Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | February 24 - March 1, 2024

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Crypto Weekly Market Update

Table of Contents

Market Trends and ETF Updates

• Crypto Weekly Recap
• Major Financial Firms Drive Bitcoin ETF Market Growth

Exchange Challenges and Solutions

• Coinbase Battles Outages Amid Bitcoin Price Rally
• Gemini's Regulatory Settlement Promises User Compensation
• BitForex Scandal Shakes Trust in Crypto Exchanges
• Binance Contends with Legal Challenges and User Losses

Innovations in Trading and Leverage

• Telegram's TON Gains as Binance Futures Introduces Leverage

Blockchain and Layer-2 Developments

• Blast Chain's Hype Meets Reality with Value Plunge
• Robinhood and Arbitrum Collaborate for Wallet Swap Efficiency

Token Economics and Market Dynamics

• Crypto Market Braces for Massive Token Unlocks in March

NFT Ecosystem and Creator Rights

• Yuga Labs and De Labs Enforce NFT Royalties
• Bitcoin Ordinal Trade Error Highlights Community's Honesty
• ZachXBT's Investigative Work Recovers Stolen NFT Funds
• VanEck Introduces SegMint, A New NFT Marketplace

Crypto Weekly Recap

Bitcoin

• Weekly change: +19.7%
• Bitcoin's week saw a dramatic price increase within days.
• BTC remained around $50,000 - $51,000 during the weekend and early Monday, then surged to $54,800.
• The price continued to ascend, breaking through $57,000, $60,000, and nearing $64,000, up by >16% in less than three days.
• This surge was driven by significant market entries, including new highs in Bitcoin ETF inflows and volume, alongside the April halving event's anticipation.
• Additional boosts came from MicroStrategy's purchase and over $5.7 billion year-to-date inflows into Bitcoin Investment Products.
• Rising U.S. debt concerns and expected inflation contributed as macro factors.
• Retail investors had a minimal impact, with low new BTC addresses despite the significant price increase. The surge briefly hit $64,000, near its all-time high, with the crypto fear & greed index reaching its peak since November 2021 at 82.
• A sharp decline followed BTC hitting $64,000, plunging below $59,000 amidst exchange glitches, notably Coinbase displaying zero balances on Thursday.
• The downturn and app issues were seen by some as bullish, suggesting higher peaks ahead from new investments.
• A CryptoQuant analyst noted the influx of "individual" investors decreased the percentage of long-term holders, indicating an upcoming true bull market.
• February's Bitcoin USD monthly candle witnessed its largest surge, around $20,000, resulting in a 43.55% gain.
• Despite the crash, BTC rebounded to about $62,000, with the fear & greed index slightly down to 80. BTC dominance slightly fell but remained up 2.82% weekly.
• A notable decrease in BTC availability at OTC desks hinted at a potential supply shock, significantly affecting price discovery.
• Bitcoin's recent surge to a yearly high means that nearly 99.6% of its supply is now in profit. However, investors were warned of possible corrections, with whales offloading 80,000 BTC and miners' reserves at their lowest since July 2021. 
• Michael Novogratz predicted a mid-$50,000s correction before reaching new highs, highlighting excessive market leverage.
• On-chain data indicates that Bitcoin has strong support at $60,300 - $62,155, with one million addresses acquiring around 671,000 BTC.  

Ethereum

• Weekly change: +14.34%
• ETH also experienced notable gains this week, though BTC's performance was more remarkable.
• Early signs of a bullish trend emerged on Monday, as ETH rose from a weekend low of $2928 to $3128.
• From Monday to Wednesday afternoon, ETH's strength increased, peaking at $3421 due to market optimism, the Dencun upgrade, record-high staking levels, anticipation of an Ethereum ETF, and significant whale accumulation, including Justin Sun, leading to exchange balances hitting 6-year lows. In this environment, new protocols utilizing ETH's liquid staking capabilities, like EigenLayer and EtherFi, successfully secured investments from major backers.
• ETH hit a peak of $3500, its highest since 2022, before falling to $3313 after a BTC downturn.
• It has since rebounded, maintaining a level above $3400, with Bitfinex analysts suggesting a potential altcoin rally.
• According to a Bybit report, from July 2023 to January 2024, institutional investment in Bitcoin and Ethereum significantly grew, with a marked shift towards Ethereum. The share of BTC and ETH in institutional portfolios increased from 50% to 80%, while investments in stablecoins and other altcoins constituted the remaining 20%. There was a decrease in investments in meme and AI tokens.

Atlcoins

• Memecoins saw an impressive performance this week.
• An Australian man disappeared after mistakenly receiving $500,000 in cryptocurrency.
• Frax Finance considered a Uniswap-inspired reward system for its token stakers.
• PancakeSwap launched an affiliate program to support forks across blockchains.
• After finding malicious code, Tornado Cash's website and Discord went offline.
• Arweave introduced a testnet with high scalability, inviting the community to participate.
• OKX opened a cryptocurrency exchange in Turkey, broadening its DeFi footprint.
• The Solana Foundation unveiled the Renaissance hackathon, offering over $1 million in prizes.
• Lawyers stated Do Kwon's extradition likely wouldn't occur before the end of March.
• Theta Network's price jumped, driven by anticipation for its Theta EdgeCloud launch and AI token enthusiasm.
• Gala Games introduced GalaSwap, an exchange platform with token rewards.
• Sam Bankman-Fried's defense team proposed a sentencing cap for the $8 billion FTX fraud case.
• Uniswap released a browser extension and tools to enhance transactions.
• Senator Warren criticized the crypto industry, demanding it adhere to traditional finance rules.
• EtherFi secured a $23M Series A funding as Eigenlayer's TVL surpassed $9B.
• Following a $6.4M exploit, the Seneca stablecoin hacker returned the stolen funds.
• The IOTA Foundation committed $10M to support tokenization and trade startups.
• The SEC accused Terraform Labs of diverting $166 million to its legal team.
• In 2024, hacked funds increased by 15.4% compared to the same period in 2023, according to Immunefi.
• The Shiba Inu team unveiled a new data security encryption method.
• StarkWare released an open-source ZK prover at ETH Denver.
• Portal debuted with a $2.5B valuation.
• Grayscale considered legal action against the SEC.
• State attorneys general argued the SEC overreached in the Kraken lawsuit.

Major Financial Firms Drive Bitcoin ETF Market Growth

BlackRock, Morgan Stanley, and others are shaping the Bitcoin ETF landscape. US spot Bitcoin ETFs saw strong inflows despite Grayscale's outflow. In seven weeks, the top 10 US Bitcoin ETFs amassed $7.5 billion in net inflows, with high trade volumes. Wells Fargo, Merrill, and others offer Bitcoin ETFs to select clients. 

Morgan Stanley considers offering spot Bitcoin ETFs on its brokerage platform, marking a broader industry trend. BlackRock Brazil launched the iShares Bitcoin Trust ETF BDR. Kraken unveiled institutional services for the Bitcoin ETF market. Vanguard's stance against Bitcoin ETFs contrasts with other firms' embrace. New leadership may prompt a shift in Vanguard's approach.  

Coinbase Battles Outages Amid Bitcoin Price Rally

Coinbase faced technical glitches during Bitcoin's surge to $64,000. Users experienced zero balances and transaction errors, coinciding with the platform's stock volatility. CEO Brian Armstrong attributed the chaos to overwhelming traffic, committing to enhance infrastructure scalability. Similar challenges have tested other major platforms. 

The incident occurred ahead of the Bitcoin halving event, emphasizing exchange reliability's importance. Analysts viewed the surge and Coinbase's technical issues as a sign of Bitcoin's strength and growing appeal. This marks another instance of Coinbase stumbling during significant market movements, revealing the unique pressures on crypto exchanges.  

Gemini's Regulatory Settlement Promises User Compensation

Gemini, a cryptocurrency exchange, settled with NY regulators to return over $1.8 billion to 200,000+ affected users due to the bankruptcy of Genesis Global Capital. Customers will receive their digital assets at current market values, surpassing the initial $1.1 billion. Gemini's commitment aims to restore trust, with 97% of assets to be distributed within two months post-settlement approval. The settlement includes a $37 million fine for customer protection lapses and a $40 million contribution to the bankruptcy effort. The Earn program's issues led to this resolution, highlighting the impact of regulatory actions on consumer protection in the cryptocurrency space.  

BitForex Scandal Shakes Trust in Crypto Exchanges

BitForex, a crypto exchange, faced a crisis with abrupt operations suspension and $56.5 million in missing cryptocurrencies. This sparked concerns about the exchange's activities and motives. Red flags were raised regarding its ownership of TRB and OMI tokens. The departure of the CEO, trading volume slump, wash trading allegations, and discrepancies in reported volumes intensified scrutiny. 

Regulatory bodies, including the Hong Kong Securities and Futures Commission, cautioned investors about unlicensed platforms. BitForex's credibility was further questioned due to contradicting volume statements and suspicious trading patterns. This situation has left users frustrated and uncertain about the exchange's stability.  

Binance Contends with Legal Challenges and User Losses

A Binance user lost $70,000 due to a hacker manipulating their account, which led to dissatisfaction with Binance's response, as the exchange's support was perceived as unhelpful. The Nigerian government reportedly fined Binance $10 billion, accusing it of facilitating illegal transactions that harmed the country's economy, amid an investigation into cryptocurrency platforms' impact on the local currency. Later on, Cointelegraph reported that Nigeria denied $10B Binance fine. Adviser clarified misquotation, stating no definitive decision was made on cryptocurrency exchange's penalty.  

The US prosecutors have requested former Binance CEO Changpeng Zhao to surrender all passports and remain in the US during his trial, highlighting legal challenges and expectations of imprisonment following his guilty plea to charges related to inadequate anti-money laundering protocols at Binance.

Telegram's TON Gains as Binance Futures Introduces Leverage

Binance Futures listed Telegram Open Network (TON) with up to 50x leverage, boosting TON token price. Telegram's TON blockchain sees a surge in value due to new developments led by Pavel Durov. Telegram channel owners will soon earn rewards for content, potentially revolutionizing revenue streams. With one trillion monthly channel views, only a fraction monetized currently, the Telegram Ad Platform expansion promises significant changes. Starting in March, owners in nearly 100 countries will receive 50% of ad revenue. Transactions will use the TON blockchain for swift, secure payments, creating a cycle where creators can cash out or reinvest in channel growth.

Blast Chain's Hype Meets Reality with Value Plunge

The Blast layer-2 chain, despite its hype and a promising start with $2.3 billion in deposits from eager depositors attracted by the prospect of yield farming and airdrops, saw a dramatic decline in its total value locked (TVL), plummeting to $650 million within 24 hours of its mainnet going live. The chain, which was touted as the only Ethereum L2 offering native yield, experienced mass withdrawals as depositors, having received Blast points, possibly looked to capitalize on Ethereum's price rise from around $2,000 to $3,450. 

Amidst this, the Blast ecosystem faced its first major scam with the 'RiskOnBlast' rug pull, where over 420 ether ($1.3 million) was stolen from investors. This event occurred as RiskOnBlast, a gambling and exchange platform, vanished after a fundraising round, raising concerns over the due diligence and investment frenzy in new blockchain projects.

Robinhood and Arbitrum Collaborate for Wallet Swap Efficiency

Robinhood has partnered with Arbitrum to enable swaps on its Web3 wallet, allowing users to leverage low costs and fast transaction speeds on Arbitrum's Ethereum-based layer-2 network. Announced at ETHDenver 2024, this collaboration aims to simplify access to layer-2 networks and support cross-chain swaps in the future. 

Additionally, Robinhood Wallet users can now participate in an exclusive NFT giveaway from Notable.art, acquiring digital sketches by American artist Hunt Slonem. The giveaway consists of four NFT mints, with US participants able to purchase a physical print of the sketches. This initiative is part of Robinhood's efforts to increase accessibility to decentralized finance and Web3, while also engaging new audiences through the integration of technology and art.

Crypto Market Braces for Massive Token Unlocks in March

In March, over $3 billion worth of crypto tokens will unlock, led by Arbitrum's release of 1 billion ARB tokens, doubling its circulating supply and valued at $2.2 billion. Tran Hoan of Capybara Investments views the unlock as "massive," expecting significant growth and restrained selling pressure. Other notable unlocks include Aptos with 24.84 million APT tokens ($290 million), Sui with 34.62 million SUI tokens ($58.15 million), and Optimism with 24.16 million OP tokens ($90 million). These unlocks contribute to a total injection of over $450 million by Aptos and $166 million by Optimism year-to-date, amid modest price increases for both.