Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | February 10 - February 16, 2024

Crypto Weekly Recap

Bitcoin:

• Weekly change: +14.95%
• Bitcoin's price surged past $50,000 early this week, fueled by growing interest in Bitcoin ETFs, hitting a daily high inflow of $632 million. Last week, cryptocurrency products saw $1.1 billion in inflows, 98% from Bitcoin. Several major US banks lobby the SEC to adjust regulations for spot Bitcoin ETF involvement due to perceived limitations.  
• The Bitcoin halving, expected in 54 days at block height 840,000, will cut miner rewards from 6.25 to 3.125 BTC, likely shrinking supply and sparking a potential rally as investors eye long positions.
• Following a January CPI report showing a 3.1% year-on-year increase, Bitcoin's price dropped to $48,753 on Wednesday but rebounded above $52,000 on Thursday, as investors seized the opportunity to buy the dip.
• Microstrategy's Bitcoin investment soared 66% in value from $5.96 billion to $9.88 billion during the rally.
• Concerns over sell-offs, including Genesis's approval to sell 35 million GBTC shares and the U.S. government's plan to auction 2,875 BTC from Silk Road seizures, paused the rally. Increased exchange deposits by short-term holders signaled a sell-off threat as the 2024 cohort entered a profitable phase.
• Bitcoin breached its two-year high at the $52,000 mark but then dipped, and recovered as short-term holders realized over $647 million in profits, marking the largest net realized gain/loss since the 2021 ATH.
• Bitcoin's attempt to surpass the $52,000 resistance was challenged by a higher-than-expected U.S. PPI announced on Friday, affecting inflation expectations and diminishing hopes for Fed rate cuts. While ETF inflows supported BTC, there were concerns over a potential 20-30% correction.
• Historical data shows Bitcoin's price often rises post-halving, like the 2020 event that escalated its value from just over $8,000 to an all-time high of around $69,000 within 18 months, although outcomes vary due to market forces and regulations.
• CryptoQuant predicts Bitcoin could exceed $56,000 after recording record institutional inflows.
• As per IntoTheBlock, Bitcoin has 85% odds of hitting a new all-time high within six months. However, potential risks such as geopolitical conflicts, underperformance of key catalysts, and unexpected selling pressure may hinder this projection.
• The Stablecoin Supply Ratio (SSR) from Glassnode, which compares Bitcoin's market cap to that of stablecoins denoted in Bitcoin, indicating the demand-supply dynamics of BTC versus USD, observed increased buying power for the past ten days.

Ethereum:

• Weekly change: +15.36%
• Interest in Bitcoin ETFs boosted the crypto market, with Ethereum's value increasing by over 15% in a week, peaking at $2,857 and a market cap of $340 billion, up from a low of $2,481.
• Ethereum's growth was fueled by Franklin Templeton's Ethereum ETF application, the introduction of ERC-404 & DN-404 token standards, $85B in Ether staking (25% of circulating supply), and a massive $200M acquisition by an Ethereum whale in February, suggesting market optimism.
• According to IntoTheBlock, Ethereum encountered significant resistance between $3,219.31 and $4,811.59, with 4.74 million ETH purchased in this range. Overcoming this hurdle was key for Ethereum's rise, though it was unclear if the fundamentals could support it.
• Ether perpetual futures' open interest hit a record on Deribit, exceeding $10.1 billion across exchanges, indicating a spike in demand for long positions. This was partly due to speculation over a potential spot ether ETF approval, spurring interest in Ether derivatives.
• As of this update, ETH has fallen below $2,800, mirroring BTC's decline in the wake of the PPI release.
• Solana, XRP, and Cardano posted notable weekly increases, driving the total crypto market cap above $2 trillion, aided by Bitcoin's climb to a $1.026 trillion valuation.

Altcoins:

• Deutsche Borse's subsidiary Crypto Finance received four crypto licenses.
• Fetch.ai Foundation partnered with Deutsche Telekom to advance AI and blockchain synergy.
• Nym Technologies secured a grant to enhance ZCash privacy infrastructure.
• HectorDAO went silent after a $2.7M hack, shocking investors.
• Ledger collaborated with Coinbase for direct crypto purchases via hardware wallets.
• Sushi announced the launch of decentralized derivatives exchange Susa on Layer N.
• Significant unlocks for several gaming tokens, including SAND, APE, IMX, PRIME, and YGG, occurred in February.
• PlayDapp was hit by double exploits, losing $290 million.
• EigenLayer became the 4th largest restaking protocol.
• Japan urged banks to screen crypto transfers to combat unlawful money transfers.
• Cardano's Q4 2023 report showed TVL growth and ADA price surge, outshining competitors.
• Bakkt was approved for a $150M securities sale to address its cash bleed.
• The Klaytn and Finschia merger was greenlit, forming Asia's largest web3 ecosystem.
• Over 1 million Telegram users signed up on NEAR Protocol's self-custodial wallet in 10 days.
• BitTorrent's BTT surged as Tron completed a TRX burn, and unveiled a Bitcoin Layer 2 solution.
• Stardust teamed up with Mysten Labs to streamline game deployment on Sui.
• Crypto money laundering dropped 30% last year, with Lazarus switching to YoMix after sanctions against Sinbad mixer, according to Chainalysis.
• ApeCoin DAO chose Arbitrum for ApeChain amid governance controversy and community reactions.
• Solana's BONK rose 35% at one point as Revolut ignited listing speculations.
• Smart money investors invested $2 million into PEPE, leading to a 30% increase after a significant dump.
• Binance Trust Wallet's iOS app vulnerability was listed on NIST, CEO contested misinformation.
• Jupiter's crypto investment was scrapped by the compliance team, reports FT.
• GoFundMe shut down the Tornado Cash legal defense crowdfunding campaign.
• VeChain's native token VET surged amid the launch of an account abstraction feature.
• Ronin's price popped after the Ethereum gaming network revealed RON rewards halving.
• Robinhood reported a 10% revenue increase amid crypto market expansion.
• CoinShares reported $108M in revenue in its 2023 earnings report.
• Coinbase saw $3.1 billion of revenue in 2023, with a third of that total in Q4.
• Analog closed $16M funding for cross-chain communication tools.
• Lava Network raised $15 million in seed funding, introducing Magma.

Investor Frenzy in Bitcoin ETFs Outstrips Mining Supply

Bitcoin ETFs have attracted significant investor interest, with large inflows into funds like BlackRock's iShares Bitcoin ETF. This surge in demand has surpassed Bitcoin supply from mining, causing debates about sustainability. Notably, the ETF market witnessed BlackRock's iShares Bitcoin Trust leading fee reductions. 

This move, along with others from Fidelity, signifies a broader trend of lowering investment costs in a bid to attract more investors. As a result, the market has experienced a surge in institutional investment, with the collective value of spot Bitcoin ETF products surpassing $10 billion, indicating a notable shift in investment preferences toward Bitcoin over traditional assets like gold.  

ERC-404 and Pandora: Innovating NFT Ownership and Trading

The ERC-404 token standard, particularly exemplified by Pandora (PANDORA), has garnered significant attention in the crypto realm due to its innovative features allowing fractional ownership of NFTs. Pandora experienced exponential valuation and trading activities, sparking interest from various players in the cryptocurrency sphere. 

However, concerns about transaction fees and adherence to traditional protocols have surfaced, prompting the emergence of the DN-404 standard as a potential competitor. Notably, the surge in NFT minting activity and transaction volumes, attributed to the success of ERC-404 tokens like Pandora, indicates a new era of excitement and innovation in the crypto space.  

Decentralization at Heart: Starknet's Billion-Token Airdrop

Starknet's upcoming STRK token airdrop aims to distribute 1.8 billion tokens to 1.3 million wallets, emphasizing decentralization and community involvement. The airdrop's eligibility criteria, unlocking schedule, and concerns over allocation integrity have sparked controversy. Despite this, Starknet remains committed to building an inclusive and vibrant community, with strong governance and potential for sustainable growth. 

The airdrop precedes multiple exchange listings, generating anticipation for the STRK token's liquidity and market potential. Starknet faces competition in the Layer 2 landscape but seeks to bridge Layer 1 and Layer 2 technologies, positioning itself as a leader in the global economy's future.  

Uniswap V4: Innovating DeFi with Hooks Amid Security Debates

Uniswap V4 is gearing up for a Q3 2024 launch, coinciding with Ethereum's Dencun upgrade, promising a significant leap in DeFi's evolution. This version introduces "hooks," transforming smart contracts into dynamic tools for real-time adjustments, aiming to reduce fees and enhance asset management. However, this feature has sparked a debate over potential security risks, centralization concerns, and its impact on competition within the DeFi space. 

Despite these concerns, Uniswap V4 aims to be the most audited code on Ethereum, with comprehensive internal, external, and community audits. The core debate revolves around balancing innovation with risk management, as hooks offer immense potential but also pose challenges in security and ecosystem diversity.

Aptos Labs Leads with Passkey Authentication and Crypto Smartphone

Aptos Labs has rolled out a passwordless passkey authentication for transactions on its Layer 1 blockchain, enhancing user convenience by eliminating the need for passwords. This system allows users to sign transactions with a passkey, leveraging biometric authentication like Touch ID or Face ID, and store private keys directly on their devices. 

In parallel, the Aptos Foundation introduced the JamboPhone, a $99 crypto smartphone available in over 40 countries, designed as a gateway to the Aptos ecosystem with pre-installed Aptos-compatible apps. The phone, which runs on Android 13 with a 6.5" IPS LCD display, aims to democratize access to blockchain technology, emphasizing affordability and educational opportunities.

Avalanche Enhances User Experience with Durango Testnet Upgrade

Avalanche's Durango upgrade on the Fuji testnet introduces Avalanche Warp Messaging for cross-chain communication and scalability improvements. The upgrade aims to enhance user experience and network operations on the C-Chain and P-Chain through features like P-Chain native transfers and subnet ownership transfers. Citi's pilot with Avalanche explores tokenization of private assets, showcasing blockchain's potential in streamlining operations and enabling new operational models. 

As per Messari, Avalanche became the 9th largest cryptocurrency in Q4 2023, driven by a 450% increase in daily transactions due to Avascriptions. While active addresses decreased, the rise in active validators and institutional partnerships support its potential expansion into gaming and Real World Assets sectors.  

Chainlink's Role in Strengthening Telefónica's Transaction Security

Telefónica partners with Chainlink to prevent SIM swap attacks by integrating GSMA Open Gateway APIs with smart contracts. This collaboration strengthens transaction security and guards against unauthorized SIM changes. Chainlink’s integration into Telefónica's framework merges telecom capabilities with blockchain tech, enhancing data verification. 

Concurrently, Chainlink's LINK token surged by nearly 8% in a week, exceeding $20 and briefly entering the top 10 digital assets by market cap. This increase is linked to heightened whale activity, with two major LINK whales withdrawing 175,183 LINK from Binance and Coinbase, signifying substantial accumulation.  

Powell and Waller Weigh In: Stablecoins, DeFi, and Dollar Supremacy

Federal Reserve Chair Jerome Powell stresses the need for stablecoin legislation and emphasizes the requirement for congressional approval for any central bank digital currency (CBDC) initiatives. Federal Reserve Governor Christopher Waller suggests that decentralized finance (DeFi) and stablecoins could strengthen the global dominance of the U.S. dollar. 

JPMorgan analysts highlight potential U.S. regulatory control over Tether's offshore usage and anticipate upcoming stablecoin regulations to impact Tether's appeal compared to more transparent and compliant stablecoins. These discussions underscore the growing focus on stablecoin legislation, the potential impact on the dollar's international influence, and regulatory scrutiny on stablecoin issuers like Tether.  

Treasury Tackles Crypto's Role in Illicit Finance Amid Misconceptions

The U.S. Treasury is gearing up to share its concerns regarding the use of cryptocurrencies in illicit finance at an upcoming hearing, highlighting the growing scrutiny on digital currencies' role in illegal activities. Despite these concerns, reports suggest that the use of cryptocurrencies in financing activities by groups like Hamas is minimal. 

A Treasury official has confirmed that cryptocurrencies are not a popular tool among terrorists, who prefer traditional banking and financial products for their operations. Meanwhile, Paul Grewal, a notable figure in the crypto space, has called for a correction from the Wall Street Journal regarding its reporting on Hamas and cryptocurrency, emphasizing the need for accurate representation of crypto's role in illicit finance.

South Korea Confronts Crypto Scandals with Regulatory Overhaul

South Korea’s crypto industry grapples with scandal, regulations, and intensified scrutiny on suspicious transactions. The blockchain sports platform Winnerz faces accusations of running a coin scam with celebrity endorsements, triggering police probes and arrests. Regulatory responses include the expulsion of unfit crypto exchanges and plans for preemptive trading suspensions. 

The Financial Intelligence Unit (FIU) reported a 49% surge in suspicious transaction reports from crypto exchanges in 2023, reflecting a push against money laundering. The FIU plans to strengthen its crypto team and deploy a virtual asset analysis system for enhanced oversight. Legislation to define digital assets and penalize illicit trading is on the horizon. 

SafeMoon Faces Legal Challenges and Financial Instability

SafeMoon's saga deepens as CEO Braden John Karony secures bail amidst his legal team's exit due to financial strains, signaling a tumultuous phase for the bankrupt crypto project. Arrested in November 2023 alongside CTO Thomas Smith for charges including securities fraud and money laundering, Karony's bail was set at a hefty $3 million, under stringent conditions prohibiting crypto promotional activities. 

Meanwhile, SafeMoon grapples with a liquidity crisis as an unidentified entity siphoned over $11 million from its pools, amidst bankruptcy proceedings initiated in December 2023. This financial turmoil is compounded by a $9 million exploit in March 2023 and serious SEC charges against its executives, painting a grim picture of mismanagement and legal woes.

Top Weekly Altcoin Gainers and Losers

Gainers:

Arweave AR (+14.67%) 

Bitget Token BGB (+11.76%) 

SATS 1000SATS (+9.99%) 

Render Token RNDR (+8.03%) 

VeChain VET (+6.90%) 

Losers:

Helium HNT (-10.41%) 

Beam BEAMX (-8.59%) 

Aptos APT (-7.82%) 

Oasis Network ROSE (-6.29%) 

Mina MINA (-6.19%)