July 23, 2024

Amberdata Digital Asset Snapshot: SEC Updates, DeFi Activity, & More

It’s been reported by multiple outlets that the SEC has told ETH ETF issuers that funds can start trading on Tuesday, July 23. Following the rumors of this news, digital asset prices have climbed this week after multiple days of sharp price declines caused by fears of major sell-offs from Mt. Gox and FTX distributions. Additionally, the German government has concluded the sale of almost 50,000 Bitcoin confiscated in January 2024.

In U.S. regulatory news, the SEC has issued several suits against crypto companies over the last few weeks, while other cases were silently closed. A new suit against Consensys alleges the company failed to register the sale of securities, while the suit against MetaMask alleges the decentralized wallet brokered “securities transactions for retail investors” as well as the “offer and sale of securities.” The investigation against Paxos for securities charges related to BUSD was closed with no enforcement action being taken against the stablecoin issuer. At one time, BUSD (Binance USD) was the third-largest USD stablecoin by market capitalization, but it has since been discontinued on Binance despite being the exchange’s featured stablecoin.

Lastly, Tigran Gambaryan, the head of financial crime compliance at Binance, is still detained in Nigeria after being held since February when he and a colleague (who managed to escape) visited the country to discuss the company’s compliance issues. Tigran spent several hours in court this week before the hearing was adjourned until October. He has already suffered harsh imprisonment and was sick with malaria. A member of his legal team said he is now suffering from a herniated disc after months of sleeping on a thin mattress. Previous letters to the White House for help from over 100 former federal prosecutors and federal agents have failed to secure his safe return.

Spot Market

Amberdata research Centralized Exchange (CEX) comparisons from weeks 7/9/2024 and 7/16/2024

Centralized Exchange (CEX) comparisons from weeks 7/9/2024 and 7/16/2024

AmberLens Spot trade volume by exchange. Binance, Binance US, OKX, Bybit, Coinbase, HTX, Kraken, bithumb, bitstamp, bitfinex, LMAX

Spot trade volume by exchange

Daily spot trading on centralized exchanges has remained relatively unchanged in the last two weeks despite fears and uncertainty around the German government asset seizure sell-offs. This is likely a positive signal that the market, despite “softening” since a volatile January and March, hasn’t gone anywhere, and it is certainly not a time to talk about any kind of market decline.

amberdata Trading volumes for USDT, USDC, and USD trading pairs across all centralized exchanges

Trading volumes for USDT, USDC, and USD trading pairs across all centralized exchanges

USDT trading volume across centralized exchanges also remains slightly down following some major DeFi liquidations just two weeks ago, continuing a period of months of trading volume market share declines. USDT still holds more than 50% of trading volume across centralized exchanges, mainly spurred by Binance, which itself has over 50% of daily trading volume.

DeFi DEXs

Amberdata Decentralized Exchange (DEX) protocol from weeks 7/9/2024 and 7/16/2024. Uniswap and Sushiswap

Decentralized Exchange (DEX) protocol from weeks 7/9/2024 and 7/16/2024

Amberdata DEX Trading volume acroos all pools over time

DEX Trading volume

DEX trading has similarly not changed dramatically since the beginning of June 2024, holding strong daily trading volumes of around $5 billion a day.

DEX pool withdrawals (liquidity removed) since July 1, 2024. Sushiswap and Uniswap DEX pool deposits (liquidity added) since July 1, 2024. Amberdata Sushiswap and uniswap. USDC, WETH, USDT, WBTC, PEPE

DEX pool deposits (liquidity added) and withdrawals (liquidity removed) since July 1, 2024

One interesting aspect is the scale of deposits into DEX pools since July 1st, especially for USDC/WETH. With withdrawals totaling around $5 billion during this timeframe and deposits surpassing $75 billion, there is a lot of bullish money being put into DEXes, hoping that yield generation from trades on the pool will outpace token price declines.

DeFi Borrow/Lend

Amberdata DeFi Lending protocol comparisons from weeks 7/9/2024 and 7/16/2024. MakerDAO, Compound v2, Aave v2 and aave v3

DeFi Lending protocol comparisons from weeks 7/9/2024 and 7/16/2024

Amberlens DeFi Lending overall deposit and withdrawal volumes

DeFi Lending overall deposit and withdrawal volumes

DeFi lending activity has fallen sharply over the course of July, with both deposits and withdrawals in the millions (as opposed to hundreds of millions), netting near zero.

Amberlens Deposit and Withdrawal volumes across DeFi Lending protocols

Deposit and Withdrawal volumes across DeFi Lending protocols

This comes at the same time as several major liquidations on protocols. Price decreases due to the German sell-off and Mt. Gox/FTX distribution fears have led to several major positions being liquidated, further depressing prices and instilling fear in lending markets as participants rushed to either repay loans or face liquidations.

Networks

Network comparisons from weeks 7/9/2024 and 7/16/2024. Bitcoin, bitcoin cash, ethereum, and litecoin

Network comparisons from weeks 7/9/2024 and 7/16/2024

Bitcoin Net Unrealized Profit / Loss (NUPL)

Market sentiment on Bitcoin, as measured by the Net Unrealized Profit/Loss (NUPL), returned to a state of optimism this week after briefly falling into fear earlier this month.

Bitcoin Puell Multiple

Despite the positive return for Bitcoin, or perhaps because of it, miner profitability as measured by the Puell Multiple dropped below 1, representing a miner loss. A multiple above 1 indicates that miners are profitable, and historical lows (multiples less than 0.6) have represented a price bounce. Regardless of the price predictions for Bitcoin, there’s a lot at stake as news and speculation surrounding Presidential elections dominate the discourse.