↘️Weekly Recap: Cryptocurrencies Pull Back Despite Fed and ETF Bullishness
Weekly Recap
Happy weekend Defiers!
It was a volatile week for cryptocurrency, with many top web3 assets retreating from their recently-posted year-to-date highs.
The week began with a three-day sell-off as investors took profits gleaned from the recent rally. Traders sent $2B worth of BTC to centralized exchanges — the largest in-flow to CEXes since the market turmoil surrounding the collapse of Terra in mid-2022.
While digital assets bounced back as mainstream markets rallied following the U.S. Federal Reserve leaving interest rates steady and tipping cuts for 2024, the combined crypto capitalization is down 2% from last week's high.
The market retracement came in spite of the U.S. Securities and Exchange Commission (SEC) confirming a fresh round of meetings with spot Bitcoin ETF hopefuls.
Several applicants updated their filings this past week, with Valkyrie, Invesco, Galaxy Digital, and Bitwise now making plans to exclusively support fiat-based “in-cash” share redemptions at launch if approved. The filings suggest the SEC is steadfast in its preference for in-cash delivery, despite BTC-based “in-kind” redemptions offering tax and other efficiency benefits to investors.
On-chain activity across the broader Ethereum ecosystem is booming. The recent uptick in Ethereum’s burn rate erased the supply inflation generated during the lull in September and October, with ETH’s supply tagging new post-merge lows. Booming activity on Linea amid its Voyage campaign has helped to propel Layer 2 adoption to new all-time highs, with L2 throughput, active users, and total value locked posting new records.
Ethereum users continue to be courted by companies and protocols incentivizing adoption with “points,” with Rainbow Wallet promising to reward early users and launching a vampire attack targeting MetaMask.
However, DeFi users were warned not to interact with dApps on Thursday after the connector library for Ledger, which facilitates connections between web3 wallets and decentralized applications, was compromised with malicious code. The vulnerability was short-lived, with victims losing just $480,000 before Ledger patched the exploit.
Donald Trump launched his third NFT collection, “Mugshots,” with tokens comprising artwork poking fun at the former-president’s ongoing legal battles. While Trump promised to ship pieces of the suit he was wearing while arrested to a handful of buyers, the floor price for many of Trump’s previous NFTs have tumbled significantly.
Bitcoin continues to attract years-old tech from Ethereum, with GFX Labs announcing plans to launch Uniswap v3 on the Bitcoin sidechain, Rootstock. The news comes as the Bitcoin network grapples with congestion caused by inscription-based fungible and non-fungible tokens.
The popular cross-chain messaging protocol, LayerZero, deployed its newly-announced v2 iteration on testnets across more than 40 blockchains. The revamped protocol aims to bolster decentralization and throughput.
Synthetix, the veteran DeFi protocol that pioneered yield farming in 2019, is revamping its tokenomics to do away with inflation. Stakers now exclusively receive trading fees as rewards, and can also access interest-free loans from the protocol.
Plus, Senator Elizabeth Warren’s latest attack aimed at the crypto industry has garnered support from a handful of senators. The Digital Asset Anti-Money Laundering Act seeks to impose KYC requirements on non-custodial wallet users, validators, and other web3 users.
And in this week’s podcast, Cami Russo spoke with Will Warren, the co-founder of 0x and Matcha, to learn about Matcha’s new cross-chain swap functionality. The Defiant founder also gives a quick recap of the week and shared her hot take on points in this week's Crypto With Cami.
Enjoy!
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Friday
- Spot Bitcoin ETF Issuers Kowtow To SEC Demanding In-Cash Redemptions Some prospective spot Bitcoin ETF issuers are kowtowing to the will of the U.S. Securities and Exchange Commission by abandoning immediate plans for “in-kind” share redemptions for fiat-based "in-cash" delivery.
- BONK Memecoin Just Had the 12th Most Successful Coinbase Debut Solana-based memecoin "BONK" had one of the most successful Coinbase debuts in the history of the exchange.
- Bitcoin Miner Raised $15M to Use Energy from Argentina’s Vaca Muerta Oil Field Bitcoin miner Unblock Global said it raised $15 million to use flared gas from Argentina’s Vaca Muerta, the world’s second-largest shale gas reserve, to power its operations.
Thursday
- There’s Actual Substance Behind the AI-Crypto Mashup Traders are betting on the crypto-AI mashup, pushing demand for tokens to feverish highs. Market cap of AI-related tokens has surpassed $9 billion this year, according to CoinGecko.
- Chainlink to Power Polygon zkEVM’s Data Feeds Chainlink, a crypto oracle provider that’s facilitated $9T worth of transactions, deployed its data on the Polygon zkEVM Layer 2. The launch allows developers to tap information more than 900 oracles.
- Approval Phishing Scams Raked In $1B Since May 2021 Cryptocurrency criminals have enjoyed explosive growth over the past two years thanks to the proliferation of approval phishing scams. According to Chainalysis, cyber criminals have drained more than $1B in funds since May 2021 via the hacking technique.
- LayerZero Launches 40+ Testnets For Newly Announced V2 Iteration LayerZero launched its v2 upgrade across more than 40 blockchains supported by the protocol. The revamped release will focus on streamlining third-party development, bolstering security, and improving throughput.
- Ledger Code Library Attacker Drains $480k After Compromising Dozens of Web3 Dapps A code library maintained by crypto wallet provider Ledger was compromised today putting web3 dApp user's funds at risk for more than five hours. Nearly $500,000 was lost to the hacker.
Wednesday
- Crypto and Mainstream Markets Rally After Fed Foreshadows 2024 Interest Rate Cuts Digital assets are rebounding with the broader markets following a three-day sell-off in response to the U.S. Federal Reserve leaving interest rates unchanged following strong economic performance in the United States.
- Trump Cuts Up His Suit in New NFT Card Collection Former U.S. President Donald J. Trump is trying to sell NFTs again. The new “Mugshots” collection seeks to poke fun at the legal battle Trump is currently embroiled in.
- Rainbow Wallet's Points Are Attracting Thousands of MetaMask Users Rainbow, a non-custodial wallet, announced a points system rewarding past users and mounting a vampire attack on MetaMask. Daily Rainbow users jumped from 100 to 2,200 in a single day in response.
- Coinbase Becomes Latest DLT Firm Embracing UAE With CeFi Smart Contract Platform Coinbase announced the launch of Project Diamond, an institutional-facing smart contract platform that will soon enter Abu Dhabi Global Market’s RegLab sandbox. The news comes as Abu Dhabi and other states within the United Arab Emirates work to foster a robust local CeFi sector.
- Crypto Markets Slump Despite SEC Meetings With Spot Bitcoin ETF Applicants The crypto markets are tumbling in spite of the U.S. Securities and Exchange Commission confirming a fresh round of meetings with prospective spot Bitcoin ETF issuers. The combined capitalization of crypto assets has crashed more than 7% since peaking at $1.65T on Sunday.
- Unstoppable Domains Expands Into LatAm And Asia in A ‘Calculated Move’ Unstoppable Domains, the largest web3 domain name company by number of domains registered, announced today it will add twelve new registrars as part of a widespread expansion into Latin America and Southeast Asia.
- Immutable zkEVM Invites Developers To Offset Gamer Gas Fees Immutable announced that its forthcoming gaming-focused Layer 2 network, Immutable zkEVM, will introduce fee-free experiences for web3 gamers. Developers building on the gaming-focused network can now abstract transaction fees away from players to improve user-experience.
Tuesday
- ETH’s Supply Tags New Post-Merge Low Amid Surging On-Chain Activity The supply of Ether has dropped to its lowest level since the network’s historic Shanghai upgrade, with ETH’s supply now down by more than 309,500 coins since The Merge last September.
- Layer 2 Starknet Unveils Plan To Distribute $3.5M in Fees To Developers The Ethereum Layer 2 Starknet, unveiled today a new pilot program that will reward a percentage of fees to the project's developers. The pilot program will allocate $3.5M or roughly 8% of all transaction fees "recollected."
- Linea Voyage Drives Record Activity On Layer 2 Activity on Linea, the recently launched Layer 2 network from Consensys, is surging amid its Voyage campaign. Transaction throughput on Linea tagged a new all-time high of nearly 15 transactions per second on Dec.10.
- Synthetix Tokenholders Vote To End SNX Inflation The community for Synthetix, a veteran DeFi protocol credited with pioneering yield farming, has voted to put an end to SNX token inflation. SNX tokenholders passed the proposal SIP-2043, ending the issuance of rewards in the form of newly-minted tokens.
- Crypto Sell-Off Deepens as Bitcoin and Ether Give Up Past Week’s Gains Traders are sending billions to exchanges as crypto gives up gains. Crypto holders sent $2B worth of Bitcoin to exchanges amid rampant profit-taking.
Monday
- Senator Elizabeth Warren's Anti-Crypto Bill Gains Momentum Senator Elizabeth Warren's bill to crack down on crypto's involvement in illicit activities continues to garner support in the Senate. The Digital Asset Anti-Money Laundering Act has gained support from five new senators, including three members of the Senate Banking Committee.
- Coinbase Lists SEAM Token as Airdrop and Liquidity Mining Program Begin Seamless Protocol's SEAM is the first token issued on the Base network to be listed on Coinbase, the largest crypto exchange in the U.S. by volume. Seamless launched a yield farming campaign to distribute the lion's share of SEAM's supply to users.
- GFX Labs is Deploying Uniswap V3 to Bitcoin Sidechain Rootstock GFX Labs is bringing Uniswap to Bitcoin. The company, which develops DeFi products, will deploy trading platform Oku later this week to the EVM-compatible Bitcoin sidechain, Rootstock.



