CMC Market Pulse delivers actionable market insights, giving you all the key narratives and developments you need in under 5 minutes.
Market Overview 📉
The crypto markets saw largely muted movements this week, despite the release of several key pieces of economic data, including Core PPI and CPI, unemployment claims and retail sales. Bitcoin (BTC) traded within a $4,000 range between $58K and $62K, while Ethereum (ETH) traded in a $200 range between $2,550 and $2,750. The week ended with both BTC and ETH positive at 0.34% and 3.30% up respectively.
In line with price action, liquidations also remained muted, with daily liquidations around $100-200M. Funding rates have also remained largely untouched, with BTC funding in the negative range while ETH stays in the low positive range.
📌 Wallets controlled by the US Government holding seized funds from Silk Road have been moved, with 10K BTC being deposited into a Coinbase Prime deposit address — Link
📌 Goldman Sachs files their 13F filing, revealing more than $418M in BTC ETF holdings. Morgan Stanley also reported holdings of $187M in IBIT — Link
📌 Bitcoin mining firm, Marathon Digital secures $300M in funding through senior convertible notes, which has since been utilized to purchase 4,144 BTC ($249M) — Link
Why does it matter?
After a bloodbath the week prior, the market manages to hold on, even recovering some of its lost value over this week. U.S. economic data from August 15 indicates a robust economy, easing recession fears. Weekly jobless claims dropped to 227,000, highlighting a stable labor market, while retail sales jumped by 1.0% in July, the largest increase in 18 months, thanks to strong consumer spending. Despite a 0.3% decline in manufacturing due to temporary disruptions, the outlook remains positive. These signs of strength and slowing inflation suggest a likely ‘soft landing’ and the Federal Reserve might start a rate-cutting cycle without risking a recession.
Despite seemingly positive economic data on the CPI and PPI, crypto markets showed little strength, diverging from traditional equities markets. SPX, which tracks the S&P 500, experienced a V-shaped recovery and is 2.3% off its highs, and Gold is just 1.16% off its all-time high price. However, Bitcoin remains 21.4% from the highs of $73,750 reached in March. This could be due to the lack of risk appetite left in the crypto markets after many market participants were wiped out by the past five months of market weakness.
Altcoins continued to rise against BTC and ETH this week, with TOTAL3/BTC rising just over 1.4% this week. Among altcoins, we saw specific outperformance in modular coins including Celestia (TIA), and Dymension (DYM), while DeFi 1.0 coins also did well, with Curve (CRV) and Aave (AAVE) among the top gainers for the week.
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Narrative of the Week 📰
Wrapped BTC (WBTC) takes the headlines this week, amidst a sudden decision by BitGo to shift the custody of their WBTC product to multi-jurisdictional custody in Singapore and Hong Kong, raising alarm bells in the Ethereum DeFi space.
📌 BitGo makes the decision to migrate their WBTC product in a joint venture with BiT Global, which will take place in 60 days — Link
📌 DAI issuer, MakerDAO puts forth a proposal to delist WBTC as collateral for DAI. WBTC currently forms 10% of DAI’s backing — Link
📌 Amidst the chaos, Coinbase tweets out a cryptic tweet, hinting at a potential Coinbase-issued BTC wrapper on Ethereum, cbBTC — Link
📌 As the DeFi community fears the worst for WBTC, Threshold Network’s tBTC sees an uptick in interest, with market participants looking for the next best option — Link
Why does it matter?
WBTC has long been a staple in the Ethereum DeFi scene, putting capital from Bitcoin to use in the vibrant DeFi scene on Ethereum. For the longest time, the arrangement with BitGo was fine, with live proof of reserves available at all times on the WBTC website.
The recent move has sparked concerns due to Justin Sun’s involvement in the arrangement, who has a less than clean track record in his dealings with the TUSD stablecoin and Huobi/HTX. That said, there are skeptics on the other side of the fence, who feel that a Coinbase wrapped BTC product might be even worse than the new setup.
Many have also speculated on the financial standing of BitGo, especially with two past failed acquisitions by Galaxy Digital and Coinbase in the past, bringing into question whether the latest move was a last resort by the team.
Major Project Updates 🗓️
📌 Circle announces a collaboration with Apple, with the tap to pay with USDC feature coming soon to Apple’s iPhones, with the feature rolling out first in Australia, Brazil, Canada, Japan, New Zealand, the UK and the US — Link
📌 Top Ethereum wallet, MetaMask, teams up with Baanx and MasterCard to release the MetaMask card, enabling users to spend directly from their self-custodied wallet — Link
📌 Cosmos-based L1, Canto, went down for 33 hours on Sunday due to a glitch in the chains’ consensus mechanism. The chain has since resumed block production after a fix was deployed — Link
📌 Arbitrum passes a governance vote to enable native ARB staking to plan for future distribution of fees to stakers, as well as the introduction of stARB, a liquid staking token for ARB — Link
Why does it matter?
This cycle’s focus has been all about mass adoption and onboarding of the masses. What better way to onboard than to allow usage of crypto for everyday transactions?
With the integration of tap to pay using USDC on iPhones and MetaMask’s release of a wallet-linked debit card, spending crypto has never been easier. This is especially considering both USDC and MetaMask’s position in their respective markets, with MetaMask being the top Ethereum wallet and USDC being the second largest stablecoin.
DeFi Brief 🏦
Source: https://coinmarketcap.com/chain-ranking/
📌 Solana restaking layer, Solayer, arrives on mainnet, enabling actively validated services (AVSs) to deploy on Solayer and for stakers to delegate to specific AVSs — Link
📌 EigenLayer launches rewards for AVSs, enabling AVSs to reward stakers and operators. Additionally, the upgrade provides a UI for users to track and claim their rewards from AVSs — Link
📌 EigenLayer competitor, Symbiotic, launches their Devnet, allowing developers to test the integration of Symbiotic’s restaking in a sandbox environment. Their mainnet is currently slated for Q3 2024 — Link
📌 Symbiotic now supports WBTC for restaking, simultaneously onboarding several new partners to support the liquid restaking of WBTC on Symbiotic, including Swell Network and EtherFi — Link
📌 Ethereum restaking protocol, Renzo, partners with Solana liquid staking project, Jito, to launch ezSOL, a liquid restaking token for jitoSOL — Link
📌 Perpetuals DEX, dYdX, announces dYdX Unlimited, an upcoming upgrade for the chain which will introduce permissionless listings, a central liquidity vault, an affiliate program and more — Link
Why does it matter?
Restaking was a hot narrative at the start of the year with EigenLayer being one of the most hyped projects in crypto back then. Although the hype has largely died down since together with Q2’s bearish move, restaking is coming back in full swing with the recent developments in the space.
Symbiotic slowly catches up with EigenLayer with its Devnet release while EigenLayer makes strides in mainnet developments. On Solana, restaking is just kicking off, with Solayer achieving mainnet and Jito stepping into the arena with Renzo.
However, it remains to be seen how useful restaking is as a technology as well as the adoption of AVSs.
Meme Coins 🚀
📌 Ethereum co-founder Vitalik Buterin sells meme coins sent to his address, like Neiro, and donates over half a million worth of ETH to an animal welfare charity — Link
📌 Memecoin deployer, pump.fun sells off another 22.3K SOL, pushing their total SOL sold to 222K SOL. The total revenue generated on the platform since launch is 615K SOL (~$89M) — Link
📌 Justin Sun launches sunpump.meme, a pump.fun fork on the Tron blockchain. A $10M incentive program has also been announced with TronDAO to support growing projects launching on the platform — Link
Fundraises 💰
📌 Intent-centric Ethereum L2, Essential, raises $11M in a Series A funding round led by Archetype, with participation from Spartan Group, Mirana Ventures, IOSG Ventures, and more — Link
📌 AI project, Sahara Labs, raises $43M in total funding in a round led by Pantera Capital, Binance Labs and Polychain, with support from Sequoia, Tangent, and many others — Link
📌 Smart account infrastructure project, Rhinestone, raises $5M in a seed round led by 1kx, with participation from Circle, Coinfund, Lattice Fund and Alchemy, among others — Link
📌 Payments application, Sling Money, raises $15M in a Series A funding round led by Union Square Ventures, alongside Ribbit Capital and Slow Ventures — Link
📌 DeFi risk, analytics and growth consultancy firm, Chaos Labs, raises $55M in a Series A funding round led by Haun Ventures, with support from Lightspeed, F-Prime Capital, Wintermute — Link
Airdrops Abound 🎁
📌 Cross-chain bridge, DeBridge, announces their airdrop checker for the DBR token, which will be launched on Jupiter’s LFG launchpad. Top 10% claimers will be subject to a 50% vest for 6 months or an immediate 20% penalty if the full amount is claimed on launch — Link
📌 Omnichain perpetuals DEX, Orderly Network, announces their governance token, ORDER, which will enable stakers to earn a share of the platform’s trading fees — Link
📌 AI data layer project, Grass, announces the end of Epoch 7 and a snapshot, as well as a bonus epoch to reward users for downloading their new desktop application — Link
📌 Points trading platform, Pichi Finance, announces their token PCH as well as the upcoming token airdrop and airdrop checker. 2.5% of the total token supply will be allocated to the first airdrop — Link
Tweet of the Week 📝
Source: ScizRtrading
Scizr bets big (and wins big) on a Polymarket bet on Trump mentioning the word “Tampon” during his interview with Elon Musk. Never change, degens.
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