Key Takeaways
📈 ETH rose by 13.1% and BTC by 8.9% in November, indicating market growth.
🖼️ Bitcoin triggers a second wave of demand for digital art and collectibles.
💹 Bitcoin's supply reaches 1.64M BTC on exchanges; ETPs attract $750M to BTC, $66M to ETH.
📊 Top stablecoins stabilize, Ethereum on-chain volumes increase.
💸 Stablecoin lending rates exceed 10% on Aave; futures arbitrage opportunities emerge.
🚀 Bitcoin dominance dips, indicating a potential shift to active altcoins like NEAR.
📧 Stay updated via CKC.Fund on LinkedIn or contact info@ckc.fund
As November's market sentiment remains positive, ETH's spot performance rose by 13.1%, closely followed by an 8.9% increase in BTC, leading to more extensive on-chain market activity. The average daily transaction counts and fees for BTC tripled compared to October, driven by renewed interest in BRC-20 and Ordinals. This surge marks the second significant wave of demand for digital art and collectibles on Bitcoin since their introduction to the network in May 2023. Benefiting from this uptick, BTC miners experienced a near six-fold increase in total transaction fees in November, a stark contrast to ETH's metrics, which saw only a 1.5-fold rise from October.
Bitcoin Exchange Supply and ETP Volumes
In November, Bitcoin's exchange supply sharply rose to around 1.64 million BTC. Meanwhile, Ethereum's exchange supply remained stable at 10-11 million ETH. Notably, the percentage of Ethereum's total supply on exchanges has been declining since 2020, reaching post-launch levels. This period also saw significant net inflows into ETPs, with BTC attracting over $750M USD and ETH $66M, reversing the trend of the previous three months' net outflows.
Stablecoin Supply and Transaction Analysis
The supply of stablecoins serves as a key indicator of investor sentiment, particularly since most crypto trading pairs are denominated in these currencies. As a result, the stablecoin supply often acts as a barometer for gauging the trading demand in the crypto market. Since April 2022, the supply of the five leading stablecoins by market cap (USDT, USDC, BUSD, TUSD, DAI) has been on a downward trend, decreasing from a peak of $133B to about $129B, suggesting a potential bottoming out in October, according to DeFiLlama data.
The supply of stablecoins serves as a key indicator of investor sentiment, particularly since most crypto trading pairs are denominated in these currencies.
However, to gain a comprehensive understanding, examining transaction volumes is crucial. Stablecoins are frequently utilized in primary market activities such as private investments and issuances. Notably, the on-chain volumes of stablecoins on Ethereum experienced an increase in November 2023, a trend that should be closely watched for insights into future market behavior and price forecasts.
Lending Market Dynamics
Interest rates for USD-pegged stablecoins such as USDC and USDT surged past 10% on Aave, a leading DeFi lending protocol. This increase reflects a heightened trader willingness to borrow stablecoins, signaling increased market leveraging. Concurrently, positive funding rates returned in the perpetual futures market, with assets like XRP showing speculators' readiness to pay premiums for bullish positions. This scenario has also led to arbitrage opportunities between DeFi lending rates and futures market funding rates.
Rotation to Altcoins
Throughout 2023, Bitcoin's market dominance trended upwards, reaching a 2.5-year high. However, a slight decrease in November hints at an investor shift from BTC to other cryptocurrencies like ETH and altcoins. NEAR, a smart contract platform, experienced a spike in activity since September, surpassing Bitcoin and Ethereum in daily transactions and active addresses, a trend that further intensified in November.
Navigating the complex and ever-changing world of digital assets can be a challenge, but staying informed is key. If you found value in these insights and wish to deepen your understanding of this evolving space, consider connecting with CKC.Fund on LinkedIn. Additionally, if you aren’t already, you can subscribe to our newsletter, filled with tailored digital asset insights. For more personalized guidance, reach out at info@ckc.fund. Connecting with us helps you stay one step ahead in the world of digital assets.
This content is intended for general informational purposes only. CKC.Fund does not render or offer personalized financial, investment, tax, legal, security, or accounting advice. The information provided in this content is provided solely as general information and to provide general education. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action. This content may contain certain statements, estimates and projections that are "forward-looking statements." All statements other than statements of historical fact in this content are forward-looking statements and include statements and assumptions relating to: plans and objectives of management for future operations or economic performance; conclusions and projections about current and future economic and political trends and conditions; and projected financial results and results of operations. These statements can generally be identified by the use of forward-looking terminology including "may," "believe," "will," "expect," "anticipate," "estimate," "continue", "rankings," “intend,” “outlook,” “potential,” or other similar words. CKC.Fund does not make any guarantees, representations or warranties (express or implied) about the accuracy of such forward-looking statements. Forward-looking statements involve certain risks, uncertainties, and assumptions and other factors that are difficult to predict. Viewers are cautioned that actual results referenced in this content could differ materially from forward-looking statements; and viewers of this content are cautioned not to view forward-looking statements as actual results or place undue reliance on forward-looking statements. Past performance is not indicative nor a guarantee of future results. No content in this content shall be viewed as a guarantee of future performance.
