Building Blocks #29
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Birds Eye View (vs Last 7 Days)
?? Overall Crypto Market Cap: $2.45 Trillion (+0.8%)
?? BTC Dominance: 57.3% (+0.4 PPT)
?? Price Snapshot:
?? Bitcoin: $74017 (+2.2%)
?? Ethereum: $2571 (-2.6%)
?? Solana: $184 (+2%)
?? BNB: $576 (-4.4%)
Bitcoin hits new $75K high as Trump takes early election lead
Bitcoin reached a new record high of over $75,000 on Nov. 6, surpassing its previous peak of $73,800 from March as investors flocked to crypto following early U.S. election results showing Donald Trump in the lead.
As New York trading began, Bitcoin (BTC) initially showed strength, climbing more than 3% to hit a daily high of $70,577 as U.S. presidential election-related volatility increased in the crypto market.
Several hours after U.S. trading ended on Nov. 5, Bitcoin hit a new all-time high, reaching $75,000.85 at 3:08 am UTC on Nov. 6 on Coinbase, as reported by TradingView.
Early election data from the Associated Press indicated Trump was ahead, securing 198 electoral college votes compared to Kamala Harris' 112 as of 3:30 am UTC on Nov. 6. Either candidate would need at least 270 electoral votes to win.
At the time of writing, Bitcoin is trading at $74,339, up 7.2% in the last 24 hours.
Throughout 2024, traders have been optimistic about Bitcoin's price potential if Republican presidential candidate Donald Trump won the election, and during the year, both Republican and Democratic candidates have adjusted their views on cryptocurrency industry regulation.
On Nov. 5, Bitcoin analyst Tuur Demeester noted that news favoring Trump's election chances has also been linked to increases in Bitcoin's price.
Bitcoin's price seems to align with Trump's rising odds on the decentralized prediction market Polymarket.
On Nov. 5, Bitcoin's price climbed back above $70,000 as Trump's predicted chances of victory rose above 60%, while Harris' fell below 39%.
Despite hitting a record high, traders expect Bitcoin's price to remain volatile, and shifts in market participants' positions reflect this outlook.
On Nov. 4, an unusual day of significant outflows from Spot Bitcoin ETFs was observed. Total outflows reached $541.1 million as Fidelity, ArkInvest, Bitwise, Grayscale and GBTC experienced selling. Meanwhile, BlackRock's IBIT saw $38.3 million in inflows.
A series of protective measures were also seen in the Bitcoin options market, a point that was thoroughly examined by Pelion Capital founder Tony Stewart.
Providing context to Stewart's comment, analyst Marcel Pechman explained:
“Traders are overall more bullish, especially for Nov. 7, Nov. 15, and Nov. 29. Most new bets were on prices at 72,000 to 75,000 or higher. The notable buy of $64,000 puts suggests some fear and market makers face higher risk if Bitcoin drops, as they sold puts at lower prices.”
What do you think is going to be the eventual outcome of the election and what impact will it have on the price of $BTC? Let us know in the comments below!
NFT Giant OpenSea to Launch New and Improved NFT Marketplace Platform in December
The non-fungible token (NFT) marketplace OpenSea is set to undergo a significant upgrade with a brand new and enhanced platform scheduled for launch in December. This announcement comes during a time when the NFT market has been experiencing a prolonged period of stagnation, often referred to as a doldrum.
"To really innovate, sometimes you have to take a step back and reimagine everything. So we built a new OpenSea from the ground up," stated OpenSea co-founder and CEO Devin Finzer in a post on X dated November 4. This statement highlights the company's commitment to innovation and improvement, suggesting that the new platform will offer features and functionalities that are more aligned with the current needs of users.
Finzer did not provide specific details about the new platform but confirmed that it will be launched in December. A link shared by OpenSea on X directed users to a waiting list page, which included a prompt for users to connect their crypto wallets. This step indicates that OpenSea is preparing for a more integrated and user-friendly experience, allowing users to easily access their digital assets.
DappRadar's Communication Manager and Head of Content, known as 'nederob,' commented on the excitement surrounding the new platform. He mentioned on X that there was "some serious hype" about the upcoming launch, as users might be anticipating an airdrop of tokens. Airdrops are a common practice in the crypto world, where users receive free tokens, often as a reward for their loyalty or participation in a platform.
However, nederob also pointed out that since OpenSea is based in the United States, the likelihood of a token airdrop is "unlikely but not unthinkable." This statement reflects the regulatory environment surrounding cryptocurrencies and NFTs in the U.S., which can complicate such initiatives.
Nederob speculated that the new features of the platform could include account abstraction or "smart accounts," which would allow for more flexible management of digital assets. Other potential features might involve shared ownership of NFTs, trading and minting of memecoins, increased integration with various blockchain networks, and the introduction of SocialFi elements. These features could significantly enhance the user experience and attract more users to the platform.
In the meantime, trading volume on OpenSea has seen a remarkable surge of almost 60% over the past week, surpassing $50 million as NFT sales have jumped. According to DappRadar, volumes reached $15 million on November 2 but have remained relatively flat since early 2022. This increase in trading volume suggests that there is still a strong interest in NFTs, despite the overall market challenges.
OpenSea was launched in 2017 but only gained widespread popularity during the NFT boom of 2021. At that time, the platform experienced peak trading volumes that reached an astonishing $5 billion in January 2022. However, since that peak, the NFT bubble has burst, leading to a significant decline in both trading volumes and revenue for the platform.
Recent data from Dune Analytics indicates that the monthly trading volume for OpenSea was just $46 million in October, which represents a staggering 99% decrease from its all-time high. This decline underscores the challenges that the NFT market has faced in recent years and highlights the need for platforms like OpenSea to innovate and adapt to changing market conditions.
The announcement of the new platform comes on the heels of a significant regulatory challenge for OpenSea. The U.S. Securities and Exchange Commission (SEC) issued a Wells notice to the NFT marketplace, warning that it could initiate an enforcement action against the platform. The SEC accused OpenSea of trading unregistered securities, which has raised concerns about the regulatory landscape for NFTs.
In response to the SEC's actions, Finzer expressed his concerns, stating that "by targeting NFTs, the SEC would stifle innovation on an even broader scale," which could have a detrimental impact on hundreds of thousands of digital artists and creators who rely on platforms like OpenSea to showcase and sell their work.
OpenSea has faced a tumultuous couple of years, including layoffs in November 2023 when Finzer announced that the company was reorienting its team around the concept of "OpenSea 2.0." This reorientation reflects the company's efforts to adapt to the evolving NFT landscape and to position itself for future growth and success.
As OpenSea prepares for its new platform launch, the NFT community will be watching closely to see how these changes will impact the marketplace and its users.
Do NFTs still seem like a fair investment option or has the bubble burst forever? Let us know in the comments below!
What is BRICS Pay and why is it important?
BRICS Pay Explained
BRICS Pay is a payment system created by the BRICS countries (Brazil, Russia, India, China and South Africa) to enable transactions between these nations across borders.
Its main goal is to avoid traditional financial systems, especially those controlled by the US dollar and Western banks, thus fostering financial self-reliance within the group.
This effort is part of a larger aim to decrease dependence on existing financial networks, like SWIFT, which can be affected by sanctions and pressure from Western nations.
In 2024, the total GDP of the BRICS countries exceeded $26 trillion, making up about 36.7% of the world economy. This means that if BRICS Pay becomes widely used across these economies, it could significantly change global trade patterns, reducing the need for middleman currencies and cutting costs linked to currency exchange and dollar-based transactions.
The political and economic roots of BRICS Pay
BRICS Pay stems from both economic and political factors, all tied to the US dollar's global dominance.
For years, the US dollar has been the world's main reserve currency, underpinning most international trade and finance. This gives the US significant sway over global financial dealings. It also means other countries can be exposed to sanctions or economic measures that may not suit their needs.
For BRICS nations, dollar dependence is a mixed blessing. They're major economic players with growing clout, but they're still bound to a system where the dollar is key.
If the US chooses to impose sanctions, as it did with Russia recently, it can block access to global financial networks like SWIFT and halt dollar transactions. This puts countries at risk of economic turmoil and curbs their financial freedom.
BRICS Pay is more than just a payment system; it's a way to avoid these risks. By setting up a direct payment channel using local currencies instead of the dollar, these countries aim for more control over their transactions and less exposure to changing US economic policies.
It's about creating an economic backup plan. If BRICS countries can trade directly and settle payments in their own currencies, they'll reduce their reliance on the dollar and build a more independent financial ecosystem.
Politically, it sends a strong message. By developing BRICS Pay, these countries are jointly stating they don't want their economic stability tied to another nation's policies. They're pushing for a more diverse financial world that's less US-centered and offers other options for trade and business. This move is about flexibility, independence, and reducing the political leverage one country can hold over others.
With this context, let's explore the features of BRICS Pay and how it aims to turn this vision into reality.
Key features of BRICS Pay
BRICS Pay seeks to establish a shared digital payment system that works across member countries. This would let users pay directly in their own currencies, avoiding exchange fees and enabling smooth cross-border transactions.
BRICS Pay uses digital wallet tech, QR code payments and interoperability systems that connect users straight to their local banks.
While details on the underlying tech are still unclear, it's likely to use secure payment protocols and blockchain or digital ledger tech to ensure openness and cut cross-border fees.
Some think it might use Ripple's XRP Things like clear rules, strong security and tech readiness will be key in deciding if XRP can be widely used in BRICS countries' financial systems.
Here are the main features of BRICS Pay:
Potential advantages of BRICS Pay
BRICS Pay enables member nations to operate more freely from Western-dominated financial networks, lessening the effects of economic penalties and building stronger economic bonds within the group.
The system promotes using local money for global trades, backing BRICS members' attempts to boost their currencies and reduce reliance on the US dollar. BRICS Pay could boost trade among member states by streamlining payment methods, making cross-border business easier and more appealing.
In 2023, digital payment amounts in BRICS economies were large, hitting about $3.25 trillion. This figure shows the big growth in digital transactions across these nations, with a 26.1% rise from the previous year. Forecasts suggest this market might grow to around $39.3 trillion by 2032, with China expected to make up nearly half of the spending.
This quick growth shows the scale of digital change within BRICS, setting a solid base for adopting systems like BRICS Pay to support smooth intra-bloc trades.
Challenges to address for successful implementation of BRICS Pay
The BRICS Pay system faces hurdles due to different financial setups, national goals, and currency swings, but if successful, it could open doors for similar systems and a more diverse global financial landscape.
Each BRICS nation has its own unique financial structure and rules, which might make smooth integration for BRICS Pay tricky.
Yet, most have been testing digital versions of their national currencies for a while. So, those in charge likely expect some challenges in making systems work together and setting common standards.
Clashing national aims and regional strife could hinder teamwork and smooth rollout of BRICS Pay. Political and economic tensions play a role. Still, India and China have made headway on border issues, thanks to ongoing talks in BRICS meetings.
BRICS currencies can be unstable, creating risks in trades without a steadying force like the US dollar.
If BRICS Pay succeeds, it might inspire other countries to adopt or join similar systems, leading to a more varied financial world. As digital money and blockchain tech grow, BRICS Pay could use these new tools to work better and reach further globally.
Robinhood, Kraken, Paxos launch Global Dollar stablecoin network
Fintech giants and crypto firms, including Robinhood, Galaxy Digital, Kraken and Paxos, have joined forces to back a new dollar-pegged stablecoin initiative.
On November 5, blockchain tech company Paxos announced the creation of an "open network" aimed at boosting worldwide stablecoin usage and adoption.
"The regulated stablecoin market's lack of competition has held the industry back. USDG changes this with a fairer model that will bring new players into the ecosystem and speed up stablecoin innovation," said Kraken's co-CEO Arjun Sethi in the announcement.
The network is set up to promote the global use of Paxos' USDG stablecoin, introduced by the company on November 1.
Currently, USDG is only available on Ethereum, but Paxos plans to expand to other blockchains as regulations develop.
Paxos will issue USDG from Singapore, claiming it largely meets the Monetary Authority of Singapore's upcoming stablecoin rules, set in August 2023.
Approved entities like custodians, exchanges, and fintech companies can join the Global Dollar Network by invitation.
The company noted that DBS Bank, Singapore's largest bank, will manage USDG's US dollar reserves. USDG is fully backed by US dollars in deposits, short-term US government bonds, and similar cash assets, allowing users to swap their tokens for real money.
Discussing USDG's launch, Paxos' product head Ronak Daya said the DBS partnership will enable business-level stablecoin use.
Paxos also offers other digital assets like PayPal USD, Pax Dollar (USDP), and Pax Gold (PAXG).
USDG and its Global Dollar Network will enter a market led by two main stablecoin issuers, Tether and Circle's USD Coin, which hold 56% and 27% of the stablecoin supply on Ethereum, respectively, according to DefiLlama figures.
Singapore advances asset tokenization with new MAS frameworks
The Monetary Authority of Singapore (MAS) has unveiled a multifaceted plan to boost the commercial adoption of asset tokenization. To reach its targets, the MAS has drawn insights from various initiatives and created new guidelines to provide direction.
At the inaugural MAS Layer One Summit, MAS deputy managing director Leong Sing Chiong highlighted the achievements of major financial institutions in Project Guardian, showcasing tokenization's potential in forex and funds. Over 40 organizations have conducted more than 15 tests across seven countries using six currencies.
The central bank official also pointed out the constraints of these trials:
To roll out tokenized assets widely, liquidity, infrastructure, standard frameworks and common settlement assets are essential, he noted. The MAS is tackling each of these challenges.
Started in 2022, Project Guardian already helps deepen liquidity through capital raising, secondary trading and asset servicing and settlement, the MAS [stated]
To address infrastructure needs, the MAS's Global Layer One, launched in 2023 and developed by BNY, Citi, JPMorgan, MUFG and Societe Generale-FORGE, will broaden its focus in the coming year. Euroclear and HSBC will join the effort as it develops usage principles and its ecosystem.
The Project Guardian industry group created two frameworks for implementing tokenization, also released on Nov. 4. The Guardian Fixed Income Framework combines international organizations' standards and principles into a guide for implementing tokenization in debt capital markets.
The Guardian Funds Framework suggests best practices for fund tokenization. This includes the Guardian Composable Token Taxonomy.
Lastly, the SGD Testnet will be made available to ease access to mutually acceptable tokenized money for payments and securities settlements. Project Guardian and Project Orchid participants will use a Singapore dollar wholesale central bank digital currency (CBDC).
Project Orchid developed use cases for retail CBDC and introduced the concept of purpose-bound money — a form of programmability — which will be implemented on the testnet.
Commercialization is the natural next phase when a project meets its goals - and MBridge announced its launch as a minimum viable product in October 2023.
Ethereum is like ‘Amazon in the 1990s’ — 21Shares
Many Wall Street investors still don't grasp Ethereum's potential, much like Amazon in its early days before becoming a $2 trillion tech giant, according to a 21Shares crypto asset manager analyst.
Despite the launch of spot Ether ETFs in July, they've seen relatively small inflows compared to spot Bitcoin ETFs.
21Shares Research Analyst Leena ElDeeb said that significant inflows into ETH ETFs will only occur once Ethereum's potential is fully understood.
"Ethereum is complex, similar to Amazon in the 1990s - full of promise but with less obvious use cases," ElDeeb explained.
Federico Brokate, VP and head of US business at 21Shares, added, "While Amazon began as an online bookstore, few could have predicted its transformation into a global e-commerce and cloud computing leader, changing how we shop and use digital services."
Likewise, Ethereum started in 2015 as a platform for basic smart contracts and now supports over $140 billion in decentralized finance applications.
Although Ethereum's $320 billion market cap is only 6.25% of Amazon's $2 trillion valuation, Brokate points out one advantage Ethereum has over 1990s Amazon: a vast pool of talent working to make the network useful.
"By the late 1990s, Amazon had about 7,600 employees. In contrast, Ethereum now has over 200,000 active developers - including software engineers, researchers, and protocol designers - all contributing to its growth," said Brokate, adding:
While Ethereum faces competition from Solana and other layer-1 networks, it still leads in decentralized exchanges, borrowing and lending, stablecoin, and real-world asset markets.
BlackRock, the world's largest asset manager, has tokenized over $533 million in money market funds on Ethereum. On November 1, the Union Bank of Switzerland launched a tokenized fund.
Financial giants PayPal and Visa are also building on Ethereum's blockchain, showcasing its growing appeal.
Despite this, ElDeeb notes that many investors still don't fully grasp Ethereum's potential, leading to a cautious approach towards spot Ether ETFs. She explains:
"Short-term investors remain hesitant to dive into spot Ether ETFs until they have a clearer picture of Ethereum's capabilities and real-world applications."
Katalin Tischhauser, Head of Research at Sygnum Bank, points out that inflows into spot Ether ETFs were just 9% of what spot Bitcoin ETFs achieved in their first 90 days, excluding Grayscale outflows.
This modest start was anticipated due to the brief marketing period, ongoing absorption of spot Bitcoin ETFs, and the U.S. regulator's stance against staking, Tischhauser explained.
However, she believes the landscape could shift significantly within a year as investors have more time to evaluate Ethereum's potential. For this reason, Tischhauser isn't worried about the numerous spot Ether ETF issuers consistently reporting zero flows.
21Shares, one of eight U.S. spot Ether ETF issuers, has attracted $21.9 million in net inflows.
Tischhauser suggests that the lack of institutional interest might be linked to Ethereum's layer-2 scaling strategy, which is impacting the main network's revenue.
CK Zheng, chief investment officer at crypto hedge fund ZX Squared Capital, said that Ethereum's declining revenues might not appeal to many Wall Street investors who rely on cash flow analysis for valuations.
However, Brokate draws a parallel with Amazon's early days, when it reported losses quarter after quarter in the 1990s. He's not concerned about Ethereum's recent revenue challenges, as its layer-2 scaling approach is bringing in millions of new users at low costs.
Brokate predicts that as layer 2 fees grow, they'll eventually push Ethereum's main network fees back to pre-blob levels, restoring its revenue stream.
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