Coin360 Daily Dispatch | Crypto Market Updates & Highlights | May 1, 2024

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Crypto Market Update

Table of Contents

Market and Regulatory Updates

• April's Crypto Market Tumbles Amid Economic Concerns
• Former Binance CEO Sentenced in High-Profile Case
• U.S. Bitcoin ETFs Experience Significant Outflows
• Hong Kong Launches Bitcoin and Ethereum ETFs

Crypto Exchanges and Platforms

• Tokenization of Real-World Assets Hits New High
• Celsius Network's Significant Token Burn Boosts Price
• Volatility Strikes Renzo Protocol Following Binance Listing
• Pike Finance Hit by Multiple Exploits

Country-Specific Developments

• StarkNet Identity Fraud Exposed by Chinese Police

Technical and Security Developments

• Bitcoin Miners Persist Despite Revenue Challenges
• Vitalik Buterin Debuts New Cryptographic Proof System
• Bitcoin Jesus Faces Tax Evasion Charges in Spain
• Crypto Hack and Scam Losses Decline in April 2024
• Curve Finance Patched for Potential Reentrancy Exploit

Market Performance

• Major Losses for Algorand, Sandbox, and Arbitrum Holders

NFT News

• AnimeCoin's New Gacha Grab Game Introduces NFT Rewards

April's Crypto Market Tumbles Amid Economic Concerns

Bitcoin faced a severe 14.76% decline in April with macroeconomic concerns and slowing ETF flows, marking its biggest monthly drop since August 2023, which continued into a 6% fall to an intraday low of $57,068. The cryptocurrency market, including Ethereum, experienced widespread losses ahead of a Federal Reserve meeting, with Bitcoin dropping to $57,000 and Ethereum below $2,900. Investor pessimism escalated due to hawkish fiscal policies and unfavorable judgments against major crypto entities, pushing Bitcoin below the $60,000 support level to two-month lows. 

Amid the sell-off, JPMorgan and Goldman Sachs anticipate the Federal Reserve's first interest rate cut in July, offering a potential future reprieve for risk assets, contrasting with more conservative predictions from other major financial institutions.

Former Binance CEO Sentenced in High-Profile Case

Former Binance CEO Changpeng Zhao, known as CZ, will serve four months in prison for violations of the US Bank Secrecy Act, reduced after a plea deal from a potential three-year sentence. This outcome has sparked mixed reactions; some see it as justice served, while others argue it's insufficient for the severity of the offenses, which included processing transactions linked to terrorist organizations. 

CZ's sentence also intends to serve as a deterrence in the crypto industry. Post-sentence, CZ plans to focus on education through his Giggle Academy initiative and emphasizes the importance of compliance in the crypto sector. He will likely serve the full term due to legal particulars, given his non-U.S. citizen status.

U.S. Bitcoin ETFs Experience Significant Outflows

In April, U.S. spot bitcoin ETFs saw significant financial movements with $343.5 million in net outflows, ending a three-month streak of inflows. BlackRock’s IBIT dominated with $1.5 billion in inflows, while Grayscale’s GBTC and others like ARKB and BRRR experienced outflows. 

Concurrently, the crypto markets witnessed nearly $200 billion drop in market cap as Grayscale transferred approximately $245 million worth of Bitcoin to Coinbase, likely for sale. This market activity coincided with nearly $400 million in trader liquidations, reflecting a volatile period for cryptocurrencies.

Hong Kong Launches Bitcoin and Ethereum ETFs

The debut of Hong Kong's Bitcoin and Ethereum ETFs saw $11.19 million in trading volume, with ChinaAMC Bitcoin ETF ranking 6th of 82 launches in the past 3 years, according to senior Bloomberg analyst Eric Balchunas. OSL CEO views it as a message from China, signaling potential for broader crypto adoption in Asia.  

Tokenization of Real-World Assets Hits New High

Real-world asset (RWA) tokenization has surged to a new peak with $8 billion locked, experiencing a 60% increase since February, driven by a preference for debt-based, high-yield investments excluding fiat-backed stablecoins, as per Messari report. This includes assets like commodities, securities, and real estate. 

On another front, BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) became the world's largest tokenized treasury fund in less than six weeks, reaching a market cap of $375 million, surpassing Franklin Templeton’s tokenized fund. BUIDL's rapid growth comes amid a broader trend towards blockchain-based tokenization of assets, which could revolutionize capital markets, potentially growing to a $16 trillion market by 2030.

Celsius Network's Significant Token Burn Boosts Price

On April 30, Celsius Network burned 652.2 million CEL tokens, which constituted 94% of the previous total supply, worth approximately $83.2 million. This reduced the remaining supply to 40.6 million CEL. Following the burn, the token saw an 8.4% price increase, contributing to its market value amid broader crypto market fluctuations.  

Volatility Strikes Renzo Protocol Following Binance Listing

Renzo Protocol's native token REZ experienced major volatility after its listing on Binance. Within 40 minutes, its price dropped from $0.2578 to $0.1908 and continued to fluctuate, ultimately plunging by 35.787% to $0.1615. Concurrently, an airdrop distributing 7% of REZ's supply commenced just before the listing, further impacting its market performance.  

Pike Finance Hit by Multiple Exploits

Pike Finance suffered two exploits within three days, resulting in a combined loss of over $1.9 million. The recent cross-chain attack led to a $1.6 million loss, affecting Ethereum, Arbitrum, and Optimism blockchains. The protocol also faced a USDC-related vulnerability, losing 299,127 USDC across the same three networks but assured the safety of other assets.  

StarkNet Identity Fraud Exposed by Chinese Police

Chinese police captured Lan Mou for forging identities to claim over 40,000 STRK tokens in the StarkNet airdrop, converting them to over $91,000 USDT. The suspect submitted 40 false airdrop forms, transferring the tokens to an OKX wallet. The airdrop attracted significant interest, with the first 45 million STRK tokens being claimed in less than 90 minutes.  

Bitcoin Miners Persist Despite Revenue Challenges

CryptoQuant CEO Ki Young Ju addressed concerns about bitcoin miners post-halving, noting that their revenues have dropped to 2023 levels. Despite this, there are no signs of capitulation, with miners holding onto their crypto holdings. They face a decision to either wait for a potential price increase or capitulate to current market conditions.  

Vitalik Buterin Debuts New Cryptographic Proof System

Vitalik Buterin introduced Binius, a system for efficient cryptographic proofs over binary fields. It operates directly on individual bits, offering significant performance gains over traditional systems. Binius uses multidimensional "hypercube" representation and binary finite fields for efficient arithmetic operations. Buterin expects further improvements in binary-field-based proving techniques in the near future.  

Bitcoin Jesus Faces Tax Evasion Charges in Spain

Roger Ver, known as "Bitcoin Jesus," has been arrested in Spain on charges of tax evasion totaling nearly $50 million. He allegedly lied to the IRS about his Bitcoin holdings and failed to report capital gains from their sale. The U.S. is seeking his extradition from Spain for trial. Ver has been a prominent figure in the Bitcoin and Bitcoin Cash communities.  

Crypto Hack and Scam Losses Decline in April 2024

In April 2024, CertiK recorded the lowest crypto hack and scam losses since 2021, totaling $25.7 million. This marked a 141% decrease from March, with exploits amounting to $21 million, flash loans to $129,000, and exit scams to $4.3 million. High-profile incidents included breaches at CondomSol and FixedFloat, showcasing ongoing security challenges in the industry.  

Curve Finance Patched for Potential Reentrancy Exploit

Cybersecurity researcher Marco Croc detected a reentrancy vulnerability in Curve Finance, receiving a $250,000 bounty. Although categorized as less severe, the exploit posed potential panic. The protocol experienced a $62 million hack, leading to a reimbursement vote for affected liquidity providers. Subsequently, it was discovered that the attacker took advantage of a vulnerability in certain versions of the Vyper programming language.  

Major Losses for Algorand, Sandbox, and Arbitrum Holders

Over 80% of Algorand (ALGO), Sandbox (SAND), and Arbitrum (ARB) holders are experiencing losses, with Algorand leading at 91%, according to IntoTheBlock. The volatile crypto market has caused significant price fluctuations, prompting caution but also indicating potential opportunities for savvy investors. Understanding the underlying technology and market trends is crucial for navigating the ups and downs effectively.