Solana Soars as Bitcoin and Ether Consolidate, Avalanche Partners With JPMorgan and Apollo, and Equi

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14 Feb 2024

Solana Soars as Bitcoin and Ether Consolidate, Avalanche Partners With JPMorgan and Apollo, and Equities Rise as Inflation Continues to Cool

TEAM GEMINI
Welcome to our Weekly Market Update.* Explore weekly crypto price movements, read a quick digest of notable market news, and dive into a crypto topic — this week we discuss private and consortium blockchains.
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TokenChange*Price**Bitcoin

BTC

-3.67%$35,976ViewEther

ETH

-8.42%$1,916ViewCryptex

CTX

+145%$2.326ViewYearn.finance

YFI

+94.70%$14,143ViewAvalanche

AVAX

+52.80%$20.955View

*Percentages reflect trends over the past seven days.
**Crypto prices as of Friday, November 17, 2023, at 11:45am ET. Check out the latest crypto prices here. All prices in USD.

Takeaways

Bitcoin and ether dip early, but recoup some gains later in the week: Bitcoin and ether had a sudden drop on Tuesday as equity markets roared following a favorable inflation report. Both cryptos, however, retraced losses quickly. Ether was also boosted on Thursday as BlackRock filed its S-1 for a spot ether ETF with the SEC.
Solana’s upward trajectory continues as Cathie Wood touts the network: Solana gained ~8% this week as ARK Invest CEO Cathie Wood praised the network’s speed and cost-effectiveness in a CNBC interview. Solana has rallied ~150% over the past 30 days and is up more than ~325% over the past year.
Equity markets soar as inflation cooled in October: Lower-than-expected inflation data released on Tuesday fueled a strong rally across equities, with the S&P 500 and Nasdaq both gaining over 2% on the day. The favorable inflation data suggests we may be nearing the end of the Fed's interest rate hiking cycle, which has brought rates to a 22-year high.
Avalanche partners with JPMorgan and Apollo to bring blockchain to portfolio management: Avalanche announced a partnership with J.P. Morgan and Apollo Global Management during this week’s Singapore Fintech Festival to use blockchain technology in portfolio management. The initiative, overseen by the Singapore Monetary Authority’s (MAS) Project Guardian, plans to leverage blockchain smart contracts and tokenization to automate and simplify portfolio management.

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Bitcoin and Ether Have Mixed Week, But Hold on to Recent Gains

Bitcoin (BTC) and other tokens saw a sudden drop on Tuesday, with BTC dipping to the ~$35k level and ether (ETH) dropping to around $1,950. There has been chatter of at least an eight-day window for the SEC to approve 19b-4 applications for spot bitcoin fund issuers, but no approval has been reported, which may have contributed to the price actions stalling out. However, the two largest cryptos quickly regained an upward trajectory.
Three spot bitcoin ETF applicants, Franklin Templeton, GlobalX, and Hashdex, had SEC response deadlines on Friday, with Hashdex’s application being delayed before the deadline as of Friday morning. Commentators expect the other two to be delayed. As of Friday, BTC was sitting around the $36k level.
On Thursday morning, ETH prices were boosted by BlackRock filing an S-1 prospectus for its spot ether ETF with the SEC. The filing was not widely expected by the market and bolstered ETH prices, which has been lagging BTC prices in its recent run up. On Friday, ETH was hovering above $1,900.

Solana’s Rise Continues as Cathy Wood Touts the Network’s Speed and Cost

Solana (SOL) continued its rally of the past couple months to well above $60 by midweek. By Friday, SOL had gained another ~8% over the week, adding to an impressive run which has seen the price rally ~150% over the past 30 days. SOL is up more than 325% over the past year. As of Friday morning, SOL was sitting around $55.
Ark Invest CEO Cathie Wood, who has been a perennial BTC bull, shared her thoughts on Solana in a CNBC interview on Wednesday. “Ether was faster and cheaper than bitcoin back in the day — that’s how we got ether. Solana is even faster and [more] cost-effective than ether.” Activity on the network has also continued to grind higher, with total value locked (TVL) nearing the $600 million mark this week, almost double the TVL this time last month.

Inflation Slows in October Fueling Hopes That the Fed’s Will End Rate Hike Cycle

Lower-than-expected inflation data released on Tuesday fueled a strong rally across equities this week, with the S&P 500 and Nasdaq both gaining over 2% on the day while treasury yields continue to fall across the curve with the front-end (short-term treasuries) particularly impacted by the move. The Consumer Price Index (CPI) came in at the same level for October as the previous month, with a year-over-year increase of 3.2%.
The data increased hopes that prices, which have remained stubbornly high, are continuing its cooling. The numbers may also portend the end of the Fed's interest rate hiking cycle, which has brought rates to a 22-year high. A rate hike at the Fed's final meeting of the year in December is now off the table, with the same outcome standing at 65% only a month ago. Commentators caution, however, that the Fed may not start cutting rates for some time, in a bid to avoid the mistakes of past decades. The futures market is now pricing in rate cuts as soon as May 2024, shifting its expectations from June 2024 previously.
The S&P 500 increased ~2.2% and the Nasdaq gained ~2.15% this week as of Friday morning.

JPMorgan and Apollo Partner With Avalanche to Bring Blockchain to Wealth Management

Avalanche announced a partnership with J.P. Morgan and Apollo Global Management during this week’s Singapore Fintech Festival to bring blockchain technology to portfolio management. The initiative, overseen by the Singapore Monetary Authority’s (MAS) Project Guardian, plans to leverage blockchain smart contracts and tokenization to automate and simplify portfolio management.
The group aims to use the LayerZero network to connect the Onyx blockchain platform (run by J.P. Morgan and Apollo) with a permissioned Avalanche Evergreen Subnet to enable subscriptions, redemptions, and rebalances for tokenized WisdomTree funds. The news was received positively by the market, with Avalanche’s native token, AVAX, rising 15% on the announcement. AVAX is now up over 50% over the past seven days.

Fake ETF Filing Sends XRP Prices on an Up and Down Ride

A fake XRP ETF filing under BlackRock’s name caused the price of XRP to rally higher, from ~$0.65 to ~$0.75, early this week. The gains were short-lived as the reports quickly confirmed that the filing was falsified and the price of XRP quickly retraced, with the price trading back around the $0.60 range as of Friday.
-From the Gemini Trading Desk
BitcoinBuzz data as of 5:30pm ET on November 16, 2023.
To learn more about the BitcoinBuzz Indicator and its components, read our introduction here. Check back every Friday for an updated score!

Private and Consortium Blockchains

With the announcement of Avalanche’s partnership with J.P. Morgan and Apollo, this week we explore lesser known types of blockchains: private and consortium blockchains.
Blockchain types that use Proof of Work (PoW) and Proof of Stake (PoS) consensus mechanisms are typically public and decentralized. However two other categories of blockchain exist — consortium blockchains and private blockchains. Private and consortium blockchains are typically used by enterprises that aim to employ blockchain architecture, but want to ensure specific information remains private, for either regulatory or competitive reasons.
A private blockchain is a blockchain controlled by a centralized entity which determines who can interact with the blockchain, verify transactions, and who can view the information recorded on the blockchain.
A consortium blockchain is a distributed ledger controlled by several entities, each of which operates a network node, participates in consensus, and has permissions to view certain types of data.
Given the lack of decentralization in these networks, this type of blockchain technology is often referred to as Distributed Ledger Technology or DLT.
Public blockchains like Bitcoin and Ethereum are censorship-resistant and offer broad ecosystems for the development of apps and platforms. Consortium blockchains, however, may offer faster transaction processing times and are easier to modify, but are walled gardens with limited usage outside of the private consortium.
ConsenSys’ Quorum (which was formerly owned by J.P. Morgan Chase) is a private, permissioned version of the Ethereum network designed to facilitate interbank information sharing. Consortium blockchains are currently under development in a variety of industries including the insurance industry, the food distribution industry, the financial services industry, and are even being used to prototype central bank digital currencies (CBDCs) around the globe.
Not all blockchains are created equal, and the various consensus mechanisms have different implications for accessibility, security, and sustainability. Likewise, not all blockchain types are equally well suited for every use case. Though public blockchains are secure and censorship-resistant, for example, they are not well-suited for enterprises due to their transparency. While PoW has been the standard consensus mechanism since the launch of Bitcoin in 2009, PoS, and DLT are rapidly gaining traction in the world of blockchain.
See you next week. Onward and Upward!
Team Gemini
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