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a weekly recap of the crypto ecosystem
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tl;dr: white hot funding week, ETH withdrawals are here, BTRFLY details Dinero, Layer Zero’s $3B valuation, RBN’s Aevo is live, USDT dominance grows & we’re so back
BTC dominance 48.5% | ETH dominance 19% | DeFi TVL $52B |
Total Crypto Market Cap $1.28T | Stablecoin Supply $132B |
As far as general news goes, this week was rather quiet and we successfully avoided any further banking calamities, macro chaos, or regulatory action. The previous two Mondays have been the exception to the generally quiet week as they’ve endured the brunt of some much needed volatility.
Last Monday, peak crypto insanity ensued which began with Elon changing the Twitter logo to the Dogecoin Shiba Inu. DOGE obviously printed, rallying 30%+ and briefly breaking 0.10 before eventually selling off over the course of the next few days. A few hours later, a seemingly innocuous sha256 shitpost from Cobie (which he’s done several other times) threw the market into a panicked frenzy when the output was “solved”. The solved output read “Interpol Red Notice for CZ” and the once private conversation rumor tweeted in unsolvable form echoed from group chats to Twitter, eventually being reported on by respectable news outlets spreading brief fear throughout the crypto market.
Since that chaos, the Interpol rumors have been quashed, CZ of course responded with 4 and Elon has reverted Twitter’s logo back to the usual bird icon. Just another Monday afternoon in crypto innit. Both of those events slowly faded into the background as the BTC lead market slowly climbed higher.
Yesterday, the slow grind up turned into a rapid expansion upwards as BTC reclaimed 30k for the first time since June of 2022. Late last week, Glassnode noted that for the first time, the amount of open interest in BTC options contracts ($10.3B) has surpassed that held in futures contracts ($10B). Those who were expressing their views on BTC’s next move via call option buys were rewarded as short liquidations mounted. The market has since continued upward ahead of the big day tomorrow that includes new CPI data and the long awaited ETH Shapella upgrade.
Speaking of Shapella, which is now apparently the proper terminology for the Shanghai + Capella upgrade that will enable staked ETH withdrawals, opinions on the upgrades effect to ETH’s price are as wide ranging as you’ll find.
In my view, the fear of a selloff is drastically overplayed and there are numerous reasons that Shapella results in more of a nonevent than anything. The Curve stETH/ETH pool remains healthy, stETH and other liquid ETH derivatives aren’t trading below their peg which would indicate people are scared of selling/liquidity, the event and unlock has been confirmed for weeks (with the general timeline known for months) allowing people to position ahead of it, Lido (33%+ of liquid staking marketshare) won’t have withdrawals enabled until mid-May and there currently aren’t any validators lining up to be first out of the exit queue.
Putting all of the above together amounts to no currently visible signs of people ecstatic to withdraw and sell their ETH. Still, I can’t shake the feeling of potentially being directly in the middle of the curve while the ends stare at me saying “ETH unlocked bad”. Despite that background feeling, I’m currently positioned for Shapella being a successful nonevent that provides tailwinds to the LSD sector along with the medium and long term outlook on the ETH/BTC ratio. Regardless, new CPI data tomorrow morning and ETH’s correlation to tradfi markets will have a greater short term impact than withdrawals finally being enabled.
Lastly, I’m once again obligated to note the current stablecoin environment as the market continues to condense into the offshore hands of Tether. USDT’s marketshare has breached 61%+ and reached levels not seen since April of 2021. Hopefully I’ll be back next week to talk about continuously improving CPI numbers and the lack of immediate sell pressure from Shapella, but I’ll be in NYC tomorrow morning through the weekend so the Page One complaint office is closed if I’m wrong.
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Layer Zero Labs, team behind Stargate Finance (STG) building interoperability & cross-chain messaging platform, raises $120M Series B @ $3B valuation
Bitget, derivatives exchange, announces $100M venture fund with focus on Asia
Re7 Capital & Republic Crypto launch $100M fund RxR for liquid token investing
OP Crypto, fund of funds crypto venture “bridging Asia & the West”, raises $28M
M^0, DeFi infra for digital asset value transfer, exits stealth, raises $22.5M seed
Swissborg, Europe-based crypto investing platform, raises $23M Series A
RACA, crypto gaming ecosystem developers, raises $16M
Polyhedra Network, ZK proof backed infrastructure, raises $15M pre-Series A
Delphi Digital announces Delphi Labs Accelerator with $13.5M in funding
Alchemy Pay, fiat to crypto payment network, raises $10M @ $400M valuation
Bitget, derivatives exchange, raises $10M to expand spot & earn products
Nibiru Chain, hopeful DeFi all-in-one platform, raises $8.5M seed @ $100M val
Astria, modular, decentralized shared sequencer network, raises $5.5M seed
Satsuma, blockchain indexing platform, raises $5M seed
Finst, Netherlands-based crypto exchange, raises $4.4M seed
Opside, ZK-Rollup-as-a-service platform, raises $4M seed
Lore, co-ownership of NFTs for expanded access/utility platform, raises $4M
Franklin, crypto payroll company, raises $2.9M seed
MicroStrategy purchases another 1,045 BTC @ average price of $28k per BTC, firm now owns 140k BTC with an aggregate purchase price of $4.17B
Bitstamp partners with Tesseract to launch crypto lending markets across Europe
Baakt completes $200M acquisition of Apex Crypto
Interim report from FTX bankruptcy reveals new details about the chaos, disorganization, and security failures of the exchange & SBF
Solana details state compression, drastically reducing the cost of data of chain
OS launches their competitor to BLUR, rebrands Gem V2 as OpenSeaPro
Tokenized gold products from Tether (XAUT) & Paxos (PAXG) top $1B in collective market cap as banking turmoil pushes gold prices higher
30+ Ethereum projects partner to launch MEV Blocker RPC, tool designed to protect users from various types of MEV attacks
S&P Global hiring for DeFi director to “enable the successful build-out and execution of a DeFi team strategy”
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tokens & protocols:
AVAX — announces Evergreen, subnets specifically for permissioned institutions
FOLD — announces plans to build omnichain LSD token mevETH with extra yield from MEV extraction routed to the token, FOLD acquires Cream’s validator
BTRFLY — introduces Dinero, overcollat stablecoin backed by ETH blockspace
RBN/AEVO — Ribbon’s Aevo order-book based DEX is live, built on OP’s stack
DOGE — whipsawed as Elon changed the Twitter logo to Doge & then back
JOE — continues recent momentum, launches liquidity book v2.1
SOL — integrates state compressed NFTs, drastically reduces minting costs
PAXG/XAUT — Paxos & Tether tokenized gold products top $1B market cap
OpenEden — unveils protocol that offers exposure to tokenized Treasury Bills (financially regulated, accredited investors only)
EigenLayer — highly anticipated ETH restaking protocol announces first testnet
Astria — introduces their decentralized by default shared sequencer network
Superfluid — streaming protocol enabling real-time, concurrent crypto transfers launches subscriptions product that any protocol or platform can embed
around the ecosystem:
Karthik Senthil detailing how middleware benefits the most from modular chains
Redphonecrypto on BTC’s Ordinals and their paradigm shifting potential
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.