BitGo: Crypto Water Cooler — Aug 28
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GM. It’s Wednesday, August 28.?
Newsmakers
Chains Profit From Memecoins. Creators and Traders, Not So Much.
Memecoins have been the top performing sector of 2024 so far. According to Forbes, the total meme coin market cap is now somewhere north of $43B, accounting for roughly 20% of the total crypto market cap, and growth shows few signs of stopping. Trading on next gen memecoin launchpad pump.fun has propelled record growth for Solana, spawning competitors on Sui, Tron, and other chains. Creators and traders continue to be lured by the prospect of the next multi-billion dollar coin.?
?But, while trading may be profitable for chains, a new report shows that just 3% of pump.fun users have made more than $1,000. Just seventy people have made $1MM or more. Some aficionados are growing frustrated by the deluge of tokens surrounding memeable events.?
Take August 12, the day of Elon Musk’s interview with Donald Trump. Over 15,000 tokens were launched, including many Trump/Musk-themed ones, but a mere thirty-eight attracted the $60,000 needed to hit their bonding curve and “graduate” to Raydium, a Solana-based decentralized exchange. Nonetheless, pump.fun generated $6.3MM in revenue that week.?
?However, the competition could be closing in. On August 21, just twelve days after launch, Tron’s entry, SunPump, topped pump.fun in revenue and number of tokens launched. SunPump helped Tron surpass both Ethereum and Solana in terms of daily fees for one twenty-four-hour period last week.?
?For its part, pump.fun recently introduced incentives for creators. The first buyer, not the token creator, now pays the $2 minting fee, and creators get 0.5 SOL if their token hits its bonding curve. That’s all good news for those whose idea of fun is to laugh at and wager on memes and throw ideas at the wall to see if they stick. For those who define fun as making significant profits by trading, maybe not so much.?
?Read more →The Defiant?
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How Many Exchanges Will Survive Hong Kong’s Regulatory Regime?
?When Hong Kong’s new regulatory regime came into effect on June 1, twenty-four firms had applied for licenses. Seven quickly withdrew their applications, and others have since followed, likely due to the costs of compliance and the ban on customers in mainland China. That’s left eleven applicants—Crypto.com, Bullish, HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, EX.IO, YAX, WhaleFin, and Matrixport HK—that have been conditionally approved.?
?These firms can remain in business while under review but can’t onboard new clients. However, as the review process continues, it appears that some may not be compliant by the end of 2024.
Hong Kong’s rules, which are administered by the Securities and Futures Commission (SFC), are based on the principles of “same activity, same risks, same regulation.” That means that, if firms are engaged in the same type of activity and taking the same risks as TradFi firms, they are subject to the same regulations. In its reviews, the SFC has found problems such as too few executives overseeing assets and insufficient protections against cybercrime. Platforms that can’t comply may have to exit the market.?
?While the rules have been called overly restrictive, two platforms—OSL and Hashkey—were able to meet the requirements and were licensed in 2023. And Hong Kong isn’t showing any signs of backing down. Its “safety first” approach is informed by its experience with unlicensed crypto platform, JPEX, which authorities, in 2023, accused of defrauding investors of $1.6B.?
The field may shrink further as firms weigh the cost of compliance against the market opportunity. But, there should be some increased level of confidence in those firms that do pass muster.
?Read more →Bloomberg ($)
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ETFs: The Killer App for Mainstream Web3 Adoption?
?Could ETFs be the long awaited “killer app” that brings digital assets into the mainstream? They have all the ingredients: functionality, ease of use, and delight. The Bitcoin and Ethereum spot ETFs launched in the U.S., Hong Kong, and Australia this year brought big TradFi brands and big money into crypto along with retail investors who value the safety of regulated markets. And, there may be more ETFs in the works.
?Solana is the next most likely candidate for an ETF product, but the SEC last week rejected applications from both 21Shares and VanEck. U.S. investors can currently buy VanEck Solana, an exchange traded note, and Grayscale Solana Trust, a closed-end fund.?
?Grayscale isn’t stopping there. Last month, it began offering a DeFi/AI fund for accredited investors containing several AI oriented protocols and two single asset funds for accredited investors: the Grayscale Bittensor Trust and the Grayscale SUI Trust. Just last week, it announced the Grayscale Avalanche Trust.?
?Whether Grayscale and others can continue to open this door into the mainstream is a topic for debate. On the one hand, precedents for approval have already been set. On the other hand, as Bloomberg analyst Eric Balchunas notes, the SEC watched BTC and ETH performance in futures trading for a long time prior to approving ETFs. If it followed the same timeline, a thumbs up for newer assets could be years away. In any event, nothing is likely to happen until the presidential election and change of administration in 2025.
?Read more →Cointelegraph
News In Brief
Business of Crypto
领英推荐
Regulation and Security
DeFi and Web3?
Midweek Market Pulse
Total Market Cap: $2.16T – 7-day change as of Tuesday 8/27/24 12 PM EST: +3.9%
The total crypto market cap increased to $2.16T, a 3.9% gain from last week, buoyed by Federal Reserve Chair Jerome Powell saying that the “time has come” for the Fed to cut interest rates at its September 17-18 meeting.
?On the Bitcoin (BTC, +4.9%) front, BlackRock’s IBIT ETF saw its largest day of inflows in over a month, and Bitcoin ETFs overall are enjoying an eight-day net inflow streak. The BlackRock fund now owns 350K BTC worth nearly $22B.
?A new report from New World Wealth and Henley & Partners shows that there are now 172.3K crypto millionaires (individuals holding $1MM or more in crypto assets) in the world, a 95% increase over the past year. The number of pure Bitcoin millionaires (people holding $1MM or more worth of Bitcoin) has doubled to 85.4K. The report finds that there are also now 325 crypto centimillionaires and 28 crypto billionaires. Five of the six newly-minted crypto billionaires can attribute much of their wealth to Bitcoin.
?Ethereum (ETH, +0.1%) struggled to keep up with rival layer-1s like Solana (SOL, +8.1%) and Tron (TRX, +7.1%). Ethereum ETFs continue to post a lackluster performance. The $202.5MM of inflows Bitcoin ETFs pulled in on Monday stand in stark contrast to the $13.2MM in outflows the Ethereum ETFs lost during the same trading session.?
?Tron (TRX, +7.1%) continued its strong recent performance and is now the ninth-largest digital asset by market cap. Tron’s new meme coin launchpad SunPump (discussed above) continues to drive increased interest and volume for Tron.?
?PayPal’s PYUSD (PYUSD, +0.0%) stablecoin has hit a $1B market cap, in large part thanks to further expansion on Solana. PYUSD’s supply on Solana has grown from zero to over $650MM in just three months, already far surpassing its supply on Ethereum where it initially launched.?
?Toncoin (TON, -18.0%) fell sharply after the arrest of Telegram CEO Pavel Durov in France on August 24. While Durov and Telegram are not affiliated with Toncoin, the token has been increasingly integrated into the messaging app this year (helping to fuel its remarkable 2024 rise) and used for revenue sharing with channel creators. Toncoin whales used the dip to add to their holdings, snapping up 13.1MM TON as the price fell below $6 on August 25.?
The Last Word
Bonding Curve
?: A mathematical formula expressing the relationship between a token’s price and supply
/ Bonding curve contracts ensure the value of each token increases as more tokens are minted and sold.
About BitGo
BitGo provides the most secure and scalable solutions for the digital asset economy, offering regulated custody, borrowing and lending, and core infrastructure to investors and builders alike.
Founded in 2013 — the early days of crypto — BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.
Over the years, BitGo has expanded from offering wallets into providing a full-suite solution that lets clients hold assets safely and then put them to work.
BitGo launched BitGo Trust Company in 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.
Today, BitGo is the leader in digital asset security, custody, and liquidity, providing the operational backbone for more than 700 institutional clients in over 50 countries — a list that includes many regulated entities and the world’s top cryptocurrency exchanges and platforms. BitGo also processes approximately 20% of all global Bitcoin transactions by value.
For more information, please visit www.bitgo.com.
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