5 Things to Know in Crypto: BTC Hovers Near $24K as Markets Await Fresh Catalysts

Key Points

• Cryptocurrency markets continue to trade in a subdued mood on Tuesday ahead of US housing and industrial production data.
• Bitcoin was last trading near $24,000 and flat in the last 24 hours, while ETH was just under $1,900.
• stETH’s discount to ETH suggests a slim chance of a bumpy Ethereum merge, says Enigma Securities.

Crypto Markets Rangebound Near Recent Highs

Cryptocurrency markets continue to trade in a subdued mood on Tuesday, with Bitcoin and Ethereum still fairly close to multi-month highs hit over the weekend and seemingly still in technical uptrends. BTC was last changing hands almost bang on the $24,000 level and Ethereum just under $1,800, with both little changed in the last 24 hours according to CoinMarketCap.

Cryptocurrency markets were buffeted on Monday by conflicting forces. Weak tier one Chinese economic data (plus some weak tier two US data) sparked renewed concerns about slowing global growth, weighing on sentiment, but strength in the US equity space and a pullback in US yields supported big tech/growth names helped give cryptocurrencies a floor. Bitcoin is currently about 5% below weekend highs in the low-$25,000s and Ethereum is about 7% off weekend highs just above $2,000.

Looking ahead, US Housing/Building Permits and Industrial Production data are due and will keep the US macro conversation focused on growth ahead of Wednesday’s US Retail Sales report and the release of FOMC minutes from the July meeting. Fresh signs of economic weakness aren’t necessarily bearish for crypto if they are coupled with a pullback in Fed tightening bets.

stETH Discount to ETH Implies Slim Chance of Bumpy Ethereum Merge

The current discount of Ethereum derivative Staked Ether to the actual ETH price (just under 3% on Tuesday morning) implies 6.25-6.5% chance that the Ethereum network’s upcoming merge will come with major bugs/delays, said crypto analytics firm Enigma Securities in new research released on Monday. Staked Ether or stETH is a token issued by Decentralized Finance (DeFi) protocol Lido that allows users to freely trade ownership of Ethereum tokens that have been staked.

Enigma calculated the above by treating stETH like an ETH bond with a 4% annualized yield. Enigma analyst John Freyermuth said on Monday that while “the market has high confidence in the Merge… until that risk premium shrinks to match the staking yield, stETH price supports the view that the Merge is not priced in”. Optimism about the upcoming Merge supported ETH last week after developers implemented the final major trial run of the upgrade on Ethereum’s Goerli testnet.

Crypto Investment Products See Weekly Outflows for First Time in Six Weeks, Profit-taking at Play?

In the week up to last Friday, cryptocurrency-linked investment products saw outflows of $17 million, the first weekly outflow from the asset class in six weeks, according to CoinShares’ latest weekly report. Bitcoin investment products saw $21 million in capital leave, while Ethereum and Tron saw $100,000 in outflows and Cardano and XRP $200,000 in outflows.

CoinShares’ investment strategist James Butterfill said in the report that it’s “difficult to discern if this is a meaningful change in sentiment given its small size, although minor outflows were seen across a broad set of providers”. “It also comes at a time of low trading volume and a recovery in prices, suggesting there could be an element of minor profit-taking,” he suggested.

BitGo to Sue Galaxy Digital for $100M For Scrapping $1.2B Merger

Crypto custody firm BitGo plans to sue cryptocurrency financial services provider Galaxy Digital for $100 million after the latter backed out of a $1.2 billion merger agreement. According to BitGo, Galaxy agreed to pay a $100 million termination fee during merger talks, but is now refusing to pay up.

According to Galaxy Digital spokesperson speaking to the crypto press, “BitGo’s claims are without merit and we will defend ourselves vigorously… BitGo did not provide certain BitGo financial statements needed by Galaxy for its SEC filing”. “The attempt by… Galaxy Digital to blame the termination on BitGo is absurd,” said a lawyer working on behalf of BitGo. “Either Galaxy owes BitGo a $100 million termination fee as promised or it has been acting in bad faith and faces damages of that much or more,” Timmons said.

CryptoPunks TV Show? Meebits Food Truck? Both Now Possible as IP Rights Get Released

Yuga Labs just released the intellectual property rights for the CryptoPunks and Meebits non-fungible token (NFT) collections, which means the owners of these NFTs will be able to use them in commercial operations. Yuga Labs, the creator of the world’s current most popular/valuable NFT collection, the Bored Ape Yacht Club (BAYC), had bought the intellectual property rights to the CryptoPunks and Meebits NFTs earlier in the year.

Yuga labs said that owners of the NFT would now be able to use them within their “TV shows, food trucks, clothing… just like the Bored Ape Yacht Club community has been able to do with their NFTs”. Yuga Labs cited a recent BAYC success story; “Snoop Dogg and Eminem’s BAYC music video was nominated for a VMA, a video they were able to make because of rights like these”.