Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | April 13 - April 19, 2024

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Crypto Weekly Market Update

Table of Contents

Crypto Market and Platform Updates

• Crypto Weekly Recap
• Binance Converts $1 Billion SAFU to USDC
• Hong Kong Greenlights Bitcoin and Ethereum ETFs
• Puffer Finance Secures $18 Million for Expansion
• Tether Integrates USDT and XAUT on TON Blockchain

Exchange and Wallet Enhancements

• OKX and Polygon Debut Zero Knowledge Network
• Kraken Introduces Privacy-Focused Crypto Wallet

Staking and Security Developments

• EigenLayer's No-Cap Policy Spurs $157 Million Influx
• Trust Wallet Issues Security Alert for Apple Users

Influential Moves and Legal Challenges

• Vitalik Buterin Endorses Privacy Protocol Railgun
• Worldcoin to Launch Bot-Discouraging Layer-2
• Yuga Labs Sells Game IP Amidst NFT Market Drop

Policy Changes and Brand Collaborations

• PayPal Changes Policies on NFT Transactions
• Adidas Partners with STEPN for NFT Sneakers

Crypto Weekly Recap

Bitcoin

• Weekly change: -7.87%
• BTC fell nearly 10% just before its next halving, influenced by geopolitical tensions and macroeconomic factors.
• Over the weekend, BTC dropped from $70,000 to $60,800 amid escalating tensions between Iran and Israel.
• BTC rebounded to $67,000 on Monday following the Hong Kong Securities and Futures Commission's approval of spot Bitcoin and Ethereum ETFs, but slumped to $60,000 by Wednesday.
• Despite the positive impact of Hong Kong's ETF approval, sustained bullish sentiment was limited due to China's complex regulatory environment.
• On Wednesday, Federal Reserve Chair Jerome Powell indicated that the U.S. economy had not met its inflation targets, suggesting that interest rate cuts were unlikely soon.
• Renewed tensions between Iran and Israel, including an explosion in Iran, triggered another dip in BTC below $60,000 early Friday.
• Despite a recovery to around $65,000, the broader crypto market remained down, with only 6 of the top 20 cryptocurrencies showing gains for the week.
• The imminent Bitcoin halving, a typically bullish event, has sparked record-breaking global interest, with Google Trends scores reaching 45, potentially rising to 100 by month's end.
• Analysts offered mixed forecasts for BTC post-halving; Goldman Sachs cited geopolitical tensions as a limiting factor, while JPMorgan and Deutsche Bank saw limited impact from the halving, though optimism remained for Ethereum ETFs and DeFi activity.
• U.S. Bitcoin Spot ETFs saw a five-day outflow totaling over $319 million, led by withdrawals from GBTC and decreased inflows to BlackRock's IBIT.
• Tether injected an additional 1 billion USDT as the Bitcoin halving approached, probably setting the stage for a market rebound (but, watch out for a potential drop before that).

Ethereum

• Weekly change: -11.93%
• ETH and the broader altcoin market experienced a decline following BTC's fall amid geopolitical tensions. ETH dropped to $2,947 and $2,887 on Saturday and Friday, respectively, due to the conflict but later recovered to above $3,000.
• Ethereum's key developments this week included the approval of a Hong Kong ETF, liquid restaking involving major investors, and the implications of the new Stablecoin Act for the blockchain.
• Ethereum is poised to achieve a $1 billion annual revenue, showcasing robust growth with a $365 million Q1 income, thanks to an increase in daily transactions.
• Notably, major investors purchased ETH during market dips for purposes such as staking, lending, or holding, possibly in anticipation of potential future spot ETF approvals.

Altcoin

• German banking giant LBBW set to roll out crypto custody services in H2 2024.
• Solana rallied as developers launched an update to tackle network congestion.
• VALR crypto exchange received a regulatory license as a CASP in South Africa.
• Base asset tokenization protocol lost $1.7M due to a private key leak.
• Arbitrum unveiled a new protocol to enhance network security.
• Arkham’s top 5 doxed crypto hodlers own $3.5B, but 35% is untouchable.
• Homium raised $10M and tokenized home equity loans on Avalanche.
• AI tokens FET, AGIX, and OCEAN merger set to go live in May.
• Drift planned a governance token launch with 100M DRIFT airdrop.
• P2 Ventures committed $50M via Hadron FC to startup founders in the Polygon ecosystem.
• TikTok's parent company partnered with Sui to explore on-chain possibilities for Web3 gaming and AI.
• Ragnarok entered Web3 through a Ronin partnership.
• a16z raised $7.2B for venture strategies, pushing for AI and Web3 gaming.
• White hat hacker group SEAL launched a crypto threat-sharing center.
• Tranchess, Scroll, and StakeStone launched a new yield product, Queen Stone.
• Centrifuge planned institutional RWA lending on Coinbase's Base, raising $15M in VC investment.
• Xai expanded to staking rewards.
• Parcl's TVL plunged 40% following an 80M PRCL airdrop to users.
• Zignaly announced a Cosmos-based ZIGChain and a $100M ecosystem fund.
• Pi Network reached 10M KYC’d users, but the token is still not tradeable.
• Omni Network's token fell 55% after an airdrop, as a fake token completely rugged.
• Sweden demanded $90M in outstanding tax from crypto miners.
• Web3 funding saw an uptick in Q1 as startups secured nearly $1.9B.
• Crypto Wealth Management Firm Abra launched new platforms for private clients.
• Ondo Finance brought tokenized treasuries to the Cosmos ecosystem with Noble integration.
• Aptos struck a DeFi partnership with Microsoft, Brevan Howard, SK Telecom.
• Scroll introduced a loyalty program, excluding China and U.S. users.
• Tribe Capital-backed Nibiru Chain allocated over $15M in developer grants.
• Polkadot introduced the JAM upgrade and a 10 million DOT prize to enhance network capabilities.
• Mango Markets' attacker was found guilty of fraud over a $110 million exploit.
• A DAO acquired rights to the image behind the Doge meme.
• Blockchain data-availability protocol Avail announced a 600M token airdrop.
• The SEC said Justin Sun 'traveled extensively' to the US, giving sway to a lawsuit.
• DeFi platform Hedgey Finance was hit by a $44 million exploit.
• FTX emptied its FTT treasury wallet, transferring assets worth over $250 million.

Binance Converts $1 Billion SAFU to USDC

Binance, the world's leading cryptocurrency exchange, has strategically converted its $1 billion Secure Asset Fund for Users (SAFU) to Circle's USD Coin (USDC), comprising approximately 3% of the USDC's total circulating supply. The move aims to enhance stability amidst crypto market volatility and regulatory pressures. With a market cap of $32.6 billion, USDC stands as the second-largest stablecoin, enjoying a 20% market share. 

Additionally, the introduction of the Lummis-Gillibrand Payment Stablecoin Act seeks to regulate stablecoins in the U.S., emphasizing consumer protection, responsible innovation, and dollar dominance. This development has been praised for its potential positive impact on the blockchain, but has also faced criticism for its potential impact on decentralized stablecoins.  

Hong Kong Greenlights Bitcoin and Ethereum ETFs

Hong Kong's groundbreaking approval of spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs) by the Securities and Futures Commission (SFC) positions the region as a fintech leader and signals a shift towards crypto adoption. The ETFs, managed by top asset managers, operate on an in-kind creation model, enhancing liquidity and trading efficiency. While optimistic projections foresee significant inflows, estimates vary from $1 billion to $25 billion. Chinese investor access, fees, and market liquidity are key factors influencing the ETFs' potential impact. 

Puffer Finance Secures $18 Million for Expansion

Puffer Finance raised $18 million in a Series A funding round, co-led by Brevan Howard Digital and Electric Capital, bringing its fully diluted token valuation to $200 million. The funding included participation from prominent investors like Coinbase Ventures, Kraken Ventures, and Franklin Templeton. 

Puffer Finance's technology aims to lower the barrier for individual stakers by enabling Ethereum validators to stake just 1 ETH and receive liquid restaking tokens (nLRTs). The protocol seeks to enhance Ethereum's decentralization and received a grant from the Ethereum Foundation for its Secure-Signer tool. With the new funding, Puffer Finance plans to launch its mainnet to expand validator participation.  

Tether Integrates USDT and XAUT on TON Blockchain

Tether is expanding its USDT and XAUT stablecoins to the TON blockchain, aiming to enable peer-to-peer payments among Telegram's 900 million users. This initiative is expected to foster seamless transactions and enhance liquidity within the TON ecosystem, particularly in decentralized finance applications. The expansion comes as TON's monthly active addresses surged to 1.7 million, fueled by incentives for integrating Telegram users. 

Meanwhile, the TON blockchain has also launched Memelandia, a platform designed to boost the visibility and growth of meme coins. Memelandia features the Ranked TOL (Ton Online Leaderboard), which monitors the performance of meme coins and provides them with marketing support, recognition, and financial rewards to foster innovation and community engagement within the cryptocurrency realm.

OKX and Polygon Debut Zero Knowledge Network

OKX and Polygon have launched the X Layer public mainnet, a Zero Knowledge (ZK) Layer-2 network aimed at making Ethereum-based transactions faster and cheaper. Designed using Polygon's Chain Development Kit, it supports cross-chain liquidity and shared state across various chains. The network allows seamless deployment of decentralized apps, enhancing scalability and reducing costs. Since its beta in November 2023, over 50 Web3 dApps have deployed on the network. 

Concurrently, OKX has seen significant executive turnover; Tim Byun, former CEO of Okcoin and head of global government relations, and Wei Lan, head of product, have recently departed from the company. This follows a restructuring to consolidate under the single OKX brand, moving away from a separate U.S. brand.

Kraken Introduces Privacy-Focused Crypto Wallet

Kraken has launched its own crypto wallet, the Kraken Wallet, which supports eight blockchains and focuses on privacy and minimal data collection. It is open-sourced, allowing developers to contribute, and part of Kraken’s commitment to promoting self-custody of assets. The wallet's release follows strategic moves to expand Kraken's product suite, including talks with layer 2 teams for building their blockchain. 

Meanwhile, Kraken has also acquired TradeStation Crypto to expand its U.S. regulatory licensing and presence. This acquisition follows TradeStation Crypto’s attainment of money transmitter and other regulatory licenses in most U.S. states, despite a past SEC settlement. This expansion supports Kraken’s broader strategy, including recent acquisitions in the European Union to secure virtual asset service provider licenses.

EigenLayer's No-Cap Policy Spurs $157 Million Influx

EigenLayer's recent removal of liquid staking token (LST) caps led to a record $157 million influx in 24 hours, significantly cutting into Lido's market share, which fell below 30%. This move highlights a shift towards greater competition in Ethereum's staking market, with the potential to further decentralize the ecosystem. Meanwhile, concerns about EigenLayer's centralization risks were raised, particularly regarding the potential for slashing events that could compromise Ethereum's security if large operators are disproportionately affected. 

Concurrently, Ethereum's DeFi TVL nearly doubled in Q1 2024, driven by liquid restaking initiatives like EigenLayer and Lido, peaking at nearly $100 billion. This resurgence is attributed to increased crypto asset prices and enhanced staking options, marking significant milestones in the blockchain's ecosystem development.

Trust Wallet Issues Security Alert for Apple Users

On April 16, Trust Wallet advised Apple users to disable iMessage due to a zero-day exploit threat. The firm warned of hackers seizing control without link interaction, particularly targeting high-value account holders. Trust Wallet's CEO cited a $2 million price for the exploit on the dark web. Despite skepticism from industry experts, Trust Wallet obtained intel from its security team and partners. Over 1.2 million users saw the alert. Apple recently addressed two zero-day vulnerabilities, emphasizing the significance of such threats. With iMessage being a known hacker target, cybersecurity remains a top concern, especially for the billions at risk in blockchain networks.  

Vitalik Buterin Endorses Privacy Protocol Railgun

Vitalik Buterin, Ethereum co-founder, used the privacy protocol Railgun to transfer 100 ETH on April 15, boosting its profile and causing its utility token, RAIL, to surge 168% in price. This support came before scrutiny over allegations of North Korean cyber attackers using Railgun to launder $60 million worth of Ether from the Harmony Bridge heist. 

However, Railgun has denied these allegations, citing its Private Proofs of Innocence system that blocks sanctioned users, including the Lazarus Group, from using its platform. Despite this, reports have speculated that a substantial amount of laundered funds from the Harmony hack passed through Railgun. The total volume of Railgun has nearly reached $1 billion, with a significant increase following Buterin’s endorsement.

Worldcoin to Launch Bot-Discouraging Layer-2

Worldcoin, the iris-scanning identification platform, announced plans to launch a Layer-2 technology called World Chain later this summer, using Optimism's software set. It aims to prioritize human transactions over bots by increasing gas fees for bots to subsidize costs for human users. This could enhance usability for its over ten million users but may reduce blockchain trading volume driven by bots. 

Meanwhile, in Buenos Aires, Worldcoin faces over $1 million in fines for alleged legal violations related to user data management, including unfair contractual clauses and improper handling of minors' registration. The fines stem from breaches of Argentina's National Consumer Defense Law.