What happened this week in the world of blockchain and cryptocurrencies? The most relevant local and international events, along with engaging background reports, concisely summarized in the weekly review.
Selected articles of the week:
Including crypto assets in traditional portfolios can improve the risk-return ratio. Bitcoin and Ethereum have a low correlation with other asset classes, making them effective diversification tools. During the COVID-19 crisis and the March 2023 banking crisis, BTC and ETH showed stronger correlations with gold, highlighting their role as a hedge. Backtests with a 60/40 portfolio show that even small allocations to BTC or ETH improve risk-adjusted returns, especially with quarterly rebalancing. Interestingly, timing plays a minor role, as crypto investments outperform the benchmark in most cases.
Over the past few weeks, MicroStrategy acquired an additional 18,300 Bitcoin (BTC) for approximately 1,11 billion USD.
Regulated Stablecoins on the Rise: MiCA Changes the Market
The introduction of MiCA compliant stablecoins has stimulated the market. Since the MiCA regulation came into effect in Europe on June 30th, Circle’s EURC and USDC stablecoins have seen a significant increase in trading volume. USDC in particular has led the demand for regulated stablecoins, reaching a weekly trading volume of $23 billion, up from $9 billion last year. However, the market is still dominated by non-compliant stablecoins, which may change in the coming months as exchanges such as Binance and Kraken have already imposed restrictions on non-compliant stablecoins.
PostFinance is entering the crypto trading market and aims to become the leading Swiss retail bank for digital assets.
FDV and Tokenomics: The Key to Long-Term Success in the Crypto Market
Fully Diluted Valuation (FDV), a critical component of cryptocurrency valuation, represents the potential total value of a project if all tokens were in circulation. High FDVs can deter investors due to the possibility of future dilution. Memecoins that release all their tokens at launch avoid future selling pressure and maintain consistent popularity. To build investor confidence and achieve long-term success, crypto projects should focus on improving their tokenomics.
What is DeFi and what is it used for? Basics and explanations, as well as additional resources, in the CVJ.CH Academy.
Liquidity and Volatility: The Impact of Bitcoin ETF Introduction in the USA
The introduction of bitcoin ETFs in the US has significantly changed the market structure. Following the approval in January 2024, trading volumes increased, particularly around the US market close (3-4 pm New York time), due to the calculation of the net asset value (NAV) of the ETFs. This increased activity led to improved liquidity and price discovery, but also increased volatility. In contrast, ETFs launched in Hong Kong had minimal impact. Overall, U.S. markets are benefiting from higher trading volumes and improved liquidity, although this has significantly reduced weekend trading activity.
Solana remains stable despite FTX/Alameda transfers, with advancing innovations such as the Seeker mobile and the Firedancer client.
Blockchain Trilemma: The Ultimate Challenge of Decentralized Technology
Furthermore, blockchains are considered superior to traditional networks, but no blockchain can simultaneously achieve maximum scalability, security and decentralization – the so-called blockchain trilemma. Developers are working on various solutions to overcome this challenge, but perfect approaches have yet to be discovered.
A summarizing review of what has been happening at the crypto markets of the past week. A weekly report in cooperation with Kaiko.
