Digital Asset Markets Display Robust Momentum and Heightened Activity

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By Matteo Greco, Research Analyst at the publicly listed digital asset and fintech investment business Fineqia International (CSE:FNQ). 

Bitcoin (BTC) wrapped up the week at approximately $63,100, marking a notable 22% surge from the previous week’s closing price of around $51,725. The week witnessed vigorous price action, particularly in the first half, as BTC experienced a substantial appreciation from Monday to Wednesday, peaking at $64,000 on Wednesday. Subsequently, the price stabilized in the latter half of the week, closing at about $63,100. As of the time of this writing, BTC has regained momentum and is currently trading above $65,000.

The BTC Spot ETFs continue to exhibit strong momentum, with a cumulative net inflow of approximately $1.7 billion recorded last week, bringing the total net inflow since inception to about $7.4 billion. Leading the race is the Blackrock Bitcoin ETF (IBIT), which surpassed $10 billion in assets under management (AUM) last week, setting a record as the fastest ETF in history to achieve this AUM milestone.

Trading volumes for BTC Spot ETFs saw a significant surge during the week, totalling $22.3 billion, with an average daily trading volume of almost $4.5 billion. This marked a remarkable 265% increase from the average daily trading volume of $1.7 billion recorded since inception. The cumulative trading volume now exceeds $73.9 billion, with the daily average volume surpassing $2 billion, currently standing at $2.1 billion.

Similarly, trading volume surged on centralized digital assets exchanges, reaching a cumulative trading volume of $73.4 billion for the week. This represents an 80% increase from the previous week’s volume of $40.7 billion and marks the highest weekly trading volume recorded since May 2022. The data underscores the recent price appreciation accompanied by robust trading activity.

The rise in open interest, which represents the total number of outstanding derivative contracts for an asset that have not been settled, is observed both for BTC and the digital assets market in general, across both centralized digital assets exchanges (e.g., Binance, Coinbase, ByBit, etc.) and traditional finance investors’ platforms (e.g., CME). This indicates heightened activity from both digital assets native and traditional finance investors.

The strong momentum extends beyond Bitcoin to the overall market, with the total digital assets market cap currently standing at $2.5 trillion, approaching the all-time high of $3 trillion. Notably, the Total3 metric, which excludes Bitcoin (BTC) and Ethereum (ETH) and represents the market cap of the top 125 capitalised digital assets, has surged to $660 billion, reflecting a 19.3% growth week-on-week and a 31.5% year-to-date increase. This underscores the broad impact of BTC Spot ETFs on market momentum beyond BTC’s price action.

Examining the total stablecoin supply also provides insights into heightened demand. During periods of low demand, the supply of stablecoins typically decreases as investors exchange them for fiat currencies like USD, GBP, or EUR, thereby reducing the overall circulating supply. Conversely, during phases of increased liquidity injection into the market, the supply of stablecoins tends to expand. Presently, the total stablecoin supply stands at approximately $145 billion, reflecting a continuous uptrend from around $129 billion noted at the end of September 2023. This confirms sustained strong investor demand observed throughout Q4 2023 and into Q1 2024.

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