TL;DR

• This week, BTC and ETH exhibited lackluster performance, declining by 1.4% and 3.3%, respectively. While BTC oscillated within a narrow range, ETH continued its downward trajectory.
• In a landmark deal, U.S. payment behemoth Stripe acquired Bridge, a stablecoin API company, for $1.1 billion, marking the largest acquisition in Web3 history.
• Japan maintains a cautious stance towards cryptocurrency ETFs, with the timeline for potential regulatory easing remaining uncertain.
• Tapioca DAO fell victim to a cyberattack, resulting in losses of approximately $4.4 million.
• On October 30, Celestia is set to unlock 175 million TIA tokens, valued at around $1.08 billion, representing 80.45% of its circulating supply.

Market Analysis

Review and Insights

• BTC Market ⸺ Over the past seven days, Bitcoin’s price declined by 1.4%. Since October 21, it has fluctuated between $66,500 and $68,000. Despite briefly dipping below this range on October 23 at 14:00, it swiftly rebounded with substantial trading volume, signaling robust buying pressure. Investors should closely monitor the critical resistance level of $68,000, as a successful breakthrough could potentially trigger further upward momentum.[1]

• ETH Market ⸺ Ethereum experienced a 3.3% drop over the last seven days. After momentarily reaching $2,770, the price retreated to a low of $2,451. Currently, ETH is trading within a descending channel, with the upper boundary serving as resistance. Traders should keep a close eye on the crucial support level of $2,450, as a breach could potentially catalyze further downward movement.[2]

• Altcoins ⸺ Over the past week, several sectors experienced notable gains, with AI Meme surging by 39.5%, DEX Aggregator rising 18.6%, and DePIN increasing 16.5%. These substantial upticks highlight the growing enthusiasm for cutting-edge blockchain applications and decentralized technologies.
• Futures Market ⸺ Bitcoin and Ethereum futures maintained positive weighted funding rates throughout the week, indicating sustained bullish sentiment among investors for both cryptocurrencies.
• Macro Data ⸺ On Monday, the U.S. Leading Index was released, showing a decline of 0.5%, surpassing the forecasted -0.3% and worsening from the previous -0.2%. This data highlights mounting signs of economic deceleration, as a falling Leading Index typically portends potential future weakness. In response, the market now anticipates a 92% probability of a 25-basis-point rate cut by the Federal Reserve in November, indicating a potential shift towards more accommodative monetary policy to bolster the economy and mitigate economic pressures.[3][4]
• Stablecoins⸺ The total market capitalization of stablecoins saw a slight uptick of 0.06% over the past week, reaching $172.529 billion. This modest increase suggests a gradual influx of off-exchange capital into the crypto market. [5]
• Gas Fees ⸺ Ethereum network activity showed a slight decrease compared to the previous week, with average transaction fees generally remaining below 10 gwei. However, during peak periods, fees occasionally spiked above 20 gwei. Notably, on October 18, gas fees surged to 62.7 gwei, likely triggered by a sudden influx of meme coin transactions. The speculative nature and market popularity of meme coins often lead to rapid increases in transaction demand, consequently driving up on-chain fees.[6]

Trending Concepts

According to Gate.io and Coingecko data, the AI Meme, DEX Aggregator, and DePIN sectors saw significant gains this week, rising by approximately 39.5%, 18.6%, and 16.5%, respectively, over the past seven days. Highlights are as follows:[7]

AI Meme — Up approximately 39.5% in the last 7 days, with a circulating market cap of about $1 billion.
The AI Meme sector refers to decentralized cryptocurrencies centered on AI themes, leveraging popular meme culture to attract users and investors. These tokens emphasize humor and entertainment, spreading rapidly through social media to create unique market phenomena.

The recent surge is likely driven by growing enthusiasm for AI-related meme culture. The quick rise in token prices has created a positive feedback loop, boosting activity in the meme sector and drawing more capital and attention. Notable tokens include ACT, GOAT, and FARTCOIN, which surged 256.2%, 123.8%, and 103.5%, respectively, over the past week.

Dex Aggregator — Up approximately 18.6% in the last 7 days, with a circulating market cap of about $1.9 billion.
Decentralized exchange aggregators (DEX Aggregators) enhance the efficiency and accessibility of crypto trading by aggregating liquidity from multiple DEXs. They help users avoid slippage on large orders, reduce transaction fees, and secure the best token prices.

The sector’s rise was primarily led by JUP, which surged 27.1%. This growth may be linked to increased trading volume in the Solana ecosystem and Grayscale’s consideration of adding JUP to its product offerings.

DePIN — Up approximately 16.5% in the last 7 days, with a circulating market cap of about $27.1 billion.
DePIN (Decentralized Physical Infrastructure Network) utilizes blockchain and token incentives to build real-world infrastructure across wireless networks, storage, geolocation, transportation, and energy sectors. This decentralized infrastructure improves resource efficiency and enhances security and reliability.

As DePIN technology develops and expands into more use cases, the sector has gained recognition, attracting increased capital inflows. Key contributors include DIMO, IAG, and HNT, which rose 51.4%, 28.9%, and 19.9%, respectively, over the past week.

Top Performers

According to Gate.io market data [8], the following altcoins have shown notable performance over the past seven days based on trading volume and price movements:

GOAT— Up approximately 121.3% in the last 7 days, with a circulating market cap of $700 million.
Goatseus Maximus is a Solana-based memecoin launched on October 11, supported by the AI bot Truth Terminal. Since its release in June, Truth Terminal has gained significant public attention and even received $50,000 in Bitcoin from Marc Andreessen, the founder of a16z [9].

This week, GOAT reached new highs amid growing interest in AI-related meme coins, with its market cap briefly hitting $800 million. The combination of enthusiasm for AI-blockchain integration and excitement within the memecoin community has driven its upward momentum.

DEEP— Up approximately 116.7% in the last 7 days, with a circulating market cap of $180 million.
DeepBook is a next-generation decentralized central limit order book (CLOB) built on the Sui blockchain, leveraging Sui’s parallel execution, sub-second latency, and low transaction fees to deliver high-performance on-chain trading. The platform offers deep liquidity and advanced price execution, catering to liquidity providers managing complex strategies.

The launch of DeepBook V3 on Sui Mainnet has provided robust infrastructure for developers and liquidity providers, especially with innovations in blockchain liquidity. This development likely attracted more participants, fueling its price surge. [10]

VIRTUAL— Up approximately 108% in the last 7 days, with a circulating market cap of $215 million.
Virtual Protocol focuses on creating plug-and-play gaming AI agents curated by humans and co-owned by contributors, enabling value flow in the gaming and AI sectors. Users can create and stake AI characters to generate revenue, and the protocol includes governance mechanisms allowing token holders to participate in decision-making.

The company’s AI bot Luna Virtuals launched its $LUNA token on October 20. As of October 24, 4:00 UTC, $LUNA reached a peak market cap of $75 million. This success boosted the parent token, $VIRTUAL, as the project gained recognition beyond the crypto sector, attracting the attention of AI professionals and increasing demand for Virtual-related offerings [11].

Weekly Spotlights

Hot Topic Review

Vitalik: Targeted Gas Fee Reductions Could Increase Ethereum’s TPS by 1.5x
On October 24, Ethereum developers Tomasz K. Stańczak and Vitalik Buterin discussed potential adjustments to Ethereum’s gas mechanism. Stańczak advocated for doubling the gas limit on Ethereum’s mainnet while recommending minimal repricing, focusing on adjustments to only a few opcodes and precompiles (approximately 5). Vitalik, however, proposed a more comprehensive plan, suggesting significant gas fee reductions. His proposal includes lowering EVM opcode costs from the 2-5 range to 1, the 6-10 range to 2, and selectively reducing logging and precompile gas costs by 75%. Vitalik argued that these reductions could increase Ethereum’s transactions per second (TPS) by 50% without compromising key performance metrics. Nevertheless, he expressed concerns that raising the maximum storage access limit could hinder Ethereum’s progress towards statelessness, which remains his primary concern [13].

This discourse highlights the diverse perspectives among developers on enhancing network performance. The Ethereum community continues to explore methods to improve user experience while preserving decentralization and avoiding excessive storage and computational demands. The ongoing debate underscores the complex balance between scalability, security, and decentralization in blockchain development.

Japan Remains Cautious About Cryptocurrency ETFs Amid Regulatory Uncertainty
Despite the approval of spot crypto ETFs in markets like the U.S. and Hong Kong, Japan maintains a cautious stance toward cryptocurrency ETFs. While Japan aspires to be a crypto-friendly nation, tax and regulatory barriers remain significant obstacles. Current laws prohibit the inclusion of crypto assets in investment trusts such as ETFs, and crypto investment profits are taxed at up to 55%, compared to only 20% for ETFs, making the latter more attractive to investors.

Some major asset managers are preparing for potential regulatory changes. Franklin Templeton has partnered with SBI Holdings to develop digital asset products, including crypto ETFs. While this collaboration suggests a possible easing of restrictions, Japan’s Financial Services Agency has not committed to approving spot crypto ETFs. Past scandals and concerns over the risks of crypto assets remain key reasons for the cautious regulatory approach [14].

Vietnam Unveils ‘National Blockchain Strategy’, Aiming to Create 20 Top Blockchain Brands by 2025
The Vietnamese government recently released its ‘National Blockchain Strategy’, outlining plans for blockchain development through 2025 and setting ambitious goals for 2030. The strategy aims to build 20 internationally recognized blockchain platforms, products, or services by 2025. Additionally, Vietnam will establish at least three blockchain testing centers or special zones in major cities, creating a nationwide blockchain network.

By 2030, Vietnam hopes to rank among the top 10 blockchain training and research institutions in Asia and gain significant influence in the industry. The government’s emphasis on blockchain reflects not only economic ambitions but also a desire to enhance global technological competitiveness. By creating regional test centers and special zones, Vietnam aims to provide practical environments for blockchain startups and R&D, accelerating the adoption of new technologies. Talent development is also a key focus, positioning Vietnam as a leader in blockchain innovation in Southeast Asia [15].

Chinese-Speaking North Korean Hackers Target Crypto Professionals’ TG/X Accounts
On October 23, several crypto industry professionals reported that their Twitter (X) and Telegram accounts were hacked. Security investigations revealed that the attacks originated from the North Korean hacker group ‘DangerousPassword’. Notably, these hackers are proficient in both popular crypto terminology and the Chinese language. One victim mentioned that he did not click on any phishing links, and the exact cause of the breach remains under investigation [12].

This incident underscores the growing sophistication of hacking techniques. Even without clicking suspicious links, users may still fall victim to attacks. Crypto professionals and users are advised to exercise caution, especially when using public WiFi, and avoid conducting sensitive transactions in such environments. Additionally, any unexpected links or requests from “friend accounts” should be treated with suspicion. To mitigate the risk of account theft, adopting stronger login methods, such as two-factor authentication (2FA) and regularly changing passwords, is recommended.

Security Incident

Tapioca DAO Hacked, Losses Estimated at $4.4 Million
On October 18, Tapioca DAO experienced a major security breach, with hackers stealing approximately $4.4 million in cryptocurrency, causing the price of the TAP token to plummet by more than 95%. Tapioca DAO is a cross-chain money market built on LayerZero. The attack employed social engineering techniques, leading to the compromise of private keys and the unauthorized transfer of funds. This theft is connected to recent hacking incidents involving other projects such as Nexera, Concentric, Masa, SpaceCatch, Reach, Serenity Shield, and MurAll, which were all targeted through fake job scams [16].

Social engineering attacks manipulate human behavior to obtain sensitive information or system access. Attackers exploit trust, curiosity, or carelessness to trick individuals into revealing passwords, clicking malicious links, or performing insecure actions.

During the Tapioca DAO attack, the ownership of a core contract was transferred. The hackers swapped the stolen TAP tokens for 591 ETH, causing a 93% drop in the token’s value. They then moved the stolen funds via the Stargate bridge to the BNB Chain. The suspicious address on BNB Chain now holds around $4.7 million in BSC-USD and USDC. Following the attack, the Tapioca DAO team collaborated with security firm SEAL911 and successfully transferred 1,000 ETH (approximately $2.7 million) to a secure address, preventing further losses. However, the hackers still control a portion of the stolen funds, and the team is actively working to recover the remaining assets.

This incident serves as a reminder to the crypto community about the importance of private key management and vigilance against social engineering attacks. The use of fake job offers to gain access to private keys highlights the need for stronger security practices within project teams. For DeFi projects, raising internal security awareness and implementing secure multi-signature mechanisms can significantly reduce such risks. Regular smart contract audits and partnerships with third-party security firms are also essential for mitigating potential threats. In the fast-evolving crypto market, prioritizing security is critical for long-term success.

Project Highlights

Chainbase
The blockchain data network Chainbase recently ranked first on the leaderboard of popular Web3 projects. In late August, Chainbase secured $15 million in Series A funding. Chainbase is an omnichain data network whose core mission is to provide a transparent, reliable, and permissionless data layer for the AI era. Through modular design, it enables cross-chain data interoperability and programmability, simplifying the construction and use of data models.

Key features of Chainbase’s omnichain data interaction layer include [17]:

1. Integrating blockchain data to bridge fragmented chains and provide easy access to data for AI and Web3 applications.
2. Utilizing dual-chain technology to support high-throughput and low-latency data processing, improving cross-chain interoperability and security.
3. Incentivizing network participants through the CBT token to ensure sustainable network growth.
4. Launching the Theia large model to simulate and predict blockchain data, enhancing users’ understanding of blockchain dynamics.

On October 11, Chainbase announced the open-sourcing of its cryptocurrency large language model Theia-Llama-3.1-8B, which optimizes both performance and resource usage. This move strengthens Chainbase’s position in the Web3 data analytics space, attracting more developers and users while advancing its ecosystem. Several months ago, Chainbase also announced a deep collaboration with Alibaba Cloud and launched Chainbase Genesis, a comprehensive omnichain data network. Users can earn UNLIMITED tokens by verifying addresses, referring friends, and completing tasks [18]. Looking ahead, users can track Chainbase’s progress in AI model applications and cross-chain data ecosystem expansion as well as its continuous innovation and collaborations in the Web3 data analytics field.

Data Highlights

Macro Funds
As of October 24, 2:00 (UTC+0), the total net asset value (NAV) of BTC ETFs stood at $64.3 billion, with cumulative net inflows exceeding $21.03 billion. The BTC ETF market remained relatively calm this week. Notably, the U.S. Securities and Exchange Commission (SEC) approved multiple Bitcoin ETF options products to be listed on Cboe and NYSE American, including options for funds by Fidelity, ARK, Grayscale, and Bitwise. The SEC’s approval of these Bitcoin ETF options marks a significant milestone for the crypto market within mainstream finance, likely enhancing market liquidity, attracting more institutional investors, and providing broader recognition and long-term benefits for Bitcoin ETFs [19].

As of October 24, 2:00 (UTC+0), the total NAV of Ethereum ETFs reached $6.99 billion, with cumulative net outflows of $488.58 million. This week, Ethereum ETFs recorded a net outflow of $8.86 million. Additionally, BlackRock updated its holdings for the iShares Ethereum Trust ETF. As of October 16, the ETF held 425,000 ETH, with a market value exceeding $1.1 billion [20].

Over the past seven days, the total stablecoin market cap rose slightly by 0.06% to $172.529 billion, with further inflows of off-exchange capital. This week, Dante Disparte, Global Policy Chief at Circle, mentioned that the UK might introduce stablecoin legislation within a few months. Furthermore, Federal Reserve Governor Waller expressed support for tokenization and stablecoins. These favorable developments are expected to further expand the stablecoin market and drive mainstream adoption [21].

Bitcoin Buy/Sell Ratio
This week, after a recent rise, Bitcoin experienced a pullback. In the short term, there may be signs of a rebound, but overall, it still faces some downward pressure. As of October 24, 2:00 (UTC+0), the total network contract liquidation volume in the past 24 hours exceeded $279 million, with long contract liquidations exceeding $202 million. Over the past 7 days, the Bitcoin buy/sell ratio has been negative for more than half of the time. The current buy/sell ratio is approximately 1.07, indicating that market participants are optimistic about Bitcoin’s short-term price trend. [22]

Weighted Funding Rate
As of October 24, 2:00 (UTC+0), the weighted funding rate for Bitcoin positions is 0.0123%, while for Ethereum positions it is 0.009%. Over the past seven days, the weighted funding rates for Bitcoin and Ethereum have been generally positive, with the overall Bitcoin/Ethereum contract long/short ratio favoring long positions. [23]

Market Opportunties

Project Airdrops

Airdrop project to watch this week: Wukong

WuKong is the first Meme-style ‘Journey to the West’ themed NFT project in the market. It will launch the largest airdrop in Solana’s history, targeting Solana phone 1st and 2nd generation users, active Raydium users, and holders of well-known Solana Memecoins and NFT Collections. [24]

The WuKong NFT will officially start minting on October 23 at 12:00 (UTC+0), with a total supply of 10K. Minting one WuKong NFT will earn an airdrop reward of 100,000 WuKong tokens. Participants can also join the WuKong token mining activity. The earlier you participate in mining, the more tokens you can mine, with a total of 500 million WuKong tokens available for mining. Minting 5 NFTs will earn a golden hoop, which provides 1.5 times the mining power of a WuKong NFT.

How to Check Airdrop Eligibility:

1. Visit the airdrop official website: https://ewukong.xyz/
2. Connect your wallet and participate in minting WuKong NFT

Note:
The airdrop plan and participation methods may be updated at any time. Users are advised to follow Wukong’s official channel 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.The airdrop plan and participation methods may be updated at any time. Users are advised to follow Wukong’s official channel 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, multiple projects successfully completed fundraising, covering a wide range of applications in infrastructure, DeFi, gaming, and other fields. According to RootData statistics, from October 18 to October 24, a total of 10 projects announced funding, amounting to $1.15 billion. Here are the top three in terms of funding size: [25]

Bridge — Bridge is a stablecoin-driven liquidity platform offering payment, cross-border transfer, and foreign exchange services. Its APIs enable companies to provide digital dollar-based services to their customers. On October 21, Stripe, a major U.S. payment giant, acquired Bridge.xyz for $1.1 billion, marking the largest acquisition in the crypto industry to date. This move by Stripe could potentially set a new trend in the market, influencing future payment methods and financial ecosystems.

Party Icons — On October 24, crypto gaming investment firm Bitkraft Ventures led a $9 million seed round for Web3 mobile gaming platform Party Icons. IDG Capital and The Sandbox co-founder Sebastien Borget were among the investors. Party Icons intends to use the funds to develop games and social experiences, while also strengthening its Web3 infrastructure.

Karpatkey — On October 22, Karpatkey, a provider of on-chain treasury management solutions for DAOs, secured $7 million in a funding round. AppWorks Venture was among the investors. The company plans to use the new capital to expand its services to more DAOs and accelerate its expansion into traditional financial institutions.

What to Watch Next Week

Token Unlock

According to Token Unlocks data, next week (Oct 25-31, 2024) will see several important token unlock events in the market. The top 3 unlocks for this week are as follows:[26]

TIA is scheduled to unlock approximately 175 million tokens on October 30 at 2:00 PM UTC, representing 80.45% of its circulating supply, valued at up to $10.4 billion. The tokens will be distributed to the project’s initial core contributors, R&D personnel, Series A and B investors, and seed round investors. This unlock may impact the token price.

OP plans to unlock about 31.34 million tokens on October 31 at 12:00 AM UTC, accounting for 2.5% of its circulating supply, valued at approximately $54.22 million. Of this, core contributors will unlock 16.54 million tokens, representing 52.7% of the total unlock.

YGG is set to unlock about 14.08 million tokens on October 27 at 2:00 PM UTC, comprising 3.62% of its circulating supply, valued at approximately $7.33 million. The community will unlock 5.32 million tokens, accounting for 37.8% of this unlock.

Crypto Calendar

The blockchain and cryptocurrency industry has several key events lined up for the coming week. Arbitrum will conclude its proposal voting for token swaps with blue-chip projects on October 25, aiming to exchange tokens with 3-7 projects, with each project capped at 500,000 ARB tokens. Notable conferences scheduled include Money 20/20 USA (October 27), Chainlink SmartCon (October 30), and Blockchain Conference Africa (October 31). [27]

On the macroeconomic front, several significant events are expected to impact the industry. The IMF-World Bank Annual Meetings will be held from October 25 to 26. Bank of England Governor Bailey is set to deliver a speech on October 26, while European Central Bank Executive Board member Panetta will speak on October 31. These speeches, along with the release of the Beige Book, will address crucial areas such as economic growth, inflation, and employment, offering valuable insights into potential future monetary policy directions. [28]

References

1. Gate.io, https://www.gate.io/trade/BTC_USDT
2. Gate.io, https://www.gate.io/trade/ETH_USDT
3. Jin10, https://rili.jin10.com/day/2024-10-20
4. CME Group, https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
5. Defillama, https://defillama.com/stablecoins
6. Gasnow, https://gasnow.io/
7. CoinGecko, https://www.coingecko.com/en/categories
8. Gate.io, https://www.gate.io/price
9. X, https://x.com/pmarca/status/1846374466101944629
10. X, https://x.com/DeepBookonSui/status/1845770720481013910
11. X, https://x.com/virtuals_io
12. News，https://www.techflowpost.com/newsletter/detail_62169.html
13. X, https://x.com/VitalikButerin/status/1849338545498210652
14. Financial Times, https://www.ft.com/content/499131cf-4a75-48fb-b7d3-1c10cd40311c
15. Vietnam，https://www.vietnam.vn/en/chinh-thuc-ban-hanh-chien-luoc-blockchain-quoc-gia/
16. CyversAlets，https://x.com/CyversAlerts/status/1847246656061739184
17. Rootdata，https://www.rootdata.com/zh/Projects/detail/Chainbase
18. Chainbase，https://x.com/ChainbaseHQ/status/1824385428813910125
19. SoSoValue，https://sosovalue.xyz/assets/etf/us-btc-spot
20. SoSoValue，https://sosovalue.xyz/assets/etf/us-eth-spot
21. Defillama，https://defillama.com/stablecoins
22. Cryptoquant, https://cryptoquant.com/asset/btc/chart/derivatives/taker-buy-sell-ratio
23. Coinglass，https://www.coinglass.com/FundingRate
24. Wukong, https://ewukong.xyz/
25. Rootdata, https://www.rootdata.com/zh/Fundraising
26. Token Unlocks, https://token.unlocks.app/
27. PANews, https://www.panewslab.com/zh/calendar/index.html
28. Jin10, https://rili.jin10.com/day/2024-10-25

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