Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | August 17 - August 23, 2024

Crypto Weekly Market Update

Table of Contents

Market Movements and Trends

• Crypto Weekly Recap

Market Surges and Blockchain Developments

• Tron Surpasses Ethereum and Solana in Daily Revenue Surge
• Grayscale Launches Avalanche Trust for Accredited Investors
• Sony to Launch Ethereum Layer-2 Blockchain Soneium

Regulatory and Legal Updates

• Solana ETF Plans Stalled Amid Regulatory Scrutiny
• Trump's Pro-Crypto Stance Boosts Support, Fuels Meme Coins
• Terraform Labs Faces Pivotal Bankruptcy Hearing

Crypto Exchange and Platform Strategies

• Coinbase Announces Strategic Moves with Polygon and Solana
• Justin Sun Defends Bitcoin Removal from USDD Collateral
• WazirX to Gradually Resume Rupee Withdrawals Post-Hack

Mergers, Acquisitions, and Market Trends

• Bitwise Acquires ETC Group, Expands European Presence
• Sotheby’s CryptoPunk Sale Reflects NFT Market Downturn

Innovative Use Cases and Partnerships

• Federal Authorities Use NFTs to Inform CluCoin Scam Victims
• Stepn Go Partners with G-Shock to Release NFT Sneakers
• ME Foundation Introduces ME Token for Cross-Chain Trading

Crypto Weekly Recap

Bitcoin:

• Weekly change: +9.76%
• U.S. Spot BTC ETF inflows hit $254.37M last week, with six consecutive days of positive daily inflows.
• Market volatility increased ahead of Fed Chair Jerome Powell's speech at Jackson Hole.
• BTC dropped from $59,000 to $58,500 on Monday, then fell below $58,000 after the U.S. government transferred nearly $600M in Bitcoin to Coinbase.
• It rebounded to $61,350 on Tuesday, but the surge was short-lived.
• On Tuesday, BTC fell back to $58,800, with modest gains until Wednesday afternoon. The decline aligned with Mt. Gox's $75M transfer to Bitstamp and $700M to an unknown wallet but was driven by reduced whale accumulation, not sell-off fears.
• Whales accumulated BTC slowly, adding just 1% to holdings monthly, down from 6% in February.
• Meanwhile, institutional investors maintained strong BTC holdings despite market volatility, with over 60% of major global hedge funds engaging in BTC via ETFs.
• On Wednesday, BTC traded flat as U.S. jobs data showed 818,000 fewer jobs added than estimated, signaling economic fragility, but surged after reports that Robert Kennedy Jr. might drop out of the U.S. presidential race and endorse Donald Trump, a pro-crypto candidate.
• BTC briefly reached $63,000 as the FOMC minutes revealed strong support for a September rate cut, with some officials backing a 25 bps cut in July. The dollar also plummeted to its lowest level of the year this week, further supporting BTC’s rise.
• BTC dominance in the digital asset market surged from 38% to 56% since November 2022, its highest in three years, reflecting a stronger focus on BTC.
• OTC desk balances surged by 60,000 BTC last month, reaching 370,000 BTC, indicating significant offloading by large holders, a potential signal for upcoming market volatility, similar to trends seen before the 2021 price correction.

Ethereum:

• Weekly change: +5.04%
• ETH ETF inflows dropped by $38.85M last week, while BTC saw positive inflows. Daily outflows persisted for six consecutive days.
• Despite challenges, BlackRock's ETHA became the first Ethereum ETF to surpass $1B in net inflows.
• ETH fluctuated between $2,573 and $2,683 early in the week, with a brief spike near $2,700 on Tuesday.
• On Wednesday, ETH hit a weekly low of $2,547 before surging past $2,700 on Friday.
• ETH’s price remained stagnant this week, with weak fundamentals, including ETF outflows, hindering growth.
• Ethereum's market dominance dropped by 1.5% since November 2022. Stablecoins fell sharply from 17.3% to 7.4%, and altcoins declined from 27.2% to 21.3%.
• As of Tuesday, ETH supply in profit hit a 2024 low, with 85.66% of circulating ETH worth more than recent purchase prices, down from 94%. Despite a 15% YTD gain, recent buyers saw losses as prices fell 30%. 2023 holders might still profit, while others may be in loss.
• Ethereum gas fees hit a five-year low due to increased Layer 2 adoption and the Dencun upgrade, reducing ETH burn and increasing supply since April. Whales, like one selling 15,000 ETH, contributed to the price drop.
• Despite lower fees and burning rates, daily average transactions held steady or slightly increased post-Dencun.
• Lower fees benefited users but posed challenges for investors, contributing to ETH’s price drop post-Dencun.
• Private Dark Pool transactions on Ethereum now account for over 50% of gas fees, avoiding front-running bots and enabling complex on-chain actions.
• The growing use of private transactions in dark pools raised concerns about centralization in the Ethereum network.
• Over 30% of Ethereum transactions are privately routed, yet they consume more than half of the network's gas fees.
• Private transactions are favored for MEV protection, especially for complex deals, despite higher gas usage.
• The rise in private transactions affected ETH's base fees, causing increased volatility in fee dynamics.

Altcoins:

• Prometheum labeled Uniswap and Arbitrum tokens as securities. Link
• Tether introduced a Dirham stablecoin with UAE partners. Link
• Ledn secured a $50M Bitcoin-backed syndicated loan. Link
• Gate.io launched a $100M innovation fund in Abu Dhabi. Link
• Telegram game Catizen partnered with HashKey Group for an airdrop. Link
• ParaSwap launched an intent-based protocol to reduce MEV attacks. Link
• Messari reported Covalent rebranding, AI modular data, and CXT buy-back. Link
• EigenLayer’s EigenDA reduced data prices by 10x. Link
• BadgerDAO founder proposed an Ethereum Layer-2 using Bitcoin as gas. Link
• Curve’s founder requested 21M CRV for development funding. Link
• Solana DeFi users were targeted by a malicious Bull Checker extension. Link
• SushiSwap added DCA and limit orders using Orbs' technology. Link
• Linea welcomed Status as a contributor to its L2 rollup project. Link
• Galxe launched the alpha mainnet of its Layer 1 Gravity chain. Link
• Clearpool unveiled an RWA yield chain on Optimism. Link
• MangoDAO’s SEC settlement faced scrutiny for investor impact. Link
• Drift Predictions Market BET attracted $3M in liquidity at launch. Link
• Starknet sought community approval to launch STRK staking. Link
• Flamingo Finance detailed recovery efforts after a $5M Poly Network exploit. Link
• Binance blocked $2.4B in potential crypto scams in 2024. Link
• Space and Time rebranded Cenit Finance as Space and Tokens. Link
• Xai tapped Gauntlet for DAO governance and treasury strategy. Link
• DePIN Media Network PTK launched on Coinbase’s Base for movie transparency. Link
• Aave launched on ZKsync-powered Era mainnet to maximize its potential. Link
• McDonald's Instagram account was hacked to promote Solana token Grimace. Link
• YieldNest built a liquid restaking token on EigenLayer. Link
• DEXScreener earned over $1M in weekly fees. Link
• Binance and CZ faced a new lawsuit over alleged laundering. Link
• The notorious MEV bot jaredfromsubway returned with new attacks. Link
• Binance added DOGS to Launchpool; airdrop delayed due to 8M requests. Link
• Blast Network saw a severe drop in TVL and user activity. Link
• SafePal Wallet launched a new staking Dapp called SFPlus. Link
• Nym released NymVPN beta featuring zk-nym registration. Link
• ENS Labs teamed with Dentity to advance real-world credentials. Link
• Aptos Foundation partnered with a Web3 streaming platform. Link
• ZKsync Era's daily revenue plunged post-airdrop, showing L2 market struggles. Link
• Conflux partnered with China Mobile’s Migu to launch blockchain video ringtones. Link
• A crypto whale lost $55.47M in DAI to a phishing attack. Link
• Anchorage Digital launched a PYUSD reward program after reaching $1B. Link
• Near Protocol deployed the Nightshade 2.0 upgrade on mainnet. Link
• TON Society launched to deepen community-based decentralization. Link
• Binance founder CZ moved to a halfway house, still not free. Link
• Floki DAO invested in a new meme coin as Binance extended airdrop support. Link
• Conduit launched a marketplace to boost rollup scalability. Link
• Fetch.ai opened a new AI lab in San Francisco, committing $10M annually. Link
• SEC opposed Richard Heart's motion to dismiss the Hex case. Link
• Return Entertainment used Aethir’s DePIN for smart TV gaming. Link
• Worldcoin faced scrutiny in Colombia for alleged privacy violations. Link
• China extradited a $14B crypto pyramid scheme mastermind from Thailand. Link
• Kraken blamed unclear regulations for a court loss in Australia. Link
• Turkish authorities arrested a crypto founder for a $4B pyramid scheme. Link
• DWF Labs dumped 12.5M Curve DAO tokens at a 17% loss. Link
• MakerDAO planned to convert 1 MKR into 24,000 NGT tokens. Link
• Tokenized RWA market hit $10B, attracting major institutions. Link
• AAVE whale buying led to 45% outperformance over the broader crypto market. Link
• Binance Futures announced a SYS 50x leverage perpetual contract. Link
• Binance supported the Frontier token swap and rebranding. Link
• Across Protocol surged 14% as Coinbase announced ACX listing. Link
• Binance announced futures listing for Voxies, causing a 75% price surge. Link
• Coinbase launched perpetual futures for Render, Saga, and Threshold. Link
• Fabric raised $33M for a new data privacy chip. Link
• YeagerAI secured $7.5M in a seed round led by North Island Ventures. Link
• Soulbound raised $4M for Web3 social gaming. Link
• BSX raised $6.2M ahead of its token launch. Link
• A16z Crypto led an $80M Series B for Story Protocol. Link
• A16z led a massive funding round, valuing PIP Labs over $2B. Link
• Paradigm led a $7.5M seed round for Sorella Labs to solve MEV issues. Link
• Binance Labs invested in a Bitcoin yield network, Corn. Link
• SatLayer raised $8M in pre-seed funding for its Bitcoin restaking platform. Link

Tron Surpasses Ethereum and Solana in Daily Revenue Surge

Tron has surged ahead of Ethereum and Solana in daily revenue, reaching $3.84 million thanks to SunPump's memecoin generator. This significant growth saw revenue double within 24 hours, fueled by the creation of over 26,000 tokens. Despite a brief downtime, SunPump's momentum remains strong, generating $526,000 in a single day. Tron's success is partly attributed to Justin Sun's $10 million boost initiative, enhancing liquidity and securing its position as a major stablecoin provider with nearly $60 billion in supply. While debates on memecoins persist, Tron's strategy to lower fees and expand transaction volumes signals ambitious market expansion efforts.

Grayscale Launches Avalanche Trust for Accredited Investors

Grayscale has launched the Avalanche Trust, targeting accredited investors with a dedicated AVAX investment vehicle. This move aims to boost real-world asset tokenization in crypto, driving AVAX's price up by 11.79% to $26.28. The trust imposes a 2.5% management fee, seen as standard in such offerings. Meanwhile, Franklin Templeton has expanded its OnChain U.S. Government Money Fund to the Avalanche blockchain. This move enables institutional investors to leverage blockchain for trading FOBXX shares, previously on Stellar. Franklin Templeton's blockchain push underscores its commitment to digital finance, enhancing accessibility to traditional financial products through innovative technology.

Sony to Launch Ethereum Layer-2 Blockchain Soneium

Sony is set to launch Soneium, an Ethereum layer-2 blockchain developed with Startale. Scheduled for a testnet debut soon, it integrates Astar Network's zkEVM technology for enhanced privacy and efficiency. Positioned as a game-changer by Startale CEO Sota Watanabe, Soneium aims to democratize Web3 accessibility. Built on the Superchain platform and utilizing Optimism’s OP Stack, it targets scalability and security challenges while facilitating user-friendly operations. Sony plans to leverage its wide-reaching distribution channels to drive adoption and support high-volume applications. This move underscores Sony's strategic expansion into Web3, aligning with its acquisition of WhaleFin and broader blockchain initiatives.

Solana ETF Plans Stalled Amid Regulatory Scrutiny

Solana's path to launching ETFs faced a setback as filings by VanEck and 21Shares vanished from the Cboe website, triggering speculation about SEC concerns. Despite remaining visible on the SEC's EDGAR system, doubts linger due to regulatory issues. The SEC's scrutiny, including discussions on Solana's classification, suggests approval hurdles under the current administration. Meanwhile, Brazil's approval of a Solana ETF contrasts sharply, highlighting geopolitical differences. Solana's native token, SOL, grapples with institutional outflows and competition from Tron amid declining interest in meme coins. VanEck persists optimistically, navigating legal complexities, aiming for eventual regulatory clarity and ETF launch.

Trump's Pro-Crypto Stance Boosts Support, Fuels Meme Coins

Donald Trump's recent pro-crypto stance, including endorsing a new platform and criticizing the SEC, has significantly boosted his support within the crypto community, reflected in the rise of Trump-themed meme coins like MAGA (+20%) and STRUMP (+10%). His odds on Polymarket surged to 53% but then dropped to 50%, still outpacing Kamala Harris at 49% (previously 46%). Trump's campaign has also received $7.9 million from the crypto sector since May. Despite Kamala's broader appeal in traditional policies, her lack of a clear crypto stance has left her trailing in this sector.

Terraform Labs Faces Pivotal Bankruptcy Hearing

On September 19, Terraform Labs will face a crucial bankruptcy hearing that will decide if the company can restructure or must liquidate following a $4.5 billion SEC settlement and asset sales. Meanwhile, FTX's reorganization plan, which gained 95% creditor approval, promises a 100% return plus interest for non-governmental creditors, despite objections from some customers regarding the valuation of crypto holdings. The final vote is set to be filed before an October 7 court hearing, marking a pivotal moment in FTX's bankruptcy process.

Coinbase Announces Strategic Moves with Polygon and Solana

Coinbase announced several strategic moves. The exchange announced its support for Polygon's token upgrade from MATIC to POL, adding it to both Polygon and Ethereum networks. Coinbase integrated Circle's EURC with Solana, allowing Euro to EURC conversions, launching a new EURC-USDC order book on August 29. Base network's "Onchain Summer" campaign drew 4 million active addresses, with 268,000 wallets minting 700,000 NFTs. On August 21, Base introduced "Basenames," simplifying wallet addresses with Ethereum Name Service, launching through a Dutch auction. Base's total value locked nearly tripled to $1.5 billion, led by Aerodrome's $592 million contribution, reflecting in Coinbase’s Q2 2024 revenue of $1.45 billion.

Justin Sun Defends Bitcoin Removal from USDD Collateral

Justin Sun, founder of Tron, downplays concerns over the removal of 12,000 Bitcoin from USDD's collateral, describing it as a routine event in DeFi. The move, which occurred without a DAO vote, mirrors mechanisms seen in projects like MakerDAO's Dai, where collateral holders can withdraw excess funds. Sun asserts that USDD maintains over 300% collateralization, making such actions typical. Critics question the transparency and governance of the move, contrasting it with DeFi principles. USDD now relies more on Tether and TRX, reflecting shifts in stablecoin collateralization strategies.

WazirX to Gradually Resume Rupee Withdrawals Post-Hack

WazirX, the Indian crypto exchange recovering from a $230 million hack last month, will gradually resume rupee withdrawals starting August 26. Users can withdraw up to 66% of their funds in two phases over a month. Initially, from August 26 to September 8, they can withdraw half of this amount, with the remainder available by September 22. The exchange's rupee operations were unaffected by the hack, and it assures users of adequate reserves for these withdrawals, although 34% of funds remain held due to ongoing investigations. This phased approach aims to restore user confidence amid ongoing recovery efforts.

Bitwise Acquires ETC Group, Expands European Presence

Bitwise has expanded its market presence by acquiring ETC Group, a London-based issuer of crypto exchange-traded products (ETPs). This move boosts Bitwise's assets under management to $4.5 billion and integrates nine new European crypto ETPs into its offerings. The acquisition aims to cater to European investors and enhance Bitwise's product range with innovative ETPs. CEO Hunter Horsley emphasized the strategic value of accessing global markets through this acquisition. Bitwise, known for its spot bitcoin ETF BITB, continues to strengthen its foothold in Europe amidst growing institutional interest in digital assets.