Weekly Newsletter - 9/9/2022
- Ethereum’s Bellatrix upgrade, the last step before the merge has been successfully activated
- US dollar index continues to break new highs putting further selling pressure on risk-on assets
- Bitcoin bounced back above $20,000 on the US dollar dip, up 8.7% in a day
- Staked ETH (stETH) price discounts widens to the highest since June ahead of the ETH Merge
- Binance Chain makes a significant scaling breakthrough with its new zkBNB
Bellatrix activated, next stop: ETH Merge: The Bellatrix upgrade was activated at epoch 144896 on the Beacon Chain at 11:34 AM UTC. Bellatrix is the final pit stop to update the Ethereum consensus layer before the Merge happens on 15 September. During the hard fork, about 5% of validators dropped offline contributing to 9% missed block rate. This could be due to configuration issues or some clients having major bugs on the validator end, but it should not be considered a major concern as they are relatively easy to recover from.
DXY breaks new highs as the Euro energy crisis continues: Both the Japanese Yen and the Euro have tumbled to new lows against the USD in more than 20 years. Aside from Fed’s firm stance to clamp down inflation by raising rates (expected 75 bps hike in Sep), Russia cutting off gas supplies to Europe could cause even more supply-side inflation and potentially require more printing to cover up the differences. Since 58% of the DXY is made up of Euros, it could push the dollar value up even higher, putting selling pressures on risk-on assets.
Bitcoin bounced above $20,000 as a much-anticipated “short squeeze” took hold: BTC/USD topped $20,000 on September 9, adding as much as $2,700 (8.7%) in hours on the day, reaching its highest since Aug 26. Ethereum also rose 4% to $1,705. According to Coindesk, as traditional market investors shrugged off Federal Reserve Chairman Jerome Powell's pro-liquidity tightening stance, risk assets, including cryptocurrencies, may draw strength from sliding inflation expectations and prospects of renewed monetary easing next year.
Staked ETH trading at a discount as users consider risk factors: Lido’s staked ETH (stETH) is currently trading close to a 5% discount from ETH (on 6 Sep) according to data from Dune Analytics. The discount could be attributed to the opportunity cost of potential gains from ETH forked tokens and market participants that are factoring in Merge execution risks, smart contract risks or any other systemic risks.
BNB chain doubled down on scaling with zkBNB: BNB Smart Chain released the zkBNB testnet on 2nd September, allowing developers to extend the functionality to their specific use cases. zkBNB leverages the security of BNB Smart Chain by rolling up all sidechain transactions into a zkSNARK (succinct non-interactive argument of knowledge). The new release will boost performance with an ability to support 100m addresses and handle 5-10k TPS.
This week, Matrixport highlights its innovative structured trading product, “Buy-below-market” to help investors seize trading opportunities in times of high volatility. The “Buy-below-market” product enables users to buy BTC at a discount. Users will first select a price range and tenor, and if the BTC settlement price remains within the range at expiry, the stablecoins invested will be converted into the target asset at a discounted price. When BTC settlement price gets out of the range, guaranteed annual yield will be earned in stablecoins.
This product is considered suitable for dip hunters, DCA investors and long-term HODLer for the next Bull cycle. Check it out under the “TRADE” menu on your Matrixport App.
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Matrixport CEO, John Ge, published an article on Milken Institute on ‘Why DeFi Is Central to a Financially Inclusive Future’. Key points highlighted were the growth trajectory of DeFi related to the evolution of mobile technology, as well as the financialization of all assets and the value that could be unlocked from it. Read the full article here.
This week, Matrixport announced a new partnership with Bloom, a shopping rewards app that allows users to earn points, NFTs, and cryptocurrencies by spending. Bloom has linked up with 80 merchant brand partners and is currently working with several online travel agencies such as Trip.com, Expedia, KLOOK, and Hotels.com. Be an early bloomer and check out more here.
With inflation casting a huge shadow across crypto and the global economy, Goldman Sachs forecasts that UK inflation could jump to 22% next year. Matrix Asset Management 's, Damien Loh shared his thoughts with Forkast.News on how we can position ourselves as crypto traders in the midst of this market:
1. Invest in digital assets as they are a hedge against inflation in the long term;
2. Expect a paradigm shift in favour of digital assets;
3. Central banks' hawkish stance has not fully priced in inflation.
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