Crypto Market Surges Back to $2 Trillion Pre-Crash Levels

Market Outlook

The total value of the crypto market is back to pre-May crash levels, now estimated at more than $2 trillion. Bitcoin and Ethereum represent 60.3% of the total market value. 42.2% for Bitcoin and 18.1% for Ethereum.

Although Bitcoin and Ethereum still trade at -28.7% and -26.2%, respectively, from their all-time high, we are undoubtedly back to a second round of the bull market as indicated by the NUPL ratio (Net Unrealized Profit and Loss). The market sentiment has turned overly positive as this metric measures the cost basis of each bitcoin investor compared to today's value. More than 50% of the current bitcoin investors have their positions in the green now, while this ratio was below 40% a few weeks ago.

The main drivers of this renewed bull market are:

• The buying pressure for Ethereum to participate in NFT-enabled games such as the Pokemon-like game Axie Infinity or purchase online avatars such as Pudgy Penguins. As such, it is not a surprise that OpenSea, the predominant marketplace for NFTs, consumes more transaction fees than Uniswap, the leading decentralized exchange. OpenSea processed $1.83M in transaction fees compared to $1.32M for the second version (v2) of Uniswap.
• The continued institutional interest and adoption of crypto beyond Bitcoin with Ethereum as the leader on that front. For the first time in history, Ethereum's trading volume on Coinbase outpaced that of Bitcoin in a quarter as cited in their Q2 report — accounting for 26% of the total volume versus 24% for Bitcoin in this period.
• The burgeoning ecosystems beyond Bitcoin and Ethereum are getting more retail traction and recognition from their network integrations with decentralized applications. Solana (SOL) is the archetype of such an ecosystem. SOL is the first cryptoasset to reach new all-time highs in our product suite with a market cap estimated at $20B. Solana is up 118% since we launched our SOL ETP in late June this year. This uptrend is on the back of solid integrations of decentralized apps into the Solana blockchain, such as the launch of an NFT project that went viral lately called, Degenerate Ape Academy. Today the Solana ecosystem is composed of more than 300 projects at the moment.

At 21Shares, we have been consistent with our thesis on Ethereum, which has caught the imagination of entrepreneurs worldwide to build better financial services and digital media than traditional services. DeFi and NFTs are the first use cases driving the demand for Ethereum and its competitors. The total addressable market for these platforms will expand over time as innovation keeps coming out. For example, UNICEF operates an innovation unit composed of initiatives for social good, including efforts to explore the possibility of DeFi to open access to financial services for the unbanked.

Weekly Returns

The returns of the top five crypto assets over the last week were as follows — BTC (1.09%), ETH (0.51%), BNB (11.85%), XRP (39.86%), and ADA (24.29%).

Net Inflows per 21Shares ETP

The net inflows of our ETPs combining $10.52 million in the past week, were as follows: AADA (+$ 6,429,828.22), ABBA (-$ 306,513.89), ABTC (-$2,104,370.47), ADOT (+$1,288,710.28), AETH (-$ 371,676.24), ASOL (+$5,117,627.79), AXLM(+$721,698.66 ), AXRP (-$2,049,393.90), AXTZ (+$855,185.79), HODL(+$339,096.04), SBTC (+$608,790.97).

Media Coverage

It’s been a relatively calm week as the major crypto assets have begun their fated mild correction after rallying for weeks, as it was alluded to by 21Shares' managing director last week, Laurent Kssis.

Our company’s CEO Hany Rashwan is scheduled to deliver a keynote speech at the CV Summit Digital Assets and Investors circle - an annual event held in the core of the crypto valley in Switzerland - where he’ll discuss the establishment of fully regulated and compliant-ready digital asset ecosystems for financial institutional investors.

News

Singapore Crypto Owners Are More Likely to Hold Ether Than Bitcoin

What happened?

The 67% of Singaporeans who have financial investments hold crypto assets and are found to prefer Ether to Bitcoin, according to The State of Crypto in Singapore. Conducted by crypto exchange Gemini in partnership with CoinMarketCap and Seedly, the study was sampled on 4,348 Singapore-based adults interested in personal finance and investment products. Almost four in five Singaporean crypto owners hold Ether, followed by Bitcoin, Cardano and Binance Coin. Nevertheless, the 33% who don't own crypto plan to enter the market within a year.

Why does it matter?

Similar to the rest of the world, the pandemic took a sharp toll on a big bundle of sectors in the popular tourist destination that Singapore was; the most severely affected were air transport, accommodation, and other tourism-related sectors. The downturn in the domestic economy caused a domino effect in the retail and food services and consequently wholesale and manufacturing as well as construction and real estate. Knowing that crypto assets are a solid store of value and a strong hedge against the pandemic-induced inflation, Singaporeans decided to invest their increased disposable incomes during the lockdowns.

From popular tourist destination to popular crypto destination, Singapore is rising to become Asia's crypto haven, which is partly credited to the island’s crypto-friendly regulations. Although not (yet) considered legal tender, Singapore’s tax authority treats cryptocurrencies as “goods,” on which applies the Goods and Services Tax, Singapore’s version of Value Added Tax. Earlier this month, Singapore gave Independent Reserve, an Australian crypto exchange, “in-principle approval” to operate as a fully regulated virtual asset service provider. This makes Independent Reserve the first to receive the “in-principle” green light from the Singaporean financial authorities and so spurs hope for the rest of the crypto exchanges that applied, which total to around 170.