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Bitcoin is holding comfortably above $29,000 ahead of the weekend as it trades at $29,150 at the time of writing. Ether, meanwhile, is exchanging hands at $1,835.
This lull in Bitcoin trading could see some dramatic movement in the near future, as noted by digital asset analytics group K33` in a report earlier this week. The largest cryptocurrency by market cap has been trading in an increasingly narrow spread over the last six weeks, unaffected by macroeconomic and industry events. Based on historical precedent, the crypto asset is headed for more volatile times.
“A deep crypto sleep tends to be followed by a violent wake-up,” wrote K33 Senior Analyst Vetle Lunde. “The market is clearly in an unprecedented stable stage, which has typically acted as a massive pressure valve for volatility once it finally reignites.” In the short term, Lunde believes “the market's volatility pressure is about to climax and that an eruption is near.”
Earlier this week, Bitcoin's five-day volatility sunk below that of the S&P, gold, and the Nasdaq 100, something only seen a few times in recent years, with every occasion preceded by periods of wild price swings. Similarly, Bitcoin's 30-day volatility dropped to near a five-year low while trading volumes contracted to multi-year lows, and derivatives activity declined sharply.
Amidst all this, the total supply of BTC last active over one year ago has declined recently, which indicates some longer-term holders are reducing their holdings, according to on-chain analytics firm Glassnode. At the same time, a slight decline has been seen in bitcoin supply in the age band of five to seven years, though its general direction has been upward.
Despite all this, Web3 developer activity continues to grow both QoQ and YoY, according to Alchemy's latest Web3 Development Report. Crypto and Ethereum wallet software developer kits (SDKs) saw 11.1 million and 26.8 million installations in Q2, respectively. Additionally, about 75.9 million smart contracts were created in Q2 on the Ethereum blockchain and L2s like Arbitrum, Optimism, and Polygon, among others.
A Look at Profitability of Crypto Companies
This week, crypto exchange Coinbase (COIN) reported $708 million in revenue for the second quarter, beating analyst estimates of revenues of $628 million. This had Coinbase (COIN) shares rising about 9% and is now trading at $90.75, up 160% this year.
However, the publicly traded company saw its transaction revenue at $327 million, slightly lower than $375 million in the first quarter. This was due to the total trading volume falling to $92 billion compared to $145 billion in Q1. These poor results “reflect multi-year lows in crypto volatility,” the company said in its shareholder letter.
In Q3, Coinbase reported generating about $110 million in transaction revenue in July. The company expects Q3 subscription and services revenue to be at least $300 million, which came in at $335 million in Q2.
Meanwhile, Coinbase's interest income was reduced by $40 million to $201 million, $151 million of which came from its USDC holdings, which is the 2nd largest stablecoin with a market cap of $$26 bln.
This week, the largest stablecoin Tether (USDT), by market cap of $83.85 billion, released a new quarterly attestation, which showed their amount of assets exceeds $86 billion. And as per the attestation, the company holds $55.8 billion of U.S. Treasury bills, making up roughly 64% of Tether's assets.
The company further noted in its blog that its operational profits are over $1 billion for the time period of April to June 2023, representing a 30% increase quarter over quarter.
Coin Profitability: SHIBA Inu's Price Performance
Token holders are also becoming profitable as prices of crypto assets are making a recovery. This includes Shiba Inu (SHIB) holders with crypto data provider IntoTheBlock, noting that in terms of active addresses by profitability, 36.75 trillion Shiba Inu positions are at the money at the current price.
One thousand seven hundred ten addresses acquired 36.75 trillion SHIB at $0.000008, which means the price is gradually building up major support near this level.
With a market cap of just over $5 billion, SHIB is the 2nd largest meme coin after DOGE and overall the 15th largest crypto asset. SHIB actually accounts for 29.5% of the meme coin sector, which has a market capitalization of $16.9 bln.
As of writing, SHIB has been trading at $0.00000864, up 5.5% in the past 24 hours, while managing $190.8 million in trading volume representing a 42.80% increase from a day ago.
SHIB gains have been steadily growing since mid-June, when it was trading at around $0.00000657. These 30% gains came after the 55.4% drop over the period of more than four months, spanning Feb to June. The beginning of 2023 was a bullish one for the meme coin as it jumped more than 82% in value to $0.00001475. But the subsequent losses put SHIB's gains in 2023 so far at a meager 5.5%.
The token's price is in the green by 10.2% in the past week and 15% in the past 30 days while down 27% in the past year. On top of it, the meme coin is also down 90% from its all-time high (ATH) of $0.00008616 hit in Oct. 2021.
This Ethereum-compatible alternative to Dogecoin (DOGE) was created by an anonymous developer named Ryoshi in August 2020.
The popular meme coin, which started with a total supply of one quadrillion only to be halved later, has a much wider ecosystem than many other meme coins, including an NFT art incubator as well as a decentralized exchange (DEX) called Shibaswap where users can trade and stake tokens without an intermediary with plans for DAO-based governance system called “DoggyDAO.”
The Shiba Inu community has been hard at work on these different products and solutions, and several developments have been made in this regard.
Latest Developments in the Shiba Inu Ecosystem
In its latest attempt to break away from its meme coin status and venture deeper into the decentralized finance (DeFi) space, the Shiba Inu developers are working on a Self-Sovereign Identity (SIS).
SSI is the digital alter ego of identity documents, like driver's licenses and passports, which will give users more control over their personal data and its distribution in the digital world. With SSI, the plan is to tie all the applications to a blockchain-based digital identity to strengthen trust among SHIB users and governments.
According to the developers, the growing interest in data protection and digital identities in the European Union (EU) and Canada could help Shiba Inu position itself in this space. They are effectively laying the groundwork for a new global standard in decentralized digital trust and international identity verification.
“In this way, Shibarium is the herald of a new digital age where faith in systems is restored and enhanced,” Shiba Inu lead developer “Shytoshi Kusama,” told CoinDesk.
The deployment of SSI is a priority for the developers who have already started working with projects in the community, such as those planning to build on the upcoming Shibarium blockchain or are using SHIB.
Shibarium is a layer 2 network built on top of the layer 1 protocol to improve the scaling, enhance speed, and reduce fees. The L2 will utilize other tokens in the Shiba Inu ecosystem, viz. SHIB, BONE, LEASH, and TREAT for apps built on the network.
Earlier this week, the team announced that in the coming days, the remaining supply of BONE will be minted and its contract will be renounced. This was described as the “necessary step” to starting Shibarium, as a significant portion of BONE is allocated to the first role of validators in the upcoming system. BONE will further serve as the “passport to the future” by functioning as a gas token, and the token delegators will bury to acquire rewards along with being used to handle technology governance within the new system.
When it comes to Shibarium, a test blockchain for it has been launched, which has seen meaningful activity in the past months. Until last month, the blockchain recorded 27 million transactions from an estimated 16 million wallets, which has since surged to over 34.6 million transactions from 17 million wallets, indicating high demand.
Not long ago, the beta version of the Shibarium bridge was also released that allows users to move their assets from the Ethereum network onto Shibarium when it launches, allowing them to take full advantage of the L2 scaling solution that is set to remove tokens from circulating to reduce supply and help boost the price. The L2 chain is expected to go live later this month, which has the community excited and the token surging.
Shibarium has been serving as a major catalyst for the growth of various metrics, as seen by momentous records set by the Puppynet testnet. It is also possible that Shibarium will be launched during the Blockchain Futurist Conference in Toronto, Canada, on Aug. 15 and 16, where SHIB lead Kusama will be delivering a speech. Meanwhile, SHIB Metaverse advisor Marcie Jastrow, who is also going to speak at the same event, has promised to present the SHIB Metaverse.
With SHIB investors grappling with inefficient transactions and elevated transaction fees, among other issues, the Shibarium upgrade is expected to mark the start of a new growth era for SHIB by resolving the pain points of Shiba Inu.
Enthusiasts and experts expect the improved and more efficient blockchain infrastructure to attract greater interest and adoption, which, in turn, would fuel the demand for the SHIB token.
In addition to Shibarium, the new burn mechanism is another factor contributing to SHIB's value. The rate at which SHIB tokens are burned, which means completely removed from circulation by sending them to dead wallets, has been increasing recently, with millions of SHIB meme coins being burned daily.
According to Shibburn, a website that tracks SHB token burns, a total of 410.65 quadrillion tokens are burned from the initial supply, while just over 589 quadrillion SHIB are now circulating on the market.
Besides these developments, the number of addresses that hold the meme coin has hit an ATH. According to IntoTheBlock, SHIB now boasts 3.51 million wallets after the count of SHIB wallets rose by 115% per week.
On another note, on-chain data shows that 3.3 trillion SHIB tokens worth more than $28 million were pulled out of centralized cryptocurrency exchanges (CEXs) throughout the month of July. According to crypto analyst Ali Martinez, this drop belongs to crypto trading platforms. This outflow also coincides with bankrupt crypto lender Voyager selling billions of SHIB tokens in July.
On top of it all, the largest crypto exchange Binance announced the addition of several new loanable collateral assets on Flexible Loan and VIP Loan on Friday, including SHIB. This sparked conversations about a potential listing of BONE on the platform, which, as talked about above, will be a crucial token for applications built in the Shibarium ecosystem.
BONE, which has gained various crypto exchange listings, including HTX, Crypto.com, and OKX, also recorded bullish momentum. The token has rallied 25% in the past week and is up over 58% in the past month and 86.5% over the past year though still down 89.3% from its peak.
SHIB was one of the most volatile and best-performing crypto assets of the 2021 bull market. Even the significant drop in its price over the last two years still has the coin among the top 20 cryptocurrencies by market cap. Not to mention, SHIB is up 15,131,023% since its Nov. 2020 low of $0.000000000056366.
Unlike the original meme coin DOGE, SHIB has been working on expanding beyond just the meme coin narrative, which could be both bullish or bearish for the token. On one hand, being just a meme coin means the upside potential is unlimited, with the platform usage, revenue, and adoption not affecting the price. On the other hand, if different products in the Shiba Inu ecosystem continue to gain traction, this can work in the token's favor and see it rising far beyond the last ATH. But that remains to be seen!
Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.