CMC Market Pulse delivers actionable market insights, giving you all the key narratives and developments you need in under 5 minutes.
Market Overview 📉
The week kicked off with a dump, led by traditional equities, with the sell off continuing after the weekend as the bulls failed to take control of the market. The end of the week saw slightly better performance, with better supporting macroeconomic data, although price action remains lackluster. Total crypto market cap fell more than 10% this week, from $3.048T to $2.739T.
Bitcoin (BTC) finished the week down 5.16%, while Ethereum (ETH) performed much worse, closing at 11.52% down from the week before.
Daily liquidations spiked early in the week with the majority of the week’s liquidations occurring on Sunday and Monday. A total of $1.1B in longs were liquidated over these two days, with only approximately another $500M in longs taken out over the remainder of the week. Funding rates continue to show little to no life, with most continuing to chop within the 0-10% range, with some even falling negative, indicating a risk-off approach in general.
📌 Strategy (former MicroStrategy), announces plans for a $21B STRK issuance program involving issuance of its 8% series A perpetual strike preferred stock, which are convertible to Strategy’s class A common stock. - Link
📌 UAE-based AI and technology fund, MGX, invests $2B into centralized exchange, Binance, making this the largest ever single investment into any crypto company. - Link
📌 Rumble Video, a video streaming company in which Tether has made a significant investment into, announces its $17.1M purchase of 188 BTC at an average price of $91,000. - Link
Why does it matter?
The crypto market performance this week largely followed traditional equities, with equities seeing a continued sell off from the week prior. Despite CPI and PPI readings coming in better than forecasted, the bulls showed no signs of life as the markets quickly retraced their initial pumps. The S&P 500 fell 3.42% over the week, while the Nasdaq was hit slightly harder, falling 3.86% in the same period.
Bitcoin dominance surged this week, as altcoin belief continued to waver. Bitcoin dominance surged over 1.7% this week to 62.30% before retracing slightly to end the week at 61.67% as markets showed signs of stabilizing, up 0.7% from the earlier week.
Looking to altcoin, despite market weakness, several sectors of altcoins still did exceptionally well including relatively new tokens Story Protocol (IP) and Solayer (LAYER), which both saw double digit increases this week. Other strong performers included Celestia (TIA), Aethir (ATH) and gold-related tokens, PAX Gold (PAXG) and Tether Gold (XAUT), on the back of a new gold all-time high.
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Narrative of the Week 📰
Hyperliquid sees user confidence in the platform shaken as a whale trader extracts $1.86M in profits while causing the Hyperliquidity Provider (HLP) vault to suffer a massive loss.
📌 Hyperliquid trader, 0xf3F, opens a $300M ETH long on 50x leverage, removing margin from his account once his position is in profit. His position is liquidated much higher than his entry price, shifting the position to HLP, which loses $4M while clearing out the position. - Link
📌 Hyperliquid reduces leverage offered to 40x and 25x on BTC and ETH pairs respectively, in response to the loss taken by the HLP vault. - Link
📌 Hyperliquid further adds in a margin ratio requirement of 20%, which limits transfers of assets out of cross margin accounts when there are open positions on the account. - Link
Why does it matter?
The $4M loss incurred by the HLP vault, which wiped out the past 3 weeks of return from the vault, has shaken user confidence in the project. Since the ‘attack’, more than $130M in deposits have been withdrawn from the vault. If the recent measures are insufficient to stem the outflow, this could significantly impact the ability of Hyperliquid to support the deep liquidity required to process the trades it sees on a daily basis. Additionally, while new measures have been put in place to safeguard the protocol, many are unsure if it is sufficient to mitigate the risk of subsequent, similar attacks.
Major Project Updates 🗓️
📌 Offchain Labs, the team behind Ethereum L2, Arbitrum, has announced plans for buybacks of the ARB token as part of a strategic reserve for the project. - Link
📌 Coinbase L2, Base, acquires the team behind Iron Fish, a privacy-focused layer, to bring privacy-preserving primitives to the Base chain. - Link
📌 Social analytics platform, Kaito, has begun buybacks of the KAITO token using network fees, with 13,333 tokens repurchased from the open market, which is double the current daily emissions. - Link
📌 Sam Altman’s proof-of-humanity project, Worldcoin, launches World Chat, a private messenger application for verified humans, with in-built payment rails and end-to-end encryption. - Link
📌 ZkEVM L2, Scroll, unveils their roadmap for 2025, seeking to improve the security, performance and overall UX of the chain. Scroll seeks to achieve 10K transactions per second while maintaining sub-cent fees. - Link
📌 Move-based Ethereum L2, Movement, finally goes live with public mainnet. - Link
Why does it matter?
Arbitrum announces buybacks of the ARB token into their treasury to support ecosystem growth marks the latest entrant in a string of crypto companies launching their own token buyback strategies. The strategy saw great success in projects such as Hyperliquid and Jupiter Exchange, which saw their token prices react positively to the news. However, many are quick to point out that buybacks do not change the actual fundamentals of the project and its token. Ultimately, a project must still have a compelling product for the project to do well in the long run. Otherwise, buybacks are just a gimmick for a short-term pump.
DeFi Brief 🏦
📌 A controversial proposal has been initiated by the Gauntlet team, involving the deployment of Compound-Morpho vaults on Polygon, with several prominent X accounts weighing in. - Link
📌 Aave introduces Project Horizon, a new initiative by Aave focused on RWAs. Horizon’s first product will enable borrowing of USDC and GHO against tokenized money market funds. - Link
📌 Jupiter founder, meow, puts forward a proposal to front 280M JUP tokens from his own token allocation to pay for the token allocations of new Jupiter employees over the next 3-4 years, and in return, he receives a 220M JUP bonus in 2030. - Link
📌 EVM DEX aggregator, 1inch, uncovers a vulnerability involving resolver smart contracts utilising an obsolete implementation of their Fusion V1 contracts. No end-user funds were put at risk and actions have been taken to make the necessary updates. - Link
📌 USDC issuer, Circle, introduces CCTP V2, which enables Fast Transfers and Hooks. Fast Transfers drop transfer times from minutes to seconds, while Hooks enable greater automation over post-transfer actions through integration with smart contracts. - Link
📌 Cryptocurrency options and futures exchange, Derebit, introduces Ethena’s USDe as collateral on their platform, allowing traders to earn up to 9% APR for simply holding USDe. - Link
📌 Stablecoin protocol, Inverse Finance, introduces Monolith, which enables anyone to launch their own immutable stablecoin using any on-chain collateral. - Link
Why does it matter?
The proposal put forth by Gauntlet seems innocent on the surface, with the proposal benefiting Compound, which has been seeing declining market share over the past few years. With Aave pulling out of Polygon, an opportunity is now present for Compound to take their spot in the Polygon ecosystem. However, critics are quick to point out that the proposal fees like Gauntlet attempting to take control of Compound’s assets, with them operating as the Curator and Allocator. Additionally, while the proposal is currently zero-fee, it also states that a fee splitter might be implemented in the future, attracting backlash from DeFi users.
Meme Coins 🚀
📌 The Own The Doge community launches the COCORO memecoin, named after the newest addition to Atsuko Sato’s family. The memecoin was launched with Atsuko’s blessing. - Link
📌 Grok, the LLM developed by Elon Musk’s xAI, has deployed a memecoin, DebtReliefBot (DBR) on the Base blockchain, at the prompt of X account, coin_domin. - Link
📌 Argentine lawyer, Gregorio Dalbon, requests for an Interpol Red Notice to be issued for Kelsier Ventures’ Hayden Davis, one of the key figures behind the Argentine LIBRA memecoin. - Link
Fundraises 💰
📌 Payment network, Mesh, raises $82M in a Series B funding round led by Paradigm, with support from Consensys, QuantumLight Capital, and Yolo Investments, among others. - Link
📌 Interoperability protocol, Axelar, raises $30M in a private AXL token sale, with participants including Arrington Capital, Electric Capital, Laser Digital, Wagmi Ventures and more. - Link
📌 Creativity-focused AI protocol, Sogni, raises $2M in a pre-seed round led by Republic and Comma3 Ventures, with other investors including Coingecko, Contango Digital and more. - Link
📌 Multi-chain perpetuals DEX, MYX Finance, raises $5M in strategic funding, with participants including FL Foundation, Metalpha, Hashkey Capital, D-11 Labs, and more. - Link
📌 Binance announces its first ever institutional investment of $2B by UAE-based fund, MGX, making it the largest ever single investment into a crypto company and largest investment paid fully in crypto. - Link
Airdrops Abound 🎁
📌 Privacy-focused AI layer, Nillion Network, opens up claims for the NIL token airdrop, distributing rewards to early users, developers and participants in their Verifier Program. - Link
📌 Berachain opens BERA reward claims for users who deposited in Dolomite or D2 Finance’s 30 day markets. For 90 day markets, rewards will be unlocked on May 6th. - Link
Tweet of the Week 📝
Source: degentradingLSD
No crying in the casino.
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