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The Hard Fork – Weekly Market Commentary

This Week’s Topics:
1) OKEx launches ether options
2) Numerai raises $3 million in token sale
3) Bitcoin network hash rate rebounds

Indices Round-up

 

TradeBlock Index Asset1 Price ($) 7d∆2
XLMX Stellar Lumens 0.08 7.86%
BCX Bitcoin Cash 254.10 5.19%
XMRX Monero 67.42 4.28%
EOSX EOS 2.78 3.57%
ETX Ethereum 243.61 2.80%
XBX Bitcoin 9736.15 2.05%
ZCX ZCash 52.27 1.51%
LTX Litecoin 46.40 0.94%
XRX XRP 0.20 -0.79%
ECX Ethereum Classic 6.79 -2.47%
1. Underlying asset sorted in descending order by 7 day price movers.
2. 7 day price movers monitored from 06/01/2020 06:00 ET thru 06/08/2020 06:00 ET.

 

7 day price movers

Digital currencies posted mixed results on the week after a brief bitcoin rally lost momentum. Among our indexed currencies Stellar Lumens traded up the most while ETC traded down the most losing 2.47%. While bitcoin is still hovering around $10,000 per coin, in a research note published this week, Bloomberg analysts predict that bitcoin will hit new all time highs of around $20,000 this year.

In traditional markets, US equities posted a strong rally after US jobs data came in significantly stronger than expected with the US economy unexpectedly adding more than 2 million jobs. The S&P 500 closed the week up more than 5%. Despite the bump in new hires, total non-farm payrolls remain well below highs seen prior to COVID-19.

Figure 1: Total US non farm payrolls over time

Data for chart sourced from St Louis Fed

 

OKEx launches ether options

This past week, the crypto exchange, OKEx, announced the launch of ether options contracts. OKEx has become a dominant player in the digital currency derivatives trading space, having launched perpetual swaps on ether and bitcoin earlier as well as bitcoin options. With the launch, OKEx ranks among a few exchanges that support ether options trading. The vast majority of digital currency derivatives trading activity is in bitcoin contracts.

OKEx maintains a considerable percentage of the total derivatives trading market share placing in the top three by volume. Volume in OKEx’s bitcoin futures contracts, one of the most heavily traded products, has come in at comparable levels to Binance and Huobi. OKEx, Huobi, and Binance have become market leaders in the space, recently surpassing BitMEX which was one of the initial leaders in digital currency derivatives trading. In addition to ether options, OKEx will launch option contracts on EOS soon.
 

Numerai raises $3 million in token sale

This past week Numerai sold $3 million in a secondary token sale. The investment firms Placeholder and Union Square Ventures participated in the sale. While token sales were frequently conducted in 2016, 2017, and early 2018, token offerings have declined considerably over the past two years as regulatory pressure has increased–making such offerings nearly obsolete. Numerai’s sale was in a private offering only open to institutions.

The capital raised will be put towards development on Numerai’s Erasure Bay initiative. Erasure currently ranks as one of the more frequently used decentralized applications (dApps) in the space. Numerai’s products include a predictions platform and a hedge fund that uses crowd sourced data and intelligence.

Numerai’s latest token sale comes as a secondary sale after the company conducted its initial token offering in 2019 when the company raised $11 million. Numerai’s NMR token has traded up more than 3x over the past one year period.
 

Bitcoin network hash rate rebounds

The Bitcoin network hash rate has staged a sturdy rebound after declining to six month lows recently. The increase in network hash rate recently is the first sustained increase since the halving which occurred in early May. Following the halving, as bitcoin block rewards were reduced by nearly 50%, hash power dedicated to the network declined as miners came under pressure from the lower revenue.

As bitcoin prices have recovered and as more efficient mining devices hit the market, hash rate is once again rising as miners increase hash power dedicated to securing the network. While the network hash rate remains below all-time highs seen prior to the halving, the recent increase has put the rate back within reach of all-time highs. In the figure below we diagram the bitcoin network hash rate over time.
 

Figure 2: Bitcoin network hash rate over time

Data for chart sourced from TradeBlock

 

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