Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | June 10 - June 16, 2023
Crypto Weekly Market Update
Written by Van
Table of Contents:
Crypto Market Weekly Update
- Market Plunges Amid SEC Lawsuits and Regulatory Crackdowns
Banking and Regulatory Updates
- BOCI First to Issue Tokenized Security in Hong Kong
- BlackRock Submits Bitcoin ETF Application to SEC
Crypto Exchange and Platform News
- Curve Founder’s Debt Causes Crypto Market Concerns, USDT Loses Peg
- Uniswap V4 Introduces Hooks for Custom Liquidity Pools
- MakerDAO Boosts DAI Savings Rate to Outperform Rival Stablecoins
- Binance Halts Operations in the Netherlands Amid Regulatory Challenges
- Ripple in Turmoil: New Documents and XRP Value Dip
- PEPE Delisted as a Borrowable Asset on Binance After Severe Value Drop
- Polygon Responds to SEC’s Allegations, MATIC Still Drops Sharply
- a16z to Launch First International Office in UK
NFT Market Updates
- NFT Marketplaces Innovate Amidst Market Downturn
- Adidas Originals Teams Up with FEWOCiOUS for Unique NFT Release
- Sotheby's Nets $10.9 Million in NFT Artwork Auction
- Xai Introduces Layer 3 Scaling Network for Web3 Games
- Snoop Dogg Unveils 'Passport Series' NFTs for Exclusive Tour Content
Crypto Market Weekly Update:
Bitcoin and Ethereum Face Steep Declines
- Bitcoin (-3.81%) outperformed Ethereum (-9.72%) over the past week.
- Still, the total crypto market cap dropped by 7% over the past 7 days, standing at $1.042 trillion.
- Bitcoin dropped 3.28% and Ethereum fell by 5.23% on June 10. Altcoins also saw severe drops, some falling over 20% in 24 hours.
- It came after the SEC filed lawsuits against Binance and Coinbase and alleged many tokens as securities, leading to speculation of major crypto funds selling their holdings.
- Bitcoin fell from $26,700 to $25,600 within a few hours, later recovering to over $26,000 on the same day.
- It continued to move between $25,700 - $26,300 until June 14.
- Bitcoin and Ethereum market caps fell by 4% and 5.7% on June 14 following hints at future rate hikes from the Fed.
- Bitcoin fell below $25,000 for the first time since March 17. All top 20 cryptocurrencies recorded losses, with Polygon and TON experiencing the largest drops.
- Dollar index (DXY) experienced a 0.17% increase against other currencies following the FOMC meeting.
Rebound in the Market: BlackRock's Planned Bitcoin ETF
- On June 15, it was revealed that BlackRock planned to offer a Bitcoin ETF with Coinbase as custodian.
- Bitcoin regained the $25,500 level and major tokens like MATIC and ADA saw some relief.
- Over $16 million in short liquidations in BTC-tracked futures occurred.
- Ethereum increased by 2% but still reached three-month lows of around $1,670.
- Crypto Fear & Greed Index returned to a neutral level at 42.
Biggest Weekly Losers in the Crypto Market
Eleven altcoins saw a weekly decline above 20%:
- Many of them were listed as “securities” by the SEC. Among this list, FLOW has just recovered from its all-time low along with ALGO.
Profit and Loss among Crypto Holders
- 62% of Bitcoin holders are seeing gains, while 38% are sitting on losses, according to IntoTheBlock.
- 91.52% of Cardano holders are currently underwater, with 7% at breakeven.
- 95.56% of Avalanche holders are in the red, with less than 5% breaking even.
- 51.74% of Dogecoin investors and 60.58% of Litecoin owners are holding underwater positions.
- Nearly 60% of Ethereum holders are currently in the money.
- The recent crypto market dip has led to several assets tumbling, with some surpassing 90% of holders holding at a loss.
Changes in Crypto Trading Volumes
- Trading volumes in Q2 2023 have reached yearly lows.
- Average daily volumes for the top 10 tokens were $10 billion in Q2, compared to $18 billion in Q1.
- Bitcoin's market share of trading volume decreased by around 20 percentage points, Ether gained a 5 percentage point increase.
- Binance's BNB token has seen a rise from 2% to over 7% of volumes in recent days, possibly due to regulatory concerns.
Staking in the Ethereum Blockchain
- 22.8 million ETH ($38.1 billion) staked inside the Ethereum blockchain, 24.3 million ETH ($40.6 billion) held on exchanges, about 20% of ETH's circulating supply.
- Difference between ETH on exchanges and staked ETH has decreased to 6.12%.
- There has been a reduction of 4.9 million ETH ($8 billion) on exchanges and an increase of 5.7 million ETH ($9.4 billion) staked on the Ethereum blockchain YTD.
- If current trend continues, ETH staked is expected to surpass the amount held on exchanges by the end of this month.
Changes in the Market Capitalization of Stablecoins
- Market capitalization of BUSD fell below that of DAI after a $95 million burn.
- Burn rate of BUSD has increased following the Binance lawsuit, which labeled the stablecoin as a security.
Impact of SEC Lawsuit Against Binance and Coinbase
- Lawsuits against Binance and Coinbase led to steep market declines.
- Over 50 people laid off from Binance.US, including those from legal, compliance, and risks departments.
- Retail crypto traders are moving from Coinbase to Robinhood.
- Coinbase shares dropped by 5.5%, later recovering, Robinhood's stock experienced small fluctuations.
Recent Regulatory Crackdowns and Exodus
- OKCoin accused by FDIC of making false claims about customer protections.
- CoinEx slapped with $600,000 penalty and forced refund of $1.17 million to New York investors.
- Huobi HK expanding its crypto trading services in Hong Kong.
BOCI First to Issue Tokenized Security in Hong Kong
Bank of China's investment bank subsidiary, BOCI, has become the first Chinese financial institution to issue a tokenized security in Hong Kong, with the issuance of $28 million worth of digital structured notes on the Ethereum blockchain. UBS assisted in originating the product for placement in the Asia-Pacific region.
Hong Kong has opened up crypto exchange access for retail users and aims to establish a stablecoin regulatory framework within a year. It has also issued an HK$800 million green bond tokenized on Goldman Sachs' protocol GS DAP and introduced two exchange-traded funds for cryptocurrency futures.
BlackRock Submits Bitcoin ETF Application to SEC
BlackRock, the world's largest asset manager, has filed an application with the SEC to register a Bitcoin exchange-traded fund (ETF). This move follows BlackRock's previous partnership with Coinbase, aiming to provide clients exposure to the cryptocurrency market. BlackRock's application, coupled with its partnership with Coinbase, puts pressure on the SEC chairman and may inject confidence into the Bitcoin market.
However, critics worry about centralized control and potential exploitation of retail investors. Other firms have also submitted ETF applications, reshaping the crypto landscape.
Curve Founder’s Debt Causes Crypto Market Concerns, USDT Loses Peg
An account associated with Curve's founder had accumulated a debt of $67.7 million using USDC and USDT as collateral. Aave’s Gauntlet proposed a patch to prevent further debt accumulation. Tether's stablecoin (USDT) depegged on Curve's exchange, leading to an increase in its weightage to over 70%. Traders sold USDT, causing concerns and reminding observers of previous incidents. Tether reassured the community, but concerns persisted.
Curve's founder then repaid $1.35 million USDT. Tether shared information with CoinDesk following an NYAG investigation, but the shared documents are outdated. Curve's governance token CRV dropped nearly 20% this week, experiencing negative bets and reduced liquidity. Uncertainty surrounds CRV due to liquidation risks and high volatility.
Uniswap V4 Introduces Hooks for Custom Liquidity Pools
Uniswap V4, the latest version of the decentralized exchange, introduces "hooks" or plugins that enable developers to create custom liquidity pools with innovative features. It aims to expedite the development of automated market maker exchanges and facilitate faster innovation. Regulatory actions against centralized exchanges have led to increased volume on decentralized exchanges.
Uniswap V4's key features include time-weighted average market makers, dynamic fees, on-chain limit orders, and reduced gas costs. It sets a new standard for decentralized exchanges, focusing on customizability, reduced costs, and advanced features. However, Uniswap's choice of Business Source Licensing for V4 has drawn criticism, sparking discussions on open-source development and licensing within the crypto ecosystem.
MakerDAO Boosts DAI Savings Rate to Outperform Rival Stablecoins
MakerDAO has approved a proposal to increase the DAI Savings Rate (DSR) to 3.49% from 1%. The move aims to encourage investors to hold and lend DAI instead of rival stablecoins such as USDC and USDT. The decision comes as MakerDAO is rearranging the backing assets of the DAI stablecoin, increasingly investing in real-world assets such as short-term US government bonds to boost revenues.
The executive vote also saw Paxos Dollar removed from the reserve by approving a decrease in its debt ceiling to zero and the curbing of Gemini Dollar in the reserve to $110 million from $500 million. MakerDAO’s in time response to market conditions helped MKR to be one of the top gainers this week.
Binance Halts Operations in the Netherlands Amid Regulatory Challenges
Crypto exchange Binance is ceasing operations in the Netherlands due to registration challenges in some EU countries. It will focus on regulated entities in France, Italy, and Spain. Starting from July 17, new users from the Netherlands will not be accepted, and existing users can only withdraw assets.
It happened after Venus Protocol, a DeFi lending platform, faced potential liquidation of a $210 million Binance Coin (BNB) position due to falling crypto prices. However, the liquidation was avoided as BNB's price remained above the threshold. It is wavering around $230 with a 10.77% weekly decline. The uncertainty keeps growing today as Paris prosecutors investigate Binance for illegally soliciting customers and money laundering.
Ripple in Turmoil: New Documents and XRP Value Dip
This is a dramatic week for Ripple and XRP, as newly revealed documents showed that former SEC director William Hinman had plans to discuss the Ethereum Foundation's operations with Vitalik Buterin in 2018. In a speech that year, Hinman stated that Ethereum tokens did not require security regulation, a stance Ripple Labs used in its defense against the SEC's lawsuit over the alleged unregistered securities offering of XRP. XRP's value dropped by 4.6% on June 14 amidst Ripple's ongoing legal battle, pushing its weekly loss to over 11.8%.
Ripple has released 2018 statements by Hinman to clarify the status of its tokens, but their chief legal officer claims Hinman "invented factors," leading to confusion. In terms of partnerships, Colombia's Central Bank and Canada's University of Toronto have teamed up with Ripple for blockchain exploration. Another movie? Poloniex, one of the oldest cryptocurrency exchanges, has acquired over 275,000 XRP by deleting more than 15,000 dormant accounts.
PEPE Delisted as a Borrowable Asset on Binance After Severe Value Drop
Binance will remove PEPE as a borrowable asset on its Flexible Loan platform on June 21, 2023, urging users to repay loans to avoid a 2% liquidation fee. The value of PEPE has dropped by 79.11% since its peak on May 5, 2023, with reports suggesting that whales are selling off their holdings, adding to the downward pressure.
Suspicion of insider involvement arose when an address sold 972.84 billion PEPE for 514 ETH ($848,000). The coin's value has since declined by an additional 2%, raising concerns about its future. Whale addresses hold 41.73% of all PEPE tokens, further emphasizing the potential impact of insider activity.
Polygon Responds to SEC’s Allegations, MATIC Still Drops Sharply
The SEC mentioning MATIC in lawsuits caused eToro to delist the coin on US platforms. In response, Polygon Labs said MATIC is not a security and launched "Polygon 2.0," a roadmap to establish the "Value Layer" of the internet. The company also created "The Value Prop," an open database of positive blockchain use cases, and saw its newly-launched zkEVM achieve a record of 1 million transactions on its network.
Meanwhile, Indian e-commerce giant Flipkart partnered with Polygon and Hang to launch a loyalty programme called FireDrops 2.0 using non-fungible tokens. Despite this, MATIC remains one of the biggest losers this week.
a16z to Launch First International Office in UK
Venture capital firm a16z plans to open its first international office in the UK, a move that reflects a growing trend of US crypto companies seeking opportunities abroad amid regulatory scrutiny. Discussions have been initiated with UK government officials, policymakers, and regulatory bodies, such as the Financial Conduct Authority. a16z aims to establish a favorable business environment, promote web3 technology, and protect consumers, while also collaborating with US policymakers for clearer regulations.
In 2024, the firm intends to launch the "Crypto Startup School" in London, following the overwhelming response of over 8,000 applications for the program's latest iteration.
Top Weekly Altcoin Gainers and Losers
Kaspa KAS (+37.67%)
tomiNet TOMI (+6.80%)
KuCoin Token KCS (+5.77%)
Maker MKR (+4.37%)
Trust Wallet Token TWT (+1.55%)
EOS EOS (-31.01%)
ApeCoin APE (-29.80%)
Polygon MATIC (-28.35%)
Flow FLOW (-28.07%)
Chiliz CHZ (-25.20%)
NFT Market Map
NFT Marketplaces Innovate Amidst Market Downturn
Despite the declining prices and volumes in the NFT market, various NFT marketplaces are enhancing their offerings to attract users. Sudoswap launched its v2 version, Blur took action against wash traders and airdrop spoofers, Kraken introduced its NFT trading platform, and LooksRare unveiled a liquidity mining program. However, only 12 of the top 50 NFT collections have gained against ETH in the last 90 days.
Despite this, developers remain optimistic about the market's future, competing to capture NFT market share before the next bull season. Blur is excluding users involved in wash trading or spoofing from its liquidity mining rewards. Sudoswap's v2 update brings on-chain royalties, conditional orders, gas optimizations, and support for ERC-1155. Kraken launched its NFT marketplace with zero-fee trading and support for various cryptocurrencies.
Adidas Originals Teams Up with FEWOCiOUS for Unique NFT Release
Adidas Originals has collaborated with NFT artist FEWOCiOUS for a digital release tied to real sneakers. The Adidas Originals x FEWOCiOUS collection includes an NFT and a specially designed physical sneaker. 4,500 Trefoil Flower Mint Passes will be available for purchase on OpenSea starting June 22. The release will have different tiers: Tier One offers early access and a discounted price for certain NFT holders, while Tier Two and Tier Three have different requirements.
The mint prices range from 0.2 ETH ($350) to 0.25 ETH ($430). Holders of the mint pass can claim one physical sneaker and receive a Digital Twin NFT. Shipping of the sneakers will begin in September.
Sotheby's Nets $10.9 Million in NFT Artwork Auction
Sotheby's has concluded another sale of non-fungible token (NFT) artwork seized from bankrupt crypto hedge fund Three Arrows Capital, bringing in over $10.9 million in sales. The live auction included pieces from the "Grails" collection, with 37 works from generative artists like Dmitri Cherniak, Tyler Hobbs, Jeff Davis and more. Notable sales included Cherniak's Ringers #879, which sold for $6.2 million to NFT investor 6529, and Tyler Hobbs' Fidenza #479, which sold for $622,300. The Grails collection liquidation sales have brought in nearly $17 million so far.
Xai Introduces Layer 3 Scaling Network for Web3 Games
Xai, a layer 3 scaling network developed with Offchain Labs and Ex Populus, aims to be a decentralized game console for Web3 games. It utilizes Arbitrum's layer 2 network architecture to enhance scalability, efficiency, and cost reduction through parallel processing. The Xai network plans to provide a frictionless experience for traditional gamers through account abstraction.
A report by Nansen suggests that Arbitrum's recent airdrop resulted in a surge of users and transactions, driving up transaction fees. Arbitrum outperformed Ethereum and Optimism, attracting The Graph, which is fully migrating to Arbitrum to lower fees and accelerate transactions.
Snoop Dogg Unveils 'Passport Series' NFTs for Exclusive Tour Content
Rapper and entrepreneur Snoop Dogg has launched a new non-fungible token (NFT) collectible series called the Snoop Dogg Passport Series. The NFT will evolve in utility as he goes on tour this summer, granting holders access to behind-the-scenes content, exclusive merch, art, and experiences from the music icon. The series was created in partnership with Web3 platform Transient labs and talent agency WME. The passport is available for purchase for about $42 or 0.025 ETH through Crossmint, an NFT payment processor, or through various crypto wallets.
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