Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | October 28 - November 3, 2023

Crypto Weekly Market Update

Table of Contents

Crypto Market Overview

• Crypto Weekly Recap: Price Actions, Market Trends, and Key Developments

Crypto Market and Regulatory Updates

• Bitcoin ETFs Signal Market Optimism
• Solana's Meteoric Rise Amid Challenges
• PayPal's Crypto Moves Under Scrutiny
• Unibot Exploit Shakes Trust in Crypto Bots

Legal and Financial Crypto Updates

• FTX Founder's Conviction Sends Warning
• U.S. Seizes Millions in Crypto from Drug Trafficker
• Coinbase and Block's Financial Performance
• SEC's Firm Stance on Terraform Labs

Blockchain and Platform Developments

• Celestia's Mainnet Beta Launch Challenges
• Aragon Association's Decentralized Shift
• SafeMoon's Legal Troubles Escalate
• Musk's Critique Highlights Bitcoin Ordinals
• Dapp Industry Shows Signs of Recovery
• Rarible Launches NFT Marketplace Service
• OpenSea Pro Expands with Polygon Integration

Crypto Weekly Recap: Price Actions, Market Trends, and Key Developments

Bitcoin:

• Weekly change: +1.76%
• Over the weekend, BTC's growth was gradual, leading to a muted response to VanEck's resubmitted spot Bitcoin ETF application on Monday, with prices fluctuating between $34.3k and $34.7k.
• CoinShares reported that Monday saw the largest crypto funds inflow in 15 months, with Bitcoin and Solana at the forefront, spurred by optimism for a Bitcoin ETF.
• By Monday, the U.S. government had become the second-largest BTC holder with 210,429 BTC, having sold 195,092 BTC and foregoing over $6 billion in potential profits.
• Glassnode's data on Tuesday indicated nearly 40 million Bitcoin addresses were still in profit, as BTC prices hovered between $34.1k and $34.6k.
• BTC concluded October with a 28% increase, reaching $34.8k on Wednesday after news that major market makers might provide liquidity for BlackRock's proposed spot bitcoin ETF.
• Invesco Galaxy joined BlackRock in listing a spot Bitcoin ETF on the DTCC site.
• Analysts began forecasting that a Bitcoin ETF approval by January could drive the BTC price to $150,000.
• Bitcoin hit $35k, then retreated, triggering significant liquidations prior to the Fed's policy decision.
• MicroStrategy's Bitcoin holdings increased by $900 million as BTC surged on Thursday, touching $35k several times throughout the day.
• Bitcoin's climb to a new yearly peak of $35,950 on Thursday resulted in over $100 million in short liquidations, with a Fidelity executive dubbing it "Exponential Gold."
• Despite lower-than-expected job growth and a potential interest rate cut from the Federal Reserve, Bitcoin's price remained stable.
• On Friday, BTC's price fell by 3.5% as concerns over 'overheated' Bitcoin derivatives emerged.
• The crypto rally seemed to dwindle as ETF excitement waned, but Bitcoin showed resilience, bouncing to $34.9k from $34.2k.
• Matrixport suggested that a 'Santa Rally' could push Bitcoin to $56K by the year's end.
• QCP Capital attributed Bitcoin's recent rally to macroeconomic factors like falling bond yields, not to the approval of a spot ETF.

Ethereum:

• Weekly change: +0.91%
• Ethereum appeared steadier than Bitcoin over the week.
• From Monday through Wednesday, Ethereum's price hovered between $1,787 and $1,828.
• The Ethereum Mainnet regained dominance over its Layer 2 counterparts, with daily Layer 2 activities dipping by a third in the past six weeks, according to L2beat data.
• Ethereum hit its weekly peak at $1,858 on Thursday.
• Positive sentiment surged as analysts and institutional investors began expressing optimism about Ethereum.
• Fund manager CoinShares highlighted Ethereum as having the most compelling growth outlook.
• Analysts from K33 Research shifted to a bullish perspective on Ethereum.
• A Swiss bank's collaboration with SEBA to offer Bitcoin and Ethereum custody and trading services helped fuel positive sentiment.
• Despite the optimism, some anticipated a retracement, with ProShares launching a short Ether-linked ETF.
• Ethereum's price dipped to $1,790 on Friday in response to Bitcoin's reaction to macroeconomic data but rebounded to $1,820 at the time of reporting.
• Concurrent with the price dip, Glassnode data indicated Ethereum was facing negative momentum, with its MVRV ratio falling below the 180-day average.

Altcoins:

• Zodia Custody, backed by Standard Chartered, expanded its operations into Hong Kong.
• The FLR token from Flare saw an increase as the company launched its public staking feature.
• Advocates for bridging protocols called for open tech standards and criticized LayerZero.
• Steve Aoki released digital sneakers for the move-to-earn game 'Stepn.'
• Snowtrace, the AVAX blockchain explorer, announced its shutdown amid controversy over Etherscan fees.
• Starknet launched a reward program offering 50M STRK for early contributors.
• Injective Protocol completed its integration with Google Cloud's CloudHub data exchange.
• Tether reported a surplus of $3.2 billion in reserves but faced delays in reducing secured loans.
• Argent, a crypto wallet developer, halted development on zkSync Era to focus on Starknet.
• The UK's financial regulator listed Bitfinex as an unauthorized firm.
• Ava Labs suggested the Astra upgrade to improve the subnet architecture on Avalanche.
• Circle ended stablecoin minting support for consumer accounts.
• Bitget and Floki accused each other of manipulation following a token listing.
• Aave proposed a new strategy to restore the GHO token's peg.
• MakerDAO transferred $250 million from Coinbase to rebuild DAI's collateral.
• WalletConnect limited its services in Russia, adhering to OFAC guidelines.
• The founder of Oyster Protocol received a four-year sentence for evading $5.5 million in taxes.
• Frax Finance resolved its domain name hijacking issue.
• Taiwanese police disrupted a $324.2 million USDT laundering scheme.
• Aptos and Avalanche led the $450 million token unlocks in November.
• An attacker stole $2.1 million from Onyx in a recent DeFi security breach.
• Nym introduced mixnet privacy to the NEAR ecosystem and ventured into decentralized VPNs.
• Hashflow activated a 'Fee Switch,' redistributing 50% of revenue to its stakers.
• Pyth Network announced a token airdrop for over 75,000 wallets.
• Qredo cut half its staff, with only six months of operational funds remaining.
• Visa partnered with HSBC and Hang Seng Bank to test tokenized deposits for Hong Kong's CBDC.
• Axie Infinity's developer is adapting Japanese Web2 games for the Ronin blockchain.
• The Dubai Financial Services Authority greenlit Ripple for use in the Dubai International Financial Center, as XRP Ledger growth surged in Q3 according to Messari.

Bitcoin ETFs Signal Market Optimism

The crypto scene has been buzzing with the potential approval of Bitcoin ETFs, like Invesco Galaxy's, signaling a warmer regulatory climate and possibly skyrocketing Bitcoin prices. BlackRock's ETF, backed by trading titans, could further cement this growth. Market volatility remains a dance with Bitcoin's price swinging, recently causing a $100 million liquidation before steadying. 

Whales are making waves, some offloading, hinting at a price dip, while others are on a buying spree, showing bullish trends. Despite a static holder count, the RSI's bullish stance and the Fed's rate decisions could push Bitcoin beyond its current range. October ended with Bitcoin's price surge and a 'Santa rally' may be on the horizon. 

Tether's cap increase and MicroStrategy's profitable Bitcoin play despite losses reflect growing institutional interest. With Grayscale's Trust discount at a low, the market's optimism is palpable.

Solana's Meteoric Rise Amid Challenges

Solana's recent trajectory has been nothing short of meteoric, with a 70% price surge over 30 days, pushing its market cap up by $6 billion. This rally is fueled by a 260% year-to-date price growth, hinting at a growing institutional fondness for Solana-based investment products, which saw a 74.1% increase in assets under management in October alone. 

Google Cloud's BigQuery integration with Solana is set to deepen insights into blockchain analytics, furthering web3 adoption. Despite the FTX debacle, Solana's price resilience signals strong market trust. GameShift, unveiled by Solana Labs, is poised to revolutionize crypto gaming by easing developers' entry into blockchain creativity. 

However, analysts caution of an overbought market, with technical indicators suggesting a potential price correction, although long-term forecasts remain bullish. Meanwhile, significant SOL offloading by Alameda post-FTX scandal and active whale transfers to exchanges like Binance and Kraken could indicate a readiness for a sell-off, despite Solana's price holding strong and even hitting a recent high of $43.

PayPal's Crypto Moves Under Scrutiny

PayPal's foray into the crypto market with its PYUSD stablecoin has caught the SEC's eye, prompting an investigation and a subpoena for documents. Despite a partnership with Paxos and regulatory assurances, PYUSD's uptake has been tepid, with just over 159 million tokens in circulation. 

Meanwhile, PayPal's UK operations face FCA-imposed constraints, limiting customers to selling or holding existing tokens and barring new crypto purchases until 2024. These restrictions reflect a broader trend of rigorous regulatory frameworks shaping the crypto landscape, underscoring the need for clear guidelines to balance innovation with market integrity and consumer protection.

Unibot Exploit Shakes Trust in Crypto Bots

Unibot, a prominent Telegram-based trading bot, was hit by a "token approval exploit" that siphoned over $600,000 from users within an hour, targeting memecoins like Joe (JOE), UNIBOT, and BeerusCat (BCAT). The exploit caused Unibot's token price to plummet by over 20%, with its market cap dropping from $200M to $45M, shaking the trust of its 1,300 active users. 

In response, Unibot paused its new router to stem the crisis and promised compensation for the affected. On-chain research teams Scopescan and PeckShield alerted users, advising them to revoke contract approvals and secure their funds. The incident has intensified the dialogue on the need for stronger security in crypto trading bots.

FTX Founder's Conviction Sends Warning

Sam Bankman-Fried, the founder of the defunct crypto exchange FTX, has been found guilty on all charges in a fraud trial, facing up to 110 years in prison. The conviction follows a monthlong trial in Manhattan federal court, with a jury taking just two days to reach a unanimous verdict. The charges include wire fraud, securities fraud, conspiracy, and money laundering. 

Meanwhile, FTX's claim pricing has soared to 57% due to the increased valuation of AI companies it had invested in, offering a glimmer of hope for creditors in the bankruptcy proceedings. The crypto community on Twitter responded with a mix of schadenfreude and cautionary takes, emphasizing the verdict as a warning to others in the industry. 

The U.S. Attorney for the Southern District of New York, Damian Williams, declared the conviction a signal to crypto fraudsters, promising "handcuffs for all," and highlighted the government's readiness to tackle more complex crypto cases in the future. FTX’s financial advisors have been providing customer transaction data to the FBI, according to court filings. 

U.S. Seizes Millions in Crypto from Drug Trafficker

U.S. authorities have clamped down on a darknet narcotics operation, seizing over $54 million in cryptocurrency from convicted drug trafficker Christopher Castelluzzo. This hefty sum includes 30,000 ether, valued at approximately $53.5 million, initially purchased during Ethereum's 2014 ICO. Additionally, Castelluzzo's assets encompass 30,000 ether classic, worth around $505,000, received in 2016. 

The seizure is a result of a civil forfeiture action aimed at recouping funds derived from illegal activities. Despite attempts to evade taxes and transfer assets overseas, law enforcement, aided by the FBI's Virtual Assets Unit and Homeland Security Investigations, intercepted the cryptocurrency before it could be laundered. 

Coinbase and Block's Financial Performance

Coinbase outperformed earnings and revenue estimates in Q3, with a slight adjusted loss per share and total revenue surpassing expectations at $674.1 million. Despite this, trading volume dipped to $76 billion, falling short of the anticipated $80.1 billion and marking a decrease from the previous quarter's $92 billion. Transaction revenue also saw a 12% drop. 

Meanwhile, Block (formerly Square) reported a substantial rise in revenue, hitting $5.62 billion, a 24% increase, with Bitcoin revenue contributing $2.43 billion since July. Excluding Bitcoin transactions, revenue was up 16% at $3.19 billion. Block's gross payment volume grew by 10%, with Cash App's volume slightly up by 1%.

SEC's Firm Stance on Terraform Labs

The SEC is pushing for a summary judgment against Do Kwon and Terraform Labs, arguing there's no real contention over the facts of the case, particularly that investments were made in what they deem securities. They're sticking to their guns that Kwon and Terraform's actions meet the Howey test criteria, indicating a security, due to the pooling of funds with profits expected mainly from the efforts of the promoters. 

The SEC is doubling down on allegations of fraud, accusing the duo of making false claims about the stability of UST and the algorithm behind it, while secretly manipulating its price stability, leading to the platform's collapse and significant investor losses. This move comes shortly after Kwon's defense sought a similar judgment in their favor, arguing the SEC hasn't proven their case. 

Meanwhile, Kwon is currently detained in Montenegro for document forgery, and Terraform's co-founder Daniel Shin has distanced himself from the debacle, blaming Kwon's mismanagement.

Celestia's Mainnet Beta Launch Challenges

Celestia's mainnet beta has launched, distributing its TIA token to 580,000 users, marking a significant step in blockchain scalability and stability solutions. 

The network, which raised $55 million last year, aims to ease the deployment of chains and supports modular chains as a data and consensus layer. TIA tokens were trading at approximately $2.29, with an estimated $120 million worth of tokens airdropped, primarily targeting Cosmos and Ethereum layer 2 ecosystems. 

However, over 55% of the airdrop was reportedly claimed by Sybil groups and airdrop hunters, with 28.92 million TIA tokens diverted by these actors through over 106,491 wallets, highlighting a challenge in fair token distribution.

Aragon Association's Decentralized Shift

Aragon Association is dissolving, earmarking $155 million in ETH for ANT tokenholders, at 0.0025376 ETH per ANT. This decision follows governance challenges and a failed treasury control transfer. Post-redemption, ANT will lose its utility, with $11 million reserved for regulatory cover. 

Aragon shifts focus to product development under a new 'Product Council', sidelining ANT speculation to concentrate on its decentralized governance tech, with a token redemption period open until late 2024.

SafeMoon's Legal Troubles Escalate

SafeMoon's top brass faces a storm of legal woes, with the SEC slapping the firm and its executives with fraud charges over the unregistered sale of SafeMoon tokens. The allegations paint a picture of deceit, where executives Karony, Smith, and Nagy are accused of falsely promising investors that their tokens were locked away, only to funnel millions into lavish lifestyles, complete with luxury cars and homes. 

Despite the SEC's crackdown, SafeMoon vows to forge ahead, even as the community's trust wanes and the token's value plummets. 

Top Weekly Altcoin Gainers and Losers

Gainers:

WEMIX WEMIX (+36.89%)

THORChain RUNE (+32.27%)

Arweave AR (+29.95%)

NEAR Protocol NEAR (+24.83%)

Solana SOL (+21.81%)

Losers:

Pepe PEPE (-14.73%)

Quant QNT (-9.62%)

FTX Token FTT (-8.70%)

Mina MINA (-7.53%)

Maker MKR (-5.97%)

NFT Market Map

Musk's Critique Highlights Bitcoin Ordinals

Elon Musk, in a candid podcast, critiqued NFTs for linking to external JPEGs rather than storing the actual image on the blockchain. This sparked discussions underscoring the significance of Bitcoin Ordinals, a Bitcoin-based NFT variant enabled by the Taproot soft fork. 

Bitcoin Ordinals, which embed data directly onto the blockchain, have seen over 38 million inscriptions to date, according to cryptocurrency analyst Will Clemente. Musk's stance echoes a broader skepticism towards NFTs' reliance on external hosting, which risks losing the associated image if the hosting service fails. 

Despite this, Ethereum remains the dominant platform for NFTs, boasting 84% of all NFT trading volumes. 

Dapp Industry Shows Signs of Recovery

The Dapp industry has shown positive signs in October, reversing the year-long downtrend, according to a DappRadar report. Daily average unique active wallets (dUAW) remained steady at 2.7 million, with a slight decline in transactions. NEAR Protocol remains the most active chain, while gaming increased its dominance with 1.66 million dUAW. 

DeFi's TVL increased by 14%, but its activity decreased. NFT trading volume saw growth for the first time this year, with Ethereum leading the pack. Exploits and hacks significantly decreased. Overall, the industry is optimistic about a potential upcoming bull run.  

Rarible Launches NFT Marketplace Service

Rarible has rolled out RaribleX, a marketplace-as-a-service product designed to simplify the entry of consumer brands and developers into the NFT space. This service, which has been in the works for over two years, aims to help brands, communities, and artists craft a fully branded marketplace with tailored search and user experience. 

Notable early adopters include Mattel, Animoca, and McFarlane. RaribleX offers a launchpad for various distribution methods, access to aggregated listings, customizable fees, and creator royalties, as well as integration with popular wallets and credit card payment options. 

This launch is seen as a step towards mainstream Web3 adoption, with Rarible emphasizing the potential for NFTs to foster vibrant online communities and brand engagement.

OpenSea Pro Expands with Polygon Integration

OpenSea Pro has integrated with the Polygon network, enhancing cross-chain asset trades and interoperability within the Web3 ecosystem. This move is a strategic response to Binance NFT’s exit from Polygon, positioning OpenSea Pro as a champion of blockchain diversity and user experience. 

The update simplifies asset transfers between chains, potentially broadening its market base. OpenSea Pro's support for cross-chain transactions is a bet on the multi-chain future of Web3, with Polygon facilitating connections to other NFT markets. 

This integration aims to make the NFT trading experience more fluid and user-friendly, acknowledging the demand for multi-chain functionality and contributing to a more unified Web3 ecosystem.

This article has been refined and enhanced by ChatGPT.