Coin360 Daily Dispatch | Crypto Market Updates & Highlights | September 12, 2024

Crypto Market Update

Table of Contents

Crypto Market Updates

• Bitcoin rallies amid inflation data and tech stock boost
• Vitalik Buterin explains ETH sales and new Layer 2 criteria
• Bitcoin and Ethereum ETFs witness net outflows
• eToro settles with SEC, limits crypto trading options

Institutional and Tokenization Developments

• Grayscale introduces XRP and SUI trusts, boosting prices
• ParaFi Capital tokenizes $1.2B fund on Avalanche blockchain
• Coinbase launches cbBTC, integrating DeFi and Base
• Binance Launchpool unveils Hamster Kombat token farming
• Anchorage and BitGo join Coinbase as crypto ETF custodians

Layer 2 and Stablecoin Growth

• Layer 2 stablecoins surpass $10B in DeFi transactions

Solana Ecosystem Updates

• Cypherpunk rebrands, focuses on Solana amidst SOL concerns

Exchange and Protocol News

• Uniswap CEO refutes deployment cost allegations
• Eigen Labs enhances blockchain security with new protocol
• Vega Protocol retires Layer 1 blockchain amid trading issues

AI, Gaming, and Web3 Innovations

• CARV launches $50M accelerator for gaming and AI integration

Regulatory and Legal Developments

• Circle moves headquarters to NYC, eyes IPO
• Ex-FTX co-CEO faces legal troubles over political donations
• Kalshi wins legal battle, launches political prediction markets

Cross-chain and Interoperability Solutions

• 1inch introduces cross-chain fusion atomic swap protocol
• Nomic brings decentralized Bitcoin custody to Ethereum

Worldcoin Controversy and Tokenization Growth

• Worldcoin denies investigation amid regulatory scrutiny
• Binance invests in tokenization of real-world assets

Security, Hacks, and Exploits

• Code4rena uncovers DittoETH exploit, avoids major damage

Environmental and Carbon Token Initiatives

• Flowcarbon cancels token sale, refunds investors

NFT and CryptoPunk Market Surprises

• Rare CryptoPunk sold for a fraction in surprise buyout

Bitcoin rallies amid inflation data and tech stock boost

Bitcoin rose above $58,000 amid a tech stock rally and U.S. inflation data hinted at potential Federal Reserve rate cuts, bolstering crypto market optimism. U.S. PPI inflation for August hit 1.7%, aligning with expectations but raising hopes for a Fed rate cut in 2024. However, Bitcoin whale transactions have dropped 33.6% since March, signaling a wait for extreme market conditions. Analysts predict further volatility, with Bitcoin potentially dropping to $45,000 before a new bull market emerges. 

Vitalik Buterin explains ETH sales and new Layer 2 criteria

Ethereum co-founder Vitalik Buterin explained his recent ETH sales, including the liquidation of 950 ETH for $2.27 million, stating it was an automated transaction set on August 29. Additionally, Buterin introduced stricter criteria for mentioning Layer 2 solutions, requiring a Stage 1 milestone by 2025, focusing on security. Coinbase attributed Ethereum’s (ETH) underperformance to the current crypto market structure. Key issues include investors crowding into altcoins, difficulties in exiting positions, declining network activity, and token inflation. Analyst David Duong highlighted that ETH lacks new catalysts to attract developer and investor interest. Institutional focus remains on Bitcoin, with limited capital flowing into Ethereum, which needs a new spark to reignite enthusiasm.

Bitcoin and Ethereum ETFs witness net outflows

Bitcoin and Ethereum ETFs experienced net outflows, with Ark's ARKB ETF leading the $43.9 million Bitcoin ETF exodus with $54 million leaving. Fidelity's FBTC ETF countered losses with a $12.6 million inflow. In contrast, Ethereum ETFs saw a modest net outflow of $0.5 million, largely due to VanEck's ETHV ETF experiencing $1.7 million in outflows.  

eToro settles with SEC, limits crypto trading options

eToro faces a $1.5M SEC settlement for permitting US customers to trade unregistered securities. Following the settlement, eToro will limit crypto trading to Bitcoin, Bitcoin Cash, and Ethereum only. The move aligns with eToro's focus on regulatory compliance and investor protection, with the requirement to liquidate non-compliant assets within 180 days.  

Grayscale introduces XRP and SUI trusts, boosting prices

Grayscale introduced an XRP Trust, causing an 8% surge in XRP's value. The trust focuses on XRP's utility for cross-border payments. Speculation arises about an XRP ETF approval by the SEC, with analysts noting potential hurdles due to Ripple's legal issues and regulatory constraints. The Trust complements Grayscale's expanding crypto offerings. Besides that, Grayscale's introduction of the Grayscale SUI Trust led to a 16% increase in SUI's price, reaching over $1. This move provides institutional investors with a new entry point into SUI and demonstrates the increasing influence of institutional endorsements on cryptocurrency valuations.

ParaFi Capital tokenizes $1.2B fund on Avalanche blockchain

ParaFi Capital plans to tokenize a portion of its $1.2 billion fund on the Avalanche blockchain using the Securitize platform, embracing blockchain integration in asset management. Tokenization allows ownership interests to be converted into digital tokens, facilitating easier access to investment opportunities. The market shows growth, with a $5 trillion forecast by 2030.  

Coinbase launches cbBTC, integrating DeFi and Base

Coinbase launched cbBTC, a 1:1 backed investment product on Ethereum and Base, enabling DeFi integration and automatic conversion of bitcoin to cbBTC. With geographical availability in several countries, it aims to challenge existing wrapped bitcoin products and drive more users to Base, potentially increasing liquidity while raising concerns about centralized influence in decentralized environments. Solv Protocol, backed by Binance Labs, has introduced Bitcoin staking for cbBTC holders on the Base network. Users can mint SolvBTC, convert it to SolvBTC.BBN for additional Bitcoin staking yields.

Binance Launchpool unveils Hamster Kombat token farming

Binance announced the launch of Hamster Kombat (HMSTR) as its 58th Launchpool project, with farming of HMSTR tokens using BNB and FDUSD from September 19 to 25. A total supply of 100 billion HMSTR, with 3 billion HMSTR allocated as rewards. Trading will commence on September 26, 2024, in multiple pairs, and a Super Earn program is also introduced.  

Anchorage and BitGo join Coinbase as crypto ETF custodians

Anchorage Digital Bank and BitGo are joining Coinbase as custodians for 21Shares' US spot crypto ETFs, diversifying custodians beyond Coinbase. 21Shares holds almost $2.5 billion in BTC and ETH. With the SEC's focus on custody rules, regulated custodians like Anchorage and Fireblocks are gaining importance for secure crypto storage.  

Layer 2 stablecoins surpass $10B in DeFi transactions

Stablecoins on Layer 2 networks exceed $10 billion, showcasing a shift from Ethereum to L2 for DeFi activities. Arbitrum leads with $4.62 billion in stablecoin inflows, while Base drives USDC adoption with $3.16 billion supply, surpassing other L2 networks. Meanwhile, a recent survey of 2,500 individuals across emerging markets reveals that stablecoin usage is expanding beyond speculative crypto trading. The $2.6 trillion settled in stablecoins this year had practical applications, with growing usage in currency conversion, goods payment, remittances, and salary disbursement. Surveyors estimate an annualized pace of $5.28 trillion for stablecoin usage.  

Cypherpunk rebrands, focuses on Solana amidst SOL concerns

Cypherpunk Holdings rebranded as SOL Strategies, holding over 86,000 SOL and earning $57,000 in staking rewards. Emulating MicroStrategy’s bitcoin strategy, it offers investors exposure to the Solana ecosystem. The firm plans to maintain a multi-token investment approach but has shown a significant emphasis on Solana. It also shed equity stakes and maintains a cash position. 

It happened as Pump.fun account sold $1.3M worth of SOL, hitting a total revenue of $95.87M, triggering concern in the Solana community. A wallet associated with FTX unstaked $23.97M worth of SOL tokens from Solana, but has not yet moved its holdings. The wallet still holds 7.1M SOL, valued at $952M, leading to speculations about potential market impact if further sold. 

Uniswap CEO refutes deployment cost allegations

Uniswap faced controversy over alleged deployment costs on Layer 2 platforms, with claims of receiving $10 million from Celo for deployments. CEO Hayden Adams refuted these allegations, stating Uniswap has never charged for protocol deployments. The company also encountered legal issues with the CFTC for unauthorized trading activities.  

Eigen Labs enhances blockchain security with new protocol

Eigen Labs has introduced the EigenLayer Security Model, featuring Operator Sets, Total Stake, and Unique Stake to enhance blockchain-AI security. Partnering with Nuffle Labs for Nuff Protocol, EigenLayer aims to extend beyond Ethereum L1, enabling restaking and rewards from anywhere. The collaboration seeks to enhance cryptoeconomic security and introduce the 'Slashing' protocol feature.

Vega Protocol retires Layer 1 blockchain amid trading issues

The community of Vega Protocol voted to retire their Layer 1 blockchain due to lack of traction in derivatives trading. Trading on the Vega chain has ceased, with the team focusing on core software development. Users are advised to withdraw assets as the network enters a ramp down period until at least Oct. 27. The Vega token price has dropped significantly.    

CARV launches $50M accelerator for gaming and AI integration

CARV, with backing from HashKey Capital and Consensys, launched a $50M accelerator to drive mass adoption of its decentralized data layer for gaming and AI. Its CARV ID enables users to monetize online data, raising over $50M from notable partners. Its versatility extends to DeFi, digital identity, and Web3 applications, offering greater control and ownership over personal data.  

Circle moves headquarters to NYC, eyes IPO

Circle, a major stablecoin issuer, is relocating its global headquarters to New York City's One World Trade Center. The move signifies Mayor Eric Adams' push to establish NYC as a crypto hub. The announcement precedes Circle's shift from Ireland to the U.S., aligning with plans for an IPO. USDC boasts a $34 billion market cap and $6.37 billion 24-hour trading volume.  

Ex-FTX co-CEO faces legal troubles over political donations

Former FTX Digital Markets co-CEO Ryan Salame appeared in a New York courtroom as Judge Lewis Kaplan considered vacating his guilty plea for unlawful political contributions and conspiracy. Salame faced scrutiny over potential perjury and his withdrawal of the motion to vacate. Co-defendants, including Sam Bankman-Fried, faced convictions and sentencing.  

Kalshi wins legal battle, launches political prediction markets

Kalshi, after a legal battle with the CFTC, launched Senate and House election prediction market contracts. The judge ruled against CFTC's attempt to block these contracts, citing the regulator's exceeded authority. Concerns were raised about manipulation risk, while Kalshi highlighted economic harm and competition from unregulated platforms like Polymarket.  

1inch introduces cross-chain fusion atomic swap protocol

1inch Network has unveiled a white paper outlining its cross-chain interoperability solution, the 1inch Fusion Atomic Swap Protocol. This innovative protocol aims to facilitate seamless cross-chain swaps between layer-1 and layer-2 blockchain networks. With heightened interest in cross-chain solutions, the industry is focused on addressing the pressing challenges of blockchain interoperability.  

Nomic brings decentralized Bitcoin custody to Ethereum

Nomic introduces Ethereum support for decentralized Bitcoin custody through nBTC, offering a trust-minimized solution for using Bitcoin in DeFi. This move competes with WBTC and addresses concerns about centralization. Previously, tBTC, renBTC, and BitGo's custody transfer were alternatives, but Nomic's nBTC aims to enhance the efficiency and decentralization of Bitcoin on Ethereum.  

Worldcoin denies investigation amid regulatory scrutiny

Tools For Humanity, the company behind Worldcoin, says neither of them is under investigation in Singapore despite authorities probing seven individuals for unlicensed sale of accounts and tokens. The project's controversial iris scan-based digital identity system has faced regulatory scrutiny globally. Despite this, it claims to have issued 6.62 million World IDs to individuals across 160 countries, including 79,134 in the past week.  

Binance invests in tokenization of real-world assets

Binance Labs has invested in OpenEden to boost tokenization of real-world assets like US Treasury Bills in DeFi, aiming to expand yield availability across the ecosystem. OpenEden's focus is on bringing traditional financial assets onto blockchain networks, with its TBILL product gaining popularity, backed by significant investments from both Binance Labs and Ripple.  

Code4rena uncovers DittoETH exploit, avoids major damage

Code4rena found an exploit in DittoETH allowing massive token minting by manipulating token prices. A warden discovered a flaw in the stablecoin rewards mechanism, jeopardizing the platform's stability. Despite initial skepticism, the vulnerability was validated, leading to its removal. The vulnerability could have caused significant damage if not identified before deployment.  

Flowcarbon cancels token sale, refunds investors

WeWork's Adam Neumann's climate venture, Flowcarbon, raised $70 million to tokenize carbon credits through their Goddess Nature Token, but the token never launched. The company is now refunding token holders due to market conditions and resistance from carbon registries. Flowcarbon's aim to bring carbon credits onto the blockchain aimed to tap into the $330 billion traditional carbon credit market.