Coin360 Daily Dispatch | Crypto Market Updates & Highlights | February 28, 2024

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Crypto Market Update

Table of Contents

Market Momentum and Institutional Interest

• Bitcoin Surges Past $62,000: A Look Ahead
• Ethereum's Bullish Momentum: Dencun Upgrade on Horizon
• BlackRock's Bitcoin ETF Shatters Records
• Investment Giants Back Bitcoin: Allocations Recommendations

Exchange and ETF Dynamics

• Kraken Targets Institutional Investors with New Division
• Peru's BVL Lists Bitcoin Spot ETFs
• Coinbase Innovates with Asset Recovery Feature
• EtherFi's Series A Funding Fuels Growth

Regulatory and Legal Updates

• U.S. Senator Warren's Crypto Regulatory Push
• Sam Bankman-Fried's Legal Team Advocates for Leniency
• Legal Spotlight on Bitcoin Fog and Bitfinex Hack

Blockchain and Crypto Innovations

• Uniswap Enhances Platform with New Features
• Telegram to Share Ad Revenue, Boosting TON Token
• Solana's Backpack Exchange Secures Series A Funding
• Justin Sun's Bitcoin Holdings Stir Controversy
• COTI Foundation Fuels Privacy-Centric Web3 Innovation

Market Trends and Analysis

• Meme Coin Mania: Pepe Leads the Pack
• Serenity Shield's Hack and Recovery Plan
• 21Shares Employs Chainlink for Enhanced Transparency
• Shawn Layden Joins NFT Startup READYgg
• VanEck's SegMint: Innovating NFT and Digital Asset Sharing

Bitcoin Surges Then Dumps: A Look Ahead

Bitcoin had surged to $64,000 then faced a correction to $61,000, while concerns and speculations around a sudden Coinbase outage raised among crypto community on X. Before the massive dump, the rally was attributed to a mix of euphoric sentiment, institutional buying demand, and anticipation of the Bitcoin halving event, which historically triggers bull markets by halving block rewards and potentially creating a supply-demand imbalance. Bitcoin's market cap has catapulted it into the top 10 assets globally, surpassing major companies like Berkshire Hathaway.

Ethereum's Bullish Momentum: Dencun Upgrade on Horizon

Ethereum's price is on an upward trajectory, briefly reaching $3,400 but then dumped to $3,340 following the Bitcoin crash.

The upcoming Dencun upgrade, scheduled for March 13, aims to reduce layer two gas fees, enhancing Ethereum's competitiveness against rising L1 projects by incorporating data blobs through EIP-4844 to lower transaction fees on L2 networks, potentially attracting more Web3 developers. 

Meanwhile, the Ethereum Foundation transferred 4,000 ETH to Kraken, hinting at a possible sell-off but maintaining the price above $3,300, keeping market participants alert to the implications of large transfers from significant Ethereum stakeholders.

BlackRock's Bitcoin ETF Shatters Records

BlackRock's Bitcoin ETF, iShares Bitcoin Trust (IBIT), saw record net inflows of $520 million, outperforming all US bitcoin funds and breaking its previous record of $493 million. Total net inflows for US spot bitcoin funds reached $577 million, with the total segment net inflows exceeding $6.7 billion. IBIT's trading volumes hit about $1.3 billion over two days, amid a crypto market rally with bitcoin reaching approximately $60,400. 

IBIT's assets under management surpassed $8 billion, trailing only Grayscale's Bitcoin Trust ETF (GBTC) at about $25 billion, despite GBTC experiencing $7.6 billion in net outflows. U.S.-listed spot bitcoin ETFs traded over $2 billion, slightly less than the previous record of $2.4 billion, with significant inflows and minimal outflows, indicating strong investor interest.

Investment Giants Back Bitcoin: Allocations Recommendations

Blackrock has suggested a bold 28% allocation to Bitcoin for investors, spurred by unexpected interest from institutional investors, while Fidelity Investments recommends a 1-3% crypto allocation in traditional 60/40 portfolios, potentially driving hundreds of billions into Bitcoin. Critics question the feasibility of Blackrock's high allocation, but a peer-reviewed paper supports the mathematical optimality of such an allocation. Fidelity's move is seen as a potential catalyst for significant demand and price reevaluation for Bitcoin, with projections suggesting a substantial increase in Bitcoin's value.  

Kraken Targets Institutional Investors with New Division

Kraken launched an institutional division targeting Bitcoin ETFs, led by Tim Ogilvie. It competes with Coinbase and Binance Institutional, offering custody and trading services. The move follows increasing institutional interest in spot Bitcoin ETFs, with significant inflows from industry leaders. The SEC lawsuit against Kraken is also in the spotlight. Gold ETFs experienced notable outflows.  

Peru's BVL Lists Bitcoin Spot ETFs

The Lima Stock Exchange (BVL) in Peru has listed three bitcoin spot ETF instruments, IBIT, HODL, and BTCO, backed by Blackrock, Vaneck, and Invesco. BVL warns investors about potential price volatility and provides access to related prospectuses. The move aims to enhance financial transparency and attract traditional investors. Peru is considering cryptocurrency regulations amid central bank concerns. 

Coinbase Innovates with Asset Recovery Feature

Coinbase launched a new feature to recover assets sent to unsupported blockchains like BNB Chain and Polygon. Users simply provide a transaction ID and inbound wallet address. For assets under $100, the recovery is free; otherwise, a 5% commission applies. Coinbase has retrieved $160 million in assets and plans to expand the feature.   

EtherFi's Series A Funding Fuels Growth

EtherFi closed a $23M Series A round, led by Bullish Capital and CoinFund, with participation from Consensys, OKX Ventures, and others. It accounts for 36% of the $4.65B liquid staked in protocols. EigenLayer TVL is $9B, with EtherFi's TVL at $1.67B. Restaking yields are accessible via LRT projects. Restaking solves cold start challenges.   

U.S. Senator Warren's Crypto Regulatory Push

U.S. Sen. Elizabeth Warren reiterates her stance against the crypto industry, emphasizing the need for it to comply with financial regulations. She advocates for the Digital Asset Anti-Money Laundering Act, aiming to extend anti-money-laundering requirements to crypto entities. The bill faces challenges in the Senate Banking Committee following initial support.  

Sam Bankman-Fried's Legal Team Advocates for Leniency

Former FTX CEO Sam Bankman-Fried's lawyers propose a 63 to 78-month sentence, opposing the recommended 100 years. They stress his charitable work and positive societal contributions, advocating for rehabilitation over punishment. They reject the Presentence Report as "barbaric" and highlight that customers will recover their funds. These arguments aim to mitigate their client's sentencing.  

Legal Spotlight on Bitcoin Fog and Bitfinex Hack

Ilya Lichtenstein, a convicted Bitfinex hack conspirator, is now testifying against Bitcoin Fog, a mixer he used to hide laundered assets. Lichtenstein claims the service wasn't his primary method of laundering, and he switched to other services. The U.S. Department of Justice seized billions in crypto in the Bitfinex case, and Roman Sterlingov, the operator of Bitcoin Fog, is on trial for money laundering. 

Uniswap Enhances Platform with New Features

Uniswap has launched a browser sidebar extension, a limit order placement feature, and advanced analytical tools. The platform aims to enhance user experience and streamline cryptocurrency transactions, having facilitated almost $2 trillion in transaction volume. The extension simplifies swapping, transaction signing, and trading, while the limit orders and enhanced analytics cater to more informed swapping.  

Telegram to Share Ad Revenue, Boosting TON Token

Telegram founder Pavel Durov announced that the platform will share ad revenue with channel owners in March. The TON token surged 40% to over $2.92 at one point following the news. Advertisers can access the Telegram Ad Platform in almost 100 countries. Channel owners will receive 50% of ad revenue, settled on the TON blockchain.  

Solana's Backpack Exchange Secures Series A Funding

Solana-based exchange Backpack closed a $17 million Series A funding led by Placeholder VC, valuing it at $120 million. Founder Armani Ferrante emphasized a crypto-native financial institution. Plans include global expansion and product development. The exchange reached $1 billion in 24-hour volume within days of launching. The ecosystem includes a noncustodial wallet and successful NFT collection. 

Justin Sun's Bitcoin Holdings Stir Controversy

Justin Sun, Tron blockchain founder, reveals owning 28,614 Bitcoins worth $1.6 billion in his personal HTX wallet, aiming to dispel suspicions about his usage. However, Adam Cochran questions the accuracy, noting Sun's holdings exceed HTX's total Bitcoin reserves of $1.342 billion. Cochran suggests potential commingling of assets or lack of genuine HTX users.  

COTI Foundation Fuels Privacy-Centric Web3 Innovation

COTI Foundation allocates $100 million in COTI tokens for development, encouraging developers to create data-secure apps. Focus areas include DeFi, decentralized identification, data management, AI, and GameFi. CEO Bar-Geffen emphasizes the potential of privacy-centric innovation in Web3. COTI integrates Garbled Circuits for on-chain privacy, achieving a computation speed up to 1000 times faster than other encryption systems. 

Meme Coin Mania: Pepe Leads the Pack

Pepe (PEPE) surged over 190% in the last week, hitting a market cap of $1.4 billion and surpassing BONK. Two traders made substantial profits, and the broader meme coin sector also experienced significant gains, with FLOKI, WIF, GROK, LADYS, DOGE, SHIB, and BONK showing notable increases.  

Serenity Shield's Hack and Recovery Plan

Serenity Shield, a multi-chain data storage startup, suffered a $5.6 million theft of 6.9 million SERSH tokens from its MetaMask wallet. The hack led to a 99% drop in SERSH's value. In response, the project plans to relaunch the token with enhanced security measures and offers token replacement on a 1:1 basis for affected holders.  

21Shares Employs Chainlink for Enhanced Transparency

21Shares integrates Chainlink's Proof of Reserve to enhance transparency for ARKB's Bitcoin reserves, allowing investors to verify the ETF's full Bitcoin backing. The off-chain reserves feed, sourced from Coinbase, is reported on-chain via Chainlink oracles. This collaboration aims to set a new transparency and security standard while empowering market engagement.