DeFi Bubble Pops

●    DeFi Bubble Pops, Leading to Reduced Ethereum Fees.
●    Samsung’s Wallet Integrates Anti-Laundering Tech.
  US Dollar Bulls Look for Bullish Momentum.

Welcome again to this week’s edition of Overbit Weekly Round Up, where we try to slow down all the business in financial markets and give a clean and concise recap of the last week.

Given how hot the space has been, it’s no surprise our first story of the week revolves around DeFi. For anyone invested or merely watching the space, it’s not exactly newsworthy that the once-booming market has begun to move downwards in recent days and weeks. SushiSwap’s $SUSHI token has dropped more than 70% in September, and another market leader in decentralized lending, $LEND, has fallen almost 30%. Aside from individual tokens dropping, it seems decentralized exchanges are taking a hit as well. Uniswap’s daily volume has crashed to $224 million, a fall of 76% since its record high of $954 million on September 1st.

However, as there always is with cryptocurrency markets, there seems to be some good news hidden within the bad. According to a recent report by CoinDesk, this downward action of the DeFi market has helped to alleviate congestion on the Ethereum network, temporarily allaying concerns of network overload and overpriced fees. “Low volatility in the crypto market as a whole has contributed to lower transaction volume and costs,” said Connor Abendschein, a crypto research analyst at Digital Assets Data. Today, Ethereum fees sit around $2 a transaction, a considerable drop-off from the soaring $15 fees of early September. While these lower fees are certainly a welcome sign in the short-term, it’s a keen reminder of how volatile and at-times immature the cryptocurrency sector can be. As revolutionary as the technology is, there are still a ton of kinks to work out before it’s ready for the mainstream.

Keeping on with the theme of evolving cryptocurrency technology, we take a look at our next story of the week. Samsung, one of the world’s leading technology manufacturers, has recently announced it’s integrated a cryptocurrency anti-money laundering solution into their built-in smartphone wallets. According to a blog post by software firm Uppsala, the company has signed an AML integration with Samsung and has “directly linked” its crypto AML solutions “to the Samsung Blockchain Service.” This new service is directed at helping users verify whom they’re sending to transactions to, checking whether or not the receiver has any links to scams, dark-web services, or other illicit activity. The move, said Uppsala, will allow Samsung smartphone users to access “real-time threat detection or push notifications triggered by suspicious transactions.” Although this service is only available in Singapore in South Korea, it is an excellent contrast to the previous story regarding the maturation of cryptocurrency technology.

In our last story of the week, we pivot towards coverage of traditional markets. With the impending results of the US vice presidential debate, it seems all eyes are on the US dollar – especially with USD bulls vying for momentum. Despite the minor setbacks on Wednesday after President Trump announced he was ending negotiations for stimulus payments, the USD market has since bounced back after Trump came out in support of different forms of stimulus payments. On top of this rhetoric from President Trump, it seems the recent FOMC Minutes are also having a positive effect on the US Dollar. In this meeting, policymakers and analysts noted the current data indicates economic activity is recovering much faster than expected after the Q2-COVID dump. Though none of these news releases were enough to move markets, it seems to have at least quelled movement for most of the dollar’s major rivals. The EUR/USD pair settled around 1.1760, while the Pound was the worst performer, weighed by Brexit-related news. This dip for the Pound comes at no surprise given the rumours that the UK will pull out of negotiations by October 15th – a deadline set by PM Boris Johnson – if more headway cannot be made. As for commodities, the asset class typically viewed as a safe-haven, they seem to be remaining stagnant as well, awaiting movement on the US front. Gold remains suppressed, ending the day at $1,887 at an ounce. Crude oil only looked slightly better, consolidating for most of the day, with WTI settling just below the 40.00 level.

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