Welcome back to DV Chain's Weekly Market Commentary! In this edition, we discuss the strong upward trend in the crypto market this week, led by BTC and meme coins. Key events include JD Vance being named Donald Trump's running mate, Hester Peirce's remarks on reconsidering ETF regulations, and Biden's official announcement of his withdrawal from the race. We also cover Germany's emergency BTC sale, the upcoming Mt. Gox distributions, and other significant market movements. Plus, we highlight some key trade ideas and upcoming catalysts. Let's dive in:
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Market Recap

• The entire crypto market marched higher all week, led by BTC and memes
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• Seems to be spot driven buying, as Coinbase premiums were persistent throughout the week and futures open interest didn’t change all that much
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• JD Vance was named as Donald Trump’s running mate and is pro Crypto
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• Hester Peirce, SEC Commissioner, Says Both Staking And In-kind Creation/Redemption For Ether/Bitcoin ETFs Are "Open For Reconsideration"
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• Earlier in the week, Biden said he would drop out of the race if diagnosed with a medical condition, then announced he tested for COVID, and eventually officially dropped out with an announcement on Sunday via X, marking a win for Elon Musk
  • Crypto markets initially sold off from uncertainty from Biden’s drop out, but the market seemed to rally as the Democratic Party endorsed Kamala Harris
    
    
• ETF Balances reached ATHs this week, interesting comparison below of BTC ETF growth

• Germany announced they officially finished the emergency sale
  • They apparently had to sell urgently due to an obscure law, that mandates emergency sales if the asset can see 10%+ price fluctuations
    
    
• Mt. Gox coins have been on the move, and customers receiving distributions via Kraken, are expected to receive coins between tomorrow and next Tuesday
  
  
• Polygon plans to migrate MATIC to POL token on Sept. 4
  
  
• Crypto Exchange WazirX hacked
  
  
• China Central Bank had surprise rate cuts
  
  
• Implied Vols went bid with major catalysts this week:
  • ETH spot ETF begins trading tomorrow 7/23
  • 7/27 Trump speaks at btc conference over the weekend
  • GDP and PCE data later in the week
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• Major Tech earnings this week, including Tesla

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Upcoming Catalysts / Trade Ideas

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• $ETH ETF begins trading tomorrow, 7/23
  • The market is now pricing very low expectations of the ETH ETF as ETH has been relatively weak compared to BTC
  • Orderbooks are notably empty at the moment, so if ETF inflows are even 20-30% of Bitcoin’s, then it should result in a prices clearing much higher
  • For those who are cautious about outright market risk, ETH/BTC also seems poised to outperform with Mt. Gox distributions imminent
  • Revisiting Larry Fink’s comments on crypto around the launch of the BTC Spot ETFs, his vision of “tokenization of everything” fit towards ETH much more so than BTC
    • Decent odds of similar comments being made by him to sell the ETH ETF when it launches
  • Regulatory outlook has become very favorable with recent election developments

• $LDO
  • LDO took an outsized selloff from the SEC lawsuit against Consensys alleging Lido and Rocketpool staking pools are securities, potentially a favorable entry point ahead of the ETH etf launch
    • Hester Pierce made comments that indicate the potential to walk back this lawsuit
  • Recent developments on the regulatory side are looking very bright, with Trump adding crypto support officially to his campaign coupled with his odds of winning surging
  • SEC allegations also seem to lose effect and mean revert over time, $SOL being the best example of this
  • DeFi as a sector is likely to benefit from the ETH ETF
  • LDO fundamentally is a very strong project, clipping almost $200m in fees on an annualized basis to its treasury
  • It has maintained majority of market share in the LST/LRT space, despite higher temporary yields in new competitor’s liquidity bootstrapping farms
  • From an institutional standpoint, it is much stronger than competitors in terms of safety and network effects. The Lido Dao’s roadmap prioritizes institutional adoption, which we think is an astute plan, given the recent interest in crypto and tokenization from Wall Street

• Polymarket is rumored to TGE sometime soon, so it’s probably worth using the platform for an airdrop

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