Bitcoin ‘Ordinals’ Boom Prompts NFT Activity Surge

February 20, 2023

The latest moves in crypto markets, in context

By Jamie Crawley, CoinDesk reporter

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Welcome to a new week! Here's what's happening in crypto today:

Hong Kong's SFC has published its proposed rules for crypto trading platforms
Decentralized wireless network Helium is shifting to Solana next month
Hedge fund Galois Capital has shut down after losing $40 million to FTX

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CoinDesk Market Index (CMI)

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BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

CoinDesk Market Index (CMI): 1,180 +0.9%
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FTSE 100: 8,001.30 −0.0%

Treasury Yield 10 Years: 3.83% −0.0

Top Stories

Hong Kong's Securities and Futures Commission (SFC) has published its proposed rules for crypto trading platforms. The regulator is seeking comments on whether to allow licensed platforms to serve retail investors and what consumer protection measures to offer. The new rules would also mean all platforms would need to apply for a license, including existing ones. Platforms "should begin to review and revise their systems and controls to prepare for the new regime," the SFC said. It was misconstrued through a tweet last week that the city was set to offer crypto trading to retail investors, which is not the case. Hong Kong's new Virtual Asset Service Providers (VASP) licensing regime kicks in at the start of June, but it only permits exchanges to provide access to professional investors.

Hong Kong (Shutterstock)

Helium is set to entirely shift to the Solana blockchain by March 27, developers have said. That's prompted a rally of the decentralized wireless network's HNT tokens, which are up nearly 6% at $3 in the last 24 hours. Following the migration, HNT, MOBILE and IOT will all be issued on the Solana network and continue to be the tokens in the Helium ecosystem. A new version of the Helium wallet app will become available, and users will also have the option of using Solana-based wallets like Phantom and Solfare.

Crypto-focused hedge fund Galois Capital has shut down after losing a sizable portion of its assets during FTX's collapse last year. Galois told CoinDesk last November that the $40 million stuck on FTX amounted to around half of its funds. The FT reported earlier today that Galois is selling its bankruptcy claims for 16 cents on the dollar. In other FTX-related news, founder Sam Bankman-Fried and other execs have been subpoenaed by bankrupt brokerage Voyager Digital's unsecured creditors. Their lawyers are investigating FTX's attempt to bail out Voyager when it went bankrupt last July.

Market Insight: Bitcoin 'Ordinals' Boom

The recent emergence of the Ordinals protocol has galvanized investor interest in STX, the native token of Bitcoin layer 2 Stacks Network, which is up around 50% to $0.60 in the last 24 hours.

Stacks Network is focused on making the Bitcoin blockchain programmable in similar fashion to Ethereum and other networks, making them the natural home for NFTs and other DeFi activity.

The Ordinals protocol went live about a month ago, allowing users to inscribe references to digital art into small transactions on the Bitcoin blockchain, akin to drawing artwork directly onto small denominations of BTC.

NFT activity on Stacks has surged of late, with data from DappRadar showing trading volume on marketplace Gamma.io up around 1000% since Ordinals went live.

"Ordinals on Bitcoin L1 are complementary to Bitcoin NFTs on L2s like Stacks," Per Muneeb Ali, Stacks' co-founder said on Monday. "Ordinals have a natural limit on the L1 scale, and L2s provide a clear scalability path … Wallets like Xverse and & Hiro are amongst the first to release or work on Ordinals."

Read the full story by Omkar Godbole

Chart of the Day

Source: Amberdata

The chart shows weekly volumes for bitcoin and ether options listed on Deribit since February 2022.
Last week, bitcoin options volume totaled $5.4 billion, the highest in three months, while the notional volume in ether options was $3.1 billion.
"Market participants continue showing preference over Bitcoin," Amberdata's Greg Magadini said.
Traders opened long positions in bullish calls at $26,000, $28,000 and $30,000 with conviction in the second half of last week, Magadini added.

- Omkar Godbole

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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.