Crypto Market Pulse Weekly - 🚀 Ethereum Dencun Upgrade Went Live!

Ethereum Dencun upgrade went live. VanEck temporarily removes management Bitcoin ETF HODL. CoinShares acquires Valkyrie’s ETFs business.

Weekly Market Index

Last week’s crypto market price index dropped by -1.75%, while the volume and volatility indices were up +1.32% and +7.76%, respectively.

Bitcoin rose to a new all-time high of US$73,777 last week, but shortly dropped to near $64,500. Ether also dropped from $4,000 to $3,600. The release of higher-than-expected wholesale price data in the United States led to a shift in expectations regarding potential cuts in interest rates by the Federal Reserve. This has resulted in an increase in interest rates and a decline in the prices of risky assets.

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Chart of the Week

The much-anticipated Ethereum Dencun upgrade was successfully activated on 13 March with one of the most anticipated Ethereum Improvement Proposals (EIPs), EIP-4844, that introduced ‘data blobs’. These data blobs bypass the traditional ‘call data’ process to publish information on the Ethereum mainnet, providing lower transaction fees in Ethereum Layer-2 (L2) networks.

Subsequently, Ethereum L2 protocols have experienced a significant reduction in transaction fees, with some platforms seeing over a 90% decrease following the upgrade. Notably, Arbitrum, Optimism, zkSync, Base, Starknet, and other L2 platforms witnessed substantial drops in gas fees post-upgrade, with Optimism's median transaction fees decreasing to the range of $0.005 (from ~$0.44) and Arbitrum’s fees to $0.05 (from ~$0.41).

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Weekly Performance

Bitcoin (BTC) and Ether (ETH) fell by -1.2% and -7.2%, respectively, in the past seven days. Price action for other selected top-cap tokens was mostly negative. Layer-1 coins NEAR and SOL outperformed.

Selected key categories all fell in terms of market capitalisation change in the past seven days, led by Layer-2.

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News Highlights

• Bitcoin's market cap surged to $1.42 trillion, surpassing silver and pushing its rank higher as one of the world's most valuable assets.

• VanEck decided to eliminate the management fee for its spot Bitcoin exchange-traded fund (ETF), HODL, until 31 March 2025, in an effort to attract more investors and boost the fund's performance in the highly competitive Bitcoin ETF market. After the announcement, its spot Bitcoin ETF saw a record $119 million inflow on 11 March.

• European digital asset investment firm CoinShares acquired Valkyrie Funds, including the sponsor rights to their spot Bitcoin ETFs. CoinShares has also obtained Valkyrie Investments, the firm's investment advisory business, and the sponsor rights for their physically-backed Bitcoin ETF.

• MetaMask is testing a Mastercard payment card entirely on-chain, allowing users to spend crypto on everyday purchases globally. This collaboration between MetaMask and Mastercard aims to create the first truly decentralised Web3 payment solution, and the card will be issued by crypto payments provider Baanx.

• Thailand's Securities and Exchange Commission (SEC) has granted permission for institutional investors and high-net-worth individuals to invest in crypto ETFs, classifying spot Bitcoin ETFs as securities under the SEC Act.

• Goldman Sachs, BNY Mellon, and other financial heavyweights are testing an enterprise blockchain called ‘Canton Network’. This initiative aims to facilitate seamless transactions and settlements for tokenised assets across various financial services, with participation from major institutions like DRW, Oliver Wyman, and Paxos.

• The Hong Kong Monetary Authority (HKMA) has initiated phase two of its e-HKD pilot program to explore innovative uses for a potential CBDC, with a focus on programmability, atomic settlement, and tokenisation. This phase aims to test new use cases not covered in the initial phase and will run until mid-2025.

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Recent Research Reports

• Research Roundup Newsletter [February 2024]: We present to you our latest issue of Research Roundup, featuring trending market insights in February, charts of the month, and our deep dive into the DePIN market.

• DePIN: Crypto’s Rising Narrative: DePIN is currently one of crypto’s hottest narratives. We introduce what DePIN is, how it works, and the current market landscape.

• Alpha Navigator [February 2024]: Crypto and equities were up in February, while fixed income was under pressure. Interest rate decisions from major central banks upcoming in March.

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Recent University Articles

• What Is a Crypto Airdrop and How Do You Get One?: Here’s what airdrops are, how they work, and how you can get crypto airdropped into your wallet.

• What Is Immutable? How It Works and How to Buy IMX Token: Immutable X is a leading Layer-2 scaling solution for Ethereum, specifically designed to enhance the efficiency of non-fungible tokens (NFTs).

• What Is Celestia? All about TIA Token: Learn about Celestia, the first modular blockchain network with a pluggable consensus and data availability services for Layer-2 rollups.

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Catalyst Calendar

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Author

Research and Insights Team

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