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- Crypto Alpha, Week 31 2024
Crypto Alpha, Week 31 2024
All things Crypto, Web3 and Blockchain to keep you updated
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TL;DR
Bitcoin 2024 Conference Highlights
US Moves $2B Bitcoin After Trump’s Reserve Pledge
Hong Kong's Largest Broker Launches Ether Trading
Ethereum ETFs Struggle Post-Launch
SEC May Pause Solana Security Claim in Binance Case
Bots Inflating Solana Metrics
Lava Public Mainnet Launch
Tria Launch Chain-Abstraction on Injective
STC Bahrain's 'Intersect' Launches on Avalanche
California DMV Adopts Avalanche for Title Transfers
Russia Legalizes Crypto Mining
Bank of England Cuts Rates for First Time in Four Years
And much more!
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Bitcoin Highlights of the Week
The Bitcoin 2024 Conference, held in Nashville, concluded on July 27th with significant announcements. BlackRock's Bitcoin Spot ETF has seen consistent positive inflows, and Robert F. Kennedy Jr. proposed a plan for the US Treasury to buy 550 Bitcoin daily, aiming to make Bitcoin transactions non-reportable and tax-free. Edward Snowden discussed Bitcoin’s role in combating corruption but warned of political exploitation, while Senator Lummis suggested the US government purchase and hold 5% of the total Bitcoin supply for 20 years.
Michael Saylor forecasted Bitcoin’s future value ranging from $3M to $49M per coin.The conference also featured bold statements from Trump, who pledged to acquire 1M Bitcoin for the US reserve, reject CBDCs, and address SEC issues. Despite ambitious commitments and projected valuations, Snowden’s caution highlights the complex political landscape surrounding Bitcoin.
David Solomon, CEO of Goldman Sachs, recently discussed Bitcoin's potential as a store of value rather than a practical use case. In an interview from the Summer Olympics in Paris, Solomon described Bitcoin as a speculative investment, acknowledging its intriguing technology but expressing doubts about its utility. Despite this, he conceded that Bitcoin could serve as a store of value, comparable to gold reserves.
Goldman Sachs, which launched a crypto desk in 2021, has been increasingly involved in digital assets, including testing the Canton Network and planning tokenization projects. The bank's growing engagement with crypto assets reflects heightened interest from hedge funds and a strategic push into digital markets.
The U.S. government transferred $2 billion worth of Bitcoin, previously seized from the Silk Road, to unknown wallets just two days after former President Donald Trump’s pledge at the Bitcoin 2024 conference. Trump had vowed not to sell any U.S. Bitcoin holdings and proposed creating a strategic national Bitcoin reserve.
This move, which critics have labeled "tone deaf," follows Trump’s promises to make the U.S. a global crypto hub and Senator Cynthia Lummis’s proposal to buy 5% of Bitcoin’s total supply. The transfer has sparked mixed reactions within the crypto community, highlighting ongoing debates about Bitcoin’s role as a reserve asset.
The University of Wyoming will open the UW Bitcoin Research Institute (BRI) in August, aiming to enhance the quality of Bitcoin research. Directed by Bradley Rettler, an Associate Professor and Bitcoin activist, the institute will focus on producing high-quality, peer-reviewed studies on Bitcoin. Rettler has criticized current Bitcoin research for its inaccuracies, citing a 2018 study that overlooked critical aspects of Bitcoin’s technical adjustments.
The BRI, which accepts Bitcoin donations and invests a portion in BTC, will offer annual workshops, academic prizes, and weekly seminars. Wyoming continues to position itself as a Bitcoin hub, supported by pro-Bitcoin figures like Senator Cynthia Lummis and Caitlin Long. Recent legislation includes Lummis’s strategic Bitcoin Reserve bill and state laws that protect digital asset privacy.
Following his keynote at the Bitcoin 2024 conference, former U.S. President Donald Trump promoted limited edition Bitcoin-themed sneakers on social media. In a Truth Social post, Trump announced that the sneakers are available for purchase using Bitcoin or other cryptocurrencies.
This move comes after his speech in Nashville, where he vowed to fire SEC chair Gary Gensler and establish a strategic Bitcoin reserve if elected. Trump has previously embraced cryptocurrency through political donations and NFT collections, reflecting his ongoing engagement with digital assets.
Daily Alphas of the Week
Ethereum Highlights of the Week
Crypto hacks surged in Q2 2024, with losses totaling $572.7 million, marking a 112% increase from the previous year. Ethereum remained the most targeted blockchain, followed by BNB Chain. Two major attacks, including one on Japanese exchange DMM Bitcoin resulting in $305 million lost, and another on Turkey's BtcTurk, which saw $55 million stolen, accounted for 63% of these losses.
Centralized finance (CeFi) platforms were primarily affected, though decentralized finance (DeFi) remained a notable target. Despite the increase in losses, fraud-related incidents decreased by 81%, and about 5% of stolen funds were recovered.
Futu Securities International, Hong Kong's leading online brokerage, has initiated Bitcoin and Ether trading for its 22 million users. This move makes Futu the first brokerage to directly offer cryptocurrency trading to Hong Kong retail investors. The platform debuted on July 23, marking a significant milestone as investor interest surges, with Bitcoin’s open interest hitting a record $39.4 billion on July 29.
The launch follows a trend of growing institutional interest in crypto, highlighted by the debut of the first spot Ether ETFs in the U.S. and Franklin Templeton's collaboration with SBI Holdings to establish a crypto ETF management company in Japan. This expansion aligns with Hong Kong's ambition to become a global crypto and blockchain innovation hub.
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BlackRock has issued a warning about an increase in scams targeting investors in its iShares Bitcoin and Ether ETFs. Impersonators posing as BlackRock representatives are using social media platforms like WhatsApp and Telegram to lure victims with false investment offers and training. The asset management firm emphasized that it never contacts users via social media to request payments or offer investments.
Despite these scams, BlackRock's iShares Bitcoin Trust has seen significant success, amassing $19.7 billion in Bitcoin since its launch in January. BlackRock's head of digital assets, Robert Mitchnick, noted that client interest remains primarily focused on Bitcoin and Ether, with little demand for other cryptocurrencies.
Arbitrum's community is set to pass a governance proposal allowing developers to launch Orbit chains outside the Ethereum ecosystem. With 83% support, the proposal responds to interest from projects wanting to deploy Orbit on non-Ethereum chains like Bitcoin, BNB Chain, and Cosmos. The Arbitrum Foundation's expansion program, launched in January, already enables third-party projects to use Arbitrum’s codebase on Ethereum-derived chains under a revenue-sharing arrangement.
Expanding Orbit chains is expected to increase revenue for Arbitrum, with new chains sharing 10% of profits back to the ecosystem. Orbit chains allow developers to create custom Layer 2 and Layer 3 rollup chains. Xai, a gaming-focused Layer 3 network, has become the top Layer 3 network by activity, consistently exceeding 100 transactions per second.
New Ether ETFs faced significant outflows, with nearly $750 million exiting in four out of five trading days. On July 30, net inflows of $33.6 million marked the first positive daily flow since launch. This trend contrasts with the successful debut of Bitcoin ETFs, highlighting differing regulatory impacts. Bitwise briefly surpassed BlackRock in trading volume by waiving its 0.2% fee, though BlackRock regained its position.
Regulatory concerns affect Ethereum due to its proof-of-stake consensus mechanism. The US SEC's stance against staking rewards has influenced investor sentiment. BlackRock noted minimal client interest beyond Bitcoin and Ethereum ETFs. Despite initial volatility, Bitwise's chief investment officer expects Ether ETFs to significantly impact ETH prices, predicting new highs by the end of 2024 due to widespread use and staking.
Solana Highlights of the Week
The SEC has proposed amending its lawsuit against Binance to delay a decision on whether Solana (SOL), Cardano (ADA), and Polygon (MATIC) are unregistered securities. This move means that while the allegations are not being dropped, the court will not need to rule on these tokens at this time. This delay follows the SEC's original complaint, which included various cryptocurrencies among those it considered unregistered securities.
The amendment also complicates the discovery process, as Binance disputes the SEC's proposed timeline. Binance insists on reviewing the amended complaint before agreeing to a discovery schedule, potentially extending the delay in the judicial process. This disagreement underscores ongoing tension between the SEC and Binance over the handling of the case.
For the first time, Solana has outpaced Ethereum in weekly total fees, earning approximately $25 million compared to Ethereum's $21 million for the week of July 22. This achievement is attributed to a surge in trading activities on Solana, driven by popular memecoins like Pump.fun and Moonshot, which have collectively amassed over $50 billion in market cap.
Additionally, Solana's total value locked (TVL) has surged to $5.5 billion, tripling since the beginning of 2024. Notably, Solana reached a daily fee high of $5.5 million on July 28, reflecting significant revenue gains for its validators. Despite this milestone, Ethereum maintains its dominance with a TVL of nearly $60 billion and a larger protocol ecosystem.
Solana recently surpassed Ethereum in several performance metrics, but research suggests that this boost may be largely artificial. An analysis by Flip Research identified a high volume of daily transactions per user on Solana, significantly exceeding Ethereum’s figures.
The report highlights that many of these transactions are driven by bots, which engage in manipulative trading practices, including wash trading and exploiting low liquidity pools on platforms like Raydium. Despite Solana's impressive metrics, including higher trading volumes and fees compared to Ethereum, the presence of such inorganic activities raises concerns about the network's true performance and market health.
In recent months, Solana's ecosystem has seen significant growth in on-chain activity and daily active addresses, exceeding 2 million. Leading this surge are decentralized applications (dapps) like Raydium, Pump.Fun, and Jito, which are the top fee generators on the network. Raydium, a prominent decentralized exchange (DEX), reported $30 billion in trading volume and $65 million in fees for July, marking a substantial increase from June.
Pump.Fun, a memecoin creation platform, saw its highest monthly fees of $28 million in July, driven by a surge in new token launches. Jito, specializing in maximal extractable value (MEV) tips, recorded $36 million in MEV fees for July, a 26% rise from June. Jito’s daily MEV tips reached $3.2 million on July 28, making it a significant contributor to Solana’s fee revenue.
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