TL;DR

• The SEC approved spot Ethereum ETFs, which generated $1.054 billion in trading volume on the first day.
• Some of the Mt. Gox creditors begin receiving their long-awaited payouts.
• Bitcoin retraced after recent gains, and ETFs saw their first net outflows in two weeks.
• The approval of Ethereum ETFs has not yet significantly boosted ETH prices.
• Altcoins struggle, but meme coins shine as the market awaits a potential Q4 revival.
• IoTeX unveiled its Whitepaper 2.0, outlining a universal infrastructure plan for DePin.
• The top performers HNT, ENA, DODO, DYDX, and SOL showed mixed results this week.

Market Analysis

Review and Insights

• BTC Market — Over the past week, BTC surged to around $68,000 before consolidating around $64,000. While the overall upward trend from the previous week continued, the market experienced a slight pullback due to factors like the Mt. Gox incident. Currently, BTC is fluctuating within a narrow range with a cautiously optimistic outlook. Notably, after 12 consecutive days of inflows, Bitcoin ETFs experienced their first outflows on July 23, indicating potential selling pressure.
• ETH Market — The positive news of Ethereum ETF approval hasn’t translated into a strong upward momentum yet, but it has provided a solid foundation for future price action. ETH has been primarily trading between $3,430 and $3,510 this week. On July 25, ETH experienced a sharp drop to around $3,100, possibly due to selling pressure from Grayscale’s ETH Trust. Going forward, ETH prices may fluctuate within a wide range for some time until the selling pressure from Grayscale is fully absorbed.
• Altcoins — The altcoin market underperformed this week, but meme coins stood out. Many top altcoins have declined by more than 60% over the past few months, fueling market pessimism. Bitcoin’s recent rally has helped lift altcoin prices somewhat. Overall market capitalization has remained relatively stable this week.
• Macroeconomic Data — According to CME FedWatch, there is a 93.3% probability that the Federal Reserve will keep interest rates unchanged in August, and a 6.7% probability of a 25 basis point cut. Apart from positive developments in the crypto market, the performance of the US stock market, the possibility of a Fed rate cut, and influences from US politics could introduce volatility into the market. Investors should closely monitor market trends and adjust their strategies accordingly.

Weekly Focus

Ethereum Spot ETFs Officially Go Live

The U.S. Securities and Exchange Commission (SEC) officially approved the S-1 registration applications of multiple Ethereum ETF issuers, allowing Ethereum spot ETFs to begin trading. The first trading day was Tuesday morning at 9:30 AM Eastern Time. This approval marks a significant milestone in the development of the crypto market, opening up new investment avenues for investors.

According to Farside data, Ethereum ETFs had an initial asset value of $10.2 billion. On the first day of trading, BlackRock and Bitwise had substantial net inflows of $260 million and $200 million, respectively. Meanwhile, Grayscale ETHE experienced a net outflow of $480 million, accounting for nearly half of the total trading volume . Despite this, the first day still maintained net inflows exceeding $100 million.[1]

On the second trading day in the US market, the cumulative trading volume of Ethereum ETFs reached nearly $1 billion. As of the market close on July 24, the daily net outflow of Ethereum ETFs was $153.13 million, with a cumulative total net outflow of $46.35 million, and a total daily trading volume of $1.05 billion. Grayscale Ethereum Trust has a management fee of 2.50%, significantly higher than the 0.2% to 0.25% of other Ethereum spot ETFs, resulting in selling pressure caused by conversion outflows. On the second trading day, it experienced a net outflow of $484.1 million, making it the only fund with outflows. In the following week, there may continue to be outflows from Grayscale, and inflows into other Ethereum spot ETFs with lower management fees.

For traditional arbitrage funds, the launch of ETH spot ETFs opens up new market opportunities, including participating in ETH’s annualized funding rate arbitrage of up to 9% and utilizing the basis between CME futures contracts and spot prices for arbitrage. Before the launch of spot ETFs, the annualized return on basis arbitrage for CME ETH futures contracts was up to 17%. However, after the launch of spot ETF trading, CME contract holdings increased rapidly, and the price of ETH monthly futures contracts declined sharply, leading to a narrowing of the arbitrage space. This indicates that large-scale positions were established for ETF arbitrage on the first day. Subsequent increases in arbitrage buying will be slower and will require factors such as a rebound in ETH prices, increased market bullish sentiment, and rising funding rates.

Mt.Gox Begins Distributing Bitcoin to Creditors

As of July 25, Mt.Gox has transferred a total of 56,452.9 BTC (valued at approximately $35.58 billion) to five cryptocurrency exchanges, including Bitbank, SBI VC Trade, Kraken, Bitstamp, and BitGo, to facilitate the distribution of compensation payments. This process involves transferring BTC from Mt.Gox addresses to these platforms, which will then distribute the funds to eligible creditors.

A breakdown of BTC transfers to these exchanges is as follows:

07.05 - 1,544.6 BTC to Bitbank;

07.05 - 1,157 BTC to SBI VC Trade;

07.16 - 48,641.2 BTC to Kraken;

07.22 - 5,110.1 BTC to Bitstamp.

On July 25, Mt.Gox creditors began receiving Bitcoin on the Kraken exchange. At the same time, the market showed the BTC price at $65,838, with a 24-hour decline of 2.24%.[2]

Unlike the asset disposal by the German government, the compensation amount for the Mt.Gox incident is larger, and some creditors may choose to hold onto their Bitcoin. However, it is expected that some of the compensation will be sold in the next 1-2 weeks, which could still impact the Bitcoin market price. As of noon on July 25, the Bitcoin balance in the Mt.Gox address is 65,000 BTC, with a successful transfer of 77,000 BTC, representing a 54% completion rate. Investors should closely monitor the selling activities of Mt.Gox creditors for BTC and BCH starting this week and are advised to make trading decisions after the market has fully absorbed the potential selling pressure.

Weekly Spotlight

IoTeX Unveils Whitepaper 2.0, Outlining a Universal Infrastructure Plan for DePin

Over the past week, the market has shown significant interest in the IoTeX 2.0 whitepaper, a leading DePIN project. IoTeX 2.0 significantly enhances the efficiency of on-chain and off-chain interactions by introducing modular design and standardized interfaces. Its core innovations lie in two new modular structures: MSP (Modular Security Pool) and DIM (Decentralized Infrastructure Module). MSP adopts the concept of pooled security that has been proven in areas like AVS, and applies it to the DePIN sector for the first time. By utilizing a token-staking-based security consensus mechanism, MSP provides a trusted foundation for infrastructure projects in the DePIN sector to co-build, collaborate, supervise, and exit. The DIM module, on the other hand, serves as a general-purpose stack layer, focusing on addressing the challenges of off-chain data interaction with blockchain. It provides a standardized set of solutions for data processing, verification, and storage. Additionally, the IoTeX 2.0 whitepaper updates its economic model by introducing a deflationary burn mechanism based on network usage to maintain a dynamic balance and promote positive development.[3]

Overall, the DePIN sector has seen relatively slow development due to its complex on-chain and off-chain interaction structures. IoTeX 2.0 offers a universal super-infrastructure solution, which may accelerate the development cycle of projects in the entire DePIN sector and provide new possibilities for DePIN projects.

Trending Categories

According to Coingecko data, the three top-performing categories this week are DID, Solana Meme, and Modular Blockchain. In the DID category, Ethereum Name Service (ENS) has benefited from positive factors like the approval of the Ethereum ETF and the V2 upgrade, leading to a continuous price increase. In the Memecoin sector, tokens like WIF, MEW, and PEPE in the Solana ecosystem have experienced rapid growth.

Decentralized Identifier (DID) — Continues to rise this week, with a 7-day increase of 15.6%. This blockchain-based digital identity system empowers individuals with full control over their personal information, significantly enhancing privacy, data security, and identity portability. By providing a secure and reliable user authentication method for DApps, DID is revolutionizing digital identity.

Solana Meme — Solana Meme refers to meme coins created and traded on the Solana blockchain. These coins often draw inspiration from humorous or cultural elements and gain attention and value through social media and online communities. The Solana Meme category has continued to perform strongly, with a 12.7% increase over the past 7 days. Although these coins may be highly volatile and speculative, their popularity and success within the Solana ecosystem highlight the enduring influence of meme culture in the digital asset space.

Modular Blockchain — A modular blockchain is a blockchain design that employs a multi-layer architecture. By separating critical functions such as execution, settlement, consensus, and data availability into different layers, it optimizes the network’s scalability, security, and customization. This design not only increases throughput but also preserves decentralization and security. Recently, the modular blockchain category has performed well, with a 3.2% increase over the past 7 days.

Top Performers

According to CoinGecko, the top performers over the past 7 days are:

HNT — HNT is a star project in the DePIN category, a decentralized wireless network built on the blockchain. It primarily transmits data through wireless connections between IoT devices and rewards network users. This month, the project announced that it has surpassed 100,000 users, a 300-fold increase in a year. It also released its latest roadmap, planning to partner with major US telecommunications companies to further enhance its coverage and user engagement. Driven by the news, its token price has recently surged.[4]

ENA — According to a tweet from Ethena Labs [5], two issuers, BlackRock’s BUIDL issuer Securitize and Steakhouse Financial have applied for reserve fund grants. Currently, the Ethena Labs reserve fund has a size of $45 million. If the cooperation is reached, part of the Ethena Labs reserve fund allocation will receive RWA or reward assets from BlackRock’s BUIDL. Additionally, Securitize will provide $250 million in liquidity for USDe. For Ethena Labs, the allocation will bring additional cash management returns, but since the current $ENA empowerment is not linked to the project’s revenue, its actual impact on the token price will be much smaller than the expected hype from the good news. However, short-term hype of good news cannot be ruled out.

DODO — According to the Snapshot page [6], the DODO community has voted to pass a proposal of “Allocating 10M DODO Tokens to Incentivize BTC Pairs on Select Chains.” This move aims to utilize DODO’s Pegged Asset Pool to improve liquidity, attract a large trading volume, and generate revenue that can offset the provided incentives. Additionally, this strategy supports DODOchain as a liquidity settlement layer, facilitating future BTC transactions and creating more value for DODO holders. It is recommended to pay attention to the changes in trading volume on Select Chains in the future, which may have a positive impact on the price of $DODO.

DYDX — According to BWENews[7], DeFi exchange dYdX is in talks for a potential sale. It is recommended to pay attention to the impact on the token price in the future.

SOL — Franklin Templeton Digital Assets stated [8] that “Besides Bitcoin and Ethereum, there are other exciting and major developments that we believe will drive the crypto space forward. Solana has shown major adoption and continues to mature, overcoming technological growing pains and highlighting the potential of high-throughput, monolithic architectures.” This statement may imply that traditional asset management institutions are optimistic about the future performance of $SOL. It is worth continuing to pay attention to the development of the Solana ecosystem.

Data Highlights

Macro Funds

As of July 25, the total trading volume of the BTC ETF reached $1.656 billion, with a total market capitalization of $62.061 billion. After 14 consecutive days of net capital inflows, the BTC ETF saw a slight outflow of $77.8 million on July 23, indicating that external interest in cryptocurrency investment remains strong.

While net inflows into BTC ETFs have increased, the market capitalization of stablecoins has seen a slight uptick of 0.64% to $164.371 billion, indicating an acceleration of off-exchange funds entering the market. This could be attributed to the market’s lowered expectations for the ETH ETF launching this week and a decrease in investor appetite for high-risk assets.

Ethereum Gas Fees

Ethereum’s Gas Fees continued to stay at a single-digit level this week. On-chain activity saw a slight increase last week but continued to decline this week. Among the top 6 Gas consumers, Telegram trading bots Banana Gun and Maestro have consistently far surpassed various DeFi protocols for several weeks. One of Banana Gun’s main features is defending against massive/spam transaction attacks, allowing Sniper bot and Sell bot to function normally under congested blockchain conditions. Maestro protocol offers tools such as multi-chain (BSC and ETH) sniper bots, wallet trackers, and whale bots.

Bitcoin Ahr999 Index

The Ahr999 index, also known as the “Hodling Indicator,” has stabilized around 0.9 over the past week. This indicates that the price of Bitcoin relative to its realized value is now within a normal valuation range. According to the Ahr999 index, this could be a good time for dollar-cost averaging.

Market Opportunties

Project Airdrops

Airdrop project to watch this week: Symbiotic

Launched in June 2024, Symbiotic is a restaking protocol designed to secure decentralized networks through flexible staking. Backed by prominent investors like Paradigm and Cyber Fund, the project raised $5.8 million in its seed round. Symbiotic’s primary competitor is the well-known restaking protocol EigenLayer, which has secured over $100 million in funding and boasts a TVL exceeding $15 billion. Symbiotic has established partnerships with several projects to strengthen its ecosystem. These collaborations include LayerZero for cross-chain asset transfers, Ethena Labs for decentralized verification and asset transfers using Symbiotic, and Lido, a liquid staking protocol. As of July 25, Symbiotic’s total value locked (TVL) has surpassed $1.17 billion.

Although there has been no official announcement regarding airdrops or specific airdrop dates, Symbiotic has introduced a “Point” system. By depositing supported assets, users earn points. The longer the staking period and the larger the amount staked, the higher the points earned. Currently, supported assets for staking include wstETH, wBETH, cbETH, sUSDe, rETH, mETH, ENA, swETH, sfrxETH, and ETHx. In addition to staking directly on Symbiotic, users can also stake assets on Layer 2 DeFi protocols like Mellow Protocol to earn multiple points.

Reminder: Investors should pay attention to contract risks and protocol risks

Weekly Fundraising Report

Multiple projects successfully completed key rounds of fundraising and acquisitions this week, covering Bitcoin mining, gaming ecosystems, Layer 2 blockchain technology, NFT collections, DAO infrastructure, and Web3 innovative solutions. According to RootData statistics, from July 19 to July 25, a total of 22 projects announced receiving funding, with 5 projects securing funding above $10 million. Among the top 10 funding rounds, 4 were seed rounds. Following are the top 5 funding rounds:

Block Mining — On July 24, Riot Platforms acquired Block Mining for $92.5 million to expand its Bitcoin mining capacity. Block Mining is a provider of Bitcoin mining infrastructure and hosting services, offering advanced hardware and hosting facilities that enable miners to perform hash calculations using the latest mining equipment.

B3 — On July 22, B3 secured $21 million in seed funding led by Pantera Capital and Hashed. Founded by a team of Base/Coinbase alumni and OG ETH contributors, B3 is a horizontally scalable gaming ecosystem aiming to provide a broader range of gaming applications through Base technology.

Caldera — On July 24, Caldera secured $15 million in a Series A funding round led by Founders Fund and Dragonfly. Caldera focuses on developing high-performance, customizable L2 blockchain technology. Its custom blockchains (Caldera Chains) offer high throughput, low latency, and customizable features, optimizing the performance and user experience of decentralized applications.

Bitlayer — On July 23, Bitlayer completed an $11 million Series A funding round, led by ABCDE Capital and Framework Ventures. Bitlayer is a Layer 2 solution that provides Bitcoin-equivalent security and Turing completeness, aiming to bring secure scalability to the Bitcoin ecosystem and promote asset diversity and innovation.

Pudgy Penguins — On July 23, Pudgy Penguins raised $11 million in funding, led by Founders Fund and Fenbushi Capital. Pudgy Penguins is a collection of 8,888 NFTs designed to accelerate Web3 innovation through IP utilization and community empowerment. Each holder gains exclusive access to experiences, events, and intellectual property licensing opportunities.

What to Watch Next Week

Token Unlock

According to Token Unlocks data, several significant token unlock events are scheduled to occur in the next 7 days (July 26 - August 1).

1. Yield Guild Games (YGG) will unlock approximately 14.08 million tokens, representing 3.74% of the current circulating supply valued at around $7.54 million.
2. Ethena (ENA) will unlock roughly 14.89 million tokens, accounting for 0.87% of the current circulating supply and valued at around $7.31 million.
3. SingularityNET (AGIX) will unlock approximately 8.45 million tokens, representing 1.32% of the current circulating supply and valued at about $5.30 million.

Details of the unlocks are as follows (data as of July 23, 2024):

Crypto Calendar

The upcoming week will also witness several crucial events in the blockchain and cryptocurrency industry. In particular, the release of some significant macroeconomic data will have a substantial impact on the industry.

The Federal Reserve is set to announce its interest rate decision (upper bound) for the period ending July 31 at 2 AM Beijing Time on August 1, 2024. The previous rate was 5.50%, and the projected rate is also 5.50%. If the Fed hints at potential future rate cuts, it could boost investor sentiment in the stock and bond markets. Conversely, a hawkish stance might cause market volatility.

Multiple offline blockchain events will be held in Shanghai, Hangzhou, Malaysia, and Tokyo next week. The most notable event is ETH EDCON 2024, an annual Ethereum community development conference that invites influential industry leaders and projects from around the world to share information. This year’s event will feature a 5-day program of workshops, gatherings, and keynote speeches by industry leaders.

References

1. Farside，https://farside.co.uk/?p=1518
2. Arkham Intelligence，https://platform.arkhamintelligence.com/explorer/entity/mt-gox
3. IoTeX，https://github.com/iotexproject/files/blob/main/publications/IoTeX_2_0_Whitepaper_1.1_EN.pdf
4. Gate.io HNT，https://www.gate.io/zh/trade/HNT_USDT
5. Ethena Labs，https://x.com/ethena_labs/status/1815857621066457454
6. Dodobird，https://snapshot.org/#/dodobird.eth/proposal/0xb190411e833c8423c466abef6d08c80a8fe0830137050ddffb29b9f2870ba2e9
7. X，https://x.com/bwenews/status/1815776742285664492
8. X，https://x.com/FTI_DA/status/1815830495403626816

Gate Research
Gate Research is a comprehensive blockchain and cryptocurrency research platform that delivers in-depth content. This includes technical analysis, hot topic insights, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.

Click here to visit →

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.