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Crypto update from DAR and Fineqia

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The September ETP Report from Digital Asset Research (DAR) reveals that of the 152 crypto ETPs from 16 issuers that it reviews, total month on month change was -15.54 per cent and total assets stood at USD7.53 billion.

Grayscale Investments BTC and ETH combined has assets of USD21.01 billion and DAR says that the GBTC discount is approximately 17.17 per cent.

Matteo Greco, Research Analyst at digital asset and fintech investment business Fineqia International has published his note on crypto assets for last week. He notes that BTC closed last week around USD26,500, a 2.7 per cent increase in price from its previous week’s closing price of USD25,850.

“BTC price exceeded USD26,000 during Wednesday last week and remained in the range between USD26,000 and USD26,500 in the last few days. Although bitcoin quickly returned to the previous trading levels, altcoins have not been adequately resilient in recovering previous values. This is reflected analysing the Bitcoin dominance, the metric which expresses the percentage of BTC capitalisation in relationship to the total digital asset market capitalisation. The BTC dominance increased in the past week to 50 per cent from 49.5 per cent recorded on the 11th of September.

“A reason for this market movement can be found in the judge approval in favour of FTX to sell their digital assets. FTX was one of the main digital asset exchanges, before going bankrupted in November 2022. The exchange obtained permission to liquidate USD3.4 billion worth of digital assets. The portfolio includes USD560 million of BTC and USD192 million worth of Ethereum (ETH). FTX also holds more than USD1 billion worth of Solana (SOL) and other altcoins.

“While BTC and ETH have enough market participation and liquidity to absorb the potential sale without a serious impact on the price, market participants are worried about the effect of sales regarding less liquid altcoins. This news led to higher selling pressure for altcoins in the last week, compared to BTC, favouring the increase of the bitcoin dominance.”

Greco notes that market activity seems to be growing again, after an abrupt decrease during summer months. “Cumulative daily volume on centralised exchanges, calculated on a seven-days moving average, surpassed USD10 billion, reaching USD11.3 billion in the period from 10th to 17th of September. This represents a 19 per cent increase compared to the USD9.5 billion recorded seven days before.

“Spot to future ratio, both for BTC and ETH, decreased in the past week. A decrease of this ratio means that futures trading is increasing in comparison to spot trading for the same asset. Considering also that volumes increased for both BTC and ETH during last week, this shows a strong increase in futures trading activity during the past week. An increase in Open Interest (OI), which is the total number of open derivative contracts, such as options or futures, that have not been settled, is typically paired with an increase in volatility.”

Greco writes that with the end of summer and the resumption of normal trading activity, the market is likely to see increased volatility again, after BTC reached the minimum volatility levels ever recorded on a 30-day basis during the first two weeks of August.

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