Token Chronicle - Week 2 November 2024

Top cryptos

Meme of the week

Market update: Strong performances following the election of D. Trump in the USA. BTC reached a new ATH at $92K before correcting to $87K between yesterday and today. The rest of the market is following the same trend, with ETH regaining $3K and Solana nearing its ATH. It's likely we'll see another push by the end of the year, possibly surpassing $100K (it is very likely according to the Polymarket prediction platform, which accurately forecasted the US election outcome). However, a significant year-end correction is also expected, with a recovery by late January. February is anticipated to be quite fruitful. ETH hit record highs this week, and traditional media along with retail investors are starting to pay attention to crypto assets again.

Main points this week:

International:

1. To aid Donald Trump in designing an appropriate regulatory framework for blockchain and cryptocurrencies in the U.S., the future president has entrusted Charles Hoskinson, founder of the Cardano blockchain and co-founder of Ethereum. Hoskinson stated that his company, Input Output Global (IOG), will soon open a division to collaborate with Trump's teams on this future regulation.

2. Donald Trump appoints Elon Musk to lead the Department of Government Efficiency (DOGE): On Tuesday, Trump officially named Elon Musk as the head of the DOGE alongside Vivek Ramaswamy. Their mission: dismantle government bureaucracy, reduce excessive regulation, eliminate unnecessary spending, and restructure federal agencies. The target is an ambitious $2 trillion in savings out of the government’s $6.5 trillion annual expenditure.

3. U.S. elections: Pro-crypto candidates win a majority in Congress: The Fairshake PAC, with substantial support from the crypto industry, spent millions to back candidates favorable to the sector. This strategy succeeded, as the majority of its endorsed candidates were elected.

4. Italy revises its proposed crypto capital gains tax: Initially planning to raise the tax to 42%, the government reconsidered, proposing a more modest increase to 28%, up from the current 26%. This amendment, spearheaded by the Lega party, is expected to gain approval from Prime Minister Giorgia Meloni, according to Bloomberg.

5. Pennsylvania considers Bitcoin as a strategic reserve: Republican Representative Mike Cabell introduced the Pennsylvania Bitcoin Strategic Reserve Act, proposing that 10% of the state’s $7 billion reserves be allocated to Bitcoin. This aligns with Donald Trump’s vision of building a national BTC reserve.

6. Genius Group (GNS), a Singapore-based AI company, has designated bitcoin as its primary treasury asset, dedicating 90% of its reserves to BTC. Initially planning to acquire $120 million in bitcoin (about 1,380 BTC), Genius Group aims to hold these assets long term and integrate BTC payments on its Edtech platform. Following the announcement, GNS shares surged 50% premarket before settling around 10% higher. This move aligns with a recent board restructuring that introduced members experienced in crypto and Web3, indicating a strategic pivot towards blockchain technology.

Regulation/Justice:

1. FTX creditors seek to recover $1.8 billion from Binance and CZ: The dispute involves the July 2021 buyback of Binance’s stake in FTX, initially acquired during FTX’s early stages. Creditors argue that these funds should now be reclaimed from Changpeng Zhao (CZ) and Binance.

2. FBI raids Polymarket CEO Shayne Coplan’s home: The FBI searched the residence of the decentralized prediction market CEO just a week after it correctly predicted Trump’s election victory. They seized his smartphone, computer, and other devices but did not arrest or charge him. Polymarket is banned in the U.S., and the Department of Justice is reportedly investigating its operations.

3. DeFi lending platform Delta Prime has faced a second exploit within two months, with a hacker exploiting a smart contract flaw to drain $5 million from its Avalanche and Arbitrum deployments. The attack, linked to a "code logic error" in the platform’s rewards contract, brings Delta Prime’s total losses to over $10 million, following a $6 million exploit in September from a stolen admin key. In response, Delta Prime has paused operations on both chains, with its total value locked (TVL) now down to around $32 million from $70 million pre-hacks.

4. A new report from the Digital Chamber highlights the role of USD-linked stablecoins in reinforcing US dollar dominance in digital finance, particularly through cross-border payments and corporate cash management in emerging markets. Stablecoins help maintain dollar relevance as traditional currency influence wanes, countering alternatives from countries like China and Russia. However, the report stresses the need for flexible US regulation to foster stablecoin growth, urging policymakers to adopt risk-based, adaptive rules to keep pace with competitive jurisdictions like the EU, UK, and Singapore and bolster the US's economic influence digitally.

5. SEC Chair Gary Gensler, in remarks at a legal conference, expressed pride in his tenure at the agency, noting the SEC's commitment to protecting U.S. financial markets. With Trump’s election and his vow to remove Gensler, there’s speculation he may soon step down, though he could choose to remain as a commissioner. In his speech, Gensler reiterated his call for crypto exchanges to register with the SEC and for issuers to comply with disclosure requirements, maintaining that many of the 10,000 digital assets are likely securities.

Traditional Finance:

1. MicroStrategy continues Bitcoin accumulation: The company, led by Michael Saylor, recently acquired 27,200 BTC at an average price of $74,463, reinforcing its position as the largest corporate Bitcoin holder globally.

2. Bitcoin price soars to $89,000 amid regulatory optimism: Asset manager Bernstein predicts the ongoing bull market will persist, citing a pro-crypto shift in the Trump administration compared to its predecessor.

3. Coinbase launches the COIN50 Index: This new product allows retail investors to track and invest in the 50 largest cryptocurrencies listed on Coinbase, similar to the S&P500 in traditional finance. However, inclusion in the index is subject to an evaluation by Coinbase.

4. BlackRock expands tokenized fund BUIDL to 5 blockchains: Using the Wormhole protocol, BUIDL is now accessible on Aptos, Arbitrum, Avalanche, Optimism, and Polygon, making it the world’s largest tokenized fund.

5. Bitwise CIO Matt Hougan predicts bitcoin could reach $500,000 as institutional adoption grows, driven by a path similar to gold’s. Following Trump's election win, bitcoin has already surpassed $90,000, with $100,000 potentially near. Achieving $500K would mean capturing 50% of the $20 trillion store-of-value market. Meanwhile, Bitwise has acquired Attestant, an Ethereum staking provider with $4 billion in staked assets.

6. A survey by digital asset bank Sygnum revealed that institutions are ready to put bigger bets on digital assets, with a striking 57% planning to ramp up their cryptocurrency exposure, fueled by a growing willingness to take risks and long-term confidence in the asset class. The annual survey gathered insights from over 400 institutional and professional investors across 27 nations with an average experience of over 10 years. A notable 65% of the survey respondents are bullish in the long term, with 63% mulling more allocation to digital assets in the next three to six months.

Ecosystem:

1. Crypto market capitalization reaches a new all-time high: Surpassing the previous record of $3.069 trillion set in November 2021, the market has grown by $760 billion in a week, attributed to the boost from Trump’s election.

2. Ethereum's evolution with Beam Chain: Major upgrades include increased transaction speed, zero-knowledge proofs (ZKP SNARK) integrated into layer 1, and other enhancements. Deployment on testnets is anticipated around 2027, though delays are expected.

3. Bitwise Asset Management has introduced a groundbreaking Aptos staking ETP on Switzerland's SIX Exchange, marking the first of its kind. This offering, named APTB, allows investors to earn staking rewards on Aptos without managing node operations, simplifying access to blockchain yields. With an expected 4.7% return, APTB could appeal to traditional investors eager to explore blockchain staking rewards in a more accessible, regulated format. Bitwise’s move reflects growing interest in bridging traditional finance with crypto-native opportunities.

4. Tether has launched the Wallet Development Kit (WDK), an open-source, modular toolkit aimed at developers and businesses. This WDK enables seamless integration of non-custodial wallet capabilities for USDT and bitcoin into apps, websites, and devices. Designed for flexibility, it supports both mobile, desktop, and web experiences while also accommodating AI agents, robots, and autonomous systems. With this self-custodial toolkit, Tether aims to expand wallet functionalities across various platforms, giving developers a powerful solution for building versatile, secure wallet interfaces.

5. The NEAR Foundation has introduced an Alpha version of User-Owned AI, featuring the NEAR AI Assistant and a Research Hub. The AI Assistant empowers users with a personalized, ownership-focused AI that interacts across Web2 and Web3—handling activities from blockchain transactions to e-commerce. Meanwhile, the Research Hub supports community-driven AI advancements with monetizable research opportunities. Also new are NEAR Intents, a blockchain transaction type that enables fluid interactions and data exchange between AI agents and services. This initiative positions NEAR Protocol at the forefront of privacy-preserving, user-owned AI on the blockchain.

6. Ethereum is gaining a unique feature with Smart Transactions (STXN), a platform by Vlad Zamfir that introduces time-based transactions to the blockchain. Dubbed the "Ethereum time machine," STXN allows smart contracts to trigger actions based on future events, such as a specific date or asset value conditions. This functionality expands Ethereum’s programmability, enabling transactions that depend on both absolute and relative prerequisites, adding new flexibility and dynamic capabilities for developers.

7. Tether has launched Hadron, a platform for tokenizing real-world assets, such as bonds, stocks, and commodities, into digital tokens on the blockchain. Aimed at providing alternative financing avenues for governments and corporations, Hadron supports compliance tools for KYC, AML, and secondary market monitoring. Initially compatible with Ethereum, Avalanche, and Liquid, Hadron plans to expand to the TON network and other smart contract chains, broadening its reach in asset tokenization.

Founding/partnerships:

1. AML compliance startup Notabene has raised $14.5 million in Series B funding, led by DRW Venture Capital, with backing from Apollo, Nextblock, ParaFi Capital, and Wintermute. Notabene helps crypto firms meet global anti-money laundering (AML) standards, aligning with FATF’s “Travel Rule” that mandates secure information sharing between transaction parties. With a user base of 165 companies, including Copper, OKX, and Ramp, Notabene handles around $2 billion in daily transactions. CEO Pelle Braendgaard expects transaction volumes to rise as Europe’s updated Transfer of Funds Regulation deadline approaches year-end.

2. Akave, a data storage chain built on Filecoin, has secured $3.45 million in pre-seed funding from Protocol Labs, Blockchange VC, Lightshift, and Blockchain Builders Fund. Akave aims to revolutionize data handling for enterprises, AI companies, and DePIN builders with decentralized data lakes, designed to offer a secure, transparent alternative to traditional cloud storage. Akave’s Yucca Testnet is now live for early testers, allowing users to explore its on-chain data management system that prioritizes data security and efficient exchange. This funding will support the development of advanced tools to make on-chain data lakes a reality.

3. Zero Gravity Labs (0G Labs) has raised $290 million for its decentralized AI operating system, including a $40 million seed round and $250 million token commitment from investors like Hack VC, OKX Ventures, and Samsung Next. The 0G token and mainnet are scheduled for mid-2025. With this funding, the team plans to double its size and drive growth through developer incentives and community events.

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.