase has announced that they will add support for asset staking and governance participation for assets stored in Coinbase Custody for institutional clients. Clients will be able to participate in Proof-of-Stake consensus, earning passive income from block rewards, and in governance decisions, such as the recent voting that took place in the MakerDAO ecosystem. The first assets to be supported are Tezos for consensus staking and Maker tokens for governance participation.

OUR OPINION: This is a step in the right direction because it enables fund managers to utilize all aspects of this emerging asset class. Assets that can be staked and yield additional cash flow to capital gains while still enjoying the safety of cold storage should always be put to work.

Crypto Mining Giant Bitmain Lets Hong Kong IPO Application Lapse—Mar 25, Bloomberg

Lightning Labs has announced the alpha release of Lightning Loop, a non-custodial Lightning Network offramp. The Loop currently offers a “Loop Out” feature, which allows payment channel users to withdraw funds from the channel into a Bitcoin wallet. This will enable receiving more payments without the need to close and reopen the channel. Lightning Labs is also working on a “Loop In” feature to enable payment channel refills.

 


 DIGITAL ASSETS ON THE MOVE

Tezos is Surging

Tezos increased by approximately 140% against the USD in the past 30 days. Here are the main reasons why.

Tezos Protocol Amendment Voting Process in Action
Tezos features an on-chain mechanism with four stages for proposing, selecting, testing, and activating protocol upgrades. This is a substitute for the current primary method for blockchain network upgrades, known as hard forking, in which network participants start following a different set of consensus rules and essentially incorporate upgrades into the current network. Hard forks can be dangerous, as communities can split due to lack of social consensus, potentially resulting in two or more different blockchains.
Tezos is undergoing the first protocol amendment vote process and is currently in the middle of the second stage, the exploration vote period. In this stage, bakers (Tezos’ word for block producers) cast votes for selected proposals from the first stage. If votes reach a certain participation ratio and there is a supermajority of yes votes at the end of this period, the amendment process will proceed to the testing period; otherwise, the process will start over with the first period.
The current proposal being voted on is called Athens A. If passed, Athens A will increase the gas limit—the computational limit per block and decrease the roll size—the minimum amount required to become a baker—from 10k to 8K XTZ. This is the very first Tezos amendment process to go live, and for now, the process is developing as intended.

Current Market Focus on Proof-of-Stake and DeFi Applications
Lately, DeFi and staking are the centers of attention in the crypto community. The DeFi space is growing rapidly, with new applications emerging and their usage increasing. Staking is also gaining social attention, partly because of the increased development of Proof-of-Stake based blockchains in general (including the first Tezos protocol amendment process, the launch of Cosmos Hub, Loom’s DPoS PlasmaChain launch, the release of Cardano 1.5, and the Ethereum 2.0 Nimbus testnet) and partly because staking yield and interest rates from DeFi applications both enable holders to earn interest on their holdings. Increased general attention can lead to price increases due to greater awareness of the project and exposure to more potential investors. 

Coinbase Custody Adds Staking Feature, Tezos First Supported Asset
Coinbase recently announced that they will enable asset staking and governance support in their Coinbase Custody solution for institutional clients. Tezos, which is currently not listed on their exchange platforms yet, was chosen as the first asset to be implemented. This means that Coinbase, one of the largest crypto financial companies, believes that Tezos has a bright future and that institutional investors can earn additional yield to capital gains while still storing assets using an institutional-grade custody solution, which may lead institutional investors to increase their portfolio allocation for Tezos. We believe this is the most important factor for Tezos price appreciation.

 


 MARKET OVERVIEW & METRICS

Weekly Market Overview, 26 Mar to 2 Apr 2019. Source: Coin360

Weekly Crypto Stats

  • Global network value reached $162.20B, with 18.05% weekly delta.
  • Global crypto market turnover was $53.151B, 26.17% from ATH.
  • Bitcoin dominance is 52.6%, with 1.71% weekly delta, and beta of 0.81.
  • Ethereum dominance is 9.92% with -3.88% weekly delta, and beta of 1.32.
  • Bitcoin hashrate is 44.07B TH/s, with 3.73% weekly delta.
  • Ethereum hashrate is 139.82K GH/s, with -1.89% weekly delta.

 


CHART OF THE WEEK

Visualization of Ethereum transactions in one day.

Source: Twitter @elementus_io

This content has been put together by Marko Štemberger and Tilen Držan. Feel free to contact us for any feedback or if you have questions.

Information provided above is not to be considered as an investment advice.

ANNOUNCEMENT

Block Analitica, the company behind Squared Capital, has just launched its digital asset metrics dashboard to the public. Though still in beta, if you are interested in a more in-depth analysis of blockchain fundamentals — everything that’s happening with stablecoins, development activity, exchange balances, and much more — we invite you to register for a free account.

2 comments

  • Ariel

    April 12, 2019 at 6:46 am

    I enjoy the article

  • Randy

    April 25, 2019 at 12:08 pm

    Thank you for the excellent article

Comments are closed.


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