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Good morning, and welcome to First Mover. I'm Lyllah Ledesma here to take you through the latest in crypto markets, news and insights. In today's newsletter: - Price Point: BTC and ETH both show gains on Wednesday despite network hacks on the Solana blockchain.
- Market Moves: Some analysts are taking the possibility of an Ethereum fork seriously: BitMEX issued a blog post arguing that a new chain might generate interest from market participants.
- Chart of The Day: Solana's SOL put-call volume ratio spikes.
Also check out our Market Wrap newsletter which drops today, and every weekday, at 5 PM EST. This is an end-of-day recap of all the most important things that happened in crypto markets. Glenn Williams, Jr., our Markets Team analyst, writes this newsletter. He has the designation of Chartered Market Technician and draws upon deep experience in both crypto and traditional markets, having worked as a digital-asset financial analyst and finance manager at Celsius and before that as a sell-side equity research analyst covering the energy industry at various firms.
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The crypto market was mostly trading in the green on Wednesday despite the news of popular layer-1 blockchain Solana suffering an exploit Tuesday night. The hack saw an unknown attacker drain at least $5 million worth of SOL, SPL and other Solana-based tokens from unsuspecting users. Bitcoin (BTC) was up 2% on the day, reclaiming $23,000. The price of BTC has moved above the highly watched 200-week moving average ($22,900), a positive sign for bulls. Ether (ETH) was up 4.7% over the last 24 hours at $1,660. Uniswap's UNI was up 15%, Curve (CRV) 10% and Aave 8%. Although the two largest cryptocurrencies' price action has not been affected by the network exploit news, Solana's SOL token has dipped slightly by 2%. "The hack will definitely cast a shadow over Solana's credibility as a better alternative to Ethereum, especially when it comes to security," said Mikkel Morch, executive director at Digital Asset Investment Fund ARK36 in an email with CoinDesk."It may even give Ethereum some additional boost from the narrative perspective as the safest and most reliable DeFi ecosystem." Earlier in the week, the cryptocurrency bridge "Nomad" suffered a $200 million drain. Since this hack, blockchain security company PeckShield said $9 million has been returned so far, equating to around 4.75% of the total loss. In other news, Ethereum developers addressed a potential glitch ahead of the Merge in the 92nd Consensus Layer Call. One researcher said that the chance of said glitch (an MEV-boost failure) is slim, but contingencies should ensure that the Merge still happens smoothly. Traditional markets saw U.S. stock futures climb as some of the investor anxiety surrounding tense U.S.-China ties eased. |
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Crypto Exchange BitMEX Offers Strategy on Potential 'ETHPoW' Split as China Miner Contests Ethereum Merge It's little more than speculation now that some Ethereum miners might break away when the world's second-biggest blockchain shifts as soon as September to a new "proof-of-stake" system that's supposed to be better for the environment. But with the Ethereum "Merge" still at least a month away, some analysts are already sharpening their pencils on various strategies to profit from any revolt in the ranks. According to Decrypt, Chinese crypto miner Chandler Guo has started a campaign to fork the Ethereum blockchain and create a spinoff, hewing to the "proof-of-work" (PoW) system that Ethereum uses now. The story was based on a Chinese-language tweet from Guo: "Ethpow will be coming soon," the post reads. "I fork ethereum once, I will fork it again!" The cryptocurrency wouldn't be ETH post-Merge. With the fork, or code change, Guo would create a new cryptocurrency called ETHPOW, according to Decrypt. Investment research analysts at BitMEX published a blog post arguing that a new chain might generate some interest from investors and traders. "Although there are many technical challenges that ETHPoW faces, as long as the chain survives, it looks likely that there could be positive narratives around the coin and leading centralized exchanges are likely to list it," the analysts wrote. As outlined by BitMEX: |
"Doing the above trade, you have potentially got more USD for free with almost zero risk! Well, zero risk when only considering certain types of risk, such as price movements," the BitMEX post states. "ETHPoW may generate a lot of excitement, and we predict that ETH vs ETHPoW will be a popular trading pair post-split, at least until another interesting dynamic comes along," BitMEX analysts said. But others are dismissing the effort almost entirely. According to Will Harborne, founder of Rhino.fi, there is likely little profit to be made from trading ETHPoW. Read the full story here. |
Chart of The Day by Omkar Godbole: SOL Put-Call Volume Ratio Spikes |
- Solana's put-call volume ratio, a gauge measuring number of put options traded relative to calls, surged above 3 early Wednesday, pointing to bearish market sentiment.
- The surge implies that more than three put options were traded for every call option.
- Perhaps investors sought protection against a price drop following reports of a multi-million dollar hack from Solana's digital wallets Phantom and Slope.
- A put option offers insurance against price drops while a call option offers protection against price rallies.
- Sol's Deribit-based options market is quite small relative to ether and bitcoin. As of writing, the notional open interest in the SOL options market was $19.2 million – a meager 0.42% of bitcoin's $4.5 billion.
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SOL Options chart: top volume by instrument. Shows increased volumes in SOL put options at $30 and $38 strikes. (Deribit) |
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The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
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Biggest Gainers Biggest Losers |
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Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges. |
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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