After starting the week above $28K only to fall back down, Bitcoin briefly surged above $28,000 again on Thursday before dropping to as low as $27,300 as traders took the opportunity to sell the rally. Now, as of writing, BTC/USD has been trading at $27,683.
The ongoing rally is expected to be short-lived due to the lack of new market capital. However, a durable price appreciation can materialize early next year, which will also see Bitcoin halving in April.
Former BlackRock managing director Steven Schoenfield, the current CEO of MarketVector Indexes, is actually expecting the US Securities and Exchange Commission (SEC) to approve a Bitcoin Spot ETF in “three to six months.”
This is due to the Commission's recent decision to delay giving verdicts on several pending ETF applications, which is unlike previous delaying tactics by the regulator.
“Instead of completely rejecting the whole list, they've asked for comments, which is a marginal but significant improvement in the dialogue,” said Shoenfield. Additionally, the SEC lost in the Grayscale lawsuit, “which means they're most likely going to have to allow the Grayscale Bitcoin Trust to be converted into an ETF.”
Schoenfield's comment came during a panel discussion on ETFs at CCData's Digital Asset Summit in London earlier this week, where he was joined by another ex-BlackRock director, Martin Bednall, who said the SEC could approve all the ETF applications at the same time in order to not give anyone first mover advantage. Still, Bednall believes BlackRock's brand and resources will give it a first-mover advantage should the agency approve Bitcoin Spot ETFs.
Meanwhile, Shoenfield believes “Blackrock will be in for quite a fight,” given the number of firms deeply committed to tradable digital assets and being “much closer to the crypto ecosystem” than the top asset manager, which has $9.42 trillion in assets under management (AUM). He also said that Spot Bitcoin ETF approval may result in a “$150 to $200 billion inflow” into Bitcoin investment products over three years.
Ether's Subdued Performance
Amidst this, investment research firm ByteTree upgraded its BTC market signal from neutral to bull as the crypto's recent price action defies a rough period for traditional financial markets.
“Bitcoin futures look good, especially when you compare them to the crisis in the bond market,” Charlie Morris, chief investment officer of ByteTree, said in the report. “It is the true safe haven from Uncle Sam's bonds.”
He pointed out that the leading crypto asset is beating the U.S. stock market at a time when surging bond yields are wreaking havoc on traditional markets. Yields have risen to their highest levels in over a decade and a half, and according to Morris, when the bond sell-off ends and rates top out, Bitcoin will be “off to the races.”
However, at the same time, Edward Moya, senior market analyst at forex trading firm Oanda, noted, “What is also preventing crypto investors from becoming more optimistic is that the bond market sell-off refuses to end, and that will cripple many crypto startups.”
While Bitcoin is still in the green by 2.3% in the past week, Ether took a bigger decline and is now trading at $1,633, down 2.5% in the past seven days. With that, ETHBTC has fallen below 0.06, a level last seen in July 2022.
This comes after the dismal performance of ETH futures ETFs, with less than $2 million traded across the various ETFs on Monday. Amidst this, JPMorgan (JPM) noted in a research report on Thursday that the rise in Ether staking since the Merge and Shanghai upgrades has come at a cost to the Ethereum network becoming more centralized and the staking yield falling from 7.3% prior to Shanghai to now 5.5% while yields rise in traditional financial assets. As such, the increase in staking has reduced the appeal of Ether from a “yield perspective.”
Analysts led by Nikolaos Panigirtzoglou pointed out that the decentralized liquid staking platform Lido is gaining traction as a “better alternative” to its centralized counterparts. Meanwhile, Lido has been adding more node operators to address centralization concerns to contain the number of staked Ether being controlled by a single operator.
Besides centralization creating risks of a single point of failure for Ethereum, there's also the added risk of rehypothecation from the rise of liquid staking, the bank said.
“Rehypothecation could then result in a cascade of liquidations if a staked asset drops sharply in value or is hacked or slashed due to malicious attack or a protocol error,” the note added.
Volume Continues to Decline
A recent report by CCData meanwhile reveals that the trading volume continued to decline in September, with the combined spot and derivatives trading volume on centralized exchanges (CEXs) dropping by 20.3% to reach $1.67 trillion. This comes after the combined monthly volume of spot and derivatives trading fell 11.5% in August to $2.09 trillion, the second-lowest monthly total since October 2020.
The continued decline can be attributed to a lack of market volatility and the seasonal effects typically observed in the third quarter, resulting in the lowest quarterly volumes since the fourth quarter of 2020.
Binance's spot market share, in particular, took a brutal brunt as it fell for a seventh consecutive month. The trading platform's spot market share dropped to 34.3% in September from 38.5% the previous month and 55.2% in January. Meanwhile, its market share in derivatives fell to 51.5% from 62.6% earlier this year.
According to crypto researcher Kaiko, the top eight platforms account for nearly 92% of depth and 90% of volume, with Binance accounting for over 30% of global market depth and more than 60% of worldwide trade volumes.
“Highly concentrated crypto markets are both a good and bad thing. There is undoubtedly a shortage of liquidity, which, when spread thin across many exchanges and trading pairs, can exacerbate volatility and disrupt the price discovery process,” wrote Kaiko's Dessislava Aubert and Clara Medalie in a note.
Some Altcoins Still Seeing Positive Action
All these sentiments are weighing on cryptocurrency prices that have the total market cap down by 0.2% to $1.13 trillion. Some altcoins are still in the green, including CHSB. The $171.69 mln market cap token jumped 29% in value this week to hit $0.1822 late on Thursday.
At the time of writing, CHSB is trading at $0.184 while managing $563.5K in 24-hour trading volume. The token is up 44.3% in the past 30 days but down by 6% over the past year.
As for 2023, the broad market trend has been downward for the token, much like most crypto assets. CHSB started the year around $0.195 and went as low as $0.10 in mid-June. Since then, the altcoin has tried to make a recovery, and the price has been trading between the $0.12 and $0.15 range before CHSB rallied 52% over the past two weeks.
Launched in the open market in early 2018 at around $0.9145, CHSB went on to hit an all-time high (ATH) of $1.64 in May 2021. However, since then, it has lost 88.8% of its value.
CHSB is the native token of SwissBorg, a wealth app that aims to connect different cryptocurrency exchanges to give users a single place to trade crypto using traditional fiat currency.
During its initial coin offering (ICO), SwissBorg minted the maximum supply of 1 billion CHSB tokens, and all of these tokens have been released in the market. About 38% of all CHBS tokens were allocated to community sales to the public, while 20% was distributed among team members as rewards, with close to 10% going to strategic investors and 15% being dedicated to the second round of funding for the project. Another 14% went to experienced investors who had already shown interest in the project.
As a multi-utility token, CHSB unlocks exclusive premium benefits such as 0% fees, as well as doubling the yield earned on Smart Yield accounts on several cryptocurrencies. The CHSB Yield Program, meanwhile, revolutionizes earning on your crypto by linking the yield paid to the performance of the SwissBorg ecosystem. Moreover, 20% of the revenues from fees are dedicated to buying CHSB tokens, which are then burned. The CHSB token further grants its holders the right to participate in the network by helping shape the future of the SwissBorg platform.
SwissBorg Prepares for CHSB Migration
With the banking industry lacking digitalization and decentralization while the blockchain network experiencing exceptional growth but with limited financial management services, SwissBorg decided to focus on providing a community-centric financial framework. It was founded by Cyrus Fazel and Anthony Lesiosmier, and SwissBorg's official whitepaper was released in Nov. 2017.
Headquartered in Switzerland, SwissBorg holds a Virtual Currency License, which allows the platform to provide its exchange and wallets internationally.
The company's flagship product, the SwissBorg app, is empowering over 700,000 verified users to buy, sell, and exchange digital assets, with features like Portfolio Analytics and AI-powered asset analysis to help them make smart investment decisions. Their Smart Yield wallet, meanwhile, gives users the opportunity to earn yields.
Back in Dec. 2022, the digital wealth management platform launched its new Multi-Asset Launchpad, which simplifies access to private markets such as equity, real estate, and other securities. At the time, the Multi-Asset Launchpad Series A raised over $4 mln from institutional and retail investors within 24 hours.
Last month, the company announced a significant fee reduction for its Thematic platform, which provides its users with expert due diligence, dynamic reallocations, and strategic rebalancing.
“Not only are we advancing its technology with big announcements on the horizon, but we're also introducing a more affordable fee structure to make our flagship wealth management product more accessible than ever before,” announced the team.
The platform comes with two fee tiers, with the standard one charging 0.4% per month and 4.8% annualized. Now, under the new fee structure, the subscription fees have declined by 37.5% to 0.25% per month and 3% annualized. The next tier, Generation & Genesis' subscription fees, have been cut down by 43% from 0.35% per month to 0.20% and from 4.2% to 2.4% annualized.
In the month of August, SwissBorg also announced the migration of its native token CHSB to BORG as part of a strategic move to establish the company's presence more firmly within the DeFi space. “By leveraging innovation, employing rigorous security standards, and aligning with the core principles of decentralized finance, we are positioning ourselves at the forefront of the DeFi movement,” noted the team at the time.
This migration is scheduled to take place in the coming weeks, with CHSB to BORG migration to commence on October 17th, 2023, and is expected to take up to 5 days to complete. For every 1 CHSB token one holds, they'll receive 1 BORG token.
Those holding CHSB tokens within the SwissBorg app aren't required to do anything, as they will be automatically converted into BORG. But those holding tokens in an external wallet have to transfer CHSB back to the SwissBorg app before the migration kicks off.
With this migration, the token's overall supply will remain the same at 1 billion tokens, minus any that have been burned, to ensure the consistency of the token's value and scarcity.
The BORG token will be based on the OpenZeppelin ERC-20 standard on Ethereum to provide a robust and secure framework. It will be multichain compatible right from the start, allowing for enhanced scalability and efficiency.
With this new token, the idea is to provide substantial utility to CHSB holders as it will enable the on-chain generation of true organic yield with the BORG token in the DeFi ecosystem. Through this move, SwissBorg aims to provide an authentic yield resulting from active participation in the DeFi ecosystem, which is expected to become a reality in somewhere around late Q4 2023 to Q1 2024.
While Bitcoin hovers above support levels and Ether has lost nearly all gains since the past week, altcoins like CHSB are still managing to spike in value as the underlying protocols continue to focus on development.
The ongoing rally is expected to be short-lived due to the lack of new market capital. A durable price appreciation can materialize early next year, which will also see the Bitcoin halving in April.