Coin360 Daily Dispatch | Crypto Market Updates & Highlights | June 15, 2023

Crypto Market Update

Written by Van

Table of Contents:

Market Developments

• Bitcoin Plunges Below $25,000 Following Hawkish Fed Announcement
• BlackRock Prepares for Bitcoin ETF Filing Amid Regulatory Uncertainty
• USDT Dominates Curve’s Stablecoin Pool, Triggers Value Deviation
• Crypto Exchanges Bolster User Protection with $2bn Nominal Fiat Funds
• MakerDAO Contemplates Reducing GUSD Holdings to Pursue Higher Revenue
• Celsius Converts Customer Altcoins to BTC and ETH Amid Restructuring Plan
• Binance Offers Bitcoin Cloud Mining Despite Ongoing Legal Scrutiny

Platform Updates

• EigenLayer’s Re-staking Protocol Launches Amid Ethereum Security Concerns
• Polygon Labs Unveils 'The Value Prop' Database for Blockchain Applications
• Polkadot Introduces OpenGov Governance Model for Enhanced Community Control
• Uniswap Defends V4 Licensing Amid Claims of Stifling Innovation
• Coinbase Partners with Bitkey for Self-Custody Bitcoin Wallet
• DeBridge Launches DLN Trade for Cross-Chain Exchange of Assets

Regulatory and Legal Developments

• HKMA Advocates for Banks to Service Crypto Exchanges Despite Regulatory Hurdles
• Brazil Designates Central Bank and Securities Commission to Regulate Crypto
• Ex-FTX CEO Sam Bankman-Fried to Stand Trial for Market Manipulation
• Colombian Central Bank and Ripple Join Forces for Blockchain Exploration
• Apple Rejects Bitcoin Wallet App Zeus Over Licensing Issues
• Cyberattack Forces Shutdown of Crypto Brokerage Floating Point Group

Concerns and Controversies

• Curve Finance Founder Returns USDT Loan Amid CRV Value Slump
• Pepe Coin Insider Sell-off Triggers Market Concerns
• Crypto Mining Exploited by Criminals for Money Laundering, Says Chainalysis

Bitcoin Plunges Below $25,000 Following Hawkish Fed Announcement

The price of Bitcoin has fallen below $25,000 for the first time since March 17 after a hawkish announcement by the Federal Reserve. The drop occurred following legal actions against Coinbase and Binance and uncertainty around interest rate signals. 

The Federal Reserve's statement hinted at future rate hikes, which could impact Bitcoin in the long term. The cryptocurrency market cap has dropped by $41 billion, currently standing at $1.03 trillion, a 3.8% decrease. Bitcoin and Ethereum market caps fell by 4% and 5.7% respectively. All top 20 cryptocurrencies recorded losses, with Polygon (-9.79%) and TON (-8.55%) experiencing the largest drops. 

According to Glassnode, individuals in the cryptocurrency community are still acquiring BTC and transferring them to wallets that are not easily accessible. The amount of Bitcoin in these wallets, known as illiquid supply, is increasing, with over 119,000 BTC being deposited into cold wallets each month.

BlackRock Prepares for Bitcoin ETF Filing Amid Regulatory Uncertainty

BlackRock is reportedly preparing to file an application for a Bitcoin ETF, with plans to use Coinbase Custody and spot market data for the ETF. It's unclear if the ETF will be spot or futures-based. The Securities and Exchange Commission (SEC) has rejected previous spot Bitcoin ETF applications but approved Bitcoin futures ETFs. 

USDT Dominates Curve’s Stablecoin Pool, Triggers Value Deviation

The weightage of USDT in Curve's 3pool stablecoin pool rose above 70% on June 15, causing a slight deviation in its value from the US dollar peg. Traders have been selling USDT for DAI or USDC, leading to the imbalance. The situation was caused by a large address borrowing USDT and swapping it for USDC. Tether's CTO assured the crypto community that the depegging is not a concern and they are prepared to redeem any amount. This incident follows a similar depegging of USDC in March. 

Crypto Exchanges Bolster User Protection with $2bn Nominal Fiat Funds

Most reputable crypto exchanges, including Binance and OKX, have adopted user protection funds, with over $2 billion combined in nominal fiat protection funds. Meanwhile, Huobi's insurance fund is collateralized by 20,000 BTC ($24,905), and Coinbase provides up to £150,000 ($189,140) worth of insurance to UK customers.

Binance maintains the top spot for both spot and derivatives trading volume, while Bitget is the only exchange that has increased its derivatives trading volume since the FTX collapse. However, the uncertain regulatory environment in the U.S. could pose a threat to exchanges' growth. 

MakerDAO Contemplates Reducing GUSD Holdings to Pursue Higher Revenue

MakerDAO, a decentralized finance (DeFi) lending platform, is considering reducing its holdings of Gemini's GUSD stablecoin from $390 million to $110 million. The proposal is currently being voted on by the community, with 94% in favor so far. MakerDAO holds 88% of GUSD's circulating supply and backs its DAI stablecoin using cryptocurrencies and real-world assets. The proposal suggests exploring higher revenue opportunities like investing in short-term U.S. Treasuries. Gemini pays a 2% annual reward to MakerDAO for using GUSD as a reserve asset.

Celsius Converts Customer Altcoins to BTC and ETH Amid Restructuring Plan

Crypto lender Celsius will convert all altcoins from customers, excluding “Custody and Withhold accounts”, to Bitcoin and Ether starting from July 1. Additionally, its reorganization plan proposes a "set off treatment" to deal with claims of retail borrowers. Celsius' restructuring proposal may face opposition from borrowers as it demands repayment of loans but has no intention of fulfilling contractual obligations such as returning collateral. 

Binance Offers Bitcoin Cloud Mining Despite Ongoing Legal Scrutiny

Binance has launched bitcoin cloud mining products available via subscription to users globally (with the exception of US-based investors). Users can purchase "hash rates", allowing them to mine bitcoin via the cloud with varying rates of success depending on the amounts purchased. The product is available for 180 days and users can earn 0.0004338 BTC per one TH/s purchased. Binance's US branch is dealing with legal scrutiny from the Securities and Exchange Commission at present but the cloud service is unaffected.

EigenLayer’s Re-staking Protocol Launches Amid Ethereum Security Concerns

Re-staking protocol EigenLayer has launched on Ethereum, allowing holders of liquid staking tokens to gain additional yield but with increased risk. The protocol aims to use the staking security of ether to secure other protocols on the network. Initially, EigenLayer supports stETH, rETH, and cbETH tokens, with a limit of 9,600 liquid staking tokens worth around $16.7 million. Ethereum co-founder Vitalik Buterin has expressed concerns about re-staking, but EigenLayer believes it can be used safely in low-risk situations. 

Polygon Labs Unveils 'The Value Prop' Database for Blockchain Applications

Polygon Labs has launched an open database called "The Value Prop," which features over 300 applications and 39 positive use cases of blockchain from around the world. The platform aims to provide a comprehensive resource for policymakers and regulators to understand the potential of blockchain beyond cryptocurrency. The use cases are categorized into seven verticals, and the platform will also include testimonials from individuals sharing how blockchain has positively impacted their lives.

Polkadot Introduces OpenGov Governance Model for Enhanced Community Control

Polkadot has introduced Polkadot OpenGov, a streamlined governance model that allows simultaneous voting on multiple issues directly controlled by the community. The new system replaces the Polkadot Council and Technical Committee with the Polkadot Fellowship, a non-powerful elected body. Multiple voting proposal tracks can now take place simultaneously, addressing the previous bottleneck issue. OpenGov was tested on Kusama for six months before its implementation on Polkadot.

Uniswap Defends V4 Licensing Amid Claims of Stifling Innovation

Uniswap defends its Business Source Licensing (BSL) for V4 as a balance between incentivizing innovation and protecting proprietary rights. The DEX has come under fire from the crypto community for labeling V4 as open source when BSL protects it. The “hooks” feature allows for customized liquidity pools, while architectural improvements provide diversity of pools. V4 is BSL-protected for up to four years, which has been criticized by experts as a tax on innovation and not genuinely open source. 

Coinbase Partners with Bitkey for Self-Custody Bitcoin Wallet

Coinbase has partnered with Bitkey, a self-custody bitcoin wallet from Block, Inc. Users can buy, sell, and transfer bitcoin via Coinbase Pay on the Bitkey wallet, allowing for easy purchasing while maintaining control of private keys. The feature is currently in beta testing and will be publicly launched later this year. Coinbase has entered into an agreement for the redemption of $64.5 million in 0.50% Convertible Senior Notes due 2026. The company estimates it will only need $45.5 million in cash to consummate the agreement due to the notes' 29% discount to par value.

DeBridge Launches DLN Trade for Cross-Chain Exchange of Assets

DeBridge has launched DLN Trade, a cross-chain exchange that enables direct trading of assets on different blockchains. It utilizes a decentralized order book to avoid locking funds in smart contracts and offers unlimited transfer limits, allowing for trades of any size. DLN Trade aims to provide protection against slippage and frontrunning and mitigate reliability and security concerns associated with liquidity pool-based infrastructure. The platform currently supports Ethereum, Arbitrum, Polygon, Fantom, BNB Chain, and Avalanche, with plans to add support for more chains in the future.

HKMA Advocates for Banks to Service Crypto Exchanges Despite Regulatory Hurdles

The Hong Kong Monetary Authority is urging local banks to accept crypto exchanges as clients to further its goal of becoming a global crypto hub, despite some banks remaining cautious due to potential regulatory issues. The regulator is also introducing clearer regulations, such as a new licensing regime for crypto exchanges offering services to retail investors, and plans to establish comprehensive rules for stablecoins within 18 months. 

Brazil Designates Central Bank and Securities Commission to Regulate Crypto

Brazil's executive branch has assigned the Central Bank and Securities Commission to oversee the country's cryptocurrency market. The Securities Commission will regulate securities, while the Central Bank will set rules for exchanges. Brazil has emerged as a crypto hub, attracting major companies like Coinbase and Bitget. 

Ex-FTX CEO Sam Bankman-Fried to Stand Trial for Market Manipulation

Sam Bankman-Fried, the former CEO of FTX, will face trial on eight original charges, including market manipulation and money laundering. The trial is set for February 2024 in New York, and the Bahamas may bring additional charges. Bankman-Fried's legal team had sought to reduce the charges, but the courts have ordered severance of certain counts. 

Colombian Central Bank and Ripple Join Forces for Blockchain Exploration

Colombia's central bank, Banco de la República, is partnering with Ripple to explore the use of blockchain technology. They will pilot Ripple's CBDC platform in a controlled environment to improve the country's high-value payments system. The initiative is part of Colombia's blockchain experimentation phase conducted by the Ministry for the Information and Communications Technologies. 

XRP's price has fallen nearly 9% in June, erasing gains from earlier in the week. The decline was influenced by the release of "Hinman emails" and a general market sell-off following the Federal Reserve's interest rate decision. 

Apple Rejects Bitcoin Wallet App Zeus Over Licensing Issues

Apple has rejected the latest version of the Bitcoin wallet app Zeus, citing the lack of necessary licenses and permissions for distributing an app with cryptocurrency exchange features. However, Zeus is in talks with Apple to resolve the issue. Apple had previously warned another Bitcoin-related app, Damus, to remove its Bitcoin tipping feature. Damus can maintain the feature at the profile level but must remove it from content sections.

Cyberattack Forces Shutdown of Crypto Brokerage Floating Point Group

Crypto prime brokerage Floating Point Group (FPG) has suspended operations after a $15 million cyberattack. The firm is working with law enforcement agencies and blockchain intelligence firm Chainalysis to investigate the incident, which occurred over the weekend. The exact loss is still being analyzed, and FPG is striving to ensure system security and asset recovery. FPG offers institutional clients access to centralized and decentralized crypto markets.

Curve Finance Founder Returns USDT Loan Amid CRV Value Slump

Curve Finance founder Michael Egorov has returned 1.35 million USDT to Aave, reducing on-chain debt and mitigating liquidation risk. Egorov's loan position, backed by 288.7 million CRV tokens, has drawn attention due to its size and the recent decline in CRV token value. Gauntlet proposed freezing CRV tokens on Aave's v2 platform to manage risk, prompting a potential migration to the v3 platform. Egorov is taking precautions regardless of the proposal's outcome.

Pepe Coin Insider Sell-off Triggers Market Concerns

Lookonchain reports that an alleged insider sold 972.84 billion PEPE coins for $848,000, raising concerns about the involvement of a potential insider in the Pepe coin market. The sale caused a further decline in PEPE's value, which has already been on a downward trajectory for the past 40 days, experiencing an 81% loss since its peak. A significant concentration of PEPE tokens is held by whale addresses, making insider activity influential.

Crypto Mining Exploited by Criminals for Money Laundering, Says Chainalysis

Crypto mining is being used by both nation-state actors and conventional criminals to launder money. Cyber criminals are using stolen cryptocurrencies to mine "clean" coins and launder them through various services, including mainstream exchanges. Ransomware actors are funneling funds through mining pools to avoid detection. Chainalysis suggests implementing rigorous wallet screening procedures and KYC protocols to prevent money laundering through mining.

Top Altcoin Gainers and Losers

Gainers:

Kaspa KAS (+22.25%)

FTX Token FTT (+9.14%)

Trust Wallet TWT (+7.03%)

Losers:

Aave AAVE (-11.08%)

Polygon MATIC (-9.93%)

Hedera Hashgraph HBAR (-9.72%)

NFT Market Map

Xai, a layer-3 scaling network built on top of Arbitrum's layer 2 network architecture, aims to cater to game creators by offering enhanced scalability, efficiency, and cost reduction. Developed in collaboration with Offchain Labs and game developer Ex Populus, Xai will enable smoother game experiences and broader adoption by hiding complex crypto elements. 

It will be the home for Ex Populus' games, including Final Form and LAMOverse, and can help other developers build Web3 games on Arbitrum. Xai's approach is similar to dedicated instances on Avalanche and Polygon.

This article has been refined and enhanced by ChatGPT.