Tokenisation of real world assets grow

Bitcoin, along with the broader crypto market, initially rallied last week on news that the Fed is expected to lower interest rates in September; however, they were unable to hold on to any of those gains. Both finished lower over the last week, and bitcoin ended the month with a double digit loss of almost -11%.

Bitcoin and Ethereum were down -8.52% and -9.53% respectively, over the seven days to 1 September. Bitcoin’s market capitalisation is down to US$1.14 trillion. The global crypto market cap is at US$2.05 trillion, while bitcoin’s market dominance is at 56.3%.

Source: CoinMarketCap. As at 1 September 2024. Past performance is not indicative of future performance. Performance is shown in US dollars and does not take into account any USD/AUD currency movements.

Source: Glassnode. Past performance is not indicative of future performance.

Crypto news we’re watching

Tokenised US Treasury bonds hit $2 billion

The total value of tokenised US Treasuries, bonds and cash equivalents is now valued at US$2.07 billion according to rwa.xyz. Since 1 January 2023, assets have grown 1,872%, growing from US$104.9 million.

The leading funds are BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), with over $502 million, and Franklin Templeton’s Onchain U.S. Government Money Fund, known as BENJI, with a $427 million market cap. The blockchains being used for these projects are mainly Ethereum, with over $1.5 billion, Stellar, at $437 million and the Solana blockchain, with over $60 million¹.

US SEC issues Wells notice to OpenSea

CEO of the non-fungible token (NFT) marketplace, OpenSea, posted on X last Wednesday that the company had been issued a Wells notice by the US Securities Exchange Commission. A Wells notice is a formal notification issued by the SEC informing individuals or companies that an investigation has been completed and the regulator intends to recommend an enforcement action.

According to CEO, Devin Finzer, the letter alleges that NFTs sold on the platform are considered securities. He wrote in a post that the company was “shocked the SEC would make such a sweeping move against creators and artists. But we’re ready to stand up and fight.”²

CRYP company spotlight

MercadoLibra shares hit all-time high

Fintech company MercadoLibra’s share price recently hit an all-time high on the Nasdaq. The share price is up over 43% over the 12 months to 30 August. The company had strong growth for commerce in Brazil and Argentina, and their Fintech Services surpassed 50 million active users. In addition, over 1.6 million new credit cards were issued over the June quarter.³

MercadoLibra is currently held in Betashares Crypto Innovators ETF (ASX: CRYP)⁴. According to the company, it is the largest online commerce and payments system in Latin America and was the first fintech to make crypto accessible to Brazilians. The company has over $29 million invested in bitcoin as of 31 March.

Bitcoin (BTC): Fear and Greed Index

The Crypto Fear & Greed Index is an indicator from Alternative.me that aims at capturing investor sentiment in a single number by incorporating data from multiple sources. The index ranges from 0 to 100, where 0 denotes “extreme fear” and therefore times of exaggerated negative investor sentiment. On the other hand, 100 means “extreme greed” and and is an indication for maximum FOMO.

According to data from Alternative.me, the Fear and Greed Index sits at a reading of 26, which is just above “extreme fear”.

Source: Alternative.me. Past performance is not indicative of future performance.

Altcoin news

‘Top 20’ altcoins were in the red, but Toncoin (TON) took it the hardest in terms of bad news. Toncoin is a blockchain platform which was initially developed by the social messaging app, Telegram. The founder, Pavel Durov was recently arrested and charged in France. Charges have been laid for alleged criminal activity on the platform, which include distribution  of child pornography and drug trafficking⁵.

Toncoin is the native crypto used by the Open Network blockchain. According to Ton’s website, it is used for network operations, transactions, games, or collectibles built on TON.

Investing in crypto assets or companies servicing crypto-asset markets should be considered very high risk. Exposure to crypto assets involves substantially higher risk when compared to traditional investments due to their speculative nature and the very high volatility of crypto-asset markets.

Investing in crypto assets or crypto-focused companies is not suitable for all investors and should only be considered by investors who (i) fully understand their features and risks or after consulting a professional financial adviser, and (ii) who have a very high tolerance for risk and the capacity to absorb a rapid loss of some or all of their investment. Any investment in crypto assets or crypto-focused companies should only be considered as a very small component of an investor’s overall portfolio.

References:

1. https://news.bitcoin.com/2-billion-milestone-reached-in-tokenized-treasury-bonds/

2. https://www.cnbc.com/2024/08/28/sec-issues-wells-notice-to-nft-marketplace-opensea.html

3. https://au.investing.com/news/company-news/mercadolibre-stock-soars-to-alltime-high-of-2030-93CH-3415812

4. As at 1 September 2024. No assurance is given that this company will remain in the portfolio or will be a profitable investment.

5. https://cryptopotato.com/toncoins-price-dips-and-open-interest-rises-in-wake-of-pavel-durovs-arrest/

Off the Chain is published every second Tuesday. It provides the latest news on bitcoin and the rest of the crypto market, along with analysis and insights into the world of crypto.

It provides general information only and is not a recommendation to invest in any crypto asset, crypto-focused company or investment product.