Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | October 26 - November 1, 2024

Crypto Weekly Market Update

Table of Contents

Market Movements and Trends

• Crypto Weekly Recap

Banking and Regulatory Updates

• Consensys Reduces Workforce, Criticizes SEC's Regulatory Actions
• Visa Partners with Coinbase for Instant Crypto Transactions
• Franklin Templeton Expands Fund to Base Blockchain
• SEC Issues Wells Notice to Immutable Over IMX Token

Market Trends and Investments

• Robinhood Launches Election Prediction Contracts Amid Competition
• Coinbase Shares Drop 14% After Missing Q3 Estimates
• Tether Reports $7.7 Billion Profit in 2024

Legal and Lawsuits

• FTX Settles $228 Million Lawsuit with Bybit

Crypto Exchange and Platform Developments

• dYdX and Kraken Announce Major Layoffs

Blockchain Gaming and NFTs

• Pudgy Penguins Enters Mobile Gaming with Blockchain Integration
• Lamborghini Launches NFT Collectibles on Coinbase's Base
• NBA Topshot Sales Surge as Season Starts

Crypto Weekly Recap

Bitcoin:

• Weekly performance: +3.83%
• Weekly US Spot Bitcoin ETF netflow: +$2.27B
• BTC faced Tether FUD over the weekend, dropping to $65,700 from $67,300 after a WSJ report about a U.S. probe on AML and sanctions violations. Tether CEO Ardoino called these claims speculative.
• BTC rebounded after Tether’s clarification but struggled to break $68,000 until Sunday night.
• On Tuesday, BTC surged to nearly $73,000, close to its ATH, as Bitcoin ETF inflows hit $893.21M, with BlackRock’s trading volume reaching $3.36B, a six-month high.
• Crypto inflows reached $901M last week, making October the fourth-largest month for investment this year at $27B, triple the 2021 record. Bitcoin attracted $920M, with slight outflows from short positions, signaling bullish sentiment amid Republican polling gains hinting at regulatory benefits.
• October 31 marked Bitcoin’s whitepaper’s 16th anniversary, celebrated across the industry, with a congratulatory tweet from Donald Trump.
• On Friday (Nov 1), BTC fell to $69,000 but maintained its 3.5-year high dominance above 60%. Contributing factors included Iran-Israel tensions, weak earnings from Microsoft and Meta, the worst month of stocks since April, bond yields above 4.3%, Core PCE inflation over 2.7%, and October job data showing just 12,000 new jobs.
• Mt. Gox moved 500 BTC (~$35M) to unknown wallets, sparking repayment rumors. BTC price remained unaffected and even surged to $71,000.
• Institutional adoption continued: MicroStrategy planned to raise $42B over three years to buy more BTC and boost shareholder returns. Metaplanet became the 19th-largest BTC holding firm with over 1,000 BTC.
• The upcoming U.S. Presidential Elections on Nov 5 were expected to impact the crypto market, increasing volatility.
• Kamala Harris' chances of winning the U.S. presidential election increased from 33% on October 30 to 38.2% on Polymarket, while Donald Trump's odds fell to around 62%, indicating lowered expectations for his win.
• Harris' rising odds may be a result of traders adjusting their positions following reports of voting irregularities concerning Trump.

Ethereum:

• Weekly performance: +0.37%
• Weekly US Spot Ether ETF netflow: +$23.93M
• ETH FUD persisted at the beginning of this week, prompting Vitalik Buterin to urge the community to "show some respect" amid ETH sales criticism.
• ETH hit a weekly low of $2,397 during Tether FUD, never revisiting that level. It reached $2,700 on Wednesday but couldn’t maintain it.
• The price rebounded to $2,550 from Friday's dip to $2,480.
• Vitalik focused on tech, addressing criticism of Ethereum’s Layer 2, noting its fragmented and complex user experience.
• ETH ETFs underperformed compared to US Spot BTC ETFs, recording modest inflows with the largest at $13.06M and weekly inflows at $23.93M. Cumulative net inflows for ETH ETFs stood at -$480.51M, while BTC’s reached +$24.21B.

Altcoins:

• Kraken, BOB, and Swell drove Optimism Superchain’s expansion.
• Phantom wallet downtime caused inaccurate balances during GRASS airdrop.
• Ethena team was accused of misusing 180M ENA tokens for farming Sats.
• Alchemy unveiled Layer 1 blockchain to enhance crypto payments.
• Truth Terminal founder’s X account was hacked to promote a new token.
• Binance launched 'Binance Wealth' for elite users and used Amazon AI to speed up verification.
• Gemini secured regulatory approval in Singapore amid Asian expansion.
• Solayer launched the first yield-bearing stablecoin backed by T-Bills on Solana.
• AI bot Tee Hee He turned $1.5K into $1.88M in 5 hours.
• VanEck planned Solana staking for institutional investors.
• DWF Labs fired a partner over alleged misconduct, announcing leadership changes.
• Starknet hit 857 TPS, averaging 127.5 TPS in a stress test.
• Ondo Finance partnered with trillion-dollar Wellington Management.
• 1inch suffered a major hack in a supply chain attack.
• Kraken released a customizable trading app inspired by Cryptowatch.
• Securitize reached $1 billion in tokenized assets and launched a fund administration service.
• Reddit sold most of its crypto holdings due to falling ad revenue.
• CZ appeared publicly at Binance Blockchain Week Dubai after release.
• Trump’s crypto business cut its fundraising goal by 90% after low sales.
• MrBeast was reportedly linked to over 50 crypto wallets allegedly used for insider trading.
• TON Foundation introduced a new Society DAO governance model.
• ZetaChain resumed block production after a six-hour halt.
• Paxos launched a USD-backed stablecoin, USDG, with DBS Bank.
• Morph public chain mainnet officially launched on Ethereum.
• Florida CFO advocated for Bitcoin in state pension funds.
• Danish crypto holders face up to 53% capital gains tax, highest globally.
• Italy’s finance minister defended the 42% crypto capital gains tax plan.
• BNB Foundation completed a $1.07 billion quarterly token burn.
• SingularityDAO merges with Cogito Finance and SelfKey after community approval.
• UBS launches its first tokenized fund on Ethereum.
• Notable Fundings:
  • Ellipsis Labs: $21M
  • Glow Labs: $30M
  • Nillion: $25M
  • Citrea: $14M
  • Gelato Network: $11M

Consensys Reduces Workforce, Criticizes SEC's Regulatory Actions

Consensys, a leading Ethereum developer and creator of MetaMask, has announced a 20% workforce reduction, affecting over 160 employees, due to challenging economic conditions and intensified regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC). CEO Joe Lubin criticized the SEC's actions as an "abuse of power," claiming that such regulatory pressures have resulted in significant job losses and stifled investment in the industry. Additionally, ongoing legal battles with the SEC exacerbate the situation, placing financial strain on many crypto firms as they struggle with high interest rates and rising legal costs.

Visa Partners with Coinbase for Instant Crypto Transactions

Visa has partnered with Coinbase to facilitate instant crypto transactions for users with eligible debit cards in the U.S. and EU. By integrating Visa Direct, customers can buy, cash out, and manage their funds without traditional transaction delays. This collaboration enhances user experience, allowing immediate access to trading opportunities. This partnership marks Visa's strategic re-entry into the crypto market, coinciding with evolving regulatory frameworks like the EU's MiCA and increased institutional interest. The initiative signals a growing trend where financial institutions recognize crypto's potential, following approvals of spot Bitcoin ETFs by the SEC and broadened regional access to crypto products.

Franklin Templeton Expands Fund to Base Blockchain

Franklin Templeton’s OnChain U.S. Government Money Market Fund (FOBXX), valued at $410 million, has expanded its trading capabilities to Coinbase's Base layer-2 blockchain, becoming the first major asset manager to do so. This addition marks the fund's accessibility across six networks, including Stellar and Polygon. Launched in 2021, FOBXX emphasizes high income and stability, maintaining a $1 per share price. Currently, it is the second-largest tokenized fund globally. Base has over $8 billion in total value locked and recorded a 55% transaction increase in Q3 2024, further advancing its decentralized infrastructure plans by 2025.

SEC Issues Wells Notice to Immutable Over IMX Token

Blockchain gaming firm Immutable has received a Wells notice from the SEC, indicating potential enforcement action for alleged securities violations related to its 2021 IMX token listing. Immutable argues the IMX token is not a security and criticized the SEC for issuing the notice after only one brief meeting. Following the announcement, IMX's price dropped by 13.7%, aligned with a 32.47 million IMX token unlock valued at $39 million. The SEC has intensified its scrutiny of crypto firms, launching 104 enforcement actions in 2023, costing companies around $426 million in legal defenses, sparking industry backlash over regulatory practices.

Robinhood Launches Election Prediction Contracts Amid Competition

Robinhood launched election prediction contracts priced $0.02–$0.99, paying $1 for correct bets, targeting user engagement ahead of the Nov. 8 U.S. election. Kalshi, boasting $87M in betting volume since October 7, introduced USDC deposits to attract users amid competition from Robinhood and Polymarket, which holds $2.6B in bets. Despite regulatory hurdles, prediction markets have surged, with high odds favoring Trump over Harris. Meanwhile, Robinhood’s Q3 earnings disappointed, missing revenue targets; shares dropped 13%. Analysts like JMP remain bullish, raising the target to $33, contrasting JPMorgan's reduced target of $20. 

Coinbase Shares Drop 14% After Missing Q3 Estimates

Coinbase's stock dropped 14.3%, its worst decline since May 2022, due to missing Q3 estimates, with $1.2 billion in revenue and $0.28 EPS, both below projections. Analysts cited reduced trading volumes and potential impacts from lower U.S. interest rates. However, the exchange reported its workforce surged to 3,672 employees in Q3, marking its highest level in almost two years despite layoffs in 2023. The company also pledged $25 million to Fairshake PAC for pro-crypto political support, targeting the 2024 elections. This happened amid increasing competition for the exchange, as Crypto.com’s October spot trading volume hit $139 billion, outpacing Coinbase, and acquired Watchdog Capital to offer equities to U.S. traders.

Tether Reports $7.7 Billion Profit in 2024

Tether reported a nine-month profit of $7.7 billion for 2024, with Q3 contributing $2.5 billion. It holds $134.4 billion in total assets, including $102.5 billion in U.S. Treasury exposure, and boasts an excess reserve of over $6 billion. Tether’s USDT circulation reached nearly $120 billion, representing a 30% increase in 2024. Meanwhile, Banco Bisa in Bolivia launched a USDT custody service, enabling customers to buy, hold, and send USDT, aligning with post-ban crypto growth in Bolivia, which saw trading volumes double to $15.6 million monthly. This initiative supports secure and regulated crypto engagement in the country.

FTX Settles $228 Million Lawsuit with Bybit

FTX agreed to a $228 million settlement with Bybit to recover assets, including $175 million in digital assets and $53 million in BIT tokens. The initial lawsuit, filed in 2023, accused Bybit and its investment arm Mirana Corp of withdrawing $327 million before FTX’s collapse using privileged access. Separately, Alameda Research, FTX’s subsidiary, sued KuCoin for $50 million in frozen assets, originally valued at $28 million, locked since November 2022. KuCoin, citing suspicious activities, stated it would follow legal orders but did not release the assets despite numerous requests.

dYdX and Kraken Announce Major Layoffs

dYdX cut 35% of its workforce under CEO Antonio Juliano’s leadership, aiming for strategic revitalization amid fierce competition and market difficulties, with its Total Value Locked dropping from over $500 million in March to $282.4 million. Kraken also laid off 15% of its staff (around 400 jobs) in a restructuring effort involving co-CEO Arjun Sethi and Dave Ripley, citing the need for organizational discipline after revenue exceeded $1 billion. These moves reflect broader economic challenges in the crypto industry, which also saw Consensys reducing its workforce by 20%. Kraken is preparing for its blockchain launch in 2025 and disputing SEC allegations.