Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | July 27 - August 2, 2024

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Crypto Weekly Market Update

Table of Contents

Market Movements and Trends

• Crypto Weekly Recap

Crypto Market Updates

• SEC Adjusts Crypto Strategy, Charges BitClout Founder
• Compound Finance Faces Governance Attack, Proposal Canceled
• Raydium Meme Coin Launch Causes Market Turbulence
• Terra Blockchain Exploit Halts Operations, Resumes with Fix

Company Performance and Financial Reports

• Tether Reports $1.3 Billion Q2 Profit, Pauses Bitcoin Purchases
• Coinbase Reports $1.4 Billion Q2 Revenue Amid Allegations

Governance and Security

• Kujira's Token Drops 40%, Team Discusses Bailout
• Neiro Memecoin Surges 4,400% Despite Insider Trading Concerns

Games and NFT Developments

• "Hamster Kombat" Game Whitepaper Reveals Token Plans
• Donald Trump's Bitcoin NFT Sneakers Sell Out
• Artists Sue SEC Over NFT Classification
• NFT Market Sales Decline by 36.6% in July

Crypto Weekly Recap

Bitcoin:

• Weekly change: -3.56%
• BTC surged close to $70,000 on Monday, boosted by Donald Trump's endorsement and proposal for a national Bitcoin stockpile. Hong Kong's Johnny Ng proposed adding Bitcoin to financial reserves to enhance stability and attract global investment.
• Weekly crypto investments reached $245 million, while Bitcoin saw $519 million in inflows.
• After that, BTC dipped 4.5% to $66,800 as the US government's $2 billion Bitcoin move raised sell-off fears. Trump's pledge at the Bitcoin 2024 conference briefly boosted optimism before a "sell the news" phase.
• On Tuesday, the SEC dropped claims that SOL, ADA, MATIC, and other tokens are securities in the Binance suit, which was bullish for crypto but didn't significantly move BTC prices.
• While the market fluctuated, the Mt. Gox repayment process continued. Creditors received nearly half of the owed Bitcoin, but Kraken and Bitstamp issues caused delays and technical problems.
• On Tuesday, BTC ETFs recorded an outflow of $18.3M, followed by the smallest net inflow since launch of $0.3M on Wednesday.
• BTC fell to $65,800, wavering between this level and $66,800 until Wednesday, the final day of July, and the Fed's interest rate announcement day.
• The Fed decided not to change interest rates but hinted at a possible September rate cut. The Bank of England cut rates by a quarter point to 5%. Tensions in the Middle East and cautious comments from Jerome Powell spooked investors. BTC fell to $62,500.
• After recovering to $65,300, BTC dropped to $62,300 as Genesis Trading, in bankruptcy proceedings, moved over $1.5 billion in BTC and ETH, suggesting possible liquidations; and a broader market sell-off triggered by weaker-than-expected US jobs data and a $1.2T crash in Wall Street. The price, at the time of writing, has reclaimed $63,000.
• Only 114,000 jobs were added in July, missing expectations of 175,000 and reflecting a rising unemployment rate of 4.3%. Traders quickly increased bets on larger Fed rate cuts, now anticipating a 70% chance of a 50 basis point cut in September. 
• Bitcoin faced a challenging Q3 as Japan's Nikkei experienced its biggest single-day drop since 1987. Historically, the second half of Q3 is tough for Bitcoin, with August and September being negative months.
• Institutions kept favoring BTC, with Grayscale Bitcoin Mini Trust beginning trading on Wednesday morning, Morgan Stanley greenlighting Bitcoin spot ETF offerings, Fidelity International listing a bitcoin ETP on the London Stock Exchange, MicroStrategy purchasing 169 BTC in July, and Hong Kong’s Futu Securities launching Bitcoin and Ether trading. Bitcoin whales accumulated $5.4B in July, reaching a decade high.
• Bitcoin needed to hold above $60,000 - $61,000 to continue towards all-time highs, according to some traders.
• Market observers from QCP cited a lack of new catalysts and macroeconomic decisions as potential headwinds for crypto prices.

Ethereum:

• Weekly change: -1.79%
• ETH saw a downtrend this week, dropping from $3,387 to $3,276 on Monday. Ethereum ETFs had $2.2 billion inflows, but Grayscale customer sell-offs caused negative flows of $284.9 million.
• On July 30, Tuesday, Ethereum turned 9. The price stayed above $3,250 as spot ETH ETFs saw a $33.67M inflow after 4 days of outflows. This was followed by a $77.21M outflow on Wednesday.
• On Thursday, the price fell to $3,086 due to market sentiment and geopolitical concerns.
• The price briefly rose above $3,200 before dropping near $3,000 again today.
• Analyst Roman predicted Ethereum's short-term performance would struggle due to Bitcoin dominance, with a liquidity shift into ETH likely by year-end.
• Solana ETF approval was expected to boost Solana's DEX volume beyond Ethereum's in July, as per DefiLlama data, despite wash trading concerns. Analyst Nate Geraci questioned BlackRock's launch of a Solana ETF, citing the need for CME-traded futures and a futures-based ETF first. BlackRock had no plans to launch a Solana ETF soon due to low market demand for altcoin ETFs.

Altcoins:

• Layer3 distributed tokens starting July 30.
• OKX listed ONDO, causing a 7% surge.
• WazirX faced backlash over recovery plan and sought Binance's help.
• 21Shares integrated Chainlink for Ethereum ETF transparency.
• Ava Labs planned to provide 42M digital car titles via app by 2025.
• StarkNet ZKX ceased operations due to low user participation.
• Renzo lost 55% of TVL in 6 weeks.
• Aave launched V3.1 to enhance protocol.
• Women in crypto earned 15% more, per Pantera survey.
• Worldcoin launched ID verification in Austria.
• LayerZero powered Animoca Brands’ Web3 gaming interoperability.
• USDY stablecoin launched on Aptos.
• Wemix.fi suspended lending services after $7M legal victory.
• Nansen CEO's memecoin hit $6M market cap in a day.
• Mantle TVL dropped after reaching all-time high.
• Ethena Labs launched USDe collateral on Bybit.
• Elixir launched deUSD with $1B liquidity support.
• Over $900M tokens unlocked in August 2024.
• Casper Network resumed operations after security breach.
• Ripple partnered with OpenEden to access tokenized treasury market.
• Manchester United and Tezos launched Web3 fantasy football game.
• DWF Labs debuted synthetic stablecoin amid sector growth.
• Galaxy Digital posted $177M net loss in Q2.
• Bitlayer overtook Merlin in the scaling battle.
• Convergence's code removal led to a $212K hack.
• Jupiter proposed a major reduction in JUP supply.
• HashKey OTC secured a major license from Singapore's MAS.
• Sandbox partnered with LayerZero to expand SAND.
• BlackRock's BUIDL paid $2.1M in July dividends.
• Pixelverse opened NFT mint, celebrating 38M players.
• Fantom rebranded as Sonic Labs, launched new token.
• Bybit withdrew from France due to regulations.
• Court upheld Do Kwon's extradition to South Korea.
• Eclipse launched mainnet powered by Solana.
• Binance Labs invested in aPriori.
• Binance Labs invested in Particle Network.
• Morpho raised $50M in a round led by Rabbit Capital.
• Bitcoin Layer-2s attracted VC funding amid rising interest.
• Coinbase, Google veterans raised $5M for 'blockchain's LinkedIn'.
• A16z Crypto led $9M round for DePIN project Daylight.
• DuelNow received $11M for Web3 betting.

SEC Adjusts Crypto Strategy, Charges BitClout Founder

The SEC has adjusted its crypto strategy, withdrawing efforts to classify certain tokens in the Binance case as securities, avoiding an immediate court ruling. Meanwhile, they've charged BitClout's founder with orchestrating a $257 million fraudulent scheme, alleging misuse of investor funds and deceptive claims about token status. 

These moves coincide with shifts in political attitudes towards crypto, with figures like Donald Trump promising a softer approach if re-elected, contrasting Democratic calls for progressive blockchain policies. The developments reflect ongoing challenges in balancing regulatory scrutiny with fostering innovation in the evolving digital asset landscape.

Compound Finance Faces Governance Attack, Proposal Canceled

In a significant governance attack on Compound Finance, a crypto whale orchestrated the passage of Proposal 289, aiming to allocate $24 million worth of COMP tokens to the goldCOMP vault. This move, amid accusations of governance manipulation, sparked intense debate and a 6% drop in COMP's value. 

Following community backlash, the proposal was later canceled, prompting Compound to introduce a new staking product for COMP holders. This incident underscored vulnerabilities in DeFi governance, triggering calls for enhanced security measures and renewed scrutiny over governance practices across decentralized finance platforms.

Raydium Meme Coin Launch Causes Market Turbulence

Raydium's recent meme coin launch created significant market turbulence on Solana. The launch, via Makenow.meme, resulted in confusion as two identical tokens emerged, causing the initial token's value to surge to $7 million before plummeting 92% within minutes. The official token saw its market cap peak at $6.7 million, dropping 70% shortly after. 

Raydium's RAY token price fell 9.8% in a day amid the chaos but remained up 10% for the month. Despite setbacks, the incident underscores the volatile nature of meme coin trading, highlighting Raydium's prominence alongside Jito and Pump.fun in Solana's fee-generating ecosystem.

Terra Blockchain Exploit Halts Operations, Resumes with Fix

Terra blockchain recently faced a major exploit, halting operations at block height 11430400. The breach targeted a vulnerability in the inter-blockchain communication protocol, allowing attackers to siphon tokens including 60 million ASTRO, 2.7 Bitcoin, $3.5 million USDC, and $500,000 USDT. Stolen assets were swiftly sold and moved to Ethereum. 

Following an emergency fix by validators, Terra resumed operations, stabilizing ASTRO at $0.0218 after a 53% drop and LUNA at $0.3944. The incident underscores the importance of robust security measures in blockchain networks, prompting renewed scrutiny of protocol vulnerabilities and the need for continuous audits.

Tether Reports $1.3 Billion Q2 Profit, Pauses Bitcoin Purchases

Tether reported a $1.3 billion net operating profit for Q2 2024, marking a record $5.2 billion profit for the first half of 2024. Despite this, Tether paused Bitcoin purchases, maintaining reserves at previous levels. The company's consolidated net equity was $11.9 billion as of June 30, 2024, with US Treasuries holdings at $97.6 billion. Tether issued over $8.3 billion in USDT during the quarter, with reserves at $118.4 billion against $113.1 billion in liabilities. Tether also faced a $653 million unrealized loss from Bitcoin price dips but gained $165 million from gold investments.

Coinbase Reports $1.4 Billion Q2 Revenue Amid Allegations

Coinbase reported $1.4 billion Q2 revenue with a 300% increase in transactions on its Base platform. Despite facing campaign finance violation allegations on August 1, Coinbase denied any wrongdoing. It also enhanced its mobile/web wallet app and eliminated fees for transfers to Base. 

Coinbase’s Base now hosts 80% of Uniswap’s active traders, with significant growth in transaction volumes since its August 2023 launch. As of July 31, Base processes nearly 42 transactions per second, second to Arbitrum One’s 20 TPS, holding around $7.2 billion in TVL. The Stand With Crypto initiative has over 1.3 million supporters.

Kujira's Token Drops 40%, Team Discusses Bailout

Kujira's token dropped 40% due to the liquidation of on-chain leveraged positions. Kujira is in discussions for a bailout to stabilize the situation, exploring options to mitigate the impact. The team proposed forming a DAO to address liquidity and security issues, aiming to bolster ecosystem resilience. 

Specific details of the bailout discussions and the DAO proposal include improving liquidity management and implementing security measures to prevent future collapses. The liquidation event triggered significant market volatility, underscoring the need for enhanced risk management strategies within Kujira’s platform.

Neiro Memecoin Surges 4,400% Despite Insider Trading Concerns

Neiro, a new Ethereum-based memecoin inspired by the Doge meme, surged 4,400%, hitting a $200 million market cap by August 1. However, concerns arose about insider trading, with 78% of tokens allocated to a few addresses, leading to $4.5 million in profits. On Solana, Neiro faced a significant drop after its developer sold tokens for $2.85 million, a potential rug pull, causing an 84% price decrease. Despite the controversies, investors remain optimistic about Neiro's future, viewing it as a continuation of the Doge legacy.

"Hamster Kombat" Game Whitepaper Reveals Token Plans

The "Hamster Kombat" game whitepaper revealed token plans with 60% of HMSTR tokens for players as the game surpassed 300 million players. Notcoin, a viral game, transitioned to a story-driven game with Lost Dogs NFTs, addressing the limitations of its tap-to-earn model. 

Catizen delayed its CATI token launch and faced backlash over a $100,000 donation to PETA. The TON game "BANANA" hit 1 million users in 72 hours, completing 2.9 million tasks. Telegram launched an in-app browser and mini app store in a new update. Trust Wallet partnered with TON to increase blockchain adoption, enabling 100 million users to send and receive Toncoin.