RESEARCH
BEQUANT Crypto&Coffee
The market got off to a positive start this week, with Bitcoin continuing its recovery and edging back towards the $11,000 level. Similarly, the recovery in the sentiment, driven by yet another pick-up in activity across the DeFi based platforms, saw Ethereum edge into the mid-$380 zone. The move higher came in spite of the ongoing network clog-up, driven by the aforementioned success of DeFi based offerings. Interestingly, the trading activity across DEX is yet to really suffer because of the elevated fees, suggesting that the less efficient market participants have already been squeezed out – welcome to crypto version of capitalism. All the same, the lack of upside by Ethereum is also likely linked back to the success of DeFi. This double edge sword notion is nothing new but given the recent commentary by Ethereum dev Raul Jordan who noted that Ethereum 2.0., the much-needed and much-delayed update to the Ethereum blockchain, is on track for a November 2020 launch, may soon cause a bit of a stir in the derivatives market place. It is also worth noting that the Ethereum Foundation announced the impending launch of a second parallel testnet, called Spadina, which will exist alongside the currently active Medalla testnet. The Spadina testnet—which has a mainnet-like configuration—will only last for three days when it goes live later this month, with a particular emphasis on deposits and genesis. The Spadina testnet will give everyone another chance to go through that process, as well as the launch of the genesis block. In other words, it’ll be a second “dress rehearsal,” as Ryan noted, for everyone before the big launch. As noted earlier, if markets are indeed underpricing the success of Ethereum2.0 launch, then then vol spread between Ethereum vs Bitcoin will narrow, as it stands 1m IV ETH vs Btc is 77% vs 55%, whereas 6m out the same spread is at 82% vs 72%, In terms of news flow, data company DeFi Pulse and investment-minded Set Protocol have created a permissionless index of the very best DeFi tokens, called the DeFiPulse Index. DeFi Pulse has become the key source of information for assessing which projects are leading and which ones are rising, judged by the total amount of crypto staked on each one, which the company calls Total Value Locked (TVL). Elsewhere, MicroStrategy has informed the SEC it ‘may increase’ $250M Bitcoin reserves. As per CoinDesk report, the business intelligence company told the US Securities and Exchange Commission on Monday it "may increase" its bitcoin (BTC) holdings beyond the $250 million haul purchased in August. That blockbuster buy transformed much of MicroStrategy's cash reserves into bitcoin, placing the Nasdaq-traded firm among Wall Street's most notable bitcoin bulls. Future allocations would continue down the treasury allocation path. On Sept. 11, the board formally recognized bitcoin as MicroStrategy's "primary treasury reserve asset on an ongoing basis." NYAG senior enforcement counsel John Castiglione filed a letter Monday ahead of a conference between the regulator and the two cryptocurrency firms arguing it is way time they complied with a 17-month-old document production order detailing financial information within the next two months. For their part, counsel representing the two firms argue the order is too broad, and the scope should be limited first. New York State Supreme Court Justice Joel M. Cohen scheduled the hearing for this Thursday, after receiving a request from the NYAG’s office last week complaining that Bitfinex and Tether had yet to turn over any documents.
