Token Chronicle - Week 4 July 2024

Top cryptos:

Meme of the week:

Quick bites:

• Bitwise announces it will donate 10% of the profits from its Spot ETH ETF to Ethereum open-source developers.

• ETH ETFs recorded nearly $150 million in trading volume within the first 30 minutes and over $1 billion on the first day (net inflow of $107 million on the first day).

• Donald Trump denies reports that he considered Jamie Dimon (JPMorgan) and Larry Fink (Blackrock) for the position of Treasury Secretary.

• dYdX, the decentralized exchange platform, is reportedly in talks to sell its trading platform.

• Many Kraken users have reported receiving reimbursement from MtGox.

• Bitcoin was displayed on the full screen of the Las Vegas sphere for the 8th anniversary of Crypto.com.

• The Russian parliament passed a bill allowing the use of cryptocurrencies for international trade.

• New record for weekly addresses on Solana.

• Thailand will distribute digital money (10K Baht or approximately 255 Euros) to 45 million citizens.

• BTC mining company Marathon Digital has purchased an additional $100 million worth of BTC.

• Trump raised more than $4 million through campaign donations in BTC and other cryptocurrencies.

• OpenAI will launch "SearchGPT," an AI search engine.

• The US national debt has surpassed $35 trillion for the first time in history.

• Russia is on the verge of legalizing cryptocurrencies and mining.

• El Salvador proposes settling trade with Russia in cryptocurrency.

• The Fed maintains interest rates unchanged at 5.25-5.50%.

Market update: The market has been quite volatile this week, with BTC rising to $69K despite difficulties in the US stock market (notably in the NASDAQ technology sector) and then dropping back to around $64K in recent days. ETH has not reacted (or has reacted poorly) to the ETFs so far, with mostly net outflows related to Grayscale (except for the last two days). There is still uncertainty regarding MtGox, the US elections, upcoming rate cuts, and slight concerns about a large BTC fund movement by the US government. Despite this, the ecosystem continues to evolve, with significant innovations on the Bitcoin network and a consistently bullish long-term outlook. We are approaching the 100-day post-halving period, which is generally when the bull run begins.

Main points this week:

• US Elections Update: Joe Biden has withdrawn in favor of Kamala Harris, who, despite some mishaps and misunderstandings in the sector, is trying to connect with various actors in the US as she realizes it has become an important electoral issue. As for Trump, he spoke at the BTC conference this weekend, with the main points of his speech being: he is pro-Bitcoin but does not have a great understanding of other cryptocurrencies or sector technologies; if elected, he wants the US to build a strategic reserve in BTC; he opposes the creation of a US CBDC and praises the freedom and independence provided by BTC; he wants to fire Gary Gensler on day 1; and he wants to free Ross Ulbricht (founder of Silk Road). Republican Senator Cynthia Lummis has proposed a bill on strategic BTC reserves (talking about one million BTC, currently about $64 billion). However, for Trump, it is primarily a political issue that allows him to gain votes and funds ($21 million raised at the Bitcoin event).

• WazirX Hack: The Indian crypto exchange suspended trading and is investigating the $230 million stolen: The Indian crypto exchange WazirX experienced a major hack on July 18, 2024, resulting in the theft of $230 million in cryptocurrencies. Following the incident, the platform suspended trading and launched a thorough investigation into the hack, which is believed to have been caused by the North Korean group Lazarus.

• Ethereum ETFs Launch: On Tuesday, July 22, the ETFs launched with large inflows on the first day, but despite this, the price of ETH remains stable or has even decreased on some days due to massive (temporary) sales by Grayscale (which, like with BTC, had a similar innovative product but is now obsolete compared to the ETFs). This latency is not surprising, as a similar phenomenon was observed with BTC ETFs.

• Gate.io Leaves Japan (regulatory reasons).

• MtGox Continues Client Reimbursements: However, it seems that the majority of MtGox clients have not chosen to sell their BTC so far. Despite a gain of +8500%, they currently prefer to HODL in anticipation of the upcoming bull run.

• Major BTC Innovations:

  1. Stablecoins and fungible tokens arrive on Bitcoin and the Lightning Network: Lightning Labs has officially launched the Taproot Assets protocol on the Lightning Network, enabling near-instant transfers of fungible tokens and opening the door for stablecoins on Bitcoin. Designed several years ago by the Lightning Labs team, the Taproot Assets protocol, formerly known as "Taro," aims to create tokens on Bitcoin with a reduced impact on the blockchain and compatibility with the Lightning network.

  2. The firm behind Proton Mail unveils "Proton Wallet," a self-hosted and open-source Bitcoin wallet: Proton, the Swiss company renowned for its privacy services like Proton Mail, Proton Drive, and Proton VPN, is expanding its offerings by announcing the launch of Proton Wallet, a Bitcoin wallet presented as secure and privacy-focused. Proton clarifies that its goal is not to enter the Bitcoin market but rather to contribute to the democratization of the leading cryptocurrency.

  3. Franklin Templeton invests in layer 2 Bitlayer: The renowned asset manager Franklin Templeton led a $16 million funding round for Bitlayer, a Bitcoin (BTC) layer 2 solution. BitLayer aims to implement Bit Virtual Machine (BitVM) technology on its network, optimizing the creation of smart contracts on Bitcoin (BTC) without compromising network security.

  4. Mempool Accelerator launches its beta to speed up transaction times: To accelerate potentially blocked transactions on the Bitcoin (BTC) network, Mempool has launched the beta of its Mempool Accelerator service. The uniqueness of this service compared to other transaction acceleration methods is that it operates off-chain, eliminating the need to send new information to the blockchain itself.

• HSBC to Block Client Payments to Crypto Exchanges in Australia: HSBC, one of the largest global banks, has recently informed its Australian clients that payments to cryptocurrency exchanges will now be blocked. This measure, effective from July 24, is justified by the desire to protect clients from investment scams.

• Sui Blockchain Announces Collaboration with Amazon: The Sui blockchain has announced that its nodes are now supported by Amazon Web Services (AWS). Sui is a layer 1 blockchain developed by Mysten Labs.

• BlackRock Will Not Launch ETFs Beyond Bitcoin (BTC) and Ethereum (ETH): After the launch of Ethereum spot ETFs this week, asset manager BlackRock responded to questions about potential crypto ETFs. They see no interest in launching additional crypto ETFs, mentioning that their clients are primarily interested in Bitcoin (BTC). So, no Solana ETH here.

• SEC's New Turn in the Binance Case: The SEC has just decided not to classify SOL, ADA, or MATIC as "securities."

Discover a tool: Let’s talk about the most famous hot wallets (see the different type of wallets below): Metamask

MetaMask is a popular cryptocurrency wallet and browser extension that enables users to manage their Ethereum-based assets and interact with decentralized applications (dApps) on the Ethereum network. Here’s a brief overview of how it works and how to use it:

1. Installation: Download and install the MetaMask extension for your browser (Chrome, Firefox, or Edge) or the mobile app from the official MetaMask website or app stores. Link

2. Setup: After installation, create a new wallet by following the setup instructions. You'll be given a recovery seed phrase—a series of words used to back up and restore your wallet. Store this phrase securely, as it's crucial for accessing your wallet if you lose access.

3. Add Funds: To add cryptocurrency to your MetaMask wallet, you can either purchase assets directly through the app using integrated services or transfer funds from another wallet or exchange.

4. Interact with dApps: MetaMask allows you to connect with decentralized applications (dApps) like decentralized exchanges (DEXs) or NFT marketplaces. Simply visit the dApp’s website, and MetaMask will prompt you to connect your wallet. It will enable you to access early tokens (that are not listed on exchange yet), to take part in airdrops, pre-sale or different functionalities of DEFI (trade, swap, bridge, lending etc).

5. Transactions: You can send and receive Ethereum and ERC-20 tokens by entering the recipient's address and the amount you wish to send. MetaMask will handle the transaction and display the gas fees required for processing. You sometimes need to add your tokens manually into Metamask to be able to see it in your wallet, go to Coingecko, search your tokens and copy the address you want to input.

6. Security: Ensure you use MetaMask securely by keeping your recovery phrase private, using strong passwords, and enabling additional security features like hardware wallet integration when possible. In addition to that, it is really important to create multiple wallets in your Metamask, so that if one gets hacked, it does not affect the others. Create one wallet per blockchain or per use-case for instance (like one for an airdrop for instance). Also important to check what you are signing with your Metamask and to verify the URLs you are using are legit ==> this is a good way to do so: VirusTotal ; there are many scams in Web3 so be very cautious.

Learning through questioning: What are the different methods of self-custody ? (as a reminder, having your crypto in an exchange is not self-custody, the company holds/owns the crypto on your behalf, like a bank basically)

Self-custody in cryptocurrency involves managing your own private keys and digital assets, with several methods offering different advantages and inconveniences:

• Hot Wallets: These are digital wallets connected to the internet, such as mobile or desktop apps. They offer convenience and quick access to your funds, making them ideal for frequent transactions. However, their constant internet connection makes them more vulnerable to hacking and malware, presenting a higher risk of theft. The most famous hot wallet is Metamask that we just discussed.

• Cold Wallets: Cold wallets are offline storage solutions, like hardware wallets (e.g., Ledger, Trezor) or paper wallets. They are not connected to the internet, providing enhanced security against online attacks. The trade-off is reduced convenience, as accessing your funds requires connecting the hardware wallet to a computer or manually inputting a key from a paper wallet. Cold storage is best suited for long-term holdings and larger amounts of crypto.

• Hybrid Wallets: Combining elements of both hot and cold storage, hybrid wallets, such as certain hardware wallets with online components, aim to balance security and accessibility. They offer a middle ground but may still carry some risks associated with online components.

Each method caters to different needs: hot wallets for ease of use and quick transactions, cold wallets for secure long-term storage, and hybrid solutions for a balance of both. Choosing the right option depends on your security requirements and how often you need to access your funds.

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Disclaimer: The information disclosed here does not constitute an investment advice ; it is for informational purposes only and does not constitute investment advice. You should do your own research while investing in crypto and only invest money you are ready to lose.