Coin360 Daily Dispatch | Crypto Market Updates & Highlights | April 29, 2024

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Crypto Market Update

Table of Contents

Bitcoin Developments

• Bitcoin's April Struggles Amid Stagflation Fears
• New Protocol Eases Bitcoin Network Congestion
• Bitcoin Miners Face Economic Challenges Post-Halving

Ethereum and Regulation

• Ethereum's ETF Prospects Dampened Amid Regulatory Hurdles
• SEC's Shifting View on Ethereum Sparks Regulatory Concerns

Regulatory and Legal Issues

• Russia Balances Crypto Regulation and Economic Interests
• Binance CEO Faces Legal Challenges
• BlackRock Strengthens Board with Crypto Expertise
• Thailand Intensifies Crackdown on Crypto Mining and Ads
• Trust Wallet Restored on Google Play Store
• US Regulatory Pressure Shuts Down Crypto Wallet Operations
• South Korea Enhances Measures Against Crypto Crimes

Crypto Innovations and Investments

• ASX Prepares for Bitcoin ETF Approval by 2024
• Grayscale Sees Reduced Outflows Amid Market Shifts
• Tether Expands into Neurotech Sector
• Friend.tech Launches V2 with Innovative Token Airdrop
• Yuga Labs Restructures to Focus on Cryptonative Initiatives

Bitcoin's April Struggles Amid Stagflation Fears

Bitcoin and Ether are trading lower due to fears of U.S. stagflation, with BTC dropping to as low as $62,050 before rebounding. Bitcoin's potential cycle peak is debated among top analysts, with predictions ranging from $70,000 to $210,000. The market anticipates the Federal Reserve's interest rate decision, with expectations set for the earliest rate cut in September, influenced by U.S. economic data.

Amidst these economic uncertainties, April may end as Bitcoin's worst month since the 2022 bear market. However, opportunities are identified with Bitcoin's open interest and MVRV ratio suggesting a possible undervaluation, according to Bitfinex Alpha report. Additionally, despite recent price struggles, the Adjusted Spent Output Profit Ratio (aSOPR) indicates that Bitcoin retains a bullish momentum, suggesting that the market might still have upward potential, as per CryptoQuant.

New Protocol Eases Bitcoin Network Congestion

Omnity has integrated Runes, a protocol for issuing fungible tokens on Bitcoin, allowing cross-chain transfers via the Internet Computer Protocol (ICP). Runes' recent mainnet launch has led to high transaction fees on Bitcoin, but the integration aims to reduce congestion on the network by shifting transactions to ICP, following the success of inscription protocols on Layer 1 and Layer 2 networks in late 2023.  

Bitcoin Miners Face Economic Challenges Post-Halving

After the fourth Bitcoin halving, miner revenue saw a significant surge and subsequent decline in transaction fees, dropping from $80 million to $6 million within days. Transaction fees, currently constituting 35% of total miner revenue, have fallen from their peak of 75%, potentially impacting miner sustainability amidst reduced block rewards and stagnant BTC prices.  

Ethereum's ETF Prospects Dampened Amid Regulatory Hurdles

As per analysts, Ethereum's surge to $3,300 over the weekend might be a false breakout due to a resistance at $3,353 and potential high liquidity sales. Meanwhile, Santiment pointed out that Ethereum's network fees reached a six-month low, potentially indicating an upcoming altcoin rally. Regarding ETF approval, Justin Sun stated it's unlikely an Ethereum ETF will be approved soon in May, given the need for more regulatory education. 

Before his statement, Franklin Templeton had listed an Ethereum ETF under the ticker EZET, still pending SEC approval, with several others also awaiting decisions, sparking hope of more approvals to be made. This ETF seeks to track Ethereum's price, with custody by Coinbase Custody Trust Company and the Bank of New York Mellon.

SEC's Shifting View on Ethereum Sparks Regulatory Concerns

In April 2023, SEC Chairman Gary Gensler and the SEC appeared to view Ethereum (ETH) as a security, contradicting earlier SEC guidance that considered ETH alongside Bitcoin as not securities. The revelation emerged from Consensys' lawsuit against the SEC, showcasing previously undisclosed beliefs held by the SEC for over a year. 

Specifically, an investigation called "Ethereum 2.0" was approved on April 13, 2023, focusing on ETH's compliance with federal regulations, indicating SEC's ongoing scrutiny following Ethereum's 2022 merge to a proof-of-stake mechanism. This stance has led to significant industry challenges, as various parties, including the CFTC, argue that ETH should be classified as a commodity, not a security.

Russia Balances Crypto Regulation and Economic Interests

According to Anton Gorelkin, the Deputy Chairman of the State Duma Committee on Information Policy, Information Technologies, and Communications, Russia will not completely ban cryptocurrency transactions but will prohibit crypto exchanges and platforms not in government pilot programs, aiming to control the crypto ecosystem and support the ruble. Legislation is targeting non-Russian crypto operations to limit exposure to Western sanctions, while allowing digital financial assets within Russia and experiments with digital rubles. 

Crypto miners and certain Central Bank projects are exceptions, with crypto mining enhancing Russia's tax revenues by over $2.59 billion. Recent use of cryptocurrencies like USDT by Russian entities for military procurements highlights ongoing debates among policymakers regarding cryptocurrency's regulation in domestic and international contexts.

Binance CEO Faces Legal Challenges

Binance's founder, Changpeng Zhao, faces a DOJ-recommended 3-year prison sentence, with Polymarket bettors estimating a 96% chance he'll be out in under 2 years. Trading levels indicate a 42% chance of less than 6 months, and letters of support from high-profile figures aim to sway the judge for a significantly reduced sentence.  

BlackRock Strengthens Board with Crypto Expertise

BlackRock appoints Moonpay’s Lindsey Haswell to its board, replacing Kimun Lee. Haswell’s expertise from Blockchain.com expected to boost IBIT growth. IBIT, second-largest spot Bitcoin ETF, faces slowing inflows despite maintaining market stability with $57.6 million inflows. Questions arise on IBIT’s transparency in reporting, countered by reassurances aligning its behavior with broader ETF trends.  

Thailand Intensifies Crackdown on Crypto Mining and Ads

The Thai SEC is intensifying efforts against misleading crypto ads, emphasizing strict compliance with advertising standards to protect investors from unwarranted risks. Meanwhile, Thai authorities seized over 650 crypto mining devices valued at approximately $5 million in Samut Sakhon and Ratchaburi, targeting operations suspected of electricity theft. The crackdown also led to the arrest of three individuals who admitted to managing the illegal operations and importing mining equipment from China for resale.

Trust Wallet Restored on Google Play Store

Trust Wallet, a noncustodial cryptocurrency wallet, has been reinstated on the Google Play Store following a temporary removal. The app's delisting prompted Trust Wallet to caution users against downloading from the Play Store due to potential scammers. This development is significant as it allows new users to access its services, potentially impacting the Trust Wallet token's performance.  

US Regulatory Pressure Shuts Down Crypto Wallet Operations

Phoenix and Wasabi Wallet cease US operations due to regulatory pressures. Concerns rise about the classification of self-custody wallet providers as money services businesses. Regulatory actions against Samourai Wallet and the MetaMask vs. SEC lawsuit complicate the future of the decentralized finance sector in the US. US authorities arrested Samourai Wallet founders on money laundering charges.  

South Korea Enhances Measures Against Crypto Crimes

South Korea is making its temporary crypto crime unit permanent due to a 49% increase in suspicious transactions. The Joint Virtual Asset Crime Investigation Unit will become a full department to address rising fraud. With over 16,000 reported suspicious transactions in 2023, the nation is also implementing strict crypto regulations to safeguard investors.  

ASX Prepares for Bitcoin ETF Approval by 2024

The Australian Securities Exchange (ASX) is anticipated to approve spot Bitcoin ETFs by 2024’s end, with diverse entities like DigitalX Ltd., VanEck, and BetaShares actively pursuing this. ASX holds significant equity market dominance and, following Asian momentum post-U.S. approvals, the region witnesses increasing interest, exemplified by Hong Kong's recent ETF approvals and Monochrome Asset Management's application via Cboe Australia.  

Grayscale Sees Reduced Outflows Amid Market Shifts

Last week, Grayscale's outflows slowed, with its GBTC product experiencing the lowest weekly outflow in nine weeks, totaling $440 million. Inflows into Newborn Nine ETFs dropped by over 50% to $126 million. Altcoins like Solana and Polkadot saw increased investor interest, while Ethereum sustained outflows of $38.4 million.  

Tether Expands into Neurotech Sector

Tether, the stablecoin issuer, invested $200 million to acquire a majority stake in Blackrock Neurotech, a brain-computer interface company. Blackrock Neurotech develops medical devices driven by brain signals to aid individuals with paralysis and neurological disorders. Tether's investment aims to support the roll-out, commercialization, and research and development of these transformative medical technologies.  

Friend.tech Launches V2 with Innovative Token Airdrop

Friend.tech V2 has sparked hype with its 100% airdrop of the FRIEND token. The platform, built on Base, is experiencing a resurgence, with $34.4 million TVL. Version 2 introduces the Money Club, NFTs, and custom engagement metrics. The point system for the airdrop is a notable addition, along with individualized chat space customization options.