Frank Holmes
Crypto SWOT: Tension between traders and creators of digital collectibles is deepening
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Strengths
- Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Shiba Inu, rising 18.78%.
- Michael Novogratz said he sees signs of increased participation in cryptocurrency markets by more traditional institutional investors in the wake of the turmoil in the digital-asset world last year, writes Bloomberg.
- Bitstamp, one of the oldest crypto exchanges, is in talks to raise fresh funding. They started the fundraising process in late June with Galaxy Digital as an adviser. The exchange plans to use the funds for operations including launching derivatives trading in Europe next year, writes Bloomberg.
Weaknesses
- Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was XDC Network, down 11.03%.
- About 13% of crypto hedge funds have shut down so far this year, as weak performance and difficulties in accessing banking services weighed on the industry, according to data tracked by Switzerland-based investment adviser 21e6 Capital AG.
- Block Inc. tumbled as much as 14% after reporting results fell short of some analysts’ expectations. Shares fell 11% to $65.14 after dropping to as low as $63.38, the biggest intraday plunge since March, writes Bloomberg.
Opportunities
- PayPal Holdings is rolling out a stablecoin, the first by a large financial company and a potentially significant boost to the sluggish adoption of digital tokens for payments, according to Bloomberg.
- Bitcoin may be close to bursting out of a period of unusually low volatility if chart patterns and the token’s history are any guide. Bitcoin has traced a falling wedge that resembles a pattern that presaged a June rally, according to an article published by Bloomberg.
- Marathon Digital Holdings’ second-quarter loss narrowed, and revenue jumped, as the Bitcoin miner increased sales of the cryptocurrency in the aftermath of a rebound in prices, writes Bloomberg.
Threats
- Tension between traders and creators of digital collectibles is deepening amid a painful slump in the market for NFTs. The friction stems from moves by top NFT exchanges Blur and OpenSea to slash royalty rates payable to artists when a token’s ownership changes, writes Bloomberg.
- Crypto entrepreneur Justin Sun transferred more than $200 million of digital tokens to his exchange Huboi Global this year to prop up reserves. Falling reserves can be an indication that traders are withdrawing funds on concerns about a platform’s viability, writes Bloomberg.
- Ethereum recorded its worst week of the year in terms of illicit flows. Data tracked by Chainalysis shows that known illicit flows as a percentage of total flows on Ethereum reached 2% for a period of several days just last week, writes TheBlock.co.
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