Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | March 9 - March 15, 2024

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Crypto Weekly Market Update

Table of Contents

Crypto Market and Investment Updates

• Crypto Weekly Recap
• Bitcoin ETFs Experience Slowdown Amidst Strategic Moves
• Ethereum's Landmark Upgrade and Future Cost Dynamics
• U.S. Senators Weigh In on Ethereum ETF Prospects
• LSE to Introduce Groundbreaking Bitcoin and Ethereum ETNs

Blockchain and Crypto Innovations

• Arbitrum's Big Bet on Gaming and Token Strategy
• MakerDAO's Strategic Pivot Towards Market Dominance
• Binance Navigates Regulatory Hurdles and Strategy Shifts
• Court Rules Against Craig Wright's Satoshi Claim
• Solana Demonstrates Strength in Market Volatility
• Ether.Fi Attracts Major Investment and Eyes Expansion

NFT Ecosystem Developments

• NFTs and IP Law: A Comprehensive Study
• VeVe and Marvel: Revolutionizing NFT Collectibles
• SuperRare Expands with Bitcoin Ordinals Initiative
• Christie's Ventures into Generative Art NFTs

Crypto Weekly Recap

Bitcoin

• Weekly change: +1.94%
• Over the weekend, BTC traded steadily before surging to $72,875 on Monday, fueled by the London Stock Exchange's acceptance of crypto ETN proposals and MicroStrategy's purchase of an additional 12,000 Bitcoin after an $800M notes offering.
• Last week, digital asset investment funds grew significantly, with a record $2.7 billion inflow, reaching $10.3 billion year-to-date, potentially topping 2021's record by March 2024. Bitcoin led with $2.6 billion inflows, making up 14% of its assets under management.
• The Dogwifhat Community's plan to display the meme on the Vegas Sphere sparked speculation of a market peak on X (and they were right about the correction!).
• BTC maintained its level until dropping below $71,000 on Tuesday night.
• During this period, Spot Bitcoin ETFs saw daily inflows hit $1 billion on March 12, with BlackRock's IBIT leading at $849 million. CryptoQuant warned of a Bitcoin sell-side liquidity crisis within six months due to rising ETF demand.
• Bitcoin reached a new all-time high of $73,670 on Wednesday, surpassing silver market cap, indicating "euphoria" in market sentiment and a 138% increase in wealth held by 'young coins' since October 2023. But it also means that the market was fueled more by speculation than long-term hodl.
• The current Bitcoin bull run is creating fewer millionaires, with under 2,000 new millionaire wallets daily, less than the 2020-2021 trend, as per Kaiko.
• The U.S. CPI rose to 3.2% annually in February, exceeding expectations and delaying Fed rate cuts, possibly until summer. After initially showing resilience, BTC fell to $69,653, rebounded to $72,000, then dipped to $66,700 on Friday. 
• The drop was also fueled by a decline in ETF inflow, and an allegedly failed spread trade by a hedge fund, resulting in over $1 billion in losses and leading to a rapid unwinding of positions. 
• However, Rekt Capital viewed this as a typical pre-halving cycle behavior. In fact, the crypto market has witnessed a surge in asset returns, with top 20 crypto-assets delivering a 90-day average return of 103%. Leverage for large-cap crypto has hit levels not seen since 2021, with Bitcoin perpetual swap funding rates reaching annualized costs of 93% to 168%. 
• JPMorgan observed that both gold and Bitcoin are being acquired by retail and institutional investors, with increased futures positions for both since February, highlighting the risk of mean reversion. They also warned that MicroStrategy's aggressive Bitcoin buying, using debt and corporate treasury, could lead to significant deleveraging, raising concerns about potential market downturn due to excessive leverage.  
• Bitcoin has risen over 160% against the US dollar in the past six months, with analysts predicting the bull market's peak between December 2024 and February 2025.
• The market eagerly awaits the Federal Open Market Committee meeting on March 19-20, 2024. Despite expectations for interest rates to hold at 5.25%-5.50%, attention is on the Fed's economic projections and Jerome Powell's comments. Traders now anticipate a June rate cut following two high inflation reports, with mixed expert views on the Fed's next moves.

Ethereum

• Weekly change: -4.74%
• ETH dipped to $3840 at the week's start from the weekend's $3900 range but rebounded to $4080 as anticipation for the Dencun upgrade grew. Meanwhile, Ether locked in liquid staking platforms soared to $54.34B, marking a $26.85B increase in 64 days. Additionally, Hong Kong financial institutions began eyeing Ethereum ETFs.
• The excitement peaked a day before the upgrade, pushing ETH to $4092. However, the breakout lacked momentum to maintain this level. Concurrently, the SEC hesitated on Ethereum spot ETF decisions amid regulatory opposition.
• The Dencun upgrade went live on Wednesday, causing ETH's price to drop below $4000.
• Despite layer 2 communities celebrating reduced fees and a surge in layer 2 token prices, some in the Ethereum community criticized the focus on layer 2 chains over long-term and loyal stakers. The upgrade, seen as favoring layer 2s, led to concerns about mainnet neglect, though support for Ethereum remained strong.
• Following a broader market downturn, ETH fell to $3640 before a slight recovery to $3705 by Friday.
• Historical data revealed mixed impacts of past Ethereum upgrades on ETH prices. Post-Dencun, ETH trended lower, possibly due to increased selling pressure.

Altcoins

• Eclipse Labs raised $50M before its Layer-2 mainnet launch.
• Paradigm led a $200M funding round for Monad Labs, valuing the company at $3B.
• Polyhedra Network secured $20M in funding, reaching a $1B valuation.
• Berachain secured $69M in funding before its mainnet launch.
• The Uniswap community rejected a proposal to distribute revenue to UNI token holders.
• Curve Finance announced plans to increase its AMM fee.
• HEX's valuation dropped over $1 billion following Richard Heart's remarks.
• Unizen vowed reimbursements after a $2.1M loss due to a platform breach.
• Toncoin's price reached a two-year high as Telegram considered going public.
• The creator of Bitcoin Fog was found guilty, with plans for an appeal.
• Coinbase aimed to raise $1 billion through a bond offering amid a bullish market.
• OKX received in-principle approval for a payment institution license in Singapore.
• dogwifhat (WIF) saw a 44% jump to a new all-time high as meme coins rose.
• BNB Chain unveiled 'Rollup-as-a-Service', encouraging Layer 2s built on BSC.
• Polkadot introduced a new SDK for DApp development.
• Crypto.com was fined €2.85 million by the Dutch Central Bank for noncompliance.
• Elon Musk announced Tesla would accept Dogecoin payments.
• Nexo reported $50 million in holiday purchases, winning a FinTech award.
• The Graph expanded its subgraph to over 40 blockchains.
• Hong Kong's regulator stated MEXC operated without a license.
• Chainlink's CCIP revenue surged 180% over two months amid adoption.
• The Avalanche Foundation made its first meme coin investment, acquiring KIMBO, COQ, and three others.
• Worldcoin addressed privacy concerns with a third-party audit.
• A Swiss firm launched a Cardano staking ETP that's fully backed.
• PancakeSwap announced v4 featuring custom pools and gas optimization.
• Celsius creditors claimed 30% less compensation than promised.
• Tether announced the launch of USDT on the EVM-compatible Celo blockchain.

Bitcoin ETFs Experience Slowdown Amidst Strategic Moves

The Bitcoin investment landscape has seen a slowdown in ETF inflows, with BlackRock leading with $345.4 million. MicroStrategy's aggressive Bitcoin purchases resulted in a total of 205,000 BTC worth over $15 billion, surpassing Tesla and Coinbase. El Salvador's Bitcoin holdings of 5,689 BTC valued at $406 million, stored in a "Bitcoin piggy bank," reflect the nation's increasing involvement in cryptocurrency. 

Cetera Financial Group approved four Bitcoin ETFs, totalling $190 billion in assets, and the NYSE proposed an environmentally-conscious Bitcoin ETF. Furthermore, the Thai SEC's exception permits local asset management firms to create private funds for investing in U.S.-based spot Bitcoin ETFs, a significant regulatory shift reflecting the growing interest in cryptocurrency investments.  

Ethereum's Landmark Upgrade and Future Cost Dynamics

The Dencun upgrade for Ethereum, implemented on March 13, 2024, has brought about a revolutionary change in data storage and transaction cost dynamics for Layer-2 networks. The introduction of "blobs" has facilitated a substantial reduction in fees, with network transactions costs plummeting by up to 99%. This milestone has prompted optimism within the crypto ecosystem, as industry leaders anticipate a surge in decentralized application (dApp) usage. 

However, caution is advised, as the demand for blobs may prompt a potential increase in costs in the future. Nonetheless, the upgrade signifies a significant stride towards Ethereum's ambition of scalable, accessible, and decentralized blockchain operations.  

U.S. Senators Weigh In on Ethereum ETF Prospects

Senators Jack Reed and Laphonza Butler caution against further crypto ETF approvals due to volatility and fraud risks, impacting the SEC's consideration of Ether ETFs. Ethereum ETF discussions intensify, with skepticism from Democratic senators and optimism from industry experts like VanEck's Pranav Kanade. Hong Kong explores Ethereum ETFs to rival the U.S.'s Bitcoin successes, aiming for global crypto market leadership. 

Despite concerns over misrepresentation and risks, the debate encompasses liquidity, regulatory influences, and staking rewards, shaping the future of Ethereum investments both in the U.S. and internationally amidst a backdrop of regulatory scrutiny and market competition.  

LSE to Introduce Groundbreaking Bitcoin and Ethereum ETNs

The London Stock Exchange (LSE) is set to introduce regulated Bitcoin and Ethereum Exchange Traded Notes (ETNs) in Q2 2024, following new guidelines from the UK's Financial Conduct Authority (FCA). These ETNs will allow professional investors to engage with cryptocurrencies within the regulated confines of the LSE. The FCA mandates that these crypto ETNs must be physically backed and devoid of leverage, ensuring stability and security. 

This move has already sparked a bullish reaction in the crypto market, with Bitcoin's price breaching $72,000 momentarily. The UK's initiative signals a deliberate embrace of digital currencies and positions it at the forefront of crypto investment integration into established financial infrastructures.  

Arbitrum's Big Bet on Gaming and Token Strategy

Arbitrum is set to unlock $2.32 billion in vested tokens on March 16, representing a significant event in the crypto space, particularly as it accounts for the highest amount among $2.7 billion of vested tokens unlocking this week. 

Meanwhile, the Arbitrum Foundation has proposed a $400 million Gaming Catalyst Fund aimed at boosting its blockchain gaming sector. This fund seeks approval from the Decentralized Autonomous Organization (DAO) and is intended to roll out over two years, aiming to enrich the gaming landscape on Arbitrum by supporting game developers with funding, mentorship, and resources.

The proposal includes distribution plans for the fund, emphasizing builder onboarding, infrastructure bounties, and setting ambitious goals such as achieving a 20% share of all new web3 games on Arbitrum.

MakerDAO's Strategic Pivot Towards Market Dominance

MakerDAO's "Endgame" initiative is set to revolutionize its ecosystem by scaling Dai's market cap to $100 billion to rival Tether, and introducing "NewStable" and "NewGovTokens" to replace MKR and Dai. Phase 1 includes rebranding and token redenomination, aiming for sustainable user growth and making savings enjoyable through yield farming. Despite ambitions, challenges remain, such as Dai's competition with USDT and market position. 

Maker's Total Value Locked (TVL) increased by 20.32%, indicating market optimism. However, recent stablecoin volume and development activity suggest fluctuating interest and potentially slow progress. Maker aims to enhance its network and user adoption, with future phases involving SubDAOs, a dedicated blockchain, and final governance immutability.

Binance Navigates Regulatory Hurdles and Strategy Shifts

Binance's senior executives, Tigran Gambaryan and Nadeem Anjarwalla, remain detained in Nigeria despite the exchange's exit, with unclear charges and their passports held. Nigeria's scrutiny intensifies as it demands the top 100 Nigerian Binance users' names and transaction histories, aiming to stabilize the naira and address financial crimes. 

Concurrently, Binance delists several TrueUSD trading pairs due to poor liquidity, maintaining other trading pairs on the exchange. In a strategic move, Binance Labs becomes an independent venture capital arm, severing ties with Binance exchange, with a portfolio worth over $10 billion and an impressive 14x return on investment, focusing on early-stage Web3 projects across various sectors.

Court Rules Against Craig Wright's Satoshi Claim

A UK judge declared that Craig Wright is not Satoshi Nakamoto, the pseudonymous creator of Bitcoin. The lawsuit, initiated by the Crypto Open Patent Alliance (COPA), aimed to prevent Wright from falsely claiming to be Nakamoto. COPA accused Wright of extensive forgery to support his claim, and the trial began on February 5, with Wright’s settlement offer being declined on January 24. 

In the midst of ongoing legal disputes, the Bitcoin Legal Defense Fund criticized the frivolous lawsuits targeting prominent Bitcoin contributors, emphasizing the negative impact on the community. Wright also faced copyright infringement lawsuits, raising important legal debates concerning the Bitcoin white paper's ownership.  

Solana Demonstrates Strength in Market Volatility

Solana's resilience amidst a crypto market downturn is highlighted by its 2% gain, despite broader market challenges, including regulatory pressures from Hong Kong's SFC and US inflation data affecting sentiment. This performance is underpinned by excitement around memecoins like WIF and BONK on the Solana network, driving a 13% increase in Solana's TVL and a 24% surge in DApp volumes. Meanwhile, Solana tokens, particularly JUP and WEN, have seen significant gains, with WIF reaching a new ATH. 

This bullish sentiment is fueled by the community's strong engagement in airdrops and decentralized applications. Furthermore, Solana is chasing BNB Chain in a race to 5% market dominance, showcasing its rapid growth and potential to surpass BNB, especially with its price exceeding $170 and gaining over 200% against BNB since September 2023. The rivalry intensifies as Solana's on-chain activity spikes and FTX's bankruptcy case proceedings unfold, potentially bolstering SOL prices further.

Ether.Fi Attracts Major Investment and Eyes Expansion

Ether.Fi is set to release its ETHFI token on Binance Launchpool, showcasing its position as a leading liquid restaking protocol with a token supply of 1 billion ETHFI and an initial circulating supply of 115.2 million. This protocol allows Ethereum's blockchain to secure other networks, offering users yield from their staked ether but introducing risks. 

Ether.Fi, with $2.3 billion in TVL, ranks top in its category. Meanwhile, Justin Sun injected 120,000 Ethereum ($480 million) into Ether Fi, pushing its TVL to nearly $3 billion. This strategic move underscores Sun's commitment to DeFi, coinciding with Ether Fi's collaboration with Omni Network for a $600 million project. Sun's Ethereum holdings amount to about 263,294 ETH, valued at approximately $492 million, highlighting his significant influence in the cryptocurrency market.