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The Hard Fork – Weekly Market Commentary

This Week’s Topics:
1) Bitcoin volatility declines to recent low, inline with S&P vol
2) Curv raises $23m in Series A
3) Bitcoin investment manager raises $190m

Indices Round-up

 

TradeBlock Index Asset1 Price ($) 7d∆2
XLMX Stellar Lumens 0.07 8.37%
EOSX EOS 2.48 5.81%
ETX Ethereum 233.48 4.68%
XRX XRP 0.18 3.89%
BCX Bitcoin Cash 228.15 3.61%
LTX Litecoin 42.45 3.60%
ZCX Zcash 53.21 1.64%
XBX Bitcoin 9191.92 0.97%
XMRX Monero 63.64 0.74%
ECX Ethereum Classic 5.77 0.12%
1. Underlying asset sorted in descending order by 7 day price movers.
2. 7 day price movers monitored from 06/29/2020 06:00 ET thru 07/06/2020 06:00 ET.

 

7 day price movers

Large cap digital currencies traded flat to up on the week. Meanwhile smaller cap alt-coins within the “decentralized finance” space saw their market prices decline this past week after rising more than 350% in the weeks prior–reaching a market cap all-time high for the sector (See Figure 1 below). Read our full in-depth report on DeFi token analysis that we published last week. Among our indexed currencies, XLM traded up the most, rising nearly 9%. Conversely, Ether Classic traded up the least, gaining 0.12% on the week.
 

Figure 1: Total market cap over time for the leading “DeFi” tokens


 

In traditional markets, US equities rose on the week on a better than expected jobs report. Non-farm payrolls increased by 4.8 million in June, better than the expected increase of 2.9 million. US unemployment declined to a COVID-19 crisis low of 11.1%. The unemployment rate peaked earlier this year at nearly 15% in April 2020.
 

Bitcoin volatility declines to recent low, inline with S&P vol

Bitcoin volatility has fallen to a recent low, following a spike in volatility in mid March during the height of financial uncertainty related to the on-going COVID-19 crisis. In recent weeks, bitcoin prices have hovered around $9,000 per coin, rarely breaking out above or falling below these levels. While bitcoin historically has maintained elevated levels of volatility relative to more mature, traditional financial markets such as US large cap equities, recently bitcoin’s volatility is inline with that of the S&P 500.

In the figure below we diagram 10-day price volatility between TradeBlock’s XBX Bitcoin Index and the S&P 500 Index. As shown, both indices saw accelerated volatility in early to mid March amidst the COVID-19 sell-off. Since this period of time, volatility has fallen considerably between both asset classes.
 

Figure 2: Bitcoin and S&P 500 volatility over time


 

Curv raises $23m in Series A

This past week, Curv announced it completed a $23 million series A financing round. Curv is developing digital currency custodial wallets designed for institutional clients. The company has built out an innovative multi-party computation (MPC) security solution which eliminates the need for private keys, which are used in accessing and sending transactions through a blockchain network. Curv’s fundraise comes as institutions increase their exposure to the still nascent digital currency space, as evidenced by growth in the CME’s bitcoin futures and options volumes as well as recent traditional fund entrants to the space.

Curv’s series A included various high profile investment firms, including DCG and Coinbase Ventures. Curv’s total fundraise comes out to $29.5–with $6.5 million raised in a seed round in 2019. The company has stated that funds will be used to increase its international footprint, new product innovations, human capital, and for new technology developments for its tX offering.
 

Bitcoin investment manager raises $190m

Investment disclosures filed with the SEC this past week revealed that The New York Digital Investment Group (NYDIG) raised $190 million for its bitcoin investment fund. The capital raise puts NYDIG as one of the largest institutional money managers in the digital currency space. In total, NYDIG manages approximately $330 million across various bitcoin investment strategies. The largest investment manager in the space is Grayscale which has more than $4 billion in AUM–majority of which is in the fund’s bitcoin investment trust.

NYDIG’s raise came from 24 investors and represents the firm’s largest bitcoin fundraise to date. The firm previously raised $140 million for its bitcoin yield fund. Benjamin Lawsky, the New York lawyer who designed much of New York’s existing regulation around digital currencies, including the state’s bitlicense, joined NYDIG last year.

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