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Ethereum, Staking

Nearly 70% of institutional investors commit to Ethereum staking – survey

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Nearly 70% of institutional investors holding Ethereum (ETH) are engaged in staking, with 52.6% of them holding liquid staking tokens (LSTs), according to a Blockworks Research report.

Nearly half of institutional investors staking ETH prefer to use only one integrated platform, such as Coinbase and Binance. Meanwhile, 60.6% of the survey participants also utilize third-party staking platforms.

According to the report, one out of five institutional investors surveyed had over 60% of their portfolio allocated to Ethereum or an ETH-based LST. The survey included exchanges, custodians, investment firms, asset managers, wallet providers, and banks.

The report revealed that the key traits taken into consideration by respondents when choosing a staking provider were reputation, range of networks supported, price, simple onboarding, competitive costs, and expertise and scalability.

Liquidity and security were also deemed the most important features for institutional investors when deciding whether staking is a viable option. On a scale from 1 to 10, liquidity scored an average importance of 8.5, reflecting concerns about exiting large LST positions if necessary.

Meanwhile, security scored even higher, with an average importance rating of 9.4, driven by worries over withdrawal efficiency in volatile market conditions. Additionally, 61.1% of respondents indicated they would be willing to pay a premium for enhanced security and fault tolerance.

Geographic location also plays a role, with half of institutional investors considering a validator’s location important when choosing a staking platform.

Rise of liquid staking

The report also highlighted that the rise of third-party staking platforms is driven by the increasing popularity of LSTs. These tokens address the initial issues with ETH staking when users lose their liquidity by locking it to help with network security.

Furthermore, due to their popularity, various DeFi applications have started integrating LST in their services. This has significantly improved liquidity and is one of the key reasons behind 52.6% of institutional investors holding LSTs, according to the report.

The report noted that liquid staking is dominated by Lido Protocol and its LST, stETH, with 54.5% of respondents involved in liquid staking holding this token.

This concentration creates a dynamic where large LSTs benefit from economies of scale. Greater market participation attracts more operators through higher fee opportunities, which in turn improves security by distributing validation across more operators. However, this also leads to concerns about centralizing validation power in a few protocols — an issue flagged by 78.4% of respondents.

Restaking and distributed validators

Restaking is another emerging trend, with a majority of investors expressing interest in the technology despite several concerns around added risks.

Restaking allows validators to use staked ETH across multiple protocols simultaneously and receive liquid restaking tokens (LRTs) to capture additional yield.

However, it introduces added risks, such as slashing — a penalty that reduces a validator’s staked ETH for malicious behavior. The report also pointed to risks like protocol-level vulnerabilities and the potential for further centralization of validators.

Despite these concerns, 82.9% of respondents were aware of the risks associated with restaking, and 55.9% of institutional investors expressed interest in staking ETH, indicating a favorable outlook for restaking.

Institutional investors view validation power centralization as a risky development, with 65.8% saying they were aware of distributed validator (DV) services.

news, Uncategorized

Polymarket volume hits $2 billion with Trump leading election bets

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The decentralized prediction platform Polymarket has surpassed $2 billion in total volume for the upcoming 2024 US presidential election.

As of now, Republican candidate Donald Trump holds a commanding 61.3% chance of winning, with over $605 million in volume and $267 million wagered, according to Polymarket’s data. In contrast, Democratic candidate and current Vice President Kamala Harris trails with 38% odds, nearly $405 million in volume, and $159 million bet on her victory.

Trump’s rising odds follow a CryptoSlate Insight report, which revealed that large-scale traders, or “whales,” have significantly influenced the market in Trump’s favor over the past day. On Oct. 16, the top two Trump backers on Polymarket executed over 1,600 trades worth over $4 million to support the former president’s campaign.

Additionally, a new Polymarket participant, “Theo4,” has placed over $12 million in high-frequency bets on Trump’s chances within just three days.

$1 billion monthly volume

These developments come as Polymarket experiences record-breaking growth.

In October alone, the platform has reported over $900 million in trading volume and is closing in on the $1 billion mark. This would represent a 100% increase compared to September, which saw approximately $503 million in total volume.

Polymarket’s user base is also expanding, with nearly 100,000 active monthly users reported this month, according to Dune Analytics data.

The platform’s most active market, “Presidential Election Winner 2024,” has driven much of this growth, amassing $785 million in volume so far in October, just weeks ahead of the Nov. 5 election.

The surge in activity on Polymarket reflects broader interest in decentralized prediction markets, which have gained popularity due to significant global events such as elections, financial policy changes, and geopolitical tensions.

Election pushes volumes on Kalshi

Meanwhile, Polymarket is not the only platform seeing increased activity ahead of the US elections.

Data from Kalshi, another prediction market, shows a similar trend. Since launching its presidential election market on Oct. 7, Kalshi has reported about $20 million in total volume.

Like Polymarket, Kalshi’s market gives Trump a favorable 57% chance of winning, while Harris stands at 43%. With the election just weeks away, both platforms see substantial engagement as the race heats up.

Kalshi recently won a legal battle against the Commodity Futures Trading Commission (CFTC), which had attempted to block the platform from listing political event contracts. Following a September court ruling in favor of Kalshi, a federal appeals court reaffirmed the decision on Oct. 2, allowing the platform to continue its operations.

Blockchain

Ark Invest calls blockchain and AI the key to revitalizing economy with deflation coming

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According to its Q3 Commentary report, ARK Investment Management believes technological innovation, particularly in artificial intelligence and blockchain technology, could be pivotal in revitalizing the global economy.

As inflation transitions to deflation in several sectors, ARK believes that its five innovation platforms, robotics, energy storage, AI, blockchain, and multi-OMIC (biological analysis) sequencing, may significantly impact macroeconomic metrics over the next five to ten years.

The firm’s CEO and CIO, Catherine Wood, noted that the convergence of these technologies is expected to drive substantial growth. Wood stated,

“Interest rates are likely to surprise on the low side of expectations, broadening the equity rally from a narrow subset of stocks and reinforcing the need for diversified AI investments.”

Wood suggests that the most promising AI investment opportunities lie in disruptive innovation, which could potentially lead to a more diverse set of market leaders as current equity concentration diminishes.

ARK’s research indicates that the economy has been experiencing rolling recessions since the Federal Reserve began hiking interest rates in early 2022. In response to these economic challenges, the firm emphasizes the importance of AI and blockchain technologies in driving productivity growth and creating new products and services. Companies harnessing these innovations may mitigate margin pressures caused by declining pricing power and inflationary trends.

The ARK Next Generation Internet ETF outperformed broad-based global equity indices during the third quarter, benefiting from holdings in companies like Tesla and Palantir Technologies. 

Palantir’s shares contributed positively after the company reported strong second-quarter earnings, with US commercial revenue growth accelerating from 40% to 55% year-over-year. Palantir’s Artificial Intelligence Platform bootcamps have demonstrated significant value to customers, prompting the company to raise its full-year guidance.

Conversely, some companies faced challenges. Shares of PagerDuty detracted from performance after management lowered full-year revenue guidance due to longer sales cycles. However, the company remains on track to achieve its targeted annual recurring revenue growth, bolstered by increased adoption of AI-driven operations and customer service products.

ARK highlights that inflation, initially triggered by supply shocks, has evolved into disinflation and may ultimately lead to deflation. The firm believes technological advancements in AI and blockchain will be instrumental in this transition. As companies lose pricing power and face profit margin pressures, those that adopt AI technologies aggressively may enhance productivity and innovate new solutions, potentially offsetting economic downturns.

The bond market has been signaling potential economic weaknesses, with indicators like an inverted yield curve suggesting a possible downturn. In this context, ARK emphasizes the strategic importance of investing in AI and blockchain technologies. The firm asserts that these innovations could drive economic recovery and reshape market forces by introducing new sector leaders.

Bitcoin

US Bitcoin ETFs surpass $20 billion in net inflows, nearing Satoshi’s holdings

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Spot Bitcoin exchange-traded funds (ETFs) have reached a significant milestone, surpassing $20 billion in total net inflows for the first time, according to data shared by Bloomberg senior ETF analyst Eric Balchunas.

The achievement follows a week of extraordinary inflows totaling $1.5 billion, indicating growing investor demand for crypto exposure via ETFs.

Balchunas highlighted that net inflows are the “most important” and “most difficult” metric to grow in the ETF industry, making this milestone particularly noteworthy. By comparison, it took gold ETFs nearly five years to hit the same net inflow figure.

Some in the community highlighted that excluding the massive outflows from Grayscale’s Bitcoin Trust (GBTC) makes the net inflows for the Newborn Nine over $40 billion, an even more staggering number compared to other ETF launches in the market’s history.

Balchunas acknowledged the impact of the outflows but argued that including GBTC showcases the growth and eliminates all avenues of criticism. He said:

“I like net [because] it’s net GBTC so there’s simply no way for haters to poke holes in it. You have to respect it.”

US Bitcoin ETFs now manage $65 billion in total assets and collectively hold roughly 951,000 Bitcoin, a new record high. Balchunas noted that the ETFs will soon rival the estimated 1.1 million Bitcoin held by the flagship crypto’s mysterious pseudonymous creator, Satoshi Nakamoto. He said:

“Bitcoin ETFs are 86% of the way to Satoshi.”

The surge in inflows has not only bolstered the total assets under management but also impacted the available supply of Bitcoin. With major institutional holders like BlackRock continuing to accumulate, Bitcoin ETFs are playing an increasingly significant role in concentrating ownership of the digital asset.

As demand for Bitcoin ETFs grows, their influence on the broader market is likely to intensify, offering regulated investment vehicles that continue to attract both retail and institutional investors.

The growing dominance of Bitcoin ETFs highlights their critical role in shaping the future of crypto investments as more investors seek secure and regulated ways to gain exposure to digital assets.

Editors Pick, Markets, Uncategorized

New whale makes $12 million high frequency Trump bets on Polymarket in 3 days

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A new Polymarket trader, “Theo4,” has executed over $12 million in high-frequency bets on Donald Trump’s chances of winning the 2024 US Presidential Election within three days. Operating under the wallet address 0x5668, Theo4 joined the platform this month and has quickly amassed over $7.1 million in positions.

Polymarket trader profile | Source: Polymarket

Most of their trades focus on markets predicting Trump’s victory, including a position of 7,553,789 shares in “Will Donald Trump win the 2024 US Presidential Election?” purchased at an average price of 58 cents per share. With the current price at 61 cents, this position alone yields a profit of approximately $237,158.

In addition to betting on Trump’s overall victory, Theo4 has placed substantial wagers on related markets, such as Trump winning the popular vote and a Republican candidate securing both the popular vote and the presidency. The trader’s activity also includes markets on the Republican Party’s success and outcomes in key states.

Despite the high trading volume, the trader has maintained a profit exceeding $346,000. The rapid accumulation of positions indicates strong confidence in the Republican Party’s performance on Polymarket in the upcoming election, purchasing new positions regardless of price.

Theo4 has now surpassed PrincessCaro as the second-largest holder of Trump positions on Polymarket. The three top holders have consistently bought up the order book throughout October as Trump’s chance rose from 50% to 61%.

Bitcoin

Bitcoin accumulation fuels market uptick signaling potential surge in price

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Bitcoin’s recent market activity reveals significant shifts in demand and accumulation patterns among large holders, suggesting potential influences on its price trajectory. The top cryptocurrency’s price surged from around $40,000 in January 2024 to above $70,000 by March before retracing. It has recently begun to again threaten $70,000, coinciding with notable increases in apparent demand and whale holdings.

Data indicates that the apparent demand for Bitcoin rose sharply in early 2024, aligning with the price escalation. Positive demand periods, marked by increases in demand relative to previous intervals, were prevalent during this time. A renewed surge in demand appears to have again fueled the recent price hike, demonstrating a strong correlation between demand trends and market valuation.

Bitcoin apparent demand | Source: CryptoQuant

Whale holdings—accounts holding substantial amounts of Bitcoin—also exhibited significant activity. Total whale holdings increased steadily from approximately 3.2 million BTC at the start of the year to over 3.7 million by October.

Bitcoin total whale holdings | Source: CryptoQuant

The monthly percentage change in these holdings spiked between January and April, reflecting rapid accumulation as prices climbed. However, the middle of the year saw fluctuations, with steep drops in holdings during June, followed by a robust recovery approaching October.

Bitcoin 1-year change in whale holdings | Source: CryptoQuant

Long-term analysis shows that whale behavior often mirrors major market movements. Periods of increased whale accumulation have historically corresponded with significant upward price trends. For instance, substantial accumulation occurred during the 2020-2021 bull run, with whales adding to their holdings as Bitcoin’s price escalated. 

Conversely, after price peaks, whales tend to reduce their holdings, suggesting strategic profit-taking or market repositioning.

Accumulator addresses—wallets that hold or consistently increase their Bitcoin holdings—also play a crucial role in the market forces of 2024. Demand from these addresses has begun rising rapidly this month, closing in on the peak from Bitcoin’s all-time high price in late March.

Bitcoin demand from accumulator addresses | Source: CryptoQuant

The interplay between these factors highlights the influence of large holders on Bitcoin’s market behavior. Whales and accumulator addresses appear to act in anticipation of price movements, accumulating during upswings and adjusting holdings during downturns. Their activities reflect market sentiment but may also contribute to price volatility.

While the correlation between demand, whale activity, and price is evident, causation remains a complex topic. Market forces are influenced by a myriad of factors, including macroeconomic conditions, regulatory developments, and broader investor sentiment. However, the observed patterns suggest that monitoring whale holdings and accumulator demand can provide valuable insights into potential market trends.

As Bitcoin matures as an asset class, understanding the behaviors of its largest holders continues to be increasingly important. Their actions can signal shifts in market momentum and offer clues about future price movements. The accumulation patterns observed this month may indicate strategic positioning by large investors, potentially setting the stage for the next significant market phase.

Bitcoin

US drives North American crypto dominance despite regional stablecoin decline

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North America has once again claimed the top spot as the world’s most significant crypto market thanks to increased institutional activity in the US, according to an Oct. 17 Chainalysis report.

Between July 2023 and June 2024, North America generated $1.3 trillion in on-chain value, representing 22.5% of the global total. Chainalysis credits this dominance to heightened institutional activity, especially in the US, where large-scale transactions exceeding $1 million account for 70% of the region’s crypto transfers.

US Crypto Dominance (Source: Chainalysis)

While the US leads the North American crypto landscape, Canada follows, with $119 billion in on-chain value during the same period.

US dominance

The US remains dominant in North America’s crypto market, primarily due to significant institutional activities around spot Bitcoin and Ethereum exchange-traded funds (ETFs).

However, this leadership is not without challenges. Chainalysis notes that the US market has been more volatile than its global counterparts.

The report stated:

“In recent quarters, the U.S. has demonstrated heightened sensitivity to both bull and bear markets. When cryptocurrency prices rise, the U.S. market shows larger increases in growth than the global market — and the inverse is true when cryptocurrency markets decline.”

Although crypto adoption has grown in the US, the country has seen a sharp drop in stablecoin holdings on exchanges. The share of stablecoin transactions on US-regulated exchanges fell from about 50% in 2023 to under 40% in 2024.

Chainalysis reported that this decline could be linked to the regulatory uncertainty surrounding these digital assets in the US. Circle, the issuer of the USDC stablecoin, has pointed out that unclear regulations in the US have prompted stablecoin projects to seek more favorable environments in Europe and the UAE.

Stablecoin use rises outside the US

In contrast, stablecoin transactions have surged outside the US, accounting for more than 60% of transactions in non-US markets by 2024.

Stablecoins Inflows Across US and Non-US Markets (Source: Chainalysis)

This trend is particularly strong in developing markets, where stablecoins provide users access to US dollars without relying on traditional banking systems. Circle confirmed this shift, reporting that 45% of US dollar banknotes in circulation were held abroad as of late 2022.

The rising use of stablecoins outside the US reflects a broader trend. Global markets increasingly view US dollar-backed stablecoins as both a store of value and a more affordable method of transaction.

Tether’s CEO Paolo Ardoino has also emphasized the importance of USDT in inflation-hit countries like Argentina, where it offers stability during economic uncertainty.