1. Industry overview
I. Overall Market Trends
Last week, BTC performed a drop followed by a rise. As previously advised, "If the uptrend line of $21,970 is broken, a large drop will occur again, and it is not recommended to go long temporarily. The support below can be referred to as the previous prediction of the support near $21,350 and $20,225." In reality, the market dropped to around $19,765. On Monday morning, with the help of the positive news of the Federal Reserve's rescue, the market rebounded quickly, testing the vicinity of $22,600 at the highest.
Currently, the short-term support below can be referred to as the vicinity of $21,600 and $20,700, while the short-term resistance above can be referred to as the vicinity of $22,660 and $24,000. Considering the breaking of the previous downtrend and the persistence of the 2B top pattern, and the current behavior belongs to the rebound of the previous uptrend line, the market remains strong in the short term and may not directly reverse, but the sentiment may ease, making it possible to operate with high short and low long. If the above technical key positions are broken, the strategy may be reconsidered. The medium-term resistance is still around $25,200.
The drop last week was caused by multiple factors. On the technical side, the 2B top pattern was formed, while on the news side, the strong expectation of a stronger US dollar interest rate increase, Biden's proposal to impose a 30% tax on the mining industry, and the consecutive liquidation of HT also contributed to the drop. In addition, the drop is also related to the linkage with the US stock market, especially Silicon Valley Bank, which faced a liquidity crisis, causing its stock price to plummet by 60%, and Silvergate fell by nearly 42%. However, Silvergate rose by 19% before the market on Friday, which I predicted at the time: panic has eased, and the cryptocurrency market should also have a temporary breathing opportunity. The previous drop in the market was an overreaction.
On Monday morning, several positive news led to a rebound in the market. In addition to the Federal Reserve ensuring the safety of users' funds at Silicon Valley Bank, the probability of a US interest rate hike and the expected terminal interest rate level of the Federal Reserve have both decreased, and Circle also announced that their deposits and reserve funds at Silicon Valley Bank are 100% safe. These news were beyond market expectations, and even Zhao Changpeng said that bank rescue would make them lose their risk management ability, indicating that even this level did not anticipate such rescue measures.
The Silicon Valley Bank incident weakened the expectation of a US interest rate hike, and the December contract for US federal funds futures jumped by 20 basis points to 95.26. The US dollar index fell by 30 points in the short term and was last reported at 104.03, and the USD/JPY fell by 1%. Spot gold continued to rise, touching $1,890/ounce, up 1.25% intraday. Nasdaq futures rose by 1%, and BTC once broke through $22,000.
In terms of interest rate expectations, according to CME Federal Reserve Watch, the probability of the Federal Reserve raising interest rates by 25 basis points to the 4.75%-5.00% range in March is 96.0%, while the probability of raising interest rates by 50 basis points has dropped to 0, compared to 73.5% last time (March 8th). The expectation of a rate cut in the second half of the year has also risen sharply.
After the weekend, the market's expectations for a Fed rate hike have completely changed. During the hearing on March 7th, Powell mentioned that the strong performance of the US economic data may lead to terminal rates higher than expected, and the Fed may not rule out accelerating the pace of rate hikes. Powell also reiterated the hawkish stance, stating that keeping inflation under control at 2% is still the Fed's top policy goal. January data on consumption, production, inflation, and employment in the US have reversed the previous downward trend, and the breadth of the reversal to some extent indicates that inflation pressures are higher than expected at the last meeting. If inflation data is observed separately, the inflation level is expected to fall to an acceptable level in the second half of 2022, but core service items have not shown any signs of weakness, and the inflation trend of service items still needs to be observed.
Today, the Fed announced a new emergency bank regular financing plan, stating that the Treasury Department will provide $25 billion in emergency loan support. The market's reaction was dramatic, and the most direct manifestation was the "collapse" of expectations for the Fed's rate trajectory. Swap trading shows that the terminal rate expectations plummeted from 5.70% in September to 5.11% in June, and at the same time, the market's expectations of a Fed rate cut in the second half of 2023 are skyrocketing. Currently, the probability of a 50 basis point rate hike in March has dropped from 75% to 0%, and the probability of a 50 basis point rate hike in May has been erased. There are more and more voices in the market calling for the Fed to consider pausing or even cutting rates.
On the policy front, US President Biden proposed a phased 30% tax on cryptocurrency mining electricity costs in his government's FY2024 budget. The tax will be implemented in the tax year after December 31 and will be phased in over three years at a tax rate of 10% per year, reaching a maximum of 30% in the third year. Cryptocurrency miners will need to report "the amount and type of electricity used and the value of the electricity." Cryptocurrency miners who obtain off-grid electricity demand will still need to pay taxes and estimate the electricity costs generated by any "power plants." Last week, it was reported that President Biden would end tax breaks for investors in cryptocurrencies and other investments in his budget proposal.
Last week, the Federal Reserve released its economic "Beige Book," which showed that the overall economic activity in the United States increased slightly in early 2023, and the labor market remained strong, although inflationary pressures still persist. Overall, the tightness of supply chains continued to ease, consumer spending remained stable, and automobile sales remained almost unchanged, but inventory levels continued to improve. Several regions reported that high inflation and higher interest rates continued to reduce consumers' disposable income and purchasing power, while the tourism industry remained strong. The report also indicated that after a period of contraction, manufacturing stabilized, and the housing market remained weak due to abnormally low inventory levels, but housing market activity in some coastal areas in the east exceeded seasonal norms. Overall, loan demand in the United States declined, credit standards tightened, delinquency rates increased slightly, and energy activity remained stable to slightly down, while the agricultural situation was mixed. Given increased uncertainty, it is not expected that the US economic conditions will improve significantly in the coming months.
There has been news in the financial world about the severe yield curve inversion in US Treasury bonds. Specifically, the (10-year minus 2-year) bond yield has reached -0.9%, the lowest in over 40 years, while the (10-year minus 3-month) bond yield is even lower at -1.2%, the lowest since the Federal Reserve began recording data. Yield curve inversion refers to when long-term bond yields are lower than short-term bond yields. Looking at the graph, over the past half century, every yield curve inversion has been a significant precursor to an economic recession, followed by significant fluctuations in global financial markets. Generally speaking, yield curve inversion indicates a problem within the economic system, which soon leads to financial market volatility. Recent examples of yield curve inversion occurred in 2020, 2018, and 2008, followed by significant fluctuations in US stocks and other major global asset prices. The overall picture depends on the short-term spread, which is the difference between the 18-month and 3-month rates and the difference between the 3-month rate and the current rate. The depth of inversion in January has now reached zero, indicating that the market's expectations for a recession have significantly decreased. This may be a deliberate move by the Federal Reserve, which started raising interest rates without first undertaking Quantitative Tightening, resulting in the steepest increase in interest rates since the 1980s. Given the size of the Fed's balance sheet, raising interest rates could lead to a global collapse. If Blackstone defaults, officials will immediately make a statement to halt mid-year rate hikes. The 10-year Treasury rate surged and fell back, but how long the problem will last is unclear. It is worrisome that after the phase of rate adjustment at the end of this month, and at the latest by early April, there will be a substantial upward surge in rates, particularly when combined with the Bank of Japan's policy shift to -0.5, which has been sustained for too long. The right shoulder of the Nikkei 225 has also remained in a range for too long.
Over the past five years, the Chinese yuan has broken through the "7" level against the US dollar three times, only to fall back below it, demonstrating increased flexibility in its two-way movement. Among various global currencies, the yuan is very stable. The central bank governor emphasized that "7" is not a psychological barrier, and the economy has remained stable despite breaking "7" three times, and the expectations of the people have remained stable.
Here's a summary of the macroeconomic data and key events in the cryptocurrency market:
March 13th (Monday): CME launches Bitcoin futures contract; the Federal Reserve holds an emergency closed-door meeting of the Federal Reserve Board.
March 14th (Tuesday): The US releases CPI data for February; the Ethereum-compatible virtual machine FEVM launches on the Fil mainnet.
March 15th (Wednesday): The Ethereum Goerli testnet activates the Shapella upgrade; the US releases February retail and PPI data.
March 16th (Thursday): Optimism executes the Bedrock mainnet upgrade; US Treasury Secretary Yellen attends a Senate Finance Committee hearing on budget issues; European Central Bank President Lagarde holds a monetary policy press conference.
March 18th (Saturday): OKXChain officially announces the OKT reduction plan.
Over the past week, the gains in altcoins have been led by LQTY, followed by MX, MKR/SNX/EOS, and other coins, but overall the gains have been relatively small. This may be due to the influence of BTC's decline last week, and there may not be a strong continuation. The Matthew effect - the stronger getting stronger - still applies, so this week, it is recommended to focus on buying opportunities for coins with larger gains on a pullback, as it is expected that they will rise again. Additionally, considering the rotational effect of coins, it may be worth a small allocation for short-term speculative trading, with profits taken timely. However, due to the weak sustainability of weak coins, the priority is still to focus on strong trending coins.
Token unlock information is generally seen as bearish news, so it is worth paying more attention to it. According to Token Unlocks data, this week (March 13th to March 19th), the following tokens will experience partial unlocks:
March 14th, 23:00:00: 6,520,128 DYDX (approximately $14.34 million) unlocked, accounting for 0.652% of total supply.
March 15th, 8:00:00: 187,500,000.02 BIT (approximately $94.52 million) unlocked, accounting for 1.951% of total supply.
March 15th, 9:18:29: 107,723 EUL (approximately $646,000) unlocked, accounting for 0.396% of total supply.
March 16th, 20:00:00: 192,307 GAL (approximately $296,000) unlocked, accounting for 0.096% of total supply.
March 17th, 8:00:00: 40,601,326 APE (approximately $180 million) unlocked, accounting for 4.06% of total supply.
Last week, according to on-chain data, "V God" Vitalik Buterin was selling some of the "shitcoins" he held. He has sold 50 billion MOPS for 1.25 ETH (approximately $2,000), 10 billion CULT for 58 ETH (approximately $91,000), and 5 trillion SHIK for 380 ETH (approximately $600,000). This should be monitored for its bearish effect.
In the list of major holders' increased positions, UMA, GMT, MIR, and KNC are among the top, besides stablecoins. These coins involve main force buying and large holders increasing positions. As a retail investor, one can follow the trend of the main force and buy before the price rises, and take profit by closing the position before the main force sells.
Regarding changes in holding addresses, HOOK/SSV/GFT/ROSE/SAND have shown significant fluctuations and deserve attention. These coins have been on the list for a long time, and it's not easy to attract new registered users in a bear market. However, these fluctuations may also be due to data manipulation by the project team, so it's necessary to be cautious.
Solana whales have transferred nearly $70 million worth of SOL to Coinbase. According to Whale Alert data, a group of Solana whales have made multiple transactions in under two minutes, with each transfer ranging from 599,999 to 554,000 SOL, totaling 2,954,427 SOL. Analysis suggests that these transactions may be the work of the same entity. It's worth monitoring SOL trading opportunities, as transfers to exchanges, especially spot trading platforms like Coinbase, often indicate potential sell-off behavior and could result in some selling pressure.
Last week, Voyager transferred cryptocurrencies worth $35.8 million, including 7,000 ETH (worth about $1.094 million) and 62.2 million MATIC (worth about $7.03 million) to Coinbase, and 7,000 ETH, 2.5 million FTM (worth about $1.01 million), 2 million IOTA (worth about $420,000), and 400,000 ONT (worth about $90,000) to Binance US. Additionally, they transferred 300 billion SHIB (worth about $3.33 million) and 1,164 ETH to crypto market maker Wintermute and 100,000 DYDX (worth about $220,000) to Kraken. However, Voyager's asset transfers are still ongoing. Previously, a bankruptcy judge approved Binance.US's acquisition of Voyager Digital assets, but the deal still needs to clear regulatory hurdles.
Last week's data showed that Voyager Token (VGX) rose to $0.502341, with a 24-hour gain of 25.7%, before settling at $0.486128. The acquisition deal between Binance.US and Voyager Digital still needs to overcome regulatory obstacles, but VGX may present speculative opportunities with significant intraday volatility.
Last week, a whale address extracted around 3.6 million MASK (worth about $14.8 million) from Binance, OKX, KuCoin, and Huobi through multiple addresses. The price of MASK token rose from $3.27 to $4.16 today, with a gain of 27%. Historical data indicates that when the address starting with 0xEf7C transfers MASK, the price tends to rise, while a transfer out could lead to a price drop. The address extracted 0.5 ETH from Upbit as gas fees and was a user of Upbit. Upbit announced that it would open MASK spot trading at 3:00 pm today. The address may sell MASK on Upbit.
Last week, the LDO whale address (starting with "0x77b3") purchased an additional 474,527 LDO coins (approximately $1.24 million) from Binance at an average price of around $2.49. The address currently holds 14.8 million LDO coins (approximately $39.38 million). It was reported that between November 5, 2021, and February 3, 2022, the address purchased 6.8 million LDO coins through six addresses using 6,135 ETH (valued at $25 million at that time) at an average purchase price of around $3.67. The address also received 7.99 million LDO coins from Binance at an average receipt price of $1.48 (valued at $11.83 million at that time).
II. Concept ups and downs
The performance of concept sectors is as follows: GAMEFI, Coinbase, DeFi, and NFT showed leading gains by percentage increase.
Specifically, RAMP rose by about 135%, GGM rose by about 80%, and FOAM had a rise of about 65%, belonging to the SBF investment in the SOL ecosystem and GameFI and ATOM concepts. Attention should be paid to the rotation of trading opportunities in the sectors to which the above-mentioned larger gain currencies belong.
III. Macro Analysis Overview
Last Friday, the three major US stock indexes rose and then fell back. At the close, the Dow fell by 1.07%, the Nasdaq fell by 1.76%, and the S&P fell by 1.45%. The yield on the US 10-year Treasury bond fell by 5.196% to 3.704%, with a spread of -89 basis points compared to the two-year Treasury yield. The VIX panic index rose by 9.69%, Brent crude oil closed up 1.5%, and spot gold has continued to rise since November 2022, with a rise of 1.97% yesterday, to $1,867.04 per ounce. The US dollar index has continued to fall from a high level, closing at 104.65.
US job growth has exceeded expectations for 11 consecutive months, but unemployment has risen, and wage growth has cooled down. This situation is mixed with joy and sorrow as the Federal Reserve considers whether to accelerate its rate hikes. The US Bureau of Labor Statistics released a report on Friday showing that after an increase of 504,000 jobs in January, employment in the US increased by another 311,000, which is lower than last month but still far exceeds expectations. The unemployment rate rose to 3.6%, and the monthly wage growth rate was the lowest in a year. In addition, the US labor force participation rate rose to 62.5%, the highest level since March 2020. US job growth has exceeded expectations for the longest period since 1998. Fed funds futures show that the probability of a 50 basis point rate hike in March has dropped to below 50%. Fed funds futures have fully priced in a 25 basis point rate cut by the Fed before the end of the year.
Haruhiko Kuroda's last meeting during his 10-year term, the Bank of Japan maintained its benchmark interest rate at a historically low -0.1%, kept the target for the 10-year government bond yield around 0%, and maintained the yield curve control range at -0.5% to 0.5%, keeping the interest rate forward guidance unchanged. The Japanese Senate approved the appointment of Kikuo Iwata as the new governor of the Bank of Japan, and the appointments of Shinichi Uchida and Norimasa Iwanaga as the new deputy governors of the Bank of Japan.
Bank of Japan Governor Haruhiko Kuroda said that the Japanese economy is recovering, and if necessary, he will not hesitate to further ease monetary policy. Interest rates are expected to remain at the current low level or even lower. The timing and method of exiting the loose policy will be decided based on economic conditions, and it will be inappropriate to discuss exiting in 2023 or 2024.
Here is an overview of this week's major economic data and events:
Tuesday, March 14th: UK January ILO Unemployment Rate for three months, US February CPI data.
Wednesday, March 15th: China's social consumer goods retail sales growth rate for Jan-Feb, above-scale industrial added value growth rate, urban fixed asset investment growth rate and February urban unemployment rate, IEA Monthly Oil Market Report, Eurozone January industrial output monthly rate, US February retail sales and PPI data, and March NAHB Housing Market Index.
Thursday, March 16th: Japan's February commodity export growth rate, Australia's seasonally adjusted unemployment rate for February, National Bureau of Statistics publishes monthly report on housing sales prices for 70 major cities, US initial jobless claims data until March 11th, US February new housing starts annual rate, building permit monthly rate, import price index monthly rate, European Central Bank's main refinancing rate, deposit facility rate, marginal lending facility rate.
Friday, March 17th: Eurozone February CPI data, Canada's February industrial product price index monthly rate, US February industrial production monthly rate, US March University of Michigan Consumer Confidence Index preliminary value.
Central Bank updates:
Wednesday, March 15th: Fed Board member Bowman gives a speech.
Thursday, March 16th: US Treasury Secretary Yellen attends the US Senate Finance Committee's budget hearing, the Australian Federal Reserve releases its economic bulletin, the UK Office for Budget Responsibility (OBR) publishes economic and fiscal expectations, ECB President Lagarde holds a monetary policy press conference.
Cryptocurrency market highlights:
Monday, March 13th: CME launches Bitcoin futures contracts. At 23:30 (UTC+8), the Fed held an emergency non-public meeting of the Federal Reserve System Board of Directors to evaluate and determine the prepayment rate and discount rate charged by Federal Reserve Banks.
Tuesday, March 14th: US February CPI data will be released at 20:30 (UTC+8), and the market predicts that this CPI will record 6%, lower than the previous value of 6.4%. The Filecoin Virtual Machine (FEVM) compatible with Ethereum will be launched on the Filecoin mainnet. Privacy network Iron Fish announces the launch of its mainnet and distributes 940,000 tokens, enabling fully private custom asset creation, destruction, trading, mining, and custody node functions. Coinbase suspends trading in Binance USD (BUSD), and Coinbase CEO cites concerns about liquidity as the reason for the suspension.
Wednesday, March 15th: Cross-chain liquidity protocol Stargate re-releases STG tokens and airdrops them to all STG holders on a 1:1 basis. Additionally, Coinbase suspended trading of Stargate Finance V1 (STG) at around 01:00. The Bank of Israel has published draft regulations for stablecoins and is soliciting public comments until this date. The Cosmos Hub will undergo the V9 Lambda upgrade, which will activate the "Replicated Security" function. The Ethereum Foundation plans to activate the Shapella upgrade on the Ethereum Goerli testnet at 06:25:36 (UTC+8), which will be the final testnet upgrade before arranging the Shapella upgrade for the Ethereum mainnet.
Thursday, March 16th: Optimism executes the Bedrock mainnet upgrade at 01:00 (UTC+8), during which deposits and transactions will be suspended, but most users will not be affected by the upgrade. The upgrade is expected to last four hours, and historical chain data will still be accessible after the upgrade. Previously, Optimism launched the new decentralized Rollup infrastructure Bedrock and completed the upgrade on the Goerli testnet.
2. Market News
This week's key news:
1. Silicon Valley Bank went bankrupt and was taken over by the US Federal Deposit Insurance Corporation (FDIC). Stablecoins such as USDC, DAI, and FRAX were unanchored (Saturday, March 11)
Silicon Valley Bank (SVB) has been shut down by the California Department of Financial Protection and Innovation and taken over by the Federal Deposit Insurance Corporation (FDIC). Silicon Valley Bank has about $209 billion in assets and $175.4 billion in deposits, the FDIC said. All insured deposits at Silicon Valley Bank were immediately transferred to the Santa Clara Deposit Insurance National Bank (DINB), created by the FDIC.
During the shutdown of Silicon Valley Bank (SVB) and Silvergate, cryptocurrency wallet withdrawals from centralized exchanges totaled approximately $902 million in USDC over the past 24 hours. A total of $68 million in USDC has been withdrawn from centralized exchanges across all “Smart Money” wallets in the past 24 hours.
Silicon Valley Bank has always been one of the most popular financial institutions among Silicon Valley technology and life science startups. Once the Silicon Valley Bank is hit by a storm, it will inevitably affect all kinds of startups, bringing a double crisis of technology and finance.
The fuse of the incident was that SVB sold 21 billion US dollars of bonds in a "jumping sale", resulting in an actual loss of 1.8 billion US dollars. Therefore, SVB stated that it would raise 2.3 billion US dollars through the sale of stocks to make up for the debts related to bonds. Losses related to the sale.
All of a sudden, various Silicon Valley venture capital institutions were frightened. "Silicon Valley Godfather" Peter Thiel's venture capital fund Founders Fund directly advises invested companies to withdraw capital from Silicon Valley Bank; Union Square Ventures tells portfolio companies to "keep only the minimum funds in SVB cash accounts";
Y Combinator CEO Garry Tan warned his invested startups that the solvency risk of Silicon Valley Bank is real, and suggested that they should consider limiting their exposure to lenders, preferably no more than $250,000;
Tribe Capital advises numerous portfolio companies to withdraw some, if not all, of the cash from Silicon Valley Bank. As a result, the bank run came, and Silicon Valley Bank fell into a deeper liquidity crisis.
Analyze its assets and liabilities.
On the liability side, due to the low interest rates in the entire money market, SVB has attracted a large number of deposits with a deposit rate of 0.25%. In addition, the technology venture capital and IPO markets have been good in the past few years, so that SVB's balance sheet has also grown rapidly. From 2019 From $61.76 billion in 2021 to $189.2 billion by the end of 2021. However, the technology venture capital market has become sluggish, especially the IPO market has been very deserted in the past year, SVB deposits have continued to decline, and for savers, direct purchase of U.S. bonds is a more cost-effective option.
On the asset side, like Silvergate Bank, when there is a large amount of deposits and cannot release funds through traditional lending methods, SVB also chooses to buy bonds such as MBS. The crux of the problem is that he does not buy a little, but almost "stud".
When interest rates were low, America's big banks kept more of their deposits in government debt, accepting lower yields during times of economic uncertainty. Silicon Valley Bank believed that interest rates would remain low for a long time, and invested most of its deposits in MBS for higher yields.
At the end of 2022, SVB had $120 billion in investment securities, including a $91 billion portfolio of mortgage-backed securities, far exceeding its total loan portfolio of $74 billion.
The $21 billion portfolio of bonds sold by SVB yielded 1.79% and had a duration of 3.6 years, according to SVB’s public filings. For comparison, on March 10, the 3-year U.S. Treasury yield was 4.4%.
Falling bond prices will create losses for Silicon Valley Bank as interest rates soar. Silicon Valley Bank holds a $91 billion bond portfolio held to maturity that is worth just $76 billion today, equivalent to an unrealized loss of $15 billion.
SVB chief executive Greg Becker said in an interview with the media: We expected interest rates to rise, but we didn't expect it to be as much as it is now.
In general, the predicament of Silvergate and SVB is mainly due to the misjudgment of the Fed's interest rate hike pace, resulting in wrong investment decisions.
2. Rocket Pool plans to upgrade Atlas in early April to be compatible with Ethereum Shanghai upgrade (March 6, Monday)
On March 6th, according to the official blog, the decentralized pledge protocol Rocket Pool announced that it will perform an Atlas upgrade in early April, making the protocol compatible with Ethereum’s Shanghai upgrade, which will allow validators to start withdrawing their assets in the beacon chain. staked ETH, and scale the protocol to meet higher demand and maintain decentralization. The main functions after the upgrade include Solo Staker migration, optimization of Minipool queue ETH, dynamic deposit pool limit, etc. Other functions include optimization of Minipool gas efficiency, and the reward system automatically tracks the effective RPL rights of each node operator.
It is reported that Atlas is the second major upgrade of Rocket Pool since its launch on the mainnet, and has been audited by Sigma Prime and ConsenSys Diligence. Rocket Pool is deploying a test version on the Zhejiang testnet, with the goal of releasing Atlas to the Ethereum mainnet by the end of March or early April.
3. On the first day of the Grayscale v. US SEC case, the judge questioned the SEC’s rejection of Grayscale’s spot bitcoin ETF application (March 8, Wednesday)
March 8 news, according to Reuters, a U.S. federal appeals court judge questioned on Tuesday whether the U.S. Securities and Exchange Commission (SEC) was correct in rejecting Grayscale Investment's (Grayscale) spot bitcoin ETF application because the agency had previously approved bitcoin futures. product. A panel of judges on the Washington, D.C., appeals court put pressure on Grayscale's argument that the SEC said that because regulators had previously approved certain regulatory protocols to prevent fraudulent practices in bitcoin futures-based ETFs, The same setup applies to Grayscale’s spot fund, as both spot and futures funds are dependent on bitcoin prices.
"For an agency, we need more information, but there seems to be a lot of information out there about how these markets work together, and the SEC has offered no explanation," said Judge Neomi Rao, Grayscale's chief counsel, Barack Obama The Times' U.S. Attorney General Donald Verrilli Jr. told the court that a bitcoin spot ETF would "better protect investors" because a bitcoin spot ETF would Investors will benefit from regulation.
In addition, according to The Block, the ruling between Grayscale and the SEC may take 3 to 6 months. Eric Balchunas, senior ETF analyst at Bloomberg, tweeted: “Our senior litigation analyst raised Grayscale’s odds from 40% to 70% this morning (local time) after hearing the Grayscale vs. SEC debate. According to the data, GBTC is now at $12.9, a one-day increase of 9.6%, and the current negative premium has narrowed to 42.11%.
- TreasureDAO announced the launch of a new creator program called Treasure Create on March 8th, Wednesday.
According to the official Twitter, the decentralized gaming ecosystem, TreasureDAO, aims to cultivate an outstanding community of video content creators within the Treasure ecosystem and games. As an official Treasure Creator, content creators can utilize the large community of over 150,000 players and games on Treasure to increase their exposure and gain opportunities such as whitelist access, in-game items, early access to game testing, and collaboration with other creators. Currently, the program has collaborated with 10 early creators and is recruiting more content creators to join Treasure Create.
- Convex Finance, a one-stop platform for CRV staking and liquidity mining, announced on March 9th, Thursday, that it has gone live on the Polygon network.
The process of providing liquidity and staking on Convex is the same as on Ethereum, and the initial pools on Polygon include TUSD+amDAI+amUSDC+amUSDT, among others. Additionally, Convex will migrate the current Arbitrum pool to the new pool to keep the codebase consistent with Polygon and prevent confusion among integrators.
- HT, the platform token of Huobi, experienced a sudden drop in price, and Sun Yuchen responded that everything is normal in Huobi's operations, and the market behavior and volatility caused the phenomenon.
On March 10th, according to news reports, HT fell from a 24-hour high of $4.81 on the Huobi exchange to a low of $0.31, a short-term drop of 93%, causing the liquidation of many large accounts. Similar price drops were also observed on other exchanges. Currently, HT has rebounded to $3.96, with a 24-hour decline of 18%. Sun Yuchen later declared on Twitter that "everything is normal in the operation, wallet, and backend of Huobi exchange. The phenomenon of liquidation caused by the market behavior and volatility only occurred because some users triggered the leveraged liquidation of the spot and contract HT tokens." He also stated that "Huobi platform will bear the losses caused by the HT market fluctuations and leveraged positions. To further improve the liquidity of multiple currencies on the Huobi platform, we will set up a liquidity fund with $100 million to continuously improve the liquidity depth of mainstream currencies and HT and enhance the ability to alert and handle leverage."
Key financing events:
1.Ethereum scaling project Scroll raises $50 million with a valuation of $1.8 billion:
Scroll, a layer 2 network on Ethereum using zk-rollups technology, has raised $50 million in a new round of financing. Investors include Polychain Capital, Sequoia China, OKX Ventures, Bain Capital Crypto, Moore Capital Management, Variant Fund, Newman Capital, IOSG Ventures, and Qiming Venture Partners.
ZK Rollup is the technology solution used by Scroll, which has many outstanding features. At the current theoretical exploration level, ZK Rollup will have better security and shorter settlement times (Optimistic Rollup currently uses fraud proof which requires a withdrawal waiting period of about seven days). ZK itself has a natural advantage in privacy protection, and it also has the ability to compress and verify large amounts of information to challenge decentralization, which is especially important for scaling. However, the development difficulty of ZK Rollup is higher compared to the currently mature Optimistic Rollup, and the technology roadmap is still in the development and exploration stage. Still, Ethereum co-founder Vitalik Buterin previously predicted at ETHSeoul that ZK Rollups would defeat Optimistic Rollups in Ethereum's L2 expansion war in terms of technology recognition. Although Optimistic Rollups are more mature, in the long run, the basic principles of ZK Rollup technology will enable it to replace Optimistic Rollups.
Scroll is one of the players in the ZK Rollups camp, and it is an EVM-equivalent zkRollup. This means that if Scroll can successfully launch and be validated by the market in the future, the adoption of EVM-equivalent solutions will directly help Ethereum ecological projects previously built on Layer 1 to migrate seamlessly. With its technological advantages, its L2 ecosystem expansion will also be more easily implemented. The above is an analysis of the advantages. Still, regardless of zkRollup or Scroll, we still need to observe its evolution trend rationally through more time before it is successfully validated, because ZK itself currently has issues such as proof efficiency problems, and the hardware acceleration field that provides solutions has not yet matured.
2.Web3 email solution EtherMail completes $4 million Pre-A round of financing:
Web3 email solution EtherMail has completed a $4 million Pre-A round of financing, led by Tim Draper and his venture capital firm Draper Associates, with participation from MS&AD Ventures and others.
Established in 2021, EtherMail aims to build a Web3 email solution that enables encrypted wallet-to-wallet communication. According to publicly disclosed press releases and research on the project's official website, EtherMail differs from other Web2 email solutions by taking a user attention approach. They believe that users who use traditional email are often invaded by a large amount of advertising information, as well as some fraudulent information. EtherMail believes that user attention is valuable and that the existing projects are also a battle for attention. Therefore, EtherMail wants to compensate users in some way. The current proposed solution by EtherMail is to use a "paid subscription" method, which requires the "marketing side" to pay the user's mailbox invaded (receiver) with its EMT token to protect the user's inbox and try to achieve a closed loop for its business model.
Personally, I think this type of product has a great vision, but for the current market that has already generated enough Web2 users, how to motivate these users to use their product and how to let the "marketing side" be willing to pay for the user's attention are still challenges.
- Web3 football game company Matchday has raised $21 million in seed funding, with Play Time, a fund under Messi's name, participating:
Web3 gaming and interactive entertainment startup Matchday announced the completion of a $21 million seed funding round, with Play Time, a fund under Messi's name, participating. As the market environment has further declined and GameFi has lost its previous momentum, the homogenization of economic models in the current GameFi track has become a serious problem, with even some "death spiral" economic models making true game participants fearful. Looking at the current market, the excessive proportion of financial attributes and the lack of fun or addictive problems in the games themselves have made leisure games and even 3A games a high-pitched direction. Matchday is a Web3 football game developer invested by Play Time, a fund under Messi's name. The developer plans to combine Web3 and mobile games to create a FIFA-authorized football game, which currently only has digital player card businesses on its official website. Users can obtain or trade digital collectible cards in specific ways and use their own player cards to compete with each other. In terms of experience, the gameplay is relatively simple, and no related innovations have been found. We have not yet found any related disclosure materials about the release of other games or related gameplay under Matchday, so we cannot make further comments at this time. We will continue to follow up if there are any important updates in the future.
- Crypto payroll compliance company Toku has raised $20 million in funding, with participation from Blockchain Capital and others:
Crypto payroll compliance company Toku has completed a $20 million Series A funding round, with investors including Blockchain Capital, GMJP, OrangeDAO, Reverie, Quantstamp, Next Web Capital, and angel investors such as Protocol Labs founder Juan Benet and Cameron and Tyler Winklevoss. The emergence of distributed work allows us to achieve collaborative production in any corner of the world, especially the emergence of Web3, including DAO, which takes distributed work to the extreme, and even becomes a normality. As you may have noticed, the members of many Web3 companies or DAO organizations are more commonly distributed in various countries and regions, so there will be issues related to salary payments. In addition to fiat currency, many project teams also prioritize using cryptocurrencies as their incentive methods. However, due to the inconsistent regulations and policies in each country and region, compliance becomes an issue that projects or DAOs need to pay special attention to. Toku helps crypto companies handle the tax work related to salary payments with tokens, claiming to have created a system that tracks crypto-related tax laws and regulations in dozens of countries. Toku currently has clients such as the Filecoin Foundation, Gitcoin, Gnosis, Hedera Hashgraph, and PleasrDAO. According to the information disclosed on its official website, Toku provides services such as token payroll, distributed work compliance solutions, and token authorization management. From a business model perspective, Toku is currently addressing a strong demand market. We know that the regulations related to crypto differ greatly in each country around the world. For globally formed projects, members are also relatively dispersed, and they often use cryptocurrencies for salary payments. Therefore, Toku can make good use of its professional capabilities to provide compliance solutions for each project party, allowing project parties to focus more on the construction of their own projects.
Detailed investment and financing events:
Last week (March 6-12), there were 27 blockchain investment and financing events globally, slightly less than the previous week. The total amount of financing was approximately $284 million, a significant increase compared to the previous week. The details are as follows:
1.In the DeFi sector, there were 4 investment and financing events, including:
Compliant-focused DEX Mauve completed a $15 million financing round with participation from Coinbase Ventures;
Stablecoin issuer Gyroscope completed a $4.5 million seed round financing and will soon launch the GYD stablecoin;
Stablecoin issuer ECSA completed a $3 million seed round financing with participation from YC;
Web3 startup nealthy completed a $1.3 million pre-seed round financing.
2.In the blockchain gaming sector, there were 3 events, including:
Believer completed a $55 million financing round with Lightspeed leading and a16z participating;
Web3 soccer game company Matchday completed a $21 million seed round financing with participation from Messi's fund Play Time;
Web3 game studio Redemption Games completed a $7 million financing round with participation from Orange DAO.
3.In the NFT and metaverse sectors, there were 2 financing events, including:
NFT trading market Coresky completed a $6 million Pre-Seed round financing;
Solana-based NFT trading platform Tensor completed a $3 million financing round.
4.In the infrastructure and tools sector, there were 9 investment and financing events, including:
Ethereum scaling project Scroll completed a $50 million financing round with a valuation of $1.8 billion;
Cloud infrastructure startup Vantage completed a $21 million Series A financing round with participation from a16z;
Cryptocurrency payroll compliance company Toku completed a $20 million financing round with participation from Blockchain Capital;
ZK tech company Proven has completed a $15.8 million seed round of financing with Framework Ventures as the lead investor；
Web3 development tool provider Cubist has completed a $7 million seed round of financing with Polychain Capital as the lead investor；
Web3 startup Tweed has completed a $4 million seed round of financing with Accel as the lead investor；
Singaporean tech startup The GrowHub has completed a $3 million pre-Series B round of financing；
Crypto asset management company Aisot Technologies has raised approximately $1.93 million in financing, with Haute Capital Partners as the lead investor；
Blockchain risk solution Over-C has completed a £1 million equity financing round, with Ayre Ventures participating.
5.In the centralized finance space, three investment and financing events have been announced:
Web3 super application Kresus has completed a $25 million Series A financing round with Liberty City Ventures as the lead investor；
Bitcoin investment app Relai has raised $4.5 million in financing.
6.Cryptocurrency quantitative trading company Spield Algorithm has completed a new round of financing, with BitValue participating.In other Web3/crypto-related project news, six events have been announced:
Web3 art platform Wild has completed a $7 million financing round led by Matrix Partners；
Web3 email solution EtherMail has completed a $4 million pre-Series A round of financing；
TON ecosystem launchpad platform Tonstarter has completed a $1.5 million seed round of financing；
Blockchain fashion transparency platform tex.tracer has completed a €1.5 million seed round of financing；
Blockchain marketing company Verofax has initiated a $750,000 financing round, with participation from 500 Startups and others；
Cryptocurrency tax startup Divly has completed a $400,000 financing round, with DHS Venture Partners and others participating.
Industry Overview Author: Lao Li(Analyst)
Market News Author: Leon (Analyst)
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