Bullish Insights Weekly Market Recap

The Bullish Insights Weekly Market Recap includes curated industry news and analysis from the Bullish team for the week of July 31, 2023.

Bullish exchange

This week’s peak exchange trade volume (24h): $522,955,484 (17,688 BTC) on August 2, 2023.

This week’s headlines

• HashKey has secured a Type 1 and Type 7 license, in compliance with Hong Kong securities law to be able to offer virtual asset trading activities as well as provide these services to institutional and retail users.
• The US Internal Revenue Service (IRS) has outlined a ruling for crypto investors to report any yield received from staking digital assets. The “fair market value” of investors earnings from staking activities will be required to be added to annual income for tax assessment.
• The Australian Securities and Investments Commission (ASIC) is suing crypto exchange eToro violating regulation related to crypto derivative products with the Commission’s Deputy Chair, Sarah Court highlighting that “ASIC is disappointed by the alleged lack of compliance in this case, given eToro’s market penetration and the depth of its brand awareness, both in Australia and globally.”
• MicroStrategy’s Q2, earning report revealed a net income of $22.2mn for the quarter with the firm’s chairman Michael Saylor tweeting the firm may sell common stock of $750mn to potentially add to its Bitcoin holdings.
• The city of Shanghai in China is ramping up its blockchain infrastructure efforts with plans to establish links with other cities like Hong Kong and Singapore by the end of 2025. Areas such as IoT, transportation, supply chain finance etc. will be in focus.
• A restart of the fallen FTX Exchange is on the cards as administrators responsible for the firm’s bankruptcy proceedings have filed a plan to re-boot the exchange for its offshore customers.
• Memecoin $BALD sees a brutal dip by over 90% in its token value after the token’s development team strips $25.6mn in liquidity, rugging token holders.
• LeetSwap, a DEX on Coinbase’s Base L1 protocol has halted trading due to a potential hack. The project noted to users that a few liquidity pools on the DEX may have been exploited and will be subject to investigation.
• Curve Finance protocol has announced a Vyper versions 0.2.15, 0.2.16 and 0.3.0 vulnerability in its stablepools (alETH/msETH/pETH) through a reentrance lock exploit. So far over $47mn in funds have been drained.
• DeFi lender Clearpool has integrated with Polygon zk EVM for greater capital efficiency. Co-founder and CEO of the protocol, Robert Alcorn, stated that “Since its inception, Clearpool was designed to be a multichain protocol that is cost-effective, seamless and scalable to provide value, efficiency and accessibility.”

Equity markets

• July ended on a high note with outperformance in smaller regional banks and tech stocks.
• A retreat in performance across US equity markets in Tuesday's session after investors reconcile a mixed bag of corporate earnings.
• US equity markets saw an overall selloff in Wednesday's trading session with major indexes seeing their worst session in months. The S&P 500 fell by 1.4%, the Dow retreated by 1.0%, and the Nasdaq Composite fell by 2.2%.

Crypto market highlights

• Despite a downward correction in price action, the Bitcoin network difficulty still remains near all-time highs. It peaked at 53.9T throughout July 20-26 and is currently at 52.7T as of August 1. The network difficulty measures how hard it is to mine a Bitcoin block. The higher the difficulty, the more computing power required by miners to mine but also means the more secure the network is against attacks.
• The correlation between Bitcoin and US indices, the Nasdaq 100 and S&P 500 is dipping to year-to-date lows of -0.57 and -0.73 respectively as of August 1. Previously the blue-chip token held a strong correlation to US equity markets in a stimulus environment but have since seen an inverse correlation that is trending with further strength.
• Since Curve Finance's reentrancy hack, the protocol has lost over $1.5bn in TVL (total value locked). It's current TVL is hovering at $1.62bn.
• The Crypto Volatility Index has fallen below 40 and is nearing all-time lows.
• Since Curve Finance's hack with over $47mn worth of funds being exploited yesterday, the protocol's founder has added back 4.63mn $USDT and 16mn $CRV tokens on Aave. Currently his wallet still holds 293mn $CRV and 59.7mn $USDT tokens.

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