Coin360 Daily Dispatch | Crypto Market Updates & Highlights | March 20, 2024

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Crypto Market Update

Table of Contents

Crypto Market Updates and Trends

• Bitcoin Stays Strong Amid ETF Outflows
• Ethereum Dips Amid Upgrade and ETF Delays
• Ethereum Foundation Faces Legal Scrutiny
• BlackRock's Bold Move Into Digital Liquidity

Legal Troubles and Innovations

• Tornado Cash Founder Charged
• Decentralized Exchange Raises $1M
• Do Kwon's Extradition Rejected
• SBF Faces Stiff Sentence Proposal
• ParaSwap Contract Vulnerability Exposed

Market Dynamics and Investments

• EtherFi Token Manipulation Concerns
• Aave Launches Loyalty Program
• AI Crypto Gains Traction in the U.S.
• StarkNet Announces Roadmap for Growth

Gaming and Partnership Developments

• Immutable and Polygon's $100M Blockchain Gaming Fund
• Anonymous Trader Profits from Shroom Coin

Security Concerns and NFT Sales

• Trezor Twitter Hack Raises Security Alarms
• Bitcoin Leads NFT Market Surge

Bitcoin Stays Strong Amid ETF Outflows

Bitcoin's resilience is highlighted as it maintained a value of $63,000 after a brief dip to $61,000, with ether also recovering. Despite fluctuations, the broader crypto market, including the stablecoin sector, which surpassed $150 billion, shows signs of liquidity recovery to pre-FTX levels. 

Notably, the Bitcoin ETF market experienced its biggest outflow day, with analysts predicting further drops if there’s another massive outflow coming. However, anticipation builds around the Bitcoin halving event, with expectations of a bullish trajectory despite potential short-term retracements. The FOMC meeting outcome is almost certain, but there's keen interest in Fed Chair Jerome Powell's comments for their impact on risk assets. 

Ethereum Dips Amid Upgrade and ETF Delays

Ethereum's price dropped 20% in a week, despite investor bullishness, following a rally and subsequent correction, now staying at above $3,300. Ether's performance lagged behind competitors during this downturn. A significant network upgrade coincided with a price peak, enhancing scalability and reducing transaction fees for layer 2 networks. Separately, the SEC has delayed decisions on Ethereum ETFs, reducing approval chances and affecting market sentiment, with final verdicts postponed to late May. 

Analysts and market odds reflect growing skepticism, contrasting with earlier optimism following Bitcoin ETF approvals. Public sentiment and analysts have turned more pessimistic regarding the approval of Ether ETFs, with odds for approval by the end of May falling. Grayscale is considering adding staking to its Ether ETF application, aiming to mitigate inflationary pressures and maintain competitiveness.

Ethereum Foundation Faces Legal Scrutiny

The Ethereum Foundation, a pivotal player in the Ethereum ecosystem, is under investigation by an undisclosed "state authority," with the investigation's scope remaining unclear. This development occurs amidst Ethereum's major technical upgrade and a pending decision on an Ether ETF in the U.S. The foundation's website underwent important changes, including the removal of a warrant canary.  

BlackRock's Bold Move Into Digital Liquidity

BlackRock and Securitize are launching the BlackRock USD Institutional Digital Liquidity Fund, offering potential high returns with a minimum $100,000 investment. This collaboration hints at BlackRock's venture into tokenization without explicit confirmation. BlackRock's spot Bitcoin ETF gained significant traction, with trading volume surpassing $1 billion. CEO Larry Fink foresees a transformative shift towards tokenizing all financial assets to eliminate corruption.  

Tornado Cash Founder Charged

Alexey Pertsev, the founder of Tornado Cash, faces money laundering charges for allegedly laundering over $1.2 billion. The case in Hertogenbosch, Netherlands, links him to cryptocurrency mixer Tornado Cash and transactions involving hacked funds. A guilty verdict could impact the crypto community, challenging the intersection of software development, money laundering, and legal liability.  

Decentralized Exchange Raises $1M

Ooga Booga, a decentralized exchange aggregator, recently raised $1 million at a $10 million valuation to support trading on Berachain's upcoming mainnet. The platform aims to find the most cost-effective crypto swaps across multiple exchanges, leveraging Berachain's "proof-of-liquidity" security method. Founder Kevin Liu transitioned from running a DEX to focusing on proven product offerings.  

Do Kwon's Extradition Rejected

The Montenegro appeals court rejected Do Kwon's appeal to reverse his extradition to South Korea over the collapse of his crypto enterprise, Terra. The U.S. Department of Justice also seeks his extradition. Kwon's lawyer confirmed the finality of the decision. The extradition timeline is yet to be determined, and the U.S. plans to continue pursuing Kwon's extradition.  

SBF Faces Stiff Sentence Proposal

Former FTX CEO Sam "SBF" Bankman-Fried faces a proposed 40-to-50-year prison sentence, sparking objections from his lawyers. They argue the severity of the sentence reflects a "medieval" view of punishment, and propose a reduced term of five to six years, emphasizing no actual losses, philanthropic efforts, and low risk of re-offending.  

ParaSwap Contract Vulnerability Exposed

ParaSwap's Augustus v6 contract, launched to improve swapping efficiency, was found to have a critical vulnerability, affecting 386 addresses. After securing the victims' funds through a white hat intervention, the company deactivated the contract on its interface and plans to reimburse victims. Hackers managed to cash out approximately $24,000 before the pause.  

EtherFi Token Manipulation Concerns

EtherFi's ETHFI token faced challenges as an early investor, Arrington XRP Capital, allegedly game the airdrop system by staking 5,000 ETH across ten wallets to amass 200,498 ETHFI tokens. This initially led to a 32% price drop in ETHFI before recovering, raising concerns about Sybil attacks and potential manipulation, despite EtherFi and Arrington's explanations.  

Aave Launches Loyalty Program

Aave's "Merit" loyalty program rewards users based on DAO contributions, distributing 280 WETH initially. It incentivizes Aave-aligned actions while penalizing non-supportive behavior, influencing competitors. The program's detailed criteria remain undisclosed to prevent manipulation, focusing on specific activities like liquid staked token deposits. Notably, it aims to maintain Aave's strategic direction and user incentivization.  

AI Crypto Gains Traction in the U.S.

In 2024, the U.S. dominated global interest in AI cryptocurrencies, followed by the UK and Turkey. Bittensor (TAO), Render (RNDR), and Fetch.ai (FET) emerged as popular choices. RNDR led in market cap, with a value surge. Saudi Arabia plans a $40B AI investment fund overseen by a16z to become the largest AI investor globally, aiming to boost its AI technology capability through partnerships and its sovereign wealth fund.  

StarkNet Announces Roadmap for Growth

StarkNet revealed its 2024 roadmap focusing on enhancing transaction speed and lowering fees. Being a prominent layer-2 network with $1.4 billion locked assets, it plans upgrades like transaction parallelization and Cairo-native integration. This aims to expedite transactions and boost network scalability for improved performance and user experience.  

Immutable and Polygon's $100M Blockchain Gaming Fund

Immutable and Polygon have launched a $100 million fund, the Inevitable Games Fund (IGF), to support blockchain games, signaling a major step in blockchain gaming development. The IGF invests in games native to ImmutableX or Polygon blockchains, with notable investments including Pixelmon and Guild of Guardians. Despite a decrease in blockchain gaming funding in 2023, the sector still saw significant interest, with Polygon emerging as a leading blockchain for gaming, achieving over 400,000 daily unique active wallets. 

On a related note, Polygon Labs paid $4 million to Starbucks for an NFT-powered loyalty program, Starbucks Odyssey, marking a shift in business development strategy toward seeking big-name partnerships. However, following the program's discontinuation, Polygon Labs is now focusing more on technology development than on such partnerships. 

Anonymous Trader Profits from Shroom Coin

An anonymous trader secured an $8.9 million profit within an hour by trading Shroom (SHROOM) memecoin during liquidity addition on Solana. The wallet invested $1.04 million in SHROOM, selling for 57,112 SOL worth $9.93 million. SHROOM's price dropped over 70% since launch to an $11.88 million market cap, sparking insider trading suspicions.  

Trezor Twitter Hack Raises Security Alarms

The official Twitter account of Trezor, a notable crypto hardware wallet provider, was recently compromised by scammers promoting a bogus presale for "TRZR" tokens. The fraudsters managed to accumulate $8,100 in funds by urging participants to deposit Solana tokens within a 24-hour window. Concerns regarding Trezor's security measures and reputation have been raised within the crypto community.