Is the rise of ETH/BTC sparking a trend of profiting from copycat coins?

February 26, 2024

I. Mainstream exchange news

Coinbase has disabled trading for Status (SNT).

• Binance has completed the integration of Filecoin (FIL) on the FILEVM Network and opened deposits.
• Crypto exchange Kraken has filed a motion to dismiss a lawsuit by the US SEC.

II. Mainstream projects and trending events

• The Uniswap Foundation has proposed distributing protocol fees to UNI token holders who have staked and delegated their voting rights.
• JPMorgan plans to offer actively managed Bitcoin funds to its private wealth clients.
• EigenLayer TVL has exceeded $8 billion.
• Pandora stated that the latest version of ERC-404 is about to be officially released, awaiting a final audit.
• Registered investment advisory platform Carson Group has approved the listing of four Bitcoin spot ETFs.
• US Judge Richard Jones has approved a plea agreement for Binance to pay a fine of $4.3 billion.
• On March 14th, OP Labs will launch the upgrade plan for 4844 and Ecotone.
• Swan Bitcoin has started providing cryptocurrency services in the US through a partnership with Bakkt.
• Stablecoin USDe, backed by Ethena Labs, has seen its supply exceed $400 million.

III. Funding news

• MXC, Arbitrum's dedicated DePIN chain, has completed a $10 million funding round led by JDI.
• HackQuest, a web3 education platform, has completed a $1.1 million pre-seed funding round with contributions like STEPN and Gitcoin's co-founders.
• Flare, a Layer1 blockchain, has completed a $35 million private placement funding.

IV. Regulatory news

• South Korean financial authorities stated that decisions on the approval of Bitcoin spot ETFs will be made after comprehensive discussions.
• China's Supreme Procuratorate stated that virtual currencies have become an important breeding ground for facilitating cybercrime.

IV. Popular projects

Market overview

US stocks continue their record highs, led by significant growth in AI and tech stocks, including Nvidia. Nvidia's Q4 report for FY2024 outperformed expectations, pushing its valuation near $2T. Meanwhile, the surge in Bitcoin's price halted upon reaching $53,000, currently showing a downward trend. The market is poised for an adjustment if BTC fails to secure its position above $53,000, with support levels at $49,500 and $48,000. ETH/BTC notably rose, trading at 0.06 versus BTC, sparking a market trend of profiting from copycat coins.

BTC ETF 

As of February 23rd, the total net inflow for the BTC spot ETFs reached $5.63 billion, with a single-day net inflow of $230 million and a single-day trading volume of $1.09 billion. ETF net assets accounted for 3.76% of BTC's market value. Key observations include:

GBTC: A single-day net outflow of $44.25 million, cumulative net outflows of $7.44 billion, a single-day trading volume of $318 million, and net assets worth $22.72 billion.

IBIT: A single-day net inflow of $167 million, cumulative net inflows of $5.91 billion, single-day trading volume of $386 million, and net assets worth $6.65 billion. 

FBTC: A single-day net inflow of $52.47 million, cumulative net inflows of $4.11 billion, single-day trading volume of $225 million, and net assets valued at $4.73 billion.

The selling pressure from Grayscale's GBTC is reducing gradually. The net inflows to IBIT and FBTC have significantly increased, maintaining daily net inflows of more than $50 million since launch. The 10 BTC spot ETFs maintain more than $200 million daily net inflows. The short-term price of BTC is linked to the cumulative demand for ETFs. This has resulted in the recent trend coinciding with ETF trading times - during periods when ETFs are not trading, BTC prices tend to fluctuate.

Uniswap proposes to distribute protocol fees to staked and delegated UNI token holders

On February 23rd, the Uniswap Foundation announced on X (former Twitter) that the Snapshot vote for the Activation Uniswap Protocol Governance proposal will be released on March 1, 2024, with on-chain voting starting March 8, 2024. The proposal primarily includes three parts:

(1) Upgrade Uniswap protocol governance to allow permissionless and programmatic collection of protocol fees.

(2) Distribute all protocol fees proportionately to staked and delegated UNI token holders.

(3) Allow governance to continue controlling core parameters: deciding which pools have to pay and the size of the fee.

Rewarding protocol fees to token holders opens up more possibilities for UNI, which has seen a cumulative rise of 47% in the past 7 days.

Previously, Uniswap did not open protocol fees to avoid additional regulatory risk as the Uniswap Labs team is publicly known. If token holders could share protocol fees, UNI could have dividend behavior, thus greatly increasing its chance of being classified as a security.

This decision to share protocol fees may have been taken after careful legal consultation, in the context of Grayscale, XRP winning against SEC, and the approval of BTC spot ETFs. If implemented smoothly, it could further unlock the money-making potential of DeFi protocols.

Ethena TVL Surpasses $420M

The stablecoin protocol, Ethena, reports a Total Value Locked (TVL) of $427 million, underpinned by a 42.45% collateralization rate. The platform, accepting stablecoins like USDT, USDC, and DAI, tempts users with a competitive 24.04% APY for staked USDe. Initiated on February 19th, Ethena's Shard campaign introduces mini-events during different phases, set to conclude after reaching $1bn TVL or three months. Participants can collect Shards through the activities, with the expectation of future airdrops. User participation has reached 25,800 as of today.

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