• Network fees for both Bitcoin and Ethereum dropped to their lowest in two months as on-chain activity faded in spite of the GBTC news.

• Bitcoin recorded modest inflows into CEXs of just $5M this week, and $170M in net outflows throughout August.

• Ether continues to record larger outflows, with $380M leaving CEXs this week and a approximately $1.5M this month.

In June 2022, Grayscale sued the SEC after being rejected to turn its GBTC fund into an ETF, according to IntoTheBlock. Over a year later, this week the US courts ruled 3-0 against the SEC's decision, deeming it "arbitrary and capricious".

Price of GBTC relative to its Bitcoin holdings has been increasing in 2023, says the report:

• The value of GBTC has increased 125% this year, more than double than Bitcoin's 62% rise
• After winning the court case, GBTC's discount has narrowed to 18% its lowest since December 2021
• The narrowing discount suggests the market is placing higher odds on Grayscale's transition to an ETF going through, which would enable users to withdraw their BTC at par and thus arbitrage the discount down to 0

GBTC's conversion into an ETF has not been approved yet, but there are signs that institutional investors are getting optimistic in Bitcoin as ETF decisions approach. 

Evolution Of Long-Term Holders

$1.5B Accumulation - Addresses holding 0.1% of the Bitcoin supply or more have added over a billion and a half in BTC holdings in the last two weeks.

• An initial spike in accumulation of 24k BTC took place after the drop to $25k, was followed by another increase in August 23 and then one of 20k BTC the day of the Grayscale ruling
• Comparing this to Bitcoin CEX netflows, which have been close to $0 as previously discussed, suggests that there is organic buying demand rather than just funds moving to exchange addresses

It's not just large investors that appear to be buying Bitcoin, the broader market also appears to be growing on-chain. 

Record High Holders - The number of addresses holding Bitcoin has reached over 48 million for the first time

• After dropping slightly in July, the number of addresses holding Bitcoin broke a new high this week
• Many of these new addresses seem to be from retail investors, since the number of addresses with less than 1 BTC but more than 0.001 BTC (~$26) reached a new high of nearly 23 million

Although the court's decision in favor of Grayscale appears to be bullish for the GBTC premium, Bitcoin prices are back to where they were roughly prior to the ruling. This casts some doubts about where Bitcoin's price may be going next, but institutional holders' accumulation suggest they are optimistic.

Important Research

As decentralized finance, or DeFi, continues to evolve and mature, the concept of total value locked – a measure of how much money users have stashed in a given protocol – has also gained significant attention.

Originally focused on digital assets such as cryptocurrencies, TVL has expanded to include tokenized real-world assets (RWA), providing a more comprehensive understanding of the assets represented on-chain. These tokenized assets are typically held in smart contracts on a blockchain network, and according recent investigation. 

While integrating RWAs into the TVL metric is still in its early stages, with only about $300 billion locked on-chain, the current state of the blockchain layer-1 and layer-2 landscape shows the following figures representing TVL as of July 2023.

Most blockchains’ TVL is largely representative of digital assets, such as cryptocurrency and NFTs, although there are a select few notable blockchains whose TVLs are heavily weighted to RWAs.

A great example is Provenance Blockchain, which has an overall TVL of $9.3 billion, of which more than $8.1 billion is from real-world financial assets, such as home equity line of credit (HELOC) loans, private equity and alternative asset funds.

NFT Trading Volume

The monthly trading volume of Ethereum-based NFTs hit its lowest level in two years last month as activity on marketplaces OpenSea, Blur, LooksRare and X2Y2 dried up, according to the last TheBlock Report.

Trading volume fell to $407 million in August, according to The Block’s data dashboard — a 32% decline from July’s $599 million and marking the lowest trading volume since June 2021. 

Also, the report say that OpenSea — which once dominated the NFT marketplace landscape and fielded investment offers at a $10 billion valuation — also saw its lowest active-user count since July 2021, according to Dune Analytics. OpenSea active users fell 12% to 126,000 in August.

In addition, Solana, another blockchain popular for minting and trading NFTs, hasn’t fared much better, with daily trading volumes on Solana-based NFT marketplaces falling below $1 million for the first time since September 2021.

From our point of view, the NFT market has been falling due to a little disorder due to the amount of supposed works of art that are being produced daily.

It seems that now any image or video can be considered as such: a piece of art simply to make a quick buck. But, we well know that the main objective of NFTs is to digitize what really has value to save memory.

Interesting Fact

As volatile as this week has been in terms of #Bitcoin price action, overall the market is in a better position because of it.

Open interest as a % of market cap fell to 1.32%.

All leverage built up over the summer has effectively been wiped out.

My base case remains: a relatively slow, mostly sideways rise, with leverage-induced volatility here and there. The highly illiquid supply awaits a demand catalyst that will result in Ngu.

A significant downward movement is highly unlikely as those who hold the majority of currencies are price agnostic.

Also, there is a paradox: good money must be scarce (difficult to produce) but also widely distributed.

For example, the Mona Lisa, although scarce, would bring little money because it is not widely distributed, nor is it divisible, nor is it easily transportable.

Bitcoin has satisfied this seemingly contradictory requirement for good money through its programmatic supply schedule.

Over time, it becomes more difficult to craft due to halves and difficulty adjustments.

However, it is also becoming more widely distributed. Note that the supply held by addresses holding less than 10 BTC ceaselessly hits new highs.

• Scarce ✅
• Widely distributed ✅
• Fungible ✅
• Portable ✅
• Durable ✅
• Divisible ✅

No other tool comes close to possessing as many desirable monetary properties as BTC. There is literally no second best.

Data That Can't Lose

🟠 Bitcoin withdrawals from exchanges are outpacing deposits at the highest rates since the FTX collapse❗️

There are currently 58,000 BTC (red) being withdrawn for every 45,000 BTC deposited (green) 👀.

Additionally, Bitcoin's long-term holder supply continues to hit new highs, while the short-term holder supply continues to hit new lows.

Price action will change dramatically:

1. When we have more people doing DCA.
2. When ETFs are approved and there is a steady inflow of new capital from pension funds.
3. When the Fed starts to ease financial conditions.
4. When the supply of new coins is halved.

All of this will inevitably occur over the next 5 to 18 months and with record liquidity on the supply side. Don't let short-term price fluctuations distract you from the generational wealth creation opportunity.

Another interesting fact is that Bitcoin open interest added to the Grayscale lawsuit has been wiped out. Liquidity drying up. But crypto-margin is about to make a YTD high.

In other hand, Exchange Depositing Transactions (SMA 7d) dropped to a 5-year low, reaching 30,798 BTC per day, a similar figure was recorded on December 11, 2016. People do not want to sell BTC. The supply deficit will continue to stimulate growth.

Altcoin World

Maker (MKR), the governance token behind MakerDAO and the Maker Protocol, has experienced a 15% price increase over the past week, according to the last report from Criptonoticias.

Last Friday, the token was priced at $991, while it is currently trading at $1,165, with a market capitalization reaching $1.3 billion.

The growth of the coin these days corresponds to the expectation generated in the community by possible announcements that MakerDAO will make at Ethcon Korea 2023, an Ethereum developer conference that takes place between today and September 3.

Within the framework of this event, the organization plans an activity called the SubDAO Genesis Event, where CeFi and DeFi developers, investors, leaders and innovators will be able to learn about SubDAOs.

Binance Coin (BNB) may be ready for a move north, steered by a resurgence by the bulls, according to FxStreet.

Based on Santiment’s Weighted Sentiment metric, social volume for BNB has been on a steady rise over the last week, with the vast majority of positive messages concerning the token also improving at the same time. 

Similarly, open interest for the token is significantly high at the start of the month, nearing the $400 million mark at $368.77 million at the time of writing.

According to data analytics platform Santiment, whales holding 1 million to 10 million tokens scooped up 586 million ARB between August 14 and 31, and as wrote FxStreet . This 77% uptick in their holdings indicates that the investors bought the dip, which is a bullish sign for the token’s price. 

Also, ARB Santiment’s 30-day Market Value to Realized Value (MVRV) hovers around -16% for Arbitrum, which indicates that ARB holders who purchased the token over the past month are at a 16% loss.

The last two times ARB dropped to this level were May 8 and June 14. Each time, Arbitrum price saw a 25% and 35% upswing, respectively, in the following three weeks.

Every Day We Can Learn

As a summary, we can affirm that the cryptocurrency market, and despite the low sentiment on the part of large investments, continues to grow exponentially.

Years ago Bitcoin was the main asset of the digital economic ecosystem. Today, we see that various networks or scalable solutions have been created that allow many to diversify their own economy.

For this reason, our personal advice is: do not look at the price, evaluate projects that will have a high reputation in the long term. To this must also be added the fact that the game changed. That is, the big capitalists entered and all of us must change our perception of seeing the economic ecosystem that the cryptocurrency market is having.

With the game changing, it's good to get used to price lateralization and constant manipulation by alternative media. The cryptocurrency market and its derivatives are now almost part of the entire global economy. Therefore, do not be surprised when the entry of all the capital from the traditional financial markets arrives.

Last article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. Remember that all information presented here is a combination of third party data added to our personal opinion.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Rubikkav.

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