Coin360 Daily Dispatch | Crypto Market Updates & Highlights | August 28, 2023

Crypto Market Update

Written by Van

Table of Contents

Market Trends

• Crypto Bear Market: The Longest Yet
• Vitalik Buterin's Mysterious ETH Transfer, Ethereum Transaction Costs Hit a Low
• 1inch Wallet and OnlyFans Make Big ETH Moves
• Shibarium Mainnet Bridge Faces Delays
• Bitcoin Miners Report Billion-Dollar Losses
• Stablecoins Outperform Traditional Payment Giants
• Machi Big Brother's ApeCoin Accumulation

Regulatory and Compliance

• Binance Tightens P2P Rules for Russians
• South Korea Sets Reserve Requirements for Crypto Exchanges
• Sam Bankman-Fried Awaits Trial Amid Legal Challenges
• Ronaldinho Faces Crypto Fraud Investigation in Brazil
• India's PM Calls for Global Crypto Framework

Country-Specific Developments

• Laos Suspends Electricity to Crypto Miners
• dYdX Protocol Eyes Migration with v4 Update
• Balancer Exchange Suffers Security Breach
• BlackRock Invests in Bitcoin Mining Companies

Crypto Exchanges and Platforms

• Friend.tech Sees Sharp Decline in User Activity
• Velodrome Launches Aerodrome on Coinbase's L2

NFT Market

• NFT Sales Dip but Buyer Numbers Rise
• SEC Charges Impact Theory over Unregistered NFTs

Crypto Bear Market: The Longest Yet

The crypto market is currently experiencing its longest bear market ever, lasting approximately 490 days. Despite Ethereum's strong fundamentals, the Ethereum market cap has not seen significant growth, mirroring the overall sluggishness in the crypto market.

Reasons for the extended bear market include the impact of the pandemic, regulatory responses to crypto collapses, and surging interest rates. However, there are positive factors such as BlackRock's interest in Bitcoin and crypto and the potential approval of a Bitcoin ETF.

With BTC's crypto price hovering around $26,000, traders are bracing for a potential dip to between $23,900 and $24,600. As traditional markets rally, crypto coin prices for major tokens like Ethereum and Bitcoin have experienced declines, adding to the bearish sentiment.

To make sense of the current market trends, traders and investors are increasingly turning to cryptocurrency charts, which show dwindling volumes and volatility across the board.

Vitalik Buterin's Mysterious ETH Transfer, Ethereum Transaction Costs Hit a Low

Vitalik Buterin, co-founder of Ethereum, has transferred 3,000 ETH (worth approximately $4.9 million) to an undisclosed address. The transaction has caused speculation within the crypto community, and the recipient and intent behind the transfer remain unknown. Buterin has previously offloaded portions of his ETH holdings.

Transaction costs on Ethereum's blockchain have dropped to their lowest levels since December, indicating low network usage. This decline coincides with the popularity of scaling solutions like Friend.tech, built on Coinbase's L2 chain. These solutions help alleviate network congestion and keep transaction costs under control.

1inch Wallet and OnlyFans Make Big ETH Moves

The 1inch Investment Fund's crypto wallet recently purchased 6,088 ETH for over $10 million. This comes after the wallet made a profit of $3.7 million from selling 11,000 ETH when the price was $1,906 in July. The wallet currently holds around $80 million in various digital assets.

UK-based parent company Fenix International, which owns content subscription platform OnlyFans, disclosed that it invested working capital into the cryptocurrency ether. The company reported revenues of over $1 billion for the first time but also recorded an impairment loss due to the decrease in the value of ether.

OnlyFans joins other companies such as MicroStrategy, SpaceX, and Tesla in disclosing purchases of crypto assets.

Shibarium Mainnet Bridge Faces Delays

The Shibarium mainnet bridge for Shiba Inu tokens is now functioning optimally, but withdrawals may experience extended processing times. Digital assets like SHIB, LEASH, and Wrapped Ether (WETH) could take up to 3 hours, while the native Bone token may require a maximum of seven days.

The bridge's specific design is attributed to the longer withdrawal period. Following the bridge restart, Shiba Inu-related tokens have experienced a slight increase in value, with SHIB up 1.45% in the last 24 hours. This is not in line with the broader crypto market's bearish sentiment.

Bitcoin Miners Report Billion-Dollar Losses

The Bitcoin mining industry has suffered significant losses, with publicly traded mining companies reporting over $4.47 billion in losses in the past year. Major players, including Core Scientific, Marathon Digital Holdings, and Riot Platforms, have accumulated losses of over $600 million each. 

Canaan Inc. was the only company to report positive earnings, with $92.33 million. The industry is facing challenges due to increasing mining difficulty and higher costs compared to the average price of Bitcoin.

This could impact the overall Bitcoin ecosystem, including decentralization and the perception of BTC's value as a reserve currency and digital asset. The upcoming Bitcoin halving in 2024 is expected to further reduce earnings for mining companies.

Stablecoins Outperform Traditional Payment Giants

Stablecoins processed over $6 trillion in transactions in 2022, surpassing traditional payment companies like Mastercard and PayPal, according to analyst Jamie Coutts. He anticipates a surge in stablecoin issuance, driven by PayPal's introduction of its stablecoin, and projects a potential 3,596% growth in stablecoin adoption.

However, Coutts acknowledges network constraints and transaction costs as potential limitations to this growth. He also suggests that other payment companies may make announcements in the future regarding their involvement with stablecoins.

Machi Big Brother's ApeCoin Accumulation

A wallet associated with Machi Big Brother has accumulated over 150,000 ApeCoin (APE) tokens, adding to previous acquisitions and bringing the total APE accumulation for August to over 3 million. This contrasts with a previous sale of over 180,000 APE tokens.

Despite the accumulation, overall market sentiment for ApeCoin remains negative, as indicated by the funding rate and decline in positive sentiments. The trading volume has remained normal, but active addresses have declined. The current trading price of APE is around $1.48.

Binance Tightens P2P Rules for Russians

Cryptocurrency exchange Binance has imposed further restrictions on its peer-to-peer (P2P) trading platform for Russian customers. The platform now only allows the use of the Russian ruble and bans the use of other fiat currencies for Russian residents.

Users must also have Russian KYC verification and reside in Russia to use the ruble on the platform. The new restrictions have received attention from Russian users, particularly those residing in other countries who need to convert rubles from Russian banks to other currencies using Binance's P2P service.

Binance did not specify whether the restrictions were related to Western sanctions or new fiat currency restrictions imposed by the Russian government.

South Korea Sets Reserve Requirements for Crypto Exchanges

South Korean authorities have mandated that cryptocurrency exchanges in the country maintain a minimum reserve of $2.28 million starting in September. The move is aimed at protecting customers from high-risk events such as hacks. Major exchanges like Upbit and Bithumb are taking steps to comply with the new regulations.

This follows the adoption of new legislation in July to enhance investor protection and regulatory oversight in the cryptocurrency industry. Authorities have been tightening their approach to the sector following the collapse of the Terraform ecosystem.

Sam Bankman-Fried Awaits Trial Amid Legal Challenges

Sam Bankman-Fried's lawyers are requesting his temporary release from jail to review documents and prepare for his upcoming trial. They argue that the limited access he currently has to his lawyers and inadequate resources are hindering his ability to adequately prepare his defense.

Bankman-Fried is facing charges of fraud and could potentially face over 100 years in prison if convicted. His lawyers also objected to the government's release of four million pages of documents, which they argue is fundamentally unfair.

Ronaldinho Faces Crypto Fraud Investigation in Brazil

Brazilian soccer star Ronaldinho Gaúcho is facing a crypto fraud investigation in Brazil regarding his company "18kRonaldinho," which promised clients daily profits of over 2% through crypto investments. Ronaldinho failed to appear before the country's Congress for a second time and may be detained by authorities to testify.

The investigation is part of a broader probe into crypto frauds in the country. Ronaldinho's legal team claims he was a victim of the alleged scam, as his name and image were used without authorization.

India's PM Calls for Global Crypto Framework

Indian Prime Minister Narendra Modi called for a global framework to regulate cryptocurrencies and ensure the governance of artificial intelligence (AI) at the Business 20 (B20) summit.

India, which currently holds the presidency of the G20, proposed a roadmap for a global crypto assets framework aligned with guidelines from the Financial Stability Board and the International Monetary Fund.

India imposes a 30% tax on crypto income and a 1% tax on crypto trades above 10,000 Indian rupees, and penalizes non-compliance with fines and potential jail terms.

Laos Suspends Electricity to Crypto Miners

Laos state-owned electricity company, Électricité du Laos (EDL), has announced that it will suspend electricity supply to crypto mining operations in the country due to drought conditions and the struggle to generate enough power.

Hydropower plants generate 95% of Laos' power, and the country aims to supply electricity locally and export to Thailand in 2024. Additionally, crypto mining projects are said to have outstanding balances that they are unable to pay.

dYdX Protocol Eyes Migration with v4 Update

The community overseeing the dYdX protocol has proposed adopting dYdX v4, which includes the launch of a custom dYdX app chain using the Cosmos SDK. The protocol aims to migrate from an Ethereum rollup. A public testnet of dYdX v4 has already recorded over $46 million in transaction volumes.

MEV mitigation and governance are among the key focus areas for the community. The governance proposal will be put to a Snapshot vote, and the price of DYDX, the native token, has seen an increase.

Balancer Exchange Suffers Security Breach

Balancer, a decentralized exchange, has experienced a breach despite prior warnings about vulnerabilities. Approximately $900,000 was stolen, and users are advised to withdraw funds from affected pools.

The total value of assets locked (TVL) on the platform has decreased by nearly 20% to $676.47 million, with approximately $164 million being withdrawn since the vulnerability concerns arose. Trust in the platform has been affected, with a minimal inflow of $38 million since the incident. This breach follows a similar exploit on Curve, which resulted in significant losses. 

BlackRock Invests in Bitcoin Mining Companies

BlackRock, one of the world's largest investment companies, has become the second-largest shareholder in four out of the five biggest Bitcoin mining companies.

As the mining industry faces challenges, BlackRock sees an opportunity and has increased its position by buying shares in these mining firms, positioning itself in the Bitcoin mining industry.

Friend.tech Sees Sharp Decline in User Activity

Decentralized social media platform Friend.tech, built on Coinbase's Ethereum layer-2 chain Base, has experienced a significant decline in daily revenue, fees, and active buyers. The number of active buyers on the platform dropped by 94% and daily fees fell by over 90% from their peak.

Velodrome Launches Aerodrome on Coinbase's L2

Decentralized exchange Velodrome is launching a new DEX called Aerodrome on Coinbase's Layer 2 Base network. With support from over 20 partners, Velodrome aims to capture liquidity and value exchange on the Base network, similar to its dominance on the OP Mainnet. The launch will include an airdrop of its native Aero token to existing users.

Top Altcoin Gainers and Losers

Gainers:

Curve DAO Token CRV (+5.31%)

XDC Network XDC (+4.15%)

ApeCoin APE (+3.67%)

Losers:

FLEX FLEX (-8.56%)

Maker MKR (-4.49%)

dYdX DYDX (-4.38%)

NFT Market Map

NFT Sales Dip but Buyer Numbers Rise

NFT sales decreased by 14% in the past week, totaling $91.86 million. However, the number of buyers increased by 38%. Ethereum remained the leading blockchain, with Solana in second place. Bored Ape Yacht Club had the highest sales, followed by Dmarket and Sorare. The top NFT sale was a Bored Ape Yacht Club NFT sold for $175,923. 

SEC Charges Impact Theory over Unregistered NFTs

The SEC has charged Impact Theory for offering unregistered nonfungible tokens (NFTs) called "Founder's Keys," which generated around $30 million. Impact Theory has agreed to a cease-and-desist order and will pay over $6.1 million in disgorgement, prejudgment interest, and a civil penalty.

The tokens were deemed securities and should have been registered under the Securities Act of 1933. Impact Theory will also destroy any remaining Founder's Keys and will not receive royalties from secondary market transactions involving the NFTs.

This article has been refined and enhanced by ChatGPT.