--- title: “That’s Our Two Satoshis” - Waiting For Demand To Return To Crypto description: We discuss how every noteworthy event is supply-based, but a market rally can only happen when there is new demand, not just less supply.  image: https://www.ar.ca/hubfs/Copy%20of%20TO2S%20375x175%20%282845%20%C3%97%201600%20px%29%20%285%29.png --- [![email-sig-logowhite](https://www.ar.ca/hs-fs/hubfs/email-sig-logowhite.png?width=102&height=96&name=email-sig-logowhite.png "email-sig-logowhite")](https://www.ar.ca/) [![Get in Touch](https://no-cache.hubspot.com/cta/default/4536350/28ac2c2f-186c-436f-9682-1169cf946ad3.png)](https://cta-redirect.hubspot.com/cta/redirect/4536350/28ac2c2f-186c-436f-9682-1169cf946ad3) ** ** ** [![Arca](https://www.ar.ca/hs-fs/hubfs/arca_square_576x576.png?width=60&height=30&name=arca_square_576x576.png "Arca")](https://www.ar.ca/) [![Get in Touch](https://no-cache.hubspot.com/cta/default/4536350/28ac2c2f-186c-436f-9682-1169cf946ad3.png)](https://cta-redirect.hubspot.com/cta/redirect/4536350/28ac2c2f-186c-436f-9682-1169cf946ad3) ** ** ** Search **Menu** ** ** [![Data Room](https://no-cache.hubspot.com/cta/default/4536350/72e2934a-0f70-4634-897e-b99fd4807a9b.png)](https://cta-redirect.hubspot.com/cta/redirect/4536350/72e2934a-0f70-4634-897e-b99fd4807a9b) [![Get in Touch](https://no-cache.hubspot.com/cta/default/4536350/28ac2c2f-186c-436f-9682-1169cf946ad3.png)](https://cta-redirect.hubspot.com/cta/redirect/4536350/28ac2c2f-186c-436f-9682-1169cf946ad3) ![](https://www.ar.ca/hubfs/Blog/Thats%20Our%202%20Satoshis/Branding/2-Sats-Header.png) [Market Recap](https://www.ar.ca/blog/tag/market-recap) | # “That’s Our Two Satoshis” - Waiting For Demand To Return To Crypto [![Jeff Dorman, CFA](https://www.ar.ca/hubfs/Jeff%20Dorman.png)](https://www.ar.ca/blog/author/jeff-dorman-cfa) Written by [Jeff Dorman, CFA](https://www.ar.ca/blog/author/jeff-dorman-cfa) Sep 25, 2023 ******![Thats Our 2 Satoshis Logo](https://www.ar.ca/hs-fs/hubfs/Thats%20Our%202%20Satoshis%20Logo.png?width=300&name=Thats%20Our%202%20Satoshis%20Logo.png)****** ******![Screenshot 2023-09-18 at 10.51.45 AM](https://www.ar.ca/hs-fs/hubfs/Screenshot%202023-09-18%20at%2010.51.45%20AM.png?width=1728&height=960&name=Screenshot%202023-09-18%20at%2010.51.45%20AM.png)****** *Source: TradingView, CNBC, Bloomberg, Messari*   **Another Yawn-Fest** Another week went by without a lot of movement in the crypto secondary market.  The FOMC meeting was the big event, ultimately sending Treasury yields higher once again and equities lower, but the minutiae of “higher rates for longer” had little to no effect on the digital assets market. Ironically, the Treasury market is now more volatile than the crypto markets.  In fact, a 30-year Treasury bond issued 3 years ago is now down over 50%, barely outperforming BTC and ETH’s declines from 2021 all-time highs (-61% and -67% respectively).  Perhaps more ironically, today’s higher Treasury yields are just about the only interesting thing happening in the digital assets industry, as projects with high cash balances are parking assets in Treasuries to earn fat yields and hundreds of millions (if not billions) in revenues.  While Tether and USDC are earning the most, some DeFi projects are doing the same thing.  Per our friends at Cumberland:   > “*It’s no wonder, then, how much focus within crypto is on importing treasury yields onchain. Maker (MKR) is up 40% since the start of July, a period where ETH is down 20%. YTD, MKR has nearly doubled. Maker is driving revenue of over $150m annually, a level of revenue generation nearly unheard of in the crypto space.  The second-best performer YTD in the DeFi sector is Lido (LDO), which derives revenue from another “risk-free rate” ETH staking yields.  MKR and LDO are, in fact, the only blue-chip DeFi names to outperform ETH this year.”* Away from yields, most of the market’s focus is on supply changes rather than demand drivers. For example, last week Mt. Gox, the defunct crypto exchange, said it [would not be able to complete](https://www.coindesk.com/markets/2023/09/21/bnb-xrp-lead-slide-in-crypto-majors-as-mt-goxs-repayment-delay-fails-to-bouy-bitcoin-prices/#:~:text=Gox%20pushed%20the%20deadline%20for,on%20current%20prices%2C%20being%20stolen.) repayments by the October 31, 2023 deadline set earlier this year, and has pushed it back by 12 months to October 31, 2024. The Mt. Gox trustees [are set to repay](https://bitcoinist.com/bitcoin-repayment-deadline-mt-gox-trustee/) 141,686 BTC and 143,000 Bitcoin Cash (BCH) as part of the repayment plan.  Last week, we discussed how the entire market was focused on the supply of digital assets being [potentially sold out of the FTX bankruptcy estate](https://www.ar.ca/blog/the-misconception-of-the-ftx-estate-sale).  Further, the market has been glued to Optimism’s (OP) increased supply due to a private round issued out of their Treasury, and upcoming VC unlocks for tokens like dYdX (DYDX).     This is a problem with the market right now.  Every noteworthy event is supply-based, but a market rally can only happen when there is new demand, not just less supply.  The three hottest areas of digital assets in years past – Stablecoins, DEXs, and NFTs - have stalled.  Stablecoin supply (AUM) is falling.    ![](https://lh4.googleusercontent.com/H6oChwxrgKp6noA4K-DXT5aIbVXK7zFZFbWnIR62PtW27yUZHUWRuyheuE7JtrKC_cIpRu20Zo8MzbHRMCLYenLMS7kg5gWpatkvRkNfZii3vX9y-3cENQQquU60gfMBhVEt2KWI6D927gXwjFzqsHc) *Source: *[*TheBlock*](https://www.theblock.co/data/stablecoins/usd-pegged)   DEX volumes are once again on track for their lowest volume month since we began tracking.    ![](https://lh3.googleusercontent.com/730rVRQqrn1JiyCx9dYkFSwInS35MsBjpUib-hhrBk1FXelbLniofkr-0Ph0Qq5mCqQxHiDvocgu9AvQ0IS7BBaR7dB7LEgjpGTy-W2rJfkBX2IEaMJ8hPtN1BDCdkDMVn0vpnoKwp7kfaZMKFoiByU) Source: Token Terminal & Arca Internal Calculations     ***And That’s Our Two Satoshis! ****Thanks for reading everyone! Questions or comments, just let us know.*   **The Arca Portfolio Management Team** *Jeff Dorman, CFA - Chief Investment Officer* *Michael Dershewitz - Chief Operating Officer* *Katie Talati - Director of Research* *Sasha Fleyshman - Portfolio Manager* *David Nage - Portfolio Manager* *Wes Hansen - Director of Trading and Operations* *Michal Benedykcinski - Senior Vice President, Research* *Nick Hotz, CFA - Vice President, Research* *Kyle Doane - Vice President, Trading* *Alex Woodard - Associate, Research* *Christopher Macpherson - Research Analyst* *Andrew Masotti - Associate, Trading and Operations*     **To learn more or talk to us about investing in digital assets and cryptocurrency** **call us now at [(424) 289-8068](tel:+14242898068).** ### Subscribe For the Latest Blockchain News & Analysis     Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, legal advice, tax advice, a research report, or a recommendation. Any decision to invest or take any other action with respect to any investments discussed in this commentary may involve risks not discussed, and therefore, such decisions should not be based solely on the information contained in this document. Please consult your own financial/legal/tax professional. Statements in this communication may include forward-looking information and/or may be based on various assumptions. The forward-looking statements and other views or opinions expressed are those of the author, and are made as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated and there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to change at any time. Arca disclaims any obligation to update or revise any statements or views expressed herein. Past performance is not a guarantee of future results and there can be no assurance that any future results will be realized. Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain information provided herein may be based on third-party sources, which is believed to be accurate, but has not been independently verified. Arca and/or certain of its affiliates and/or clients may now, or in the future, hold a financial interest in investments that are the same as or substantially similar to the investments discussed in this commentary. No claims are made as to the profitability of such financial interests, now, in the past or in the future and Arca and/or its clients may sell such financial interests at any time. The information provided herein is not intended to be, nor should it be construed as an offer to sell or a solicitation of any offer to buy any securities, or a solicitation to provide investment advisory services. 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