Bitcoin Drops Below $30,000 While Institutional Adoption Ramps Up

Bitcoin (BTC) closed last week at about $29,300, a 2.7% decrease in price compared to the $30,100 closing price of the previous week. BTC dropped as low as $28,750 during Monday last week, in expectation of a 25bps hike rate that was confirmed by the US central bank on Wednesday, before ranging the whole week between $29,000 and $29,500.

The BTC dominance, the metric which expresses the ratio between the BTC market and the total digital assets market cap, decreased from its year-to-date top of about 52% to the current 49.8%. Following the XRP ruling, the market has been dominated by the altcoins, both in price action and volumes.

Important news comes from institutional adoption. Coinbase, one of the major digital asset exchanges worldwide, announced in February the future launch of Base, an Ethereum Layer 2 (L2) chain that offers a safe, low-cost, developer-friendly way to build on-chain. On July 13th, developers officially started to have access to the network.

On July 29th BALD, a meme coin inspired to the Coinbase founder, was launched. In slightly more than 24 hours it reached $45 million of market capitalisation, surging in price by x4,000,000. This coin launch was the main cause of a x48 spike in Total Value Locked (TVL) on the Base blockchain. TVL is a metric used in DeFi which expresses the fiat worth amount of funds that are deposited into a specific protocol or chain. This represents the first big inflow of funds for the Coinbase DeFi ecosystem.

Moving towards real-world asset (RWA) tokenisation, a specialised blockchain firm, Securitize, has started issuing tokenised securities in Europe on the Avalanche blockchain. These securities represent equity in the Spanish real estate investment trust Mancipi Partners and secondary trading is expected to begin in September.

In Italy, Milano Hub, the Bank of Italy’s fintech innovation centre in support of digital evolution, has launched a DeFi project involving Polygon Labs and Fireblocks. The goal is to help financial institutions to correctly approach decentralised finance and tokenised assets. Milano Hub will also support the development of the “Institutional DeFi for Security Token” platform, the program that aims to support TradFi to experiment with security tokens and execute transactions using DeFi in a secure and regulated way.

All this news that came in the last few days highlight how much institutional interest towards the digital asset space is increasing. Following the huge number of ETF applications filed in the past couple of months, we are now observing a strong move of institution towards DeFi and asset tokenisation. The number of use cases and projects involved in RWA tokenisation is rapidly increasing and it is expected to surge in the next few years bringing fractional property and tamper proof ownership to several markets which are currently really illiquid and fragmented.