Crypto Report - Monday June 26th, 2023
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Summary
NEAR Foundation Partners With Alibaba Cloud to Accelerate Web3 Growth in Asia
Bitcoin Investment Sentiment Turned Bullish After Largest Weekly Fund Inflow in a Year
First Mover Asia: Bitcoin Opens the Week Above $30K Amid Rising Investor Optimism
U.S. Has Room for a Compliant Crypto ETF to Grow Market Share as a Bitcoin On-Ramp: Bernstein
Terra Classic Revival Plans Continue as 6 Engineers Aim to Revive LUNC Ecosystem
NEAR Foundation Partners With Alibaba Cloud to Accelerate Web3 Growth in Asia
The NEAR Foundation is partnering with Alibaba Cloud to accelerate Web3 growth in Asia and the Middle East. This collaboration grants the NEAR Foundation access to Alibaba Cloud's developer ecosystem, aiming to attract more developers to build on the NEAR protocol. Developers will be able to launch new NEAR validators using Alibaba Cloud’s "plug-and-play" infrastructure as a service. The partnership will also offer remote procedure calls (RPC) as a service to NEAR ecosystem developers and users, providing multi-chain indexing and data-query application programming interfaces (API). Users can utilize the NEAR Blockchain Operating System (BOS) while leveraging Alibaba Cloud’s infrastructure for building and interacting with other users. The announcement led to an 8% jump in NEAR's price, reaching $1.57. This development follows Alibaba's appointment of Joseph Tsai, an active Web3 investor, as its new Chairman. Raymond Xiao, head of international Web3 solutions at Alibaba Cloud Intelligence, emphasized the significance of this partnership for developers and validators in Asian markets, who can now leverage Alibaba Cloud’s comprehensive infrastructure in the region.
Bitcoin Investment Sentiment Turned Bullish After Largest Weekly Fund Inflow in a Year
Digital asset investment products experienced the largest single weekly inflows in a year, mainly driven by bitcoin-related products, following nine consecutive weeks of outflows, as reported by European digital asset manager CoinShares. Bitcoin products accounted for $188 million or 94% of total inflows, while short-bitcoin products saw an outflow of $4.9 million. This shift in sentiment is attributed to recent high-profile institutions filing for exchange-traded funds (ETFs) and bitcoin's price hitting a one-year high. BlackRock, Invesco, and WisdomTree all filed applications for physically backed ETFs with the U.S. Securities & Exchange Commission. The total inflows reached $199 million, reversing almost half of the prior nine weeks' outflows, with Exchange Traded Product (ETP) trading volumes totaling $2.5 billion for the week. Ethereum witnessed inflows of $7.8 million, but this only represented 0.1% of assets under management (AUM), compared to bitcoin's 0.7%, showing a weaker appetite for ethereum. The positive sentiment did not significantly impact altcoin investments, with only minor inflows into XRP and Solana, but it did encourage $8 million inflows into multi-asset investment ETPs.
First Mover Asia: Bitcoin Opens the Week Above $30K Amid Rising Investor Optimism
Bitcoin and ether have experienced strong gains recently, driven by investor optimism over potential approval of spot bitcoin ETFs. Bitcoin remains above the $30K mark with a 15.6% increase in the last week, while ether is up 1.3% to $1,901. Analysts believe that if bitcoin stays above $30K, another leg up is possible, with $27K providing strong support. Liquidated long positions totaled $9.5 million in the past 24 hours, compared to $7.10 million in liquidated short positions. The SEC has not indicated when it will decide on the bitcoin ETFs from BlackRock, Invesco, and WisdomTree. Meanwhile, Japan has amended its tax law to exclude unrealized gains of self-issued cryptocurrency from taxation, fostering a healthier environment for crypto startups. This move has been praised by industry stakeholders, with Ripple's policy lead for Asia, Rahul Advani, commending Japan's clear taxonomy for digital assets and its careful regulation of crypto exchanges.
U.S. Has Room for a Compliant Crypto ETF to Grow Market Share as a Bitcoin On-Ramp: Bernstein
Grayscale's $19 billion Bitcoin Trust (GBTC) may face competition as investment giant Blackrock files for a spot bitcoin exchange-traded fund (ETF) in the U.S., according to a Bernstein research report. Grayscale currently earns around $380 million in annualized fees, despite the product's inefficiencies and significant trading discount over the past 28 months. The U.S. Securities and Exchange Commission (SEC) has approved multiple bitcoin futures ETFs but not a spot bitcoin ETF. If BlackRock and other firms succeed in entering the spot ETF market, they could provide a more convenient, compliant, and acceptable product for both retail and institutional investors seeking bitcoin exposure. Blackrock's iShares unit filed paperwork with the SEC earlier this month, prompting asset managers like Invesco and Wisdom Tree to apply or reapply for a bitcoin ETF product. Bernstein highlights that Grayscale Bitcoin Trust represents only 3% of the total bitcoin market cap, leaving room for a compliant ETF to grow its share by addressing custody concerns. With GBTC's current annual fee at 2%, there is potential to align pricing with more traditional asset ETFs, which are often below 0.5%.
Terra Classic Revival Plans Continue as 6 Engineers Aim to Revive LUNC Ecosystem
Six engineers known as the "Six Samurai" are working on a Terra Classic ecosystem revival plan to separate from its disgraced founder, Do Kwon, and rebuild the project. Terra Classic, developed by Terraform Labs, is an independent blockchain that continued after the collapse of Terra, with its LUNC tokens valued at $580 million. The engineers, led by "Bilbo Baggins" and "Solid Snake," proposed a $116,000 three-month spend in a governance proposal, pledging to work part-time on the project. They plan to upgrade the network to reduce syncing time between nodes, create a terraUSD (USTC) testnet for testing financial services, develop an application to generate yield for token holders, and reward developers for user activity their applications generate. These efforts aim to drive value to the Terra Classic ecosystem and increase LUNC value over time. Community member "RedlineDrifter" has also suggested a new model for Terra Classic's UST stablecoin to address the original design's issues, which led to the collapse of Terra, a 99.9% drop in LUNA token prices, and a $28 billion loss in Terra-based DeFi applications.
