The upward momentum this week has kept Bitcoin above $27,000 as of Tuesday, while Ethereum has been trading at around $1,645. With this, the total market capitalization of cryptocurrencies currently stands at $1.12 trillion.
These gains came despite Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware approving FTX's motion to sell its crypto assets worth $3.4 billion to pay back creditors.
The now-defunct exchange's top holdings include $1.16 billion in SOL, $560 million in BTC, $192 million in ETH, and $137 million in APT. The firm has also received approval to liquidate $1.3 billion in brokerage and government-recovered assets, as well as $2.6 billion in debtor and non-debtor cash. The combined value of assets set to be liquidated amounts to approximately $7.3 billion.
Amid this backdrop, there was market concern last week about the potential impact of FTX's liquidation sales. Many feared that these sales could trigger a market crash. However, Coinbase (COIN), the largest cryptocurrency exchange in the US, addressed these concerns in its weekly market report. The report outlines several reasons why the impending mass token liquidation by the bankrupt FTX is unlikely to significantly disrupt the market.
On the news of FTX's liquidation plans, market players reacted swiftly. Trading volumes in the cryptocurrency market soared within the past week, with daily spot activity for BTC and ETH increasing by 37%, although volumes have since subsided.
However, according to David Duong, head of Coinbase's institutional research, concerns about market disruption may be overstated. Duong explains that FTX's liquidation plans are unlikely to cause market shocks as they are subject to weekly sell limits. Initially, these limits are set at $50 million across various crypto assets, which could be raised to $100 million in subsequent weeks and even reach a maximum cap of $200 million if approved by the committees representing FTX's debtors.
He further noted that there are strict controls placed on selling some ‘insider-affiliated' tokens and would require a ten-day advance notice to the committees before they are liquidated. FTX will also be able to hedge its sales of BTC and ETH through an investment advisor after receiving committee approval. In addition, a large part of FTX's SOL holdings will remain locked until 2025 due to the asset's vesting schedule, as are some other tokens that are up for sale.
Crypto Majors in Focus
During this recent high trading volume, Bitcoin whale transactions dropped by around 10%, according to data from the market intelligence platform Santiment. BTC whale transactions are currently at 4,188 transfers, indicating that smaller investors rather than big players could have triggered the recent bullish momentum. Moreover, the total amount of BTC supply on exchanges also plunged to 1.15 million coins, indicating self-custodial accumulation after consistently declining since Sept. 7, per Santiment.
With the largest cryptocurrency by market cap enjoying an uptrend, its market dominance has been on the rise. Bitcoin's market dominance, which tracks its share of the total digital asset market, rose to 50.2% earlier on Monday, near a 26-month high of 52% reached at the end of June when the asset manager BlackRock filed for a spot Bitcoin ETF.
While Bitcoin enjoys more “potential buying pressure” from the ETF listings, altcoins may be on the brink of breaking lower, said Markus Thielen, research head at digital asset services provider Matrixport, in an interview.
Bitcoin could further benefit from the latest regulatory changes proposed by the New York Department of Financial Services (NYFDS), including stricter rules to list and delist cryptocurrencies on exchanges. The agency also updated its list of coins — now only covering BTC, ETH, and six stablecoins — pre-approved by the state for license holders to custody without further regulatory hurdles.
The crypto market's latest advance, which saw Bitcoin spiking to the highest level since Aug. 31, also came as traders bet on greater odds on the Federal Reserve keeping borrowing costs unchanged later this week and through the rest of the year.
The CME FedWatch Tool shows that an overwhelming majority, at 99%, expects the US central bank to leave rates stable between 5.25% and 5.5% this Wednesday. Moreover, it shows a 69% chance of no action in November and a 58% probability of the same in December. The Fed has raised rates by 5.25% since March 2022 to tackle inflation.
The Fed will deliver a policy decision at the end of the Federal Open Markets Committee (FOMC) two-day meeting on Wednesday at 14:00 ET, accompanied by a statement and full forecast update in the Summary of Economic Projections, including a press conference by Fed Chair Jerome Powell.
AZERO Sees Action
While crypto majors are enjoying the bullish momentum, some altcoins have still managed to stand out, such as AZERO. The token surged 12% to climb past $0.816 early on Tuesday, a level last seen about ten days ago. Since then, the price has lost some of its gains but remains well in the green.
The $193.65 million market cap coin is up by 8.5% in the last 24 hours to now trade at $0.8024 while managing $2 million in trading volume, representing a jump of 115.90% from one day ago.
Despite this latest spike in value, AZERO has actually been on a downtrend this year ever since Feb. 19, when the token surpassed $1.86, last seen in May 2022. The surge of 127% in the first two months of 2023 was in line with the broad crypto market, but the altcoin couldn't maintain its gains and is currently down 2.4% this year so far.
The price of AZERO is also down by 22.1% over the past year and has lost 74% of its value since hitting its all-time high (ATH) of $3.09 in August 2022, after entering the market in late Jan. 2022 at $1.23.
AZERO is the native token of the Aleph Zero platform and is used to secure the network through staking, pay for transaction fees, and provide a basic unit of account between multiple subnetworks created on the platform.
Besides being used for validator node staking, the token is also used as collateral for wrapped assets in Liminal as well as to get discounts on decentralized exchange (DEX) swap fees and on fees for asset-wrapping and bridging on Liminal. AZERO is further used in governance voting processes.
The token is currently available to trade on Gate.io, KuCoin, MEXC, HTX (formerly HTX), Bitget, Bitrue, and CoinEx. Back in June, BitMart also added support for the AZERO/USDT pair. AZERO has a total supply of 339,522,888, of which 238,626,499 tokens are currently circulating in the market. Most of the coins (71%) are staked, as per its official website.
Aleph Zero is a scalable, proof-of-stake (PoS) public blockchain that combines a new, peer-reviewed Directed Acyclic Graph (DAG)-based consensus protocol with zero-knowledge proofs (ZK-SNARKs) and Secure Multiparty Computation (sMPC) to increase transaction speed and enhance privacy. Despite using Polkadot's Substrate framework, it is not a Polkadot parachain and has its own sovereign ecosystem.
For privacy, Aleph Zero uses its own software-based multichain privacy layer called Liminal, which is a new approach to making privacy features programmable. Through the ability to keep the private state of smart contracts from other chains on Aleph Zero, it allows developers to either build natively on Aleph Zero or just use Liminal as the privacy Layer 2.
The project successfully updated its mainnet to version 10.0 in March 2023, which brought ink! 4.0 smart contracts to its ecosystem. With this update, all the products became free to be deployed to the Mainnet, contributing to the growth of the Aleph Zero ecosystem.
Aleph Zero Focuses on Development
Founded in 2018, Aleph Zero is a public blockchain platform developed to solve the shortcomings of current infrastructure layers.
In May 2021, the project obtained a no-action letter from the Swiss Financial Market Supervisory Authority FINMA, which classified Aleph Zero's business model as compliant with Swiss law. It also stated that there are no authorization requirements under Swiss financial market law for the issuance of the AZERO coin.
The project launched its mainnet towards the end of 2021, and today, the Zug-based peer-reviewed public blockchain with private smart contracts boasts of fast speed, having 0.9 sec time to finality, and cheap transactions with the average cost per transaction being 0.0003 AZERO.
This week, Aleph Zero took to X (previously Twitter) to share that soon it will be launching Aleph Zero Snap, which is in the audit stage. This comes after the popular wallet MetaMask announced Snaps, which allows users to add features and functionality to their wallet. A Snap is an application built by a third-party developer that adds features and functionality to the wallet.
Earlier this month, the team announced Aleph Zero's involvement in an open-source, decentralized, privacy-enhanced, and composable identity layer of Web3 to enable a user-owned internet. This layer is called idOS, the Identity Operating System, which is built in collaboration with Fractal, Kwil, NEARProtocol, and Gnosis Chain.
Yet to be launched, the idOS is made up of two key elements a dStorage Network of Nodes, which is managed by node operators that host user-encrypted data, usually in the form of W3C Verifiable Credentials, and an Access Management Protocol, which allows users to manage their own data as well as grant or revoke access to third parties like dApps.
About a month ago, the project updated its bug bounty program, which was created in partnership with Immunefi to enhance the network's security. The program has been designed to reward white-hat hackers who assist the project in improving Aleph Zero's robustness, build a more secure network, and safeguard both the blockchain and its user base.
Rewards are distributed according to their perceived harmfulness based on the level of vulnerabilities with critical issues involving up to 50K USD, high-level issues up to 15K USD, medium up to 5K USD, and discovery of low-level issues granting up to 1K USD in rewards.
All of this has been after an eventful June and July when the project reached several important milestones and development targets. During this period, the enterprise-grade blockchain integrated with hardware wallet Ledger, providing users an alternative to store, use, and manage their AZERO coins without compromising their private keys.
With more than 6 million Ledger devices sold worldwide, wallet owners can now leverage their devices to send, receive, and hold AZERO tokens. This integration will also grant Ledger users secure access to the full range of services and features offered by the Aleph Zero ecosystem, including staking, using dApps, DEXs, and more, in the coming future.
During this time, Ariel Gabizon, who has previously been involved with Zcash, Protocol Labs, and Aztec Network, also joined Cardinal Cryptography in an advisory position to help design Aleph's multichain privacy layer Liminal. Polkasafe also integrated the Aleph Zero network to enable users to have an easy-to-use, non-custodial multisig platform and developers to leverage Polkasafe SDK to use its functionalities in their dApps.
Moreover, the Aleph Zero team launched the official Aleph Zero Zealy questboard and the Aleph Zero Podcast. The team also concluded the Mainnet 11.3 update, which improved network stability, block production, and block finalization speed.
On top of it all, this year, the project launched a $50 million Aleph Zero Ecosystem Funding Program to fund innovations from developer teams that expand the capabilities, functionalities, and adoption of the privacy-focused blockchain. This funding program is backed by long-term contributors to the project, including NxGen, Pragma Ventures, BlackDragon, RR2 Capital, Necker Ventures, Hodl.nl and Hodl Ventures, Cardinal Cryptography and Cardinal Ventures, Bellwether Rocks, Offbeat, and Diamond Atlas Capital.
Through its program, which the Aleph Zero Foundation oversees, the project is attracting developers by providing comprehensive support that goes beyond just grants, such as assisting with business feasibility, regulatory compliance, and community-building.
Despite the latest bout in volatility, the crypto asset AZERO remains in a broad downtrend. Not to mention, Bitcoin is currently ruling the market momentum, and altcoins are struggling to find traction and attention. However, all the developments happening in the Aleph Zero ecosystem during the bear market can help the platform when the tide changes and strong bullish momentum returns.