Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | October 7 - October 13, 2023

Crypto Weekly Market Update

Table of Contents

Crypto Market Overview

• Crypto Weekly Recap: Price Actions, Market Trends, and Key Developments

Breaking Scandals and Legal Issues

• FTX Scandal Rocks the Crypto World
• Binance Navigates Regulatory Maze and Humanitarian Aid

Market Health and Currency Trends

• Ethereum's Mixed Signals on Market Health
• USDR Stablecoin Crashes Amidst Liquidity Crisis

Banking and Financial Innovations

• JPMorgan's Blockchain Milestone in Collateral Settlement
• Mastercard's CBDC Tokenization Revolution
• CoinList Unveils Staking Fund Amid Regulatory Complexity

Market Dynamics and Volume

• HTX Market Share Revives After China Ban

Crypto Wallets and Payment Processors

• MetaMask Adds Stripe for Easier Crypto Onboarding

Leadership and Company Strategy

• Paolo Ardoino Ascends as Tether's New CEO

High-Profile Sales and Trading

• Record-Breaking CrypToadz NFT Sale Raises Eyebrows

Gaming and Entertainment

• Blockchain Gaming Investments Dip in Q3

Regulatory Updates

• UK Committee Urges NFT and Fan Token Regulation

Crypto Weekly Recap: Price Actions, Market Trends, and Key Developments

Bitcoin:

• Weekly change: -2.45%
• Crypto market, including Bitcoin and Ethereum, faced big losses this week.
• Bitcoin dropped $600 on Monday, from $27,900 to $27,300.
• Israel-Hamas conflict and FTX lawsuit pressured the crypto market.
• Bitcoin aims to stabilize above $26,800, wiping out October gains.
• CPI rose 0.4% monthly and 3.7% annually on Wednesday, exceeding 3.6% forecast. 
• Gold reached a two-week peak of $1,890 following the CPI report.
• Trial of Sam Bankman-Fried and potential rate hike add to market woes.
• Bitcoin hit a two-week low of $26,600 on Wednesday amid challenges.
• Bitcoin outperformed others, possibly due to spot-based ETF approval hopes.
• USDT holdings on exchanges approached $10 billion as crypto investors scout deals.
• Bitcoin's October performance usually positive, but now at a three-month sentiment low.
• U.S. Dollar Index near 10-month high may limit Bitcoin's rise above $28,000 short-term.

Ethereum:

• Weekly change: -4.29%
• Ethereum hit a seven-month low of $1,524 on Thursday, after Ethereum Foundation sold $2.7M in ETH on Uniswap on Monday.
• Ether-Bitcoin ratio sank to a 15-month low on Tuesday as ETFs didn't boost sentiment.
• Ethereum mainnet's daily fee revenue is at its lowest since the DeFi boom of 2020.
• The decrease in fees may challenge this thesis and raise questions about the long-term sustainability of Ethereum's fee model.
• Weekly NFT sales on Ethereum dropped 6.1% to $32.44M, even for big names like Bored Ape Yacht Club and CryptoPunks.
• Investors eye Federal Reserve speeches next week for clues on interest rates.

Altcoins:

• HTX hacker gave back funds, Justin Sun rewarded with 250 ETH
• Deribit to launch XRP, SOL, MATIC options in January
• Bancor's price surged 70%, trading volume at 19-month peak
• Solana's institutional money influx reached 2022 high
• Trader Joe's sued crypto project over name, JOE Token plummeted
• Circle launched USDC tokens on Polygon
• Web3 Foundation earmarked $40M for Polkadot, DOT hit 3-year low
• Polygon's ApeCoin DAO pitch questioned for costs
• Platypus Finance hit by $2M exploit on Avalanche
• Dogecoin's daily transactions dipped to 3-month low
• Fortnite's BRICK token spiked 80% in a day
• Terraform Labs blamed Citadel Securities for stablecoin fall
• Flare Network burned 2.1B FLR for ecosystem health
• THORChain rose 8%, THORSwap resumed trading
• Frax Finance's staking vault pulled in $30M, FXS stable
• FriendTech added two-factor authentication after sim-swap risks
• WOO Network repurchased shares from bankrupt Three Arrows Capital
• Immutable partnered with Amazon on cloud gaming evolution
• Lido's $4M Arbitrum grant split community, faced $30K Ethereum penalty
• SSV Network's value tanked as founder joined Israeli Army
• Stars Arena reclaimed 90% of stolen funds, offered $257K bounty
• BarnBridge DAO complied with SEC ruling
• Uniswap rolled out Android Ethereum Wallet
• GMX secured biggest share of $40M Arbitrum Grant
• Ex-Voyager CEO Steve Ehrlich faced U.S. lawsuits for fraud and misleading customer safeguards

FTX Scandal Rocks the Crypto World

The FTX scandal exploded when Caroline Ellison, former CEO of Alameda Research, accused Sam Bankman-Fried (SBF) of misusing $1 billion in customer funds to buy Binance's equity in FTX. Ellison also claimed FTX tried to recover $1 billion from the Chinese government using shady accounts, and when that failed, sent $150 million in crypto to Chinese officials. 

SBF faces 13 legal charges, including fraud and money laundering. The scandal led to a $175 million settlement with Genesis Global Holdco, far less than the initial $3.9 billion claim. The fiasco also impacted Solana's market value and revealed a $190 million undisclosed loss for Alameda.

Binance Navigates Regulatory Maze and Humanitarian Aid

Binance took a firm stance against terrorist financing by freezing Hamas-linked accounts, following a request from Israeli authorities. The action is precise, affecting only targeted accounts and sparing ordinary Palestinian users. On the flip side, Binance faces UK regulatory issues as the Financial Conduct Authority (FCA) imposed restrictions on its new partner, Rebuildingsociety.com, affecting its ad approvals. 

Meanwhile, Binance's Industry Recovery Initiative, aimed at aiding crypto projects in liquidity crises, has only deployed less than $30 million of its $1 billion fund. Additionally, a local Israeli Web3 community initiated "Crypto Aid Israel," raising nearly $50,000 in crypto donations for civilians affected by the Israel-Palestine conflict.

Ethereum's Mixed Signals on Market Health

Ethereum is facing a mixed bag of trends. Gas fees have dipped to 8.8 Gwei, signaling decreased activity in DeFi, NFTs, and layer-2 networks. Major players like Uniswap, 1inch, and MetaMask have reduced gas consumption, contributing to the decline. Ethereum's supply is growing at 1,460 ETH daily, pressuring its 'ultrasound money' narrative. 

User retention is a concern, with only 7% sticking around after a year. Ethereum whales have offloaded 12 million ETH, contrasting Bitcoin whales who are accumulating. Standard Chartered predicts a bullish $8,000 Ethereum price by 2026, driven by smart contracts and gaming.

USDR Stablecoin Crashes Amidst Liquidity Crisis

USDR, a stablecoin by Tangible, plummeted from $0.996 to $0.50 within hours, shocking the crypto community. The coin was unique for its reserve assembly, primarily tokenized real estate, and had projected yields of 6.38%. Tangible's reserves shrank to $49.6 million from over $80 million, with DAI making up 50% of the reserves. 

Regulatory changes and a liquidity crisis exacerbated the situation. One investor even traded $130,000 of USDR for USDC at a negligible rate, causing a bot to profit $107,000. Tangible aims for recovery by liquidating their insurance fund and injecting $2.4 million from its DAI, USDC, and USDT holdings.

JPMorgan's Blockchain Milestone in Collateral Settlement

JPMorgan has executed its first live blockchain-based collateral settlement using its Ethereum-based Onyx blockchain and Tokenized Collateral Network (TCN). In collaboration with BlackRock and Barclays, BlackRock tokenized shares of one of its money market funds. These tokens were swiftly transferred to Barclays as collateral for an OTC derivatives trade. 

The process was near-instantaneous, marking a first for all parties involved. The tokenization aims to reduce operational friction in meeting margin calls, offering a quicker, more cost-effective way to meet margin requirements.

Mastercard's CBDC Tokenization Revolution

Mastercard has developed a groundbreaking solution for the tokenization of Central Bank Digital Currencies (CBDCs) across multiple blockchains. This tech innovation was part of a pilot project with the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre. The focus is on robust security, ensuring that only authorized parties can interact with the CBDC. 

The solution was demonstrated through a live transaction where a pilot CBDC was used to buy a Non-Fungible Token (NFT) on the Ethereum blockchain. This development opens doors for secure and seamless transactions across various public and private blockchains.

CoinList Unveils Staking Fund Amid Regulatory Complexity

CoinList has rolled out a staking fund targeting accredited U.S. investors, offering yields on digital assets like Ethereum (APY 3.76%) and Near (APY 6.96%). The fund aims to expand its asset offerings, with APYs ranging between 4% and 15%. Staking rewards will be pooled and distributed in the respective tokens. 

Despite regulatory hurdles, CoinList has navigated U.S. SEC guidelines, which have previously led to penalties for companies like Kraken and Coinbase for their staking services. CoinList aims to operate within the law, although the SEC's future stance remains uncertain.

HTX Market Share Revives After China Ban

According to a recent report by Kaiko, HTX's market share plummeted from 22% to 4% post-China's crypto ban but recently spiked to 20%, mirroring a similar surge on Poloniex. Small altcoins fueled this, jumping from $1.4 billion to $3.4 billion in weekly volume. In the USDT-USDC pair, a net $350 million USDT was consistently sold for USDC. 

Two HTX-linked wallets transferred nearly $400 million USDC to Binance. The abrupt volume surge, stablecoin swaps, and Binance transfers point to orchestrated, unusual activity on HTX.

MetaMask Adds Stripe for Easier Crypto Onboarding

MetaMask, a widely-used Ethereum and multi-coin wallet, has rolled out support for Stripe, a major payment processor. This new feature enables users to deposit fiat and receive crypto through a fresh on-ramp. Initially available to U.S. users, the Stripe on-ramp is accessible via MetaMask's mobile app, browser add-on, and Portfolio service. 

The feature leverages Stripe's Link service for one-click payments. MetaMask already supports nine other payment services, including PayPal and Coinbase Pay. With a user base of 30 million and connections to over 17,000 Web3 services, MetaMask has handled $10 billion in P2P coin swaps.

Paolo Ardoino Ascends as Tether's New CEO

Paolo Ardoino is set to become Tether's new CEO in December, taking over from Jean-Louis van der Velde, who will shift to an advisory role. Ardoino, currently Tether's CTO and also serving as CTO for Bitfinex and CSO for Holepunch, has been a key player in boosting Tether's market cap to $83 billion. 

The company aims to focus on financial inclusion in emerging markets and become a tech powerhouse under his leadership. Velde praised Ardoino, emphasizing Tether's continued growth focus on emerging markets and transformative tech. Ardoino vows for transparency and seamless integration of digital assets globally.

Top Weekly Altcoin Gainers and Losers

Gainers:

Loom Network LOOM (+61.47%)

Klaytn KLAY (+7.72%)

Frax Share FXS (+7.43%)

Tether Gold XAUT (+5.83%)

PAX Gold PAXG (+4.85%)

Losers:

Mantle MNT (-18.63%)

THORChain RUNE (-17.82%)

Radix XRD (-17.56%)

Rocket Pool RPL (-15.21%)

Rollbit Coin RLB (-14.96%) 

NFT Market Map

Record-Breaking CrypToadz NFT Sale Raises Eyebrows

A CrypToadz NFT, typically valued under $1,000, was sold for a staggering 1,055 wETH ($1.6 million) on OpenSea. This particular NFT is one of 6,969 created by artist Gremplin and had a trading volume of 12,000 ETH ($38 million) in its first 10 days. The buyer's wallet was funded by an account linked to Tornado Cash. 

The NFT was previously bought for just 0.95 ETH ($1,600), raising suspicions of wash trading. Tornado Cash itself has been under scrutiny, with the U.S. imposing sanctions for its role in laundering.

Blockchain Gaming Investments Dip in Q3

In Q3 2023, the blockchain gaming sector attracted around $600 million in investments, marking a 38% drop from Q2's $973 million. The total funding for the year stands at roughly $2.3 billion, just 30% of last year's total. Over 6,100 jobs were cut across the gaming industry, affecting both traditional and crypto gaming companies. 

The majority of Q3 funding went to gaming-centric investment firms, signaling venture capital's continued role in the industry. Axie Infinity led in NFT transaction volume with $90 million, followed by Gods Unchained at $55 million. Sky Mavis, behind Axie, distributes 112,000 AXS tokens ($472,000) to players every season.

UK Committee Urges NFT and Fan Token Regulation

A UK parliamentary committee is pushing for regulations on nonfungible tokens (NFTs) to protect creators from copyright infringement. They're concerned about the quick minting of NFTs and the slow legal recourse for artists. The committee also calls for a code of conduct for NFT marketplaces to shield creators, consumers, and sellers from fraud. 

On the sports front, the committee warns against football organizations like Manchester City and Tottenham Hotspur issuing "fan tokens," citing their volatility and misleading perks. They recommend excluding fan tokens from any metrics of fan engagement due to their risky nature.

This article has been refined and enhanced by ChatGPT.