| | | Good afternoon. Coinbase (COIN) continues its tear on the markets, up ~20% this month and ~155% this year. But while the company’s stock price continues to rise on the back of a potential ETF approval, other exchanges are beginning to bite into the company’s trading volumes. Kraken’s US crypto trading volumes, for example, have grown to 27% of market share from 19% over the past three months. Something to keep an eye on 🧐. | Today’s Big Stories:
⚔️ BTCs outperforming rival
📅 Mid-Year crypto update | Today's newsletter is 1,148 words, a 5-minute read. |
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📌 MUST READS |
| | The Unlikely Candidate Significantly Outperforming BTC This Year |
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All eyes were on BTC in June, with the cryptoasset notching an impressive 13% return, fortifying a year-to-date return of more than 84%. |
But while everyone was watching BTC price movements and the rise in the asset’s market cap dominance, another similar asset was significantly outperforming. |
Bitcoin Cash (BCH), the pariah spin-off from BTC, surged more than 164% in June, jumping from $113 to $304. |
Although BCH has struggled to find an audience since launching as a fork from bitcoin in 2017, in June the asset began seeing renewed interest. |
Why? The underloved asset is now receiving a backdoor nod of regulatory clarity – through the launch of EDX Markets. |
On June 20, 2023, EDX Markets, a cryptocurrency exchange backed by several major Wall Street firms such as Citadel, Charles Schwab, and Fidelity began conducting its first trades. |
Unlike other crypto-first exchanges such as Coinbase and Binance, EDX aims to take elements of traditional finance and combine them with the future of digital asset trading. |
While other crypto exchanges are “custodial,” meaning they require that you hold your tokens on the exchange while trading, EDX is “noncustodial.” EDX simply runs a marketplace where institutional firms can agree on a price to execute a trade, then moving the assets directly between each other to settle. This method is how the traditional stock market operates. |
While this is an important move for institutions, the news primarily fell under the radar as it has very little impact on the retail trading experience. EDX is primarily seeking business from institutional investors that are interested in digital assets but concerned of the troubles at exchanges such as FTX or Binance. |
But, why would the launch of an institutional exchange impact the price of BCH? |
Because BCH was one of only four assets – along with bitcoin, ethereum, and litecoin – chosen to be listed on EDX Markets for institutional investors to trade. |
While the SEC and Gary Gensler are attacking crypto from all sides, EDX feels confident that these four assets will fall under the purview of commodities as opposed to securities. |
Even Gary Gensler at a 2018 Bloomberg conference stated: |
“Over 70% of the crypto market is Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They’re not securities.” |
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And while bitcoin, ether, and to a smaller extent, litecoin, have continued to be bellwether assets, spending their time in the top 10 by market cap, BCH has been underperforming for years. |
But if institutional investors are limited to a group of four assets to trade and BCH is one of those, by proxy, it will begin to receive more attention. |
Does this mean that BCH is a great asset to hold for the long term? No, not necessarily. |
But, it does mean that its prospects are much more bright (from a price perspective) than they were only a month ago. |
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🔎 DEEP DIVES |
| | Mid-Year Crypto Update: Unbundled |
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Ryan Selkis, CEO of Messari, and known for his hot takes and entertaining threads is back at it with a big one. |
Every year, Selkis goes to great lengths to produce Messari’s much-anticipated End of Year Report. And every year, we consider it borderline required reading. It’s jam-packed with research-backed predictions, quality insights, and overall, paints a good picture of consumer sentiment and the current trending narratives surrounding crypto. |
Lucky for us, this week, Selkis unexpectedly went on a bender to produce a quick-hit 2023 “mid-year” update via Twitter. |
In his words, he wanted to get this out because “a lot has changed in the first half of year” and that he’s never been more bullish on crypto than he is now. |
We couldn’t agree more. |
So in the light of saving you time (although you can still read the entire thread here), we wanted to share an overview of what we thought was most interesting and important. |
🧵 Thread Highlights: |
1.) Right now, it’s all about the macro. In other words, all eyes should be on Bitcoin and Ether and not things like DeFi, NFTs, the metaverse, L2’s and all the other distractions that came about between the 2021-2022 bull run. |
We agree. There’s a reason your friendly writers at CoinSnacks continue to pound the table on BTC and ETH adoption stories over the drama-ridden spats about DAOs, lending protocols, meme coins like PEPE, NFT insanity and so forth. The king-of-the-throne cryptocurrency, BTC, and the industry titan cryptocommodity, ETH – which, together, already take up ~75% of the market – are undoubtedly the primary drivers of today’s evolving crypto economy.
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2.) The Bitcoin spot ETF itself won’t matter that much. While a BTC spot ETF would certainly boost adoption, its price impact will be baked in well in advance. The actual shift in crypto demand will come from the credibility of new institutions like Blackrock piledriving into the space, not just from ETF flows. This means that retail investors right now can front run an ETF and any subsequent price moves. |
3.) There are three medium-term macro narratives to live and die by right now. The narratives/tailwinds that currently matter are: |
The lack of confidence in central banks: Funny money monetary policies are quite the norm these days. Don’t be surprised if there’s more inflation, even higher rates, and more money printing. The role of crypto in an AI-driven world: In an age of digital abundance, tech that provides reliable, global, mathematically guaranteed scarcity is critical. The importance of a balkanized global economy amidst great power conflict: Countries that are not aligned with the US, whether they are independent or rival states, will increasingly use gold and other forms of digital currency to diversify their reserves.
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4.) People and projects worth paying attention to in the meantime: |
Important People: |
@iampaulgrewal, Coinbase’s (COIN) Chief Legal Officer, who is leading the fight for crypto in the US @ddisparte, Circle’s Chief Strategy Officer, who is pushing for bipartisan stablecoin legislation @s_alderoty, Ripple’s Chief Legal Officer. Their case vs. the SEC will likely have a mass effect on the future of digital assets not named bitcoin; ruling is due soon @RishiSunak, UK’s Prime Minister, who recently formed a CBDC Taskforce, and successfully pushed for regulatory crypto clarity in the UK Other people to watch include: Binance’s CZ who is getting absolutely pounded by regulators (and rumors), BlackRock’s Larry Fink who recently joined the BTC spot ETF race, and the cofounder of MakerDAO who is pushing for operation “EndGame”
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Products to Watch: |
Firedancer, a Solana validator client developed by Jump Crypto Sovereign SDK, a flexible, chain-agnostic framework for rollup development BASE, also known as Coinbase’s entrance (with its 110 million users) to the Layer2 ecosystem Hooks (UNIv4), customizable smart contracts with specific integration rules to a given protocol The booming ETH staking ecosystem Decentralized Databases, a much-needed Web3 component Lens Protocol, an early leader in the decentralized social media onramp XMTP, a generalized messaging protocol and network that allows end-to-end encrypted messaging between crypto addresses Safe (and other wallets) benefitting from ERC-4337 (account abstraction)
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TWEET OF THE WEEK |
 | RIZZO @pete_rizzo_ |  |
| ✨ #Bitcoin legend photobombs the Fed at $2,500, exactly 6 years ago. Trillions have been printed since 💫 twitter.com/i/web/status/1… |  | | | Jul 11, 2023 | | |  | | | 1.93K Likes 388 Retweets 136 Replies |
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