Coin360 Daily Dispatch | Crypto Market Updates & Highlights | April 23, 2024

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Crypto Market Update

Table of Contents

Bitcoin Market Updates

• Bitcoin Reaches Record High amid ETF Buzz
• Proposal BIP-420 to Introduce Smart Contracts on Bitcoin

Ether and SEC Updates

• SEC Postpones Decision on Franklin Templeton Ether ETF
• SEC Seeks $5.3 Billion Judgment Against Terraform Labs

Crypto Exchange News

• Binance Grapples with Global Regulatory Challenges
• Crypto.com Delays South Korea Launch Amid Regulatory Scrutiny
• eToro and 21Shares Launch Crypto Portfolio for Retail Investors

Regulatory and Legal Developments

• Tether Complies with Sanctions, Freezes Assets
• Legal Challenge to SEC's Expanded 'Dealer' Definition
• Ripple Pushes Back Against SEC's Hefty Fine Proposal

Banking and Institutional Involvement in Crypto

• European Banks Adopt Crypto Amid Regulatory Clarity
• NYSE Considers 24/7 Trading to Match Crypto Markets

Platform and Token Developments

• Asymmetric Research Identifies Reentrancy Bug in Cosmos
• Unclaimed Crypto Assets Linger in DeFi Bridges
• Akash Network's AKT Token Soars After Upbit Listing
• Safe Protocol Token Becomes Transferable, Valuation Drops
• INJ 3.0 Upgrade Launches, Promotes Deflationary Tokenomics
• Governance Reforms Follow Mango Markets Manipulation Incident
• Metis Advances Decentralized Sequencer System
• Stacks Nakamoto Upgrade Enhances Throughput
• Magic Eden's Runes Platform Boosts BTC Transaction Fees
• Zentry Rebrands to Unify Gaming Platforms
• Apecoin's Price Recovers Despite Challenges in NFT Initiatives

Bitcoin Reaches Record High amid ETF Buzz

Bitcoin price once reached $67,200, with Bitfinex noting a supply squeeze due to the halving event and insatiable demand influenced by the introduction of spot Bitcoin ETFs. In contrast, Fidelity Digital Assets revised its Bitcoin outlook to neutral, citing valuation concerns despite the growth of its Wise Origin Bitcoin Fund. Glassnode suggests investors are moderating expectations post-halving, noting diminishing returns and significant unrealized profits currently in the market. 

QCP Capital predicts that the impact of Bitcoin's halving on market dynamics may take two months to materialize, with possible short squeezes in altcoins and memecoins. Meanwhile, IntoTheBlock highlights a recovery in the stablecoin market cap, now at $160 billion, driven by inflows into decentralized finance and supported by U.S. spot Bitcoin ETFs, indicating bullish market sentiment.

Proposal BIP-420 to Introduce Smart Contracts on Bitcoin

The BIP-420 proposal aims to enable covenants on Bitcoin, introducing features like smart contracts, secure bridges, and on-chain trading. Authored by Ethan Heilman and Armin Sabouri, the proposal seeks to reintroduce the OP_CAT opcode via a soft fork to expand Bitcoin's functionalities. However, its implementation is contingent upon technical, security, and community consensus considerations. Other Bitcoin covenant proposals, such as CTV, CSFS, and LNHANCE, are also under discussion, each with varying approaches and trade-offs.

SEC Postpones Decision on Franklin Templeton Ether ETF

The SEC has delayed its decision on the Franklin Templeton spot Ether ETF until June 11, extending the approval period for spot Ether ETFs. Standard Chartered anticipates that Ether ETFs are unlikely to be approved in May due to rising macro risks and regulatory hurdles. Regarding price action, Ethereum's market momentum may be hindered by a significant sell-wall at the $3,170 to $3,270 price range, representing a major holding concentration by 1.63 million addresses. 

Justin Sun's alleged acquisition of 127,388 ETH has highlighted bullish sentiment among Ethereum whales despite the price being slow to go up. Ethereum's price dynamics in Q2 are influenced by factors such as potential regulatory delays in ETF approvals, strong performance predictions, and competition from other blockchain networks, creating mixed sentiments of FOMO and FUD among investors.

SEC Seeks $5.3 Billion Judgment Against Terraform Labs

The SEC has filed a motion seeking a $5.3 billion judgment against Terraform Labs and Do Kwon for fraud. The request includes $4.7 billion in disgorgement and prejudgment interest, and $520 million in civil penalties. Additional proposed penalties involve barring Kwon from serving as an officer or director and imposing an injunction on Terraform Labs.  

Binance Grapples with Global Regulatory Challenges

Binance faces regulatory actions in the Philippines with the SEC seeking to remove its apps from Google and Apple stores due to unregistered securities and brokerage activities. In Canada, Binance faces a class-action lawsuit for allegedly selling crypto derivatives unlawly. Binance has also introduced the Renzo governance token REZ, allocating 2.5% of the total supply to its Launchpool. Furthermore, Binance launched a copy trading tool for spot crypto contracts, enhancing user trading capabilities and offering profit shares to lead traders.

Crypto.com Delays South Korea Launch Amid Regulatory Scrutiny

Crypto.com is postponing its South Korea app launch due to a reported on-site inspection by local regulators regarding alleged anti-money laundering failures. The exchange maintains the "highest" AML standards and plans to ensure Korean regulators understand its policies. Approvals were received in 2022, but the launch is postponed pending regulator review.  

eToro and 21Shares Launch Crypto Portfolio for Retail Investors

eToro and 21Shares have collaborated to launch the 21Shares-Flows crypto portfolio for retail investors. This dynamic portfolio of 25 cryptoassets uses data-driven insights from European crypto ETP flows to adjust its allocation according to market dynamics. 21Shares recently surpassed $5 billion in Assets Under Management and has seen substantial growth, offering diverse ETPs for crypto exposure.  

Tether Complies with Sanctions, Freezes Assets

Tether pledges to freeze assets connected to OFAC-sanctioned entities amid reports of Venezuela's state oil company, PDVSA, using USDT to navigate oil export sanctions. Following U.S. oil sanctions reimposition, PDVSA allegedly shifted to USDT payments to evade fund freezes, with customers required to prepay in USDT for oil transactions, as per Reuters' sources.  

Legal Challenge to SEC's Expanded 'Dealer' Definition

The Blockchain Association and Crypto Freedom Alliance of Texas have filed a lawsuit against the SEC's expanded "dealer" definition, alleging it could encompass innocent digital asset traders. They argue that the SEC disregarded public feedback and economic analysis. The lawsuit seeks to declare the rule as arbitrary and block its enforcement, arguing that it blurs the line between dealers and traders.  

Ripple Pushes Back Against SEC's Hefty Fine Proposal

Ripple Labs has rejected the SEC's proposed $1.95 billion fine, advocating for a $10 million penalty instead. The court found Ripple breached securities laws with XRP sales but dismissed certain SEC claims. Ripple argued against the excessive penalties, asserting its compliance and negligible gains to disgorge from institutional sales.  

European Banks Adopt Crypto Amid Regulatory Clarity

European banks are venturing into crypto due to regulatory clarity under the MiCA framework. Bitpanda is aiding banks lacking technical expertise. Raiffeisen partners with Bitpanda for digital asset services. Institutional interest grows post-U.S. Bitcoin ETF approval. Landesbank Baden-Württemberg partners with Bitpanda for crypto custody due to corporate demand. Banks pivot towards crypto services to meet customer needs.  

NYSE Considers 24/7 Trading to Match Crypto Markets

The New York Stock Exchange (NYSE) is considering 24/7 stock trading and is gauging market sentiment through a survey. This move would align stock trading with the round-the-clock availability of cryptocurrency markets, but concerns about managing overnight price swings and maintaining liquidity have surfaced. Initial feedback from a poll suggests mixed support for the idea.  

Asymmetric Research Identifies Reentrancy Bug in Cosmos

Asymmetric Research, a contributor to the Wormhole protocol, discovered a reentrancy vulnerability in Cosmos blockchain. The bug could have risked $150 million but was patched before exploitation. This marked the first such vulnerability in the trusted Cosmos ecosystem, impacting IBC-connected chains like Osmosis. Asymmetric emphasized the need for cross-chain security research.  

Unclaimed Crypto Assets Linger in DeFi Bridges

Arkham Intelligence's report unveils millions of unclaimed crypto assets in DeFi bridge contracts. Instances include $800,000 in the Arbitrum bridge, $14 million in wrapped BTC, $117,000 from a CryptoPunks sale, and over $1 million in the Optimism bridge. Notable individuals and entities, such as an NFT collector and Coinbase, are among those who have overlooked substantial sums.  

Akash Network's AKT Token Soars After Upbit Listing

Akash Network's AKT token surged over 50% following its listing on Upbit, reaching nearly $7 with a market cap exceeding $1.45 billion. The company, built on the Cosmos blockchain, facilitates decentralized cloud computing and will host the Akash summit, focusing on decentralized AI. This aligns with the broader trend of decentralized hardware utility for non-crypto use cases.  

Safe Protocol Token Becomes Transferable, Valuation Drops

Safe Protocol's governance token, SAFE, recently became transferable after being locked for nearly two years. With a circulating supply of 427 million out of a total one billion tokens, Safe's valuation dropped by 19% to $2.8 billion. The decision stemmed from extensive community engagement, culminating in a resounding vote for token transferability.  

INJ 3.0 Upgrade Launches, Promotes Deflationary Tokenomics

INJ 3.0 upgrade is live on mainnet after a successful on-chain vote, leading to a new era for Injective. The upgrade brings significant changes to the tokenomics system, reducing inflation and making INJ one of the most deflationary assets. With a 400% increase in deflation over the next two years, the network is now positioned to react to staking fluctuations effectively.  

Governance Reforms Follow Mango Markets Manipulation Incident

Mango Markets underwent governance changes post-Avi Eisenberg's market manipulation conviction. A buyback proposal involving MNGO tokens, purchased from the FTX estate, received substantial support to boost token value. The proposal, initially defeated but later revised for broader participation, notably influenced by tokens from the FTX estate, showcases potential liquidity implications and community governance dynamics.  

Metis Advances Decentralized Sequencer System

Metis, an Ethereum L2 rollup platform, completed Phase 1 of its Decentralized Sequencer upgrade and launched Phase 2, introducing sequencer mining and liquid staking. The 20% Mining Rewards Rate incentivizes participation in sequencer mining, promoting network resilience and decentralization. Partnership support aims to bolster community involvement and decentralized sequencer system vision.  

Stacks Nakamoto Upgrade Enhances Throughput

Stacks is undergoing the Nakamoto upgrade to address congestion by decoupling block production from Bitcoin's schedule. The overhaul introduces a new block production method and consensus algorithm, enhancing transaction throughput. With $1.3 billion worth of STX staked, representing one-third of the total supply, the token surged over 16%, reaching the top 25 tokens by market capitalization.  

Magic Eden's Runes Platform Boosts BTC Transaction Fees

Magic Eden's recent launch of the Runes platform aims to streamline BTC token trading by consolidating tools and resources, allowing for easier management of BTC-related activities in one venue. 

The Runes protocol developed by Casey Rodarmor, designed for creating fungible tokens on Bitcoin, has already impacted transaction fees, causing Bitcoin daily fees to hit a new all-time high of $80 million on April 20th, which is four times the previous record. This surge in fees occurred right after Bitcoin’s halving event on April 19th, which has paradoxically increased miners' earnings despite halved block rewards, thanks to the spike in transaction fees from Runes-related activities. 

Zentry Rebrands to Unify Gaming Platforms

Zentry, formerly GuildFi, rebrands to create an integrated gaming Superlayer. With $140 million funding and influential backers, Zentry aims to unify gaming platforms into a single Play Economy. A 1-for-10 token split integrates the community, and plans for a real-life massive multiplayer RPG experience, transcending traditional DAOs, further solidify Zentry as a dominant force.