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The Hard Fork – Weekly Market Commentary

This Week’s Topics:
1) Decentralized exchange trading volume hits high
2) BlockFi eyes $50 million series C
3) Avalanche raises $42 million in token sale


Indices Round-up


TradeBlock Index Asset1 Price ($) 7d∆2
ETX Ethereum 324.34 36.51%
ZCX Zcash 69.58 20.77%
ECX Ethereum Classic 7.22 18.13%
LTX Litecoin 48.85 15.66%
BCX Bitcoin Cash 258.80 15.40%
XBX Bitcoin 10272.96 12.19%
XMRX Monero 77.26 12.00%
XRX XRP 0.22 11.07%
EOSX EOS 2.78 7.92%
XLMX Stellar Lumens 0.10 -1.25%
1. Underlying asset sorted in descending order by 7 day price movers.
2. 7 day price movers monitored from 07/20/2020 06:00 ET thru 07/27/2020 06:00 ET.


7 day price movers
Large cap digital currencies posted a strong rally on the week, with bitcoin trading back above $10,000 per coin and ETH trading above $320 per coin. The push higher in large caps this week comes as smaller cap alt-coins have been surging, with various currencies within the DeFi sector seeing more than 250% gains over the past few months. Among our indexed currencies, ETX rose the most gaining 36.51%. Conversely, XLMX was our only asset to trade down, losing 1.25% on the week. Bitcoin’s volatility saw a slight uptick on the price action after reaching recent lows.

Figure 1: Bitcoin price volatility over time


In traditional markets, the US dollar declined as Congress prepares an additional stimulus package. The US dollar reached a nearly two year low against a basket of currencies (DXY), as the Euro and Yen have staged strong rallies since March. Safe haven non-fiat stores of wealth also saw an uptick in price, with gold reaching an all time high. US equities meanwhile traded nearly flat on the week.

Decentralized exchange trading volume hits high
Decentralized exchange (DEX) trading volume hit a recent high on the back of increased price action for DeFi tokens. As we highlighted last week, the DeFi sector has been red hot with various tokens seeing all-time highs over the past few weeks. A large portion of the trading taking place on DEXs is in DeFi token pairs. In the figure below, we diagram the notional trading volume over time across the largest DEXs.

Figure 2: DEX notional trading volume over time


Despite the recent high water mark for DEX trading volumes, they do still trail that of centralized exchanges. In the figure below we compare DEX volumes vs that of the largest US accessible exchange, Coinbase for its highest volume pair, XBT/USD.

Figure 3: DEX volume vs Coinbase volume


While DEX volumes do still trail that of centralized exchanges, they have become a viable alternative digital currency marketplace for trading activity. In prior years, as we highlighted in our report on DEXs in 2018, DEX volumes were fractional relative to centralized exchanges.

BlockFi eyes $50 million series C
First reported by TheBlock, the digital currency lender, BlockFi, is reportedly looking to raise $50 million in a series C offering at a $400 million pre-money valuation. The potential raise comes after the firm secured $30 million in funding in a series B offering completed in February 2020–led by Valar Ventures.

BlockFi has raised more than $100 million in equity offerings over the past few years and ranks as one of the largest lenders in the digital currency space. According to TheBlock, BlockFi saw a considerable increase in institutional revenue from $45k per month to over $2 million per month by March 2020. While digital currency markets as well as traditional markets declined in the spring of 2020, digital currency lenders reported a strength in transactional activity without incurring significant losses.

Avalanche raises $42 million in ICO
It feels like a flash back to the ICO days of 2017. This past week, Avalanche announced that the firm closed a $42 million public token sale that sold out in just 4.5 hours. The firm also completed a $12 million private sale in June as well as a seed sale last year. The token sale saw participation from investors in over 100 countries.

Avalanche’s token sale ranks as one of the largest sales since 2018. While Initial Exchange Offerings (IEOs) saw life in 2019, the market for new token sales, whether ICO or IEO, was relatively anemic in the second half of 2019 through 2020 with few sales taking place.

Avalanche operates a baseline interoperable blockchain that allows for businesses and individuals to create customized chains that suit their entity’s needs, including private or public chains. Avalanche claims enhanced scalability relative to rival blockchain platforms, with a smart contract platform that confirms transactions in under one second.

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