Weekly Market Insight: May week 4

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Market Updates

21 May 2024

Headline News

- The State of Wisconsin Pension Fund invested $163 million in GBTC and IBIT according to the recent 13F filing in Q1 2024. The pension fund is not the only significant size fund that invested in Bitcoin. Millennium Management held a combined $1.94 billion in shares of 5 spot Bitcoin ETFs, Bracebridge Capital held combined $434 million in 3 spot Bitcoin ETFs and surprisingly more players took the orange pill.
- The US Senate voted 60-38 to repeal SEC's SAB 121 crypto accounting policy (requires companies disclosure their customers' crypto assets in their balance sheets that may lead to increased complexity of financial accounting and compliance burden), which then attention shifted to Biden administration's intent to veto the resolution in his previous statement.
- Bitcoin price increased by 7.6% on Wednesday after the release of the US inflation rate that matched market expectations.

Macro-Outlook

- The US annual inflation eased to 3.4% in April from 3.5% in March, in line with market forecasts. The probability of September to have the first rate-cut slightly increased from 61.2% to 64.8%.
- Retail sales in the US are unchanged month-over-month in April, lower than market forecast of 0.4% rise, suggesting consumer spending have slightly eased.
- On the other hand, US PPI in April increased by 0.5%, higher than market estimation of 0.3%.

Upcoming Economic Calendar including,

- Monday, May 20th 3:30am: Jerome Powell speech at the Georgetown Law Commencement Ceremony in Washington DC.
Powell was reported positive for Covid-19 and is working from home.
- Thursday, May 23rd 2:00am: US FOMC Minutes
- Friday, May 24th 8:30pm: US Durable Goods Orders in April

Weekly-Cryptos-Overview

- Microstrategy will be added to the MSCI World Stock Index, taking effect at market close on May 31st.
- CME Group announced to launch spot Bitcoin trading for its clients. Coinbase shares price dropped by 9.43% on the same day.
- MakerDAO founder, Rune introduced decentralised "PureDai" stablecoin, which is backed by Ethereum and liquid-staking-tokens with support of decentralised oracles. PureDai will be a free-floating peg stablecoin. Alternative to PureDai, NewStable will focus on compliance with regulations and real-world assets implementation, with freeze function enabled.
- Chainlink released a report of a new Smart NAV industry pilot between the Depository Trust and Clearing Corporation (DTCC), 10 financial institutions and Chainlink. The report demonstrated how DTCC and Chainlink make NAV data available across any blockchains for fund tokenization.
- Lens introduced Lens Network, which powered by zkSync stack. The network will be Validium chain (data availability off-chain) in the early stage and later envolves to Volition (with financial transactions processed using Ethereum ZK Rollup).
- CyberConnect has rebranded to Cyber together with its mainnet launch, which is powered by AltLayer, OP Stack and EigenDA.
- Robinhood launched Solana's stake service in Europe.
- Solayer introduced its Solana restaking solution, Shared Validator Network (SVN). Other notable and potential Solana restaking solution providers, including Picasso and Jito.
- Drift Protocol, a decentralised perpetual exchange on Solana, had launched its token.
- Fjord Foundry, a "fair-launchpad", introduced a staking mechanism which will be using the protocol revenue buyback and burn portion of the token and distributing the remaining to stakers.
- AO Games was introduced as the first gaming launchpad on AO the computer.
- Maverick Protocol V2 is live on testnet, which features better swap gas, AI programmable pools, ve-Factory and more.
- Avocado wallet introduced Chain Agnostic Payments, allowing users to send assets across multiple chains to several people all at once.
- Axelar is partnered with Deutsche Bank for participation in MAS's Project Guardian asset tokenization implementation.
- Bounce Finance introduced MBA, a synthetic token created by merging MUBI, BSSB and AMMX. The merging process is irreversible and transaction fees collected from the purchase of MBA will be distributed to AUCTION holders. It also introduced Bounce Booster, where users are required to deposit a BNB/FDUSD pair to earn from Binance Launchpool, funding rate arbitrage, AUCTION farming and access to Bounce Launchpad.
- pStake Finance announced building a Bitcoin liquid restaking solution in collaboration with Babylon.
- ALEX Lab, the largest AMM DEX in Stacks, was exploited using compromised private keys obtained via a phishing attack, resulting in 13.7 million losses in STX. The asset recovery effort is currently ongoing.
- Pump.fun, a "meme factory" on Solana network, was exploited through private key leakage, resulting loss of 12.3K SOL (around $2 million). According to Defillama, the protocol had $4.14 million of revenue in a week.

Upcoming Alpha: Token Unlock, Governance

- NVIDIA's Q1 earnings will be released on May 22nd, after the market, potentially bringing high short term volatility to AI-related tokens.
- May 23rd will be the first deadline for VanEck's spot Ethereum ETF application. The market estimates a 10% chance of the ETF will be approved by end of May in Polymarket and Grayscale ETHE is still trading at a 24% discount.

In the early hours of Tuesday morning, Bloomberg ETF analyst Eric Balchunas said that due to "increasingly political issue", the probability of ETF application approval was increased from 25% to 75%. According to reports, applicants are being asked to update 19b-4 filings on an accelerated basis by SEC.

- IntentX, a decentralised perpetual exchange, announced its token launch on May 23rd.
- GnosisDAO community proposed a $30 million buyback of GNO. The voting will end on May 24th.
- Fantom proposed to rebrand to Sonic, migrating FTM to S at 1:1 ratio. The new layer-1 will has a native layer-2 bridge connected to Ethereum, together with significant performance improvement.
- Blast has postponed its airdrop launch to June 26th.
- BVM teased v2 release in June.
- PYTH token unlocked on May 20th, amount representing 141.67% of the token supply.
- AVAX token unlocked on May 22nd, amount representing 2.5% of the token supply.
- OP token unlocked on May 29th, amount representing 2.22% of the token supply.
- PRIME token unlocked on May 31st, amount representing 4.24% of the token supply.

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