Coin360 Daily Dispatch | Crypto Market Updates & Highlights | February 13, 2024

Bitcoin Surges Past $50K

Bitcoin's resurgence above $50,000, before slightly down to $49,960, marks a significant shift from its last peak in December 2021, driven by heightened institutional demand, potential interest rate pivots, and the upcoming Bitcoin halving, enhancing its scarcity. This bullish momentum is further evidenced by Glassnode's on-chain metrics, indicating early signs of a bull market as long-term holder MVRV enters "high-risk" territory, suggesting a market expansion phase. 

The crypto market's capitalization nearing $2 trillion, alongside Bitcoin's breakthrough, reflects a robust recovery from the two-year crypto winter, with factors like Federal Reserve easing cycles and the absence of retail frenzy hinting at a more sustained growth phase. Nearly $40 billion flowed into Bitcoin's market cap in a single day, underscoring the asset's strong start to a new bull cycle, potentially setting the stage for unprecedented market cap creation and duration. 

The Crypto Fear and Greed Index reaching its highest level since Bitcoin's $69K all-time high in November 2021 further highlights the market's shift towards extreme greed, signaling a heightened investor sentiment as the ecosystem anticipates further gains.

Crypto Sees $1.1 Billion Inflows

Last week saw $1.1 billion crypto inflows, with Bitcoin driving 98%. Ethereum and Cardano surged. Canada and Germany experienced outflows. Bitcoin ETF dominance pushed AuM to $59 billion, the highest since early 2022. Google search trends suggest bear market levels despite a brief Bitcoin price surge to $50,000, attributed to whale accumulation and upcoming halving speculation.  

Spot Bitcoin ETFs Eclipse Miners

Spot Bitcoin ETFs have significantly outpaced miner production, absorbing over ten times the Bitcoin mined in recent days. Specifically, ETFs attracted roughly $493.4 million or about 10,280 Bitcoin on a single day, with BlackRock's iShares Bitcoin Trust leading at $374.7 million. This activity starkly contrasts with the 1,059 BTC produced by miners, valued at approximately $51 million. The trend continued with about 12,700 BTC, or $541.5 million, flowing into ETFs compared to the 980 BTC mined. 

Franklin Templeton Eyes Ethereum ETF

Franklin Templeton has thrown its hat into the ring with a filing for a spot Ethereum ETF, marking it as the ninth applicant in this arena. This move underscores the growing interest in integrating cryptocurrencies into mainstream financial products, offering investors easier access to Ethereum. Notably, Franklin Templeton's ETF includes a staking option, allowing participation in Ethereum's consensus mechanism. Meanwhile, Kraken is eyeing the crypto ETF custodianship market, aiming to challenge Coinbase by leveraging its industry standing. 

This happened as ETH surpassed $2,670, marking its highest level since May 2022.  Ethereum's positive trends include increased validator demand, growth in staked ETH, and a 15% price rise in a week. The surge in ETH's price may be linked to old addresses accumulating more, rather than new investor interest.

Peter Thiel's $200M Crypto Investment

Peter Thiel's Founders Fund invested $200 million in bitcoin and ether in 2023, split equally between the two assets, according to a Reuters report. This venture capital firm, with more than $12 billion in assets under management, has a history of successful crypto investments. Additionally, it has backed various crypto startups and did not comment on the recent investment.  

Analog Secures $16M for Cross-Chain Tools

Analog, a Web3 platform, secures $16M funding for cross-chain communication tools, valuing the startup at $120M. Backers include Near, Wintermute, Orange DAO, Quantstamp, and venture firms like Tribe Capital. The platform aims to simplify pulling and analyzing on-chain data and introduces a software development kit for general message passing, focusing on cross-chain development features.  

SafeMoon CEO Faces Legal Challenges

SafeMoon CEO Braden John Karony was granted bail with strict pretrial conditions after his legal team, citing financial constraints, sought to withdraw. Karony and the CTO faced charges including securities fraud and money laundering, with over $200 million allegedly misused. 

Concurrently, an unidentified individual siphoned over $11 million from SafeMoon's liquidity pools across multiple blockchains, amid the project's bankruptcy proceedings. This event sparked speculation about its link to SafeMoon's financial woes, which had already been exacerbated by a $9 million exploit and charges from the SEC against its executives.

Blockchain Association Warns Congress

The Blockchain Association expressed concerns to Congress over Senator Elizabeth Warren's Digital Asset Anti-Money Laundering Act, citing potential capital and expertise outflow from the US. The proposed bill aims to extend AML responsibilities to digital asset entities and faces opposition from the Association and former national security professionals. 

Changpeng Zhao's Court Date Set

Former Binance CEO, Changpeng Zhao's sentencing for failing to maintain effective anti-money laundering measures has been rescheduled for April 30 in a Seattle Federal Court. He may face up to 18 months in prison, but prosecutors could argue for a 10-year maximum sentence. Regulatory scrutiny of the cryptocurrency industry continues to intensify.  

South Korea's Crypto Celebrity Scandal

South Korea is grappling with a celebrity crypto scandal involving the blockchain sports platform Winnerz, accused of running a coin scam with celebrity endorsements, leading to investor complaints about fake cryptocurrency issuance and withdrawal issues. Meanwhile, the Financial Intelligence Unit (FIU) is tightening scrutiny on crypto exchanges, planning to expel those deemed unfit from the market in 2024. 

This includes introducing a preemptive trading suspension system for suspicious transactions and stringent checks on Anti-Money Laundering measures, operational capacity, and consumer protection, aligning with the upcoming Virtual Asset User Protection legislation aimed at curbing illicit trading activities.

ERC-404 Token Drives Gas Fees Up

The ERC-404 token standard, blending ERC-20 and ERC-721 features, has sparked a frenzy, driving Ethereum gas fees to an eight-month high due to increased network congestion. Pandora, an ERC-404 token, surged 12,000% in a week, pushing transaction costs on Ethereum to over $60 for an average transaction, with peaks at 377 gwei. 

This spike in gas fees, attributed to the ERC-404's experimental nature and its higher transaction costs compared to traditional standards, has led to a significant market cap drop for ERC-404 tokens, with leading tokens like Pandora experiencing over 20% price drops before recovering. The Ethereum community is now faced with the challenge of optimizing this new token standard to mitigate its impact on gas fees.

Solana Phone Pre-Orders Soar

Solana's Chapter 2 phone amassed 100,000 pre-orders in a month, signaling strong interest. Priced at $450, it targets early 2025 for delivery, with $45 million for development. The new device seeks to expand access to crypto technology, contrasting the expensive first version and focusing on embedding cryptocurrency functionality. The successful pre-order campaign prompts inquiries into the driving force behind the demand.  

Deutsche Telekom Partners with Fetch.ai

Deutsche Telekom partners with Fetch.ai Foundation to integrate AI and blockchain solutions. Their subsidiary MMS serves as a validator for Fetch.ai's decentralized network, leveraging AI-driven autonomous agents to secure and streamline transactions. Joint efforts with Bosch aim to advance industrial applications and IoT technologies. The collaboration will be highlighted at Bosch Connected Experience.  

FTX's Digital Custody Sold to CoinList

FTX's unit, Digital Custody Inc. (DCI), purchased for $10 million in 2022, will be sold to CoinList for $500,000 following FTX's bankruptcy. DCI holds a South Dakota custody license and is financially supported by its original CEO. FTX aims to repay all creditors and offload subsidiaries, including the upcoming sale of AI startup Anthropic.  

Deutsche Borse Expands Crypto Services

Deutsche Borse's subsidiary, Crypto Finance, secures four crucial licenses from BaFin, advancing its crypto trading operations for institutional investors. Commerzbank AG also gains approval for crypto custody services. Germany's cryptocurrency revenue is forecasted to reach $2.5 billion by 2028. Enforcement actions against illicit Bitcoin operations raise uncertainty and speculation. Coinbase doubles its employee growth in Germany.  

Top Altcoin Gainers and Losers

Gainers:

Ordinals ORDI (+14.60%) 

Render Token RNDR (+12.91%) 

Sei SEI (+12.82%) 

Losers:

Bittensor TAO (-3.94%)

Chainlink LINK (-1.60%) 

Immutable X IMX (-1.48%)