November 2023 CKC.Fund Monthly Market Update

Deciphering Cryptocurrency Market Trends

November 2023

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.
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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.

Nov boosts BTC, ETH. BTC fees surge. Exchange BTC rises. ETPs see $750M inflow, ETH steady.

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.

Stablecoins drop, Nov on-chain rises. Rates surge, signaling crypto leverage.

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.

Stablecoins rise, Bitcoin dips. Altcoins gain. NEAR surpasses BTC, ETH.

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 Connecting with us helps you stay one step ahead in the world of digital assets.

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Delia Sabau

Delia Sabau

Delia has a remarkable history of devising and managing investment and risk strategies for portfolios exceeding $1B in both digital and traditional asset classes. She boasts an extensive background in global hedge fund management, DeFi, blockchain, and quantitative research, with significant roles at Fair Isaac and BlackRock. She's led investment initiatives across multiple continents, with her expertise recognized in North America, Europe, Latin America, and Australia. A holder of a B.S. in Mathematics from the University of Bucharest and an MBA in Finance from UC Berkeley, she also possesses blockchain and fintech certifications from Oxford. Delia's global experience enables her to drive value in the international digital asset landscape.