Ethereum spot ETF as the next catalyst?
Ethereum spot ETF as the next catalyst?
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Welcome to Stay on-chain! Today we’ll walk you through the next catalysts for crypto in 2024, Frax launching its Layer2, the crypto-phone frenzy, and much more. By the way, make sure to join us on Telegram 👾
In today’s edition:
Market performance
News roundup
Extra content from great minds
Farms of the week
Venture Capital
Meme of the week
Reading time: 5 min
Alright, dear readers, brace yourselves for some red numbers this week. Just like Cobie perfectly predicted, the Bitcoin spot ETF launch turned out to be a "sell the news" event. Those who hopped on the ETF through their stock trading apps got a not-so-friendly -8% as a welcome gift. Ethereum took a milder hit, sliding down just 3%.
The top performer of this week is ... SC! A coin no one ever heard about. Right behind comes BLUR, the token behind the biggest NFT marketplace. Its co-founder, also leads Blast, the L2 network which rolled out the testnet. The not-so-lucky ones this week are BONK, Solana's meme-coin, and Thorchain's RUNE.
The on-chain metrics are holding steady and the fear and greed index is still showing "greed" in the markets. An interesting tidbit: Bitcoin dominance is declining, hinting that altcoins are holding strong.
BlackRock is bullish ETH
Larry Fink, the big boss at BlackRock, is pretty optimistic about Ethereum. In an interview with CNBC, he said he “sees value” in a spot Ethereum ETF in the US. Larry threw in some bullish statements like "These are just stepping stones towards tokenization." Talking about Bitcoin, he compared it to gold, saying, "I believe it's an asset class; it’s no different than what gold represented over thousands of years," and pointed out that we're almost at the limit of how much bitcoin can be created.
Larry seems to be officially a crypto bro. Check out the interview here!
But here's the twist: many big financial players don't think the SEC will give the green light to an Ethereum spot ETF anytime soon. Bitcoin had to go through a long process before getting approved, and Ethereum is fundamentally different with its Proof-of-Stake algorithm and being launched through an initial coin offering. Still, some heavy hitters, like BlackRock and Fidelity, have already applied for spot ETH ETFs. Dangerous to bet against them.
Bitcoin halving’s targeting April 2024
Bitcoin halvings are a way for the orange coin to further shrink inflation by maintaining its scarcity, with a fixed maximum supply set at 21,000,000 BTC. What happens is that every 4 years the block rewards paid out to miners securing the network are reduced by half, so that the actual 6.25 BTC will shrink to 3.125 BTC in April 2024. Historically, Bitcoin halvings have always propelled immense price growth for the currency — and while history doesn’t repeat itself, it often rhymes.
So, how’s the BTC spot ETF thing going? We gotta say, well. $10B in trading volume in the first three days, with 3 ETFs among the top 10 in weekly flows.
Crypto-phones are becoming a trend
Remember Solana’s Saga Phone? Right, the phone that pays you to buy it. Following the scent of its predecessor, Solana Mobile announced the second chapter of this journey: a new crypto-phone, subject to production by reaching at least 100,000 pre-orders. Sponsored by Solana’s top-tier protocols, users will be able to lock in a unit by depositing $450, with shipping expected in early 2025 with rewards & giveaways along the way — the question many are posing is whether it’ll become an airdrop machine like the Saga.
On a similar note, Trader Joe teased its community on 𝕏 about releasing a crypto-phone themselves. This might be the beginning of a novel narrative where Web3 melts with consumer technology, or the dawn of a disaster for treasuries trying to get into an ultra-competitive market as smartphones.
The Dencun Ethereum upgrade is just around the corner
The Ethereum team has gone ahead and rolled out the Dencun upgrade onto the Goerli testnet — a practice run before the release on the main chain.
The highlight of the Dencun upgrade is the introduction of EIP-4844 — a new way of handling transactions called proto-danksharding, which will let Ethereum nodes temporarily store and access data off the main chain. Why? To cut down on how much storage space Ethereum needs. It's expected to bring down the costs of transactions for Ethereum apps, giving the chain a boost, especially to Layer 2 rollup chains.
Fun fact: a fat-finger trader dropped $8.6 million in SOL on a meme-coin called Dogwifhat (WIF) in a single trade, incurring an instant loss.
Frax Finance is launching its L2
Frax Finance, the OG DeFi protocol famous for its decentralized stablecoin, is gearing up to introduce its L2 blockchain called Fraxtal. The new L2 chain is scheduled for release in the first week of February.
Fraxtal will host all the existing Frax products, including the stablecoin FRAX, the lending platform Fraxlend, an Automated Market Maker (AMM), an inflation-linked stablecoin FPI, and the liquid staking token frxETH. The frxETH token will play a key role in the L2, acting as the gas for the chain— the token users will use to pay transaction fees.
Several well-known projects are showing their support, with Etherscan launching Fraxscan from day 1, and the stablecoin-focused DEX Curve deploying their protocol shortly after the launch.
Tether performs its quarterly BTC buy
As we mentioned in May 2023, Tether expressed their willingness to use up to 15% of its profits to buy Bitcoin. In fact, Tether announced today that they bought 8,888 BTC in Q4 2023, for an actual value of roughly $400M. As of today, they own 66,465 BTC valued at $2.8B. You have some competition behind you, Saylor. Source: Decrypted.
Have some fun: here’s JP Morgan’s CEO Jamie Dimon years-long campaign against Bitcoin — 𝕏/zGuz
How’s the Bitcoin Ordinals mania going?
It never ended. Further enhanced by Sotheby’s curating dedicated auctions the frenzy has calmed down a bit, but transaction fees remain high on average because of the associated network activity. Besides Ordinals intended as image inscriptions within a satoshi (the smallest Bitcoin unit), the use cases are plenty.
Spanning from inscribing valuable information on the blockchain to using it as a time chain, to simply trading & collecting rare satoshi units like the ones included in satoshi first blocks — with some listed as high as a few BTC.
Aave V3 soon on Solana?
The governance in charge of Aave, the well-known lending protocol, is currently reviewing a proposal to launch Aave v3 on Neon EVM, a solution that allows Ethereum dApps to run on the Solana network.
The proposal, put forward by the Neon Foundation, aims to expand Aave's lending services to the Solana blockchain. The proposal suggests introducing three initial types of collateral—SOL, mSOL, jitoSOL—and one borrowable asset, USDC.
If the proposal is approved, Aave could use Solana's liquidity for its lending services. The document mentions that a version of Aave v3 has already been tested on Neon EVM's developer-focused testnet.
Hedera to allocate 4.86B HBAR tokens towards further development of the network and enabling its decentralized governance — 𝕏/hedera
Rabby.io wallet hints airdrop — 𝕏/Rabby_io
AltLayer to launch its token ALT and airdrop EigenLayer & TIA stakers — blog.altlayer.io
Venezuela president Maduro to terminate the Petro (PTR) state-sponsored cryptocurrency — Coindesk
Governance proposal on Lido’s forum to create an Ethereum roll-up for the protocol — research.lido.fi
Fantom reduces validator staking requirements by 90% to enhance network security — Coindesk
TrueUSD stablecoins depegs amidst large outflows — CoinMarketCap
The Socket/Bungee bridge has been exploited — 𝕏/spreekaway
Rocket Pool 𝕏 account has been compromised — 𝕏/Rocket_Pool
Blast launched its testnet — Decrypt
Animoca partners with Magnus Carlsen for a de-chess game — The Block
Donald Trump said he "will never allow the creation of a CBDCs" if elected in 2024. — 𝕏/WatcherGuru
“The bull market is just beginning. 2024 will be a choppy year with regards to price action, but I still expect by year-end, we will be at or above an all-time high in the market cap of Bitcoin and the entire crypto complex.” — Arthur Hayes
Celestia, the new (3,3) by Taiki Maeda
A good explanation of Dymension, Saga, Altlayer, Monad and other projects by Ignas
Mantle’s LST mETH restaking will soon be kicking off on EigenLayer for a brief enrolment window between Jan 29 and Feb 2 with a cap of 200K.
Despite its unfortunate launch, Manta staking still offers an attractive yield for MANTA long term holders, with APYs as high as 41%.
The Aptos incentives season has begun, got some idle stablecoins? Check out Aries Markets, paying you a 32.77% APY to supply USDT.
Manta Pacific’s STONE, backed by ETH 1:1 and redeemable in early March be bought at a discount due to its temporary illiquidity — as of today, you can get it for a 5.3% discount and redeem it for ETH in a couple of months (37.2% APY).
HashKey Group raised $100M in a Series A Round, and is now valued at $1.2B. Description: HashKey Group operates the Hong Kong-based crypto exchange.
Flowdesk raised $50M in Series B Round led by Cathay innovation, and is now valued at $250M. Description: French crypto market maker offering a comprehensive suite of crypto-financial services.
Klin raised $17M in an undisclosed Round led by 1k(x). Description: staking platform that enables users to participate in Ethereum’s security and earn rewards while doing so.
SkyArk Chronicles raised $15M in an undisclosed Round led by Binance Labs. Description: blockchain-based game that incorporates a variety of features, offering a unique and immersive experience.
DIMO raised $11.50M in a Series A Round led by CoinFund. Description: decentralized car data protocol, focusing on empowering drivers and fleets to collect and view their own car data while earning rewards through the DIMO token.
Want to know more? Head out to Crypto Fundraising and get real-time investing data.
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Disclosure: Authors may own crypto assets named in this newsletter. Stay on-chain is meant for informational and educational purposes only. It is not meant to serve as investment advice. Please consult your investment, tax, or legal advisor before making investment decisions.