TL;DR

• Bitcoin rebounded from a low of $52,500 but faced resistance, now fluctuating around $57,400.
• Stablecoins grew by 0.25%, with US BTC and ETH spot ETFs seeing slight net inflows this week.
• The US 10-year Treasury yield curve inverted for the first time since July 2022.
• Osmosis launched “Polaris,” an omnichain DEX expanding beyond Cosmos with enhanced UX features.
• Vitalik announced only to publicly support L2 projects that have reached Stage 1+.
• Caterpillar Coin suffered a flash loan attack, losing $1.4 million.
• Synthetix is launching SNAXchain; Stacks introduces an Asian foundation and plans a halving upgrade
• This week’s funding round covered various sectors including infrastructure, systems, and RWA, totaling $82.35 million

Market Analysis

Review and Insights

BTC — Over the past 7 days, BTC price has shown significant volatility. After testing support at $52,500 on Sep 7, BTC gradually rebounded but faced resistance near the key level of $58,500. Currently, Bitcoin is fluctuating around $57,400. Additionally, as the price rebounded, Bitcoin’s market dominance rose to about 57.5%.[1]

ETH — ETH dipped below its monthly low on September 7, hitting $2,180 before rebounding. Since then, it has flucutuated. The relatively weak recovery led to ETH’s market share falling from 14.6% to 14.1%, as more funds flowed into BTC. Current trading volume remains relatively stable, indicating the market may be in a wait-and-see mode. This suggests short-term price movements might not be too dramatic.[2]

Altcoins — Over the past 7 days, the total market cap of altcoins has declined, indicating weakened demand for risk assets. Although tokens like Fantom have shown strong performance, trading volume has decreased compared to previous weeks. BTC’s high market dominance has suppressed altcoin performance.[3]

Futures Market — The futures market exhibited notable volatility over the past week. BTC’s weighted funding rate gradually trended towards negative values, signaling strengthening bearish sentiment. The long-short ratio for BTC and ETH contracts across the network shows an increase in short positions during this period, particularly during price downturns when shorts gained dominance.

Macroeconomic Data — The U.S. August Non-Farm Payroll report showed an addition of 142,000 jobs, below the expected 165,000. The unemployment rate was 4.2%, meeting expectations. Following this data, the market estimates a 55% probability of a 50 basis point rate cut. As of September 7, the probability of a 25 basis point cut was 70%, and 30% for a 50 basis point cut. The actual rate cut magnitude will influence subsequent market trends.[4]

Stablecoins — Over the past seven days, the market cap of stablecoins increased by 0.25% to $170.29 billion. USDT continues to dominate with a 69.56% market share. Compared to last week, USDT’s market cap rose slightly by 0.36%, while USDC’s increased by 1.30%. Overall, the stablecoin market remained stable this week, with USDC showing a larger increase in market cap, though the scale of funds didn’t change significantly.[5]

Gas Fees — Ethereum’s on-chain activity has remained generally low recently, though the week saw notable fluctuations. Gas prices peaked at 37.7 gwei on September 6, while dipping as low as 2.38 gwei at other times.[6]

Trending Concepts

According to data from Gate.io and Coingecko, three crypto market sectors have shown remarkable growth over the past week: Gaming Blockchains, AI Agents, and Layer 2 solutions. These sectors have surged by approximately 22%, 18.2%, and 16.7%, respectively in the last seven days. The trending concepts for the last 7 days are: [7][8]

Gaming Blockchains — Approximately 22% increase over the past 7 days, with a market cap of about $4.65 billion.

The Gaming Blockchains sector focuses on decentralized platforms for managing and trading in-game assets. The growth in this area is driven by increasing integration of blockchain technology into gaming ecosystems. The recent market sentiment improvement and attention to some unreleased TON-based projects may have contributed to the strong performance of existing gaming platform tokens. Notable performers include SKL (SKale) and BEAM, which rose by 10.1% and 9.8% respectively in the past week.

AI Agents — Approximately 18.2% increase over the past 7 days, with a market cap of about $4.06 billion.

AI Agents are decentralized artificial intelligence projects built on blockchain, aimed at providing automated services for decentralized applications. The sector’s impressive performance may be attributed to the AI concepts highlighted in Apple’s September 10th event. Key players in this space, such as Fetch.ai (FET) and SingularityNET (AGIX), have seen increases of 18.5% and 20.6%, respectively. The potential of AI Agents continues to grow as AI and blockchain integration expands.

Layer 2 — Approximately 16.7% increase over the past 7 days, with a market cap of about $17.53 billion.

Layer 2 solutions aim to address scalability issues of main blockchain networks by increasing transaction processing capacity and reducing fees. This week, the Layer 2 sector has been particularly noteworthy, with market attention focused on its role in improving network throughput and reducing pressure on main chains. Standout performers in this category include WALV (Alvey Chain), LAI (LayerAI), and CYBA (Cybria), which have seen impressive gains of 118.7%, 39.0%, and 19.2%, respectively over the past week.

Top Performers

According to Gate.io data, the following cryptocurrencies have demonstrated significant growth and substantial market capitalization over the past 7 days: [9]

MOB — Approximately 37.51% increase over the past 7 days, with a market cap of $132 million.

MobileCoin is a privacy-focused payment token designed for everyday transactions, addressing security, transaction speed, and energy consumption issues on mobile devices. Its architecture ensures that transaction details are visible only to the parties involved, safeguarding user privacy. After a sharp decline at the beginning of the year, MOB has been consistently rebounding for three consecutive months.

SUPER — Approximately 32.49% increase over the past 7 days, with a market cap of $416 million.

SuperVerse is a decentralized platform focused on virtual reality and NFTs, encompassing NFT marketplaces, generation tools, and trading platforms. The project aims to attract users by building an open NFT ecosystem. Recently, new developments announced by SuperVerse on the X platform have caught market attention, potentially contributing to the token’s price surge.

APE —— Approximately 24.07% increase over the past 7 days, with a market cap of $459 million.

ApeCoin is the governance token launched by Yuga Labs, the team behind the Bored Ape Yacht Club (BAYC) project, and is widely used within the BAYC community. BAYC, an NFT collection on the Ethereum blockchain, has recently garnered attention due to its collaboration with the streetwear brand BAPE. The second season of their clothing line is set to launch online on September 14, which may be driving the price increase of APE.

Weekly Spotlights

Hot Topic Review

Raydium Introduces “Burn & Earn” Feature
Raydium has introduced an innovative “Burn & Earn” mechanism designed to enhance project credibility by allowing token teams to permanently lock their liquidity within the Constant Product Market Maker (CLMM). This ensures that traders continue to earn trading fees even after liquidity is locked. This feature is specifically tailored for CL pools with unlimited liquidity ranges. Once LP tokens are locked, providers cannot withdraw or modify their positions but can still claim fees and rewards via the portfolio page. Additionally, the liquidity page will display the percentage of locked assets in the pool, and this data is accessible through API.

“Burn & Earn” not only bolsters project credibility but also protects traders by locking liquidity. On Solana, the surge in popularity of meme tokens has led to a significant increase in user numbers. [10] Given the typically low market cap of these tokens, insufficient liquidity can lead to wild price fluctuations. By permanently locking liquidity, “Burn & Earn” effectively mitigates the market volatility risks associated with large-scale withdrawals and liquidity shortages, creating a more stable trading environment for traders and reducing potential losses from sudden liquidity droughts. This mechanism significantly improves the reliability of trading, decreases market instability, and provides token traders with a more robust trading platform.

Osmosis Launches Omnichain DEX “Polaris,” Expanding Beyond Cosmos
Osmosis recently unveiled “Polaris,” its omnichain decentralized exchange, signaling a significant expansion beyond the Cosmos ecosystem. This new platform embraces a diverse range of blockchain networks, including EVM, Bitcoin, Solana, TON, and Move. Polaris streamlines cross-chain asset management and trading through a unified interface, offering users seamless access to multi-chain liquidity and effortless trading capabilities. By abstracting existing liquidity venues and bridges, the platform achieves cross-chain functionality without requiring additional liquidity or custom integrations. Moreover, Polaris incorporates Osmosis’s privacy features, enabling users to enjoy a truly chain-agnostic and user-centric trading experience while safeguarding their trading strategies.

Vitalik Buterin Sets New Era for L2 Endorsements: Stage 1+ or Nothing
In a September 12 post, Vitalik announced that from next year, he’ll focus on publicly mentioning only L2 projects that have reached at least the first stage, regardless of his personal investments. This move aims to create space for emerging projects to grow. He noted that several ZK-rollup teams are expected to hit this milestone by year-end, emphasizing the need to maintain essential security measures while ensuring the proof system’s integrity. Vitalik views the first stage as a critical benchmark, requiring at least 75% council agreement to overturn the proof system, with over 26% of council members independent from the rollup team. This shift signifies L2 projects’ progression towards greater decentralization and security, ushering in an era of cryptographic trust.[11]

Stacks Establishes Asian Foundation with Initial $15 Million Grant
The Stacks Asia Foundation, launched on September 11, aims to boost the Stacks ecosystem’s growth in Asia with an initial $15 million fund and partnerships with strategic allies like DeSpread, Spartan Group, and SNZ. Focusing on key markets—South Korea, Hong Kong, Singapore, Japan, Southeast Asia, and the UAE—the foundation seeks to enhance asset liquidity and accessibility. It plans to achieve this by forging strong networks, expanding market presence, and promoting applications, while simultaneously driving Bitcoin DeFi ecosystem development. These efforts are expected to foster long-term regional growth, technological innovation, and improved asset liquidity in the cryptocurrency market.[12]

Security Incident

Caterpillar Coin Hit by Flash Loan Attack, Loses $1.4 Million
On September 10, Caterpillar Coin ($CUT) suffered a flash loan attack, resulting in a loss of approximately $1.4 million, with the token experiencing a 99% slippage. The core of this attack lay in the attacker exploiting vulnerabilities in the token’s price protection mechanism, manipulating both token reserves and the reward system.[13]

The attacker initially borrowed 4.5 million USDT and transferred it to their contract. They then created new contracts and conducted a series of transactions, significantly reducing the quantity of CUT tokens in the liquidity pool and profiting through multiple arbitrage operations. This process was repeated several times, allowing the attacker to extract substantial funds from the liquidity pool. After repaying the flash loan, the attacker netted a profit of about $1.25 million. This represents one of the most common techniques in flash loan attacks, where market control is achieved by exploiting slippage vulnerabilities during the flash loan process, ultimately leading to profit.

The price protection mechanism of CUT tokens involves multiple contracts, particularly an external contract linked to a liquidity pool. This contract lacked safeguards against price manipulation, allowing attackers to profit significantly during price fluctuations.

Project Highlights

Synthetix to Launch App Chain SNAXchain
Synthetix is set to launch a new governance cycle and introduce SNAXchain, an application chain built on Optimism Superchain. The election process kicked off with nominations on August 30, followed by voting on September 6, and the new governance cycle is set to begin on September 16. SNAXchain will act as the cornerstone for Synthetix’s governance as it expands into additional ecosystems and layer-2 networks, marking a crucial step in the protocol’s growth.[14]

Synthetix is a decentralized liquidity provision protocol built on Ethereum and Optimism, focusing on issuing and trading synthetic assets (synths). These synthetic assets are collateralized by the Synthetix Network Token (SNX), allowing users to create synthetic assets by locking SNX in contracts.

a16z Crypto Selects 21 Startups for Fall 2024 Accelerator Cohort
a16z recently unveiled the list of 21 companies selected for its Crypto Startup Accelerator (CSX) Fall 2024 cohort. These companies focus on various areas including decentralized finance (DeFi), artificial intelligence (AI), blockchain infrastructure, and consumer applications. Notable projects include Anera Labs, which focuses on cross-chain liquidity infrastructure; Banyan, leveraging AI to enhance work communication; Fermah, offering a universal zero-knowledge proof generation layer; Cork Protocol, specializing in on-chain credit risk pricing; and zkSpin, developing a highly parallel blockchain.[15]

Several companies from previous a16z CSX cohort have achieved remarkable success. Notable examples include Phantom, a leading wallet in the Solana ecosystem; Goldfinch, a decentralized lending platform; and FanCraze, which specializes in fan economies for sports and entertainment. These companies have secured investments ranging from millions to hundreds of millions of dollars and have attracted user bases in the millions, gaining industry-wide recognition. Investors would be wise to keep a close eye on the progress of these companies to identify potential market opportunities.

Data Highlights

U.S. ETF Spot Market Data
From September 7 to September 11 at 4:00 (UTC+0), Bitcoin ETFs’ total net asset value reached $52.2 billion, representing 4.59% of BTC’s market cap, with a cumulative net inflow of $17.04 billion. The BTC ETF market experienced net inflows this week, highlighted by a $117 million influx on September 10. Fidelity, Grayscale, and Ark 21Shares led the charge, contributing $63.16 million, $41.13 million, and $12.68 million, respectively. This market rebound triggered increased inflows, reversing the recent trend of persistent outflows.[16]

For Ethereum ETFs, from September 7 to September 11 at 4:00 (UTC+0), the total net asset value reached $6.53 billion, accounting for 2.28% of Ethereum’s total market cap. Despite a cumulative net outflow of $562 million over this period, September 10 saw a net inflow of approximately $11.44 million. Fidelity led the charge with $7.13 million, followed by BlackRock with $4.31 million.[17]

U.S. 10-Year Treasury Yield Surpasses 2-Year Yield, Ending Inversion Since July 2022
According to FRED data, the U.S. 10-year Treasury yield is 3.666%, while the 2-year yield is 3.660%, ending the inversion that began in July 2022. An inverted yield curve typically reflects strong market expectations for future Fed rate hikes.[18] The 10-year yield surpassing the 2-year yield may indicate market expectations that the Fed is nearing the end of its tightening policy.

The normalization of the yield curve (with long-term rates exceeding short-term rates) hints at potentially more manageable borrowing costs. This shift could enhance financing conditions for both businesses and individuals, potentially spurring investment and consumption—key drivers of economic recovery. However, it’s crucial to keep a close eye on future interest rate trends to see if this positive slope persists in the long run.

Stablecoin Market Cap Changes
According to DefiLlama data, as of September 12 at 00:00 (UTC+0), the stablecoin market cap rose by 0.25% over the past week to $170.428 billion. USDT maintains its dominance with a 69.56% market share. Compared to the previous week, USDT’s market cap inched up by 0.25%, while USDC’s grew by 1.27%. The stablecoin market remained largely stable, with the top three stablecoins—USDT, USDC, and DAI—all experiencing growth. However, lower-ranked stablecoins saw a slight decline in market cap.[19]

Weighted Funding Rates
As of September 11 at 11:00 (UTC+0), Bitcoin’s weighted funding rate stood at -0.026%, while Ethereum’s was 0.0041%. Over the past week, Bitcoin’s rate turned negative on September 7, whereas Ethereum’s remained largely positive. This suggests a weakening of long positions for Bitcoin contracts across the network, in contrast to Ethereum contracts, which are predominantly bullish.[20]

Market Opportunties

Project Airdrops

Airdrop projects to watch this week: Symbiotic

Symbiotic is a restaking protocol that offers more flexibility than EigenLayer. It supports a wider range of staking options, including various collateral types such as ERC-20 tokens. This innovative approach has propelled Symbiotic to become the second-largest restaking protocol after EigenLayer. With its modular design and support for multiple collateral types, Symbiotic breaks traditional restaking paradigms, bringing both innovation and flexibility to the space. In June 2024, the protocol secured $5.8 million in seed funding, led by Paradigm and Cyber Fund. [21]

How to participate:

Visit EtherFi, select Symbiotic Restaking, and stake wETH or other tokens to receive weETHs. By staking wETH in EtherFi’s Symbiotic Restaking Vault, you have the opportunity to earn:

• 1x Symbiotic points
• 3x EtherFi points
• 3x Veda points
• 2.8% annual yield reward

Note: 
The airdrop plan and participation methods may be updated at any time. Users are advised to follow Symbiotic's official channels for the latest information. At the same time, users should participate cautiously, be aware of risks, and conduct thorough research before participating. Gate.io does not guarantee the subsequent distribution of airdrop rewards.

Weekly Fundraising Report

This week, several projects successfully completed funding rounds, covering a wide range of applications in infrastructure, systems, and Real World Assets (RWA). According to RootData statistics, from September 6 to September 12, a total of 10 projects announced funding, amounting to $82.35 million. Here are the top three in terms of funding size:[22]

Syrupal Protocol — The decentralized options and structured financial products exchange Syrupal, founded by former engineers from Bitmain, MatrixPort, and TOP Chain, announced on September 10 its successful completion of a $25 million seed round. Several top crypto traders participated as investors. Syrupal provides options for mainstream cryptocurrencies, including BTC and ETH, offering various option strategies to help users hedge risks in different market conditions. The platform’s main product is already available on the Arbitrum chain and will gradually expand to other multi-chain environments.

PIN AI — On September 10, infrastructure company PIN AI secured $10 million in a pre-seed round. Investors included a16z CSX, Hack VC, and Blockchain Builders Fund (Stanford’s blockchain accelerator). PIN AI is developing the world’s first open-source Personal Intelligence Network (PIN)-an AI operating system that leverages smartphone and app data to enhance user control and privacy protection.[23]

Huma Finance — Huma Finance, a company focused on tokenizing Real World Assets (RWA), completed a $10 million funding round on September 11. This round was led by venture capital firm Distributed Global. Huma Finance plans to use these funds to expand its payment financing (PayFi) platform to the Solana blockchain and Stellar’s Soroban smart contract network.[24]

What to Watch Next Week

Token Unlock

According to Token Unlocks data, next week (September 13-19, 2024) will witness several significant token unlock events in the market. Most of these unlocks are valued at tens of millions of dollars or more, with a staggering total of $1.09 trillion worth of tokens set to be unlocked. Here are the top 3 token unlocks for this week:[25]

ARB — 92.65 million tokens will be unlocked on September 16 at 1:00 PM (UTC+0), accounting for 2.65% of the circulating supply. Of these, 56.13 million tokens (60% of this unlock) will be unlocked for the team.

STRK — 64 million tokens will be unlocked on September 15 at 00:00 (UTC+0), representing 3.6% of the circulating supply. Early contributors will unlock 33.57 million tokens, which is 52% of this unlock event.

APE — 15.6 million tokens will be unlocked on September 17 at 00:00 (UTC+0), accounting for 2.31% of the circulating supply. The Treasury will unlock 7.34 million tokens, which is 47% of this unlock event. The majority of the unlocked tokens come from the DAO treasury.

The unlock details are as follows:

Crypto Calendar

In the upcoming week (September 13-19, 2024), the blockchain and cryptocurrency industry will see several key events. Justin Sun has announced that he will submit a proposal on September 15 to further reduce transaction fees on the Tron network. Stacks is also expected to complete an upgrade on September 15, which will halve the STX production rate.[26]

The Mid-Autumn Festival will be celebrated from September 16 to 18, during which many Asian countries will have market closures due to the holiday.

On the macroeconomic front, the release of key data will significantly impact the industry. Notably, the Federal Reserve will announce its interest rate decision and release a summary of economic projections. This release will cover key areas such as economic growth, inflation, and the job market. These data points are crucial for understanding the future direction of the Fed’s monetary policy.[27]

References

1. Gate.io, https://www.gate.io/price/bitcoin-btc
2. Gate.io, https://www.gate.io/price/ethereum-eth
3. Gate.io, https://www.gate.io/bigdata/estimate
4. Yahoo, https://finance.yahoo.com/markets/
5. Coingecko, https://www.coingecko.com/en/categories
6. Ultrasound, https://ultrasound.money/
7. Coingecko, https://www.coingecko.com/en/categories
8. Gate.io, https://www.gate.io/price
9. Gate.io, https://www.gate.io/price
10. Dune, https://dune.com/queries/3304991/5535008
11. X, https://x.com/VitalikButerin/status/1834061075970683367
12. StacksAsia, https://stacksasia.foundation/introducing-the-stacks-asia-foundation
13. X, https://x.com/EXVULSEC/status/1833514743451292146
14. Synthetix, https://blog.synthetix.io/synthetix-governance-epoch-an-introduction-to-snaxchain
15. a16z, https://a16zcrypto.com/posts/article/announcing-the-csx-fall-2024-cohort/
16. SoSoValue, https://sosovalue.xyz/assets/etf/us-btc-spot
17. SoSoValue, https://sosovalue.xyz/assets/etf/us-eth-spot
18. Fred, https://fred.stlouisfed.org/series/T10Y2Y
19. Defillama, https://defillama.com/stablecoins
20. Coinglass, https://www.coinglass.com/pro/AvgFunding/ETH
21. Rootdata, https://www.rootdata.com/zh/Projects/detail/Symbiotic?k=MTI4MDM%3D
22. Rootdata, https://www.rootdata.com/zh/Fundraising
23. Decrypt, https://decrypt.co
24. Coindesk, https://www.coindesk.com
25. Tokenunlocks, https://token.unlocks.app/
26. PAnewslab, https://www.panewslab.com/zh/calendar/index.html
27. Jin10, https://rili.jin10.com/day/2024-09-16

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Disclaimer
Investing in the cryptocurrency market involves high risk, and it is recommended that users conduct independent research and fully understand the nature of the assets and products they are purchasing before making any investment decisions. Gate.io is not responsible for any losses or damages caused by such investment decisions.