With the crypto market losing more than 20% in market cap, the first quarter of 2026 was rough for DeFi, which showed an 11% decline in TVL. However, RWA was one of the few sectors that went the other way, adding 30% in total value, partially offsetting the DeFi decline.

And within RWA, tokenized gold was one of the primary engines behind this growth.

Every Third RWA Investor Now Owns Tokenized Gold

Tokenized gold is the second-largest RWA category (behind tokenized treasuries), and it ended Q1 at $5.6 billion in market cap. Over the quarter, tokenized gold added $1.3 billion in new value, bringing its total growth to 30%. To put this into perspective, this single-quarter increase is nearly half of what the sector added during the entire 2025.

The same pattern can be seen in user growth.

Tokenized gold gained over 44,500 new wallets in Q1 alone, marking the largest increase in its history. In practical terms, this suggests that every fifth tokenized gold today entered the market within just these three months.

This rapid expansion pushed tokenized gold to a new milestone. Today, roughly one in three RWA participants holds tokenized gold, making it the most widely adopted real-world asset on-chain.

At the same time, the quarter was not short of new narratives. Tokenized stocks led in absolute user growth, adding nearly 80,000 new asset holding addresses. In turn, other commodities, including tokenized oil, metals, and agricultural assets, delivered the fastest relative gains. These segments attracted fresh attention and capital, which likely partly limited tokenized gold’s performance.

Another notable signal comes from how the asset is being used. The amount of tokenized gold actively deployed in DeFi jumped by 123% during the quarter, pushing total active value above $193 million. This is the biggest surge in DeFi adoption for tokenized gold ever, and it signifies that users are increasingly putting tokenized gold to work instead of perceiving it as a simple store of value.

Tokenized Gold Achieves Largest Outperformance Over Physical Gold on Record

To understand what tokenized gold’s Q1 2026 growth actually means, it helps to start with the broader gold market context. Q1 was a highly volatile period: on one hand, it recorded its best month in more than 25 years; on the other, it went through its worst weekly drop since 1983.

Despite this turbulence, physical gold still ended the quarter up 5.5%, pushing its total market value to $32.6 trillion. Major gold ETFs moved in the same direction, with SPDR Gold Shares (GLD) gaining around 10% and iShares Gold Trust (IAU) rising by 8% in holdings.

However, tokenized gold expanded by 30% over the same period, marking its largest quarterly outperformance versus physical gold on record. In relative terms, tokenized gold grew 5.5 times faster than the underlying asset — a gap that highlights how quickly on-chain gold exposure is scaling compared to traditional markets.

Overall, of all the major gold investment vehicles tokenized gold posted the strongest market cap growth in Q1. Also, if tokenized gold were an ETF, it would now rank as the fourth-largest one.

Tokenized Gold Trading Slows as It Enters Top Investment Vehicle Territory

Tokenized gold trading activity remains strong, but its growth is beginning to normalize as it reaches the scale of traditional markets. In Q1 2026, tokenized gold recorded $82 billion in trading volume, marking a 1,300% increase year-over-year — a pace roughly 20 times faster than what the largest gold ETFs posted over the same period.

At the same time, the growth gap is starting to narrow, with tokenized gold volume showing its slowest growth over the past year, falling behind several leading gold ETFs. As a result, tokenized gold slipped from the second-largest to the third-largest gold trading instrument by volume in Q1.

This doesn’t necessarily signal weakening demand. As tokenized gold reaches a scale comparable to the largest ETFs, maintaining explosive growth becomes more difficult. In turn, traditional instruments are seeing renewed activity, likely driven by the same macro volatility that supported gold prices overall.

PAXG Gains Ground in Market Cap, XAUT Outperforms in Wallet Growth

One of the major trends of 2025 was Tether Gold (XAUT) gaining share from Paxos Gold (PAXG) and smaller tokenized gold assets. In Q1 2026, the picture became more balanced.

On market cap, PAXG had the stronger quarter by a wide margin. It posted a 51% increase, adding more than $800 million in value, while XAUT grew 16%. PAXG entered the year as the smaller of the two assets and closed Q1 just $200 million behind, down from a gap closer to $650 million. This means that PAXG outpaced XAUT in terms of attracting new capital in Q1 2026.&

XAUT’s wins came elsewhere. Its number of wallets holding the asset nearly doubled in Q1, growing by close to 19,000 wallets. This means that for the first time since 2024 XAUT added more holders than PAXG in a single quarter. PAXG’s wallet base grew by 26%, broadly in line with the wider tokenized gold market.&

The DeFi picture reinforces the same split. Virtually all of the growth in DeFi-deployed tokenized gold during Q1 came from XAUT, whose active value in protocols surged +127%, while PAXG’s pulled back slightly.&

That divergence is becoming a defining feature of how these two assets function in the market. PAXG attracts capital that sits, with longer-duration holders accumulating a store of value. XAUT attracts capital that moves — deployed into protocols, actively traded, recycled. This duopoly resembles the stablecoin landscape where USDT and USDC are showing the growing divide in use cases.

Beyond the top two, the most notable development was Matrixdock Gold, whose DeFi-deployed value grew over 1,500% in the quarter — a sign of deepening protocol integration that could matter more as on-chain gold use cases expand.

Conclusion

Q1 2026 was a strong quarter for gold broadly — and tokenized gold outpaced the entire field. It grew faster than physical gold, faster than every major ETF, and remained one of the top gold investment vehicles in terms of trading volume. The market cap growth was more than just price appreciation and it came alongside one of the biggest increases in the holder base ever.

The next milestone will likely be closing the gap with GLD and IAU, the only two gold investment products still ahead by trading volume. Whether Q1’s convergence with GLD’s growth pace signals maturation or a temporary plateau will likely be the defining question of the quarters ahead.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

This week looks better than the previous one — at least on paper. The liquidations nearly disappeared, and long-term holders crossed back into profitable territory. But the amount of loss being realised per Bitcoin moved hit its highest level since February selloff, and NUPL continued falling. This suggests that the stress gauge is down but the underlying pain is not.

About the Bitcoin Impact Index

The Bitcoin Impact Index measures which groups of Bitcoin holders are under financial stress, how severe that stress is, and whether it’s severe enough to shake confidence in the market’s direction. It combines on-chain holder behaviour, ETF and derivatives activity, and exchange-level liquidity flows into a single weekly score between 0 and 100. Unlike sentiment indicators, it deliberately excludes social media and volume data to focus on what participants are doing rather than what they are saying.

Score bands:

• Normal Rotation (0–24) — routine profit-taking, no structural shift
• Elevated Repositioning (25–49) — specific groups shifting positions, pressure uneven across the market
• High Impact (50–74) — broad stress across multiple holder groups and institutional flows simultaneously
• Critical Impact (75–100) — full capitulation: LTH losses, large ETF outflows, major liquidations, and heavy exchange inflows at once

Week 14 (March 29 – April 4): BII 42.5 — Elevated Repositioning

The index dropped 15 points from last week. That is a meaningful improvement — but the data tells a more complicated story.

Positive signals: the worst of previous weeks unwound quickly

The most dramatic shift was in derivatives. Over the past month, leveraged traders were aggressively positioned for further downside. Last week, the pressure released through forced position closures, and total liquidations collapsed to the lowest level since mid-February. With less forced selling pressure in the system, the immediate stress on price eased.

Stablecoin inflows returned positively at $179 million daily average, and Bitcoin arriving at exchanges fell to its lowest level since December, meaning sellers are stepping further back.

Mixed signals: long-term holders are at a crossroads

Long-term holders crossed back to the breakeven line, with LTH SOPR sitting exactly at 1.0. This is a decision point. From here, long-term holders either return to selling at a profit, which would be a genuine structural improvement, or they slip back below breakeven under continued price pressure, which is what happened in previous weeks after a similar brief recovery. This is the third time in 2026 that LTH SOPR approached or crossed 1.0 without sustaining it. Each prior attempt was followed by a deterioration and price decrease.

Funding rates flipping positive is the week’s most ambiguous signal. On the surface it looks like sentiment improving. But the last time funding turned positive, it was followed within two weeks by the sharpest stress escalation of the year.

Negative signals: the pain per Bitcoin moved is near its worst

Despite the improved index value, realized loss density — how much loss is being concentrated per unit of Bitcoin actually moved — hit its highest reading since February’s stress peak. That means the holders who are selling are doing so at deep losses, even as the volume of selling has dropped. Fewer people are selling, but those who are selling are hurting more. That is not the signature of a market that has worked through its stress. It is the signature of holders being squeezed into selling at increasingly bad prices.

Shark and whale wallets both reduced their Bitcoin balances this week, a quiet reversal after weeks of accumulation. NUPL declined for the second consecutive week, meaning the overall profitability of the market continued eroding even as price held relatively stable.

What could happen next

The index improvement this week was driven primarily by derivatives unwinding rather than genuine on-chain healing. The key signals to watch are whether LTH SOPR can stay above 1.0 and build on it rather than slipping back, and whether the realized loss density eases as the holders currently selling at deep losses either exhaust or step back.

If LTH SOPR holds above 1.0 and stablecoin inflows sustain, the index has room to show lower values and the recovery becomes more credible. If the pattern of the past two months repeats — brief improvement followed by a reversal — the index heads back toward High Impact and the mid-2018 and mid-2022 parallels flagged last week become harder to dismiss.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

• Total stablecoin supply added only $8 billion in Q1 2026 — the weakest expansion since Q4 2023, as the market rotated rather than grew.
• Yield-bearing stablecoins grew over 22% in Q1, contributing more than half of net stablecoin market cap increase.
• Stablecoins accounted for 75% of all crypto trading volume in Q1 2026, the highest share ever recorded.
• Total stablecoin transaction volume surpassed $28 trillion in Q1 2026, reaching a new all-time high. 76% of that volume was bot-driven — the highest level in two years.
• Retail-sized stablecoin transfers fell 16% in Q1 2026 — the largest drop on record, with the closest comparable decline in Q1 2022.

Across the crypto sector, Q1 2026 has been drawing comparisons to 2022. Bitcoin posted its worst start to a year since the 2022 bear market, while multiple volatility, volume, and on-chain metrics have been resembling mid-2022 patterns. Stablecoin data is telling a similar story shaped by two parallel forces.

On one side, the broader risk-off environment pushed more capital toward stablecoins as a defensive hold, driving their share of crypto trading volume to all-time highs and accelerating demand for yield-bearing alternatives. On the other, regulatory momentum continued to build, with stablecoin yield potentially creating new friction. Separately, the Office of the Comptroller of the Currency released a proposal to implement the GENIUS Act, which could hamper stablecoin rewards programs more broadly.

The result was a quarter that looked, on many metrics, like a classic bear market reset — but with a stablecoin market that is structurally much larger, more institutionally integrated, and more regulatory-aware than it was in 2022. Here is what this means and what path forward this may develop.

Supply Dynamics

Mid-2022 Rotation Trends

By the end of Q1 2026, the total stablecoin supply crossed $315 billion, updating its all-time high. However, the quarter added only around $8 billion in net new supply, marking it the weakest quarterly expansion since Q4 2023, and a sharp contrast to the $45.7 billion added in Q3 2025.

In relative terms, the supply expanded by only 2.6%, while the total crypto market cap dropped by 21%. As a result, stablecoins’ dominance in the crypto market cap briefly jumped from 9% to 13%, for the first time since early 2023. This suggests that the market is increasingly rotating toward stablecoins, and a nature of this rotation resembles mid-2022, when stablecoin dominance surged from 8% to 17% as investors were seeking defensive positioning and capital preservation.

Another similarity with mid-2022 is the divergence between the two leading assets. In Q1 2026, USDC gained $2 billion in supply, while USDT shed $3 billion. The last time the two moved this way simultaneously was Q2 2022.

As such, if the pattern holds and bearish conditions persist, the crypto market could see further increase in stablecoin dominance and demand. However, this doesn’t necessarily mean further stablecoin supply expansion as it remains under pressure due to USDT.

Yield-Bearing Stablecoins Fueled More Than Half of Net Supply Increase

Aside from USDC, one of the biggest drivers behind supply growth in Q1 2026 was market restructuring around yield. Yield-bearing stablecoins, assets that pass returns directly to holders, often through exposure to U.S. Treasuries or DeFi lending, grew by over 22% in Q1 alone, marking it the best-performing category in the sector. This means they added around $4.3 billion in market cap, accounting for the majority of stablecoin growth last quarter.

As a result, yield-bearing stablecoins are dominating among assets posting the largest supply gains in Q1 2026. For instance, USDY’s market cap saw an over 150% increase in Q1, while sUSDS added more than $2.5 billion in market cap, more new capital than the next four yield-bearing stablecoins combined in absolute terms.

Other top performers are also closely linked to yield-generating mechanisms. USDS, for instance, largely serves as an entry point to sUSDS, while USD1 has benefited from the launch of World Liberty Markets, which expanded its DeFi utility and yield access. So even where the yield is indirect, it is clearly driving adoption.

One of the major reasons behind this expansion was a broader risk-off environment, which pushed investors to look for efficient ways to park their capital, and capital preservation with yield became more attractive.&

Another catalyst could be the ongoing discussions about stablecoin yield within the Clarity Act framework. Specifically, it’s about whether centralized exchanges should be allowed to pay yield on stablecoin balances, a model that banks see as a direct threat to their deposit business. The recent text updates would ban yield payments for simply holding a stablecoin on CEX balances, which could further expand the appeal of yield-bearing stablecoins.

Biggest Drop of USDT Supply on Ethereum Ever

In terms of network distribution, Tron was the clear winner, adding more than $4 billion in stablecoin supply in Q1 2026, mainly in USDT. However, this growth came alongside a major shift away from Ethereum L1. More than $7 billion of USDT left Ethereum during the quarter — the largest drop on record. For comparison, this is close to the total USDT outflows on Ethereum seen during the entire 2022 bear market.

Notably, this decline was almost fully offset by growth in USDC and yield-bearing stablecoins on Ethereum. This suggests users are rotating within the Ethereum ecosystem rather than exiting it.

Among smaller ecosystems, Solana saw the largest growth in absolute terms, adding more than $1.6 billion in supply. HyperEVM led in relative growth, with its stablecoin supply increasing by more than 80% in Q1 2026.

Trading Volume Dynamics

Stablecoins Are Eating Crypto Volume

Stablecoins are now dominating crypto trading activity more than ever before. In Q1 2026, stablecoins registered $8.3 trillion in trading volume, accounting for 75% of total crypto trading volume, the highest share on record. This surpasses the previous peak of 72% in Q3 2022.& &

As such, stablecoin trading volume appears to be healthy in absolute terms. Q1’s $8.3 trillion total runs ahead of the same period in both 2025 and 2024. The difference is that the broader crypto market has contracted relative to stablecoins dramatically.

This dynamic strongly echoes mid-2022 behavior, when uncertainty pushed capital into stable pairs and sidelined directional risk.

USDT is at the center of that story. Despite its supply declining, USDT alone accounted for 68% of all crypto trading volume (up from 63% in Q4 2025) and 86% of all stablecoin trading volume in Q1 (down from 87% in Q4 2025).

USDC Gains Ground as USDT Reserves Decline

Although USDT stayed dominant in trading volume, USDC is quietly strengthening its position. Its share of stablecoin trading volume increased from 9% to 10% quarter-over-quarter, showing a slight rotation from USDT.&

CEX.IO’s internal data shows the same shift, but in more striking terms. Across all financial operations involving stablecoins, including trading and on-chain transactions, USDC’s share rose from 48% in Q4 2025 to 58% in Q1 2026.

However, the biggest change occurred in exchange balances. USDC exchange reserves increased by over 12% in Q1 2026, while USDT reserves fell by 12%. This suggests increased USDC adoption on CEXs, as well as that “wait and see” users were actively stockpiling USDC.&

The DEX volume supports this claim as its share in USDC trading volume decreased from 27% to 23%. This indicates that USDC has primarily seen an increase of its volume on CEXs.

Transaction Volume Dynamics

The Largest Bot Activity Ever on Ethereum and Tron

Stablecoin transaction activity reached a new all-time high in Q1 2026, with total volume surpassing $28 trillion and showing a 51% increase compared to Q4 2025. However, most of this activity and growth was not organic. Around 76% of all stablecoin transaction volume in Q1 2026 was driven by bots, up from 70% in Q4 2025, and the highest level since Q2 2024.

Note: Organic activity is measured as adjusted volume using the Adjusted Transaction Methodology. Bot activity combines Bot and Other (Unadjusted) transactions. Internal transfers include internal smart contract transactions and intra-exchange transfers.

When broken down by network, the bot activity trends become even more pronounced. In Q1 2026, Ethereum and Tron recorded their highest levels of bot-driven stablecoin activity ever, reaching 72% and 54%, respectively.

One of the drivers behind this move could be the increasingly risk-off environment. Instead of taking directional bets, traders are relying more on low-risk strategies like arbitrage, which are largely automated.&

This is especially visible on Ethereum DEXs, where stablecoin swaps now make up the majority of trading volume. As this share has grown, so has the presence of automated activity. In fact, the share of automated programs on Ethereum DEXs also reached an all-time high in Q1 2026.

USDC Registered Its Largest Share in Organic Volume

USDC accounted for 80% of total stablecoin transaction volume and 85% of all bot-driven activity in Q1 2026. As automation increased, it further reinforced USDC’s dominance across the stablecoin landscape.

At the same time, USDC also recorded one of its strongest gains in organic (adjusted) activity, with volume rising by 59% quarter-over-quarter. In contrast, USDT moved in the opposite direction, with its organic volume declining by 17%, marking one of its steepest drops on record.

This divergence led to a complete shift in the structure of real usage. For the first time since 2019, USDC overtook USDT in organic (adjusted) transaction volume. Furthermore, on an annualized basis, USDC now accounts for around 63% of organic volume, the highest share ever recorded, outpacing 2018 values.

This suggests that USDC is no longer just leading in infrastructure and automated flows, but is increasingly becoming the primary asset for real on-chain activity. Meanwhile, USDT’s role appears to be drifting more toward off-chain trading activity, reinforcing the growing divide between how the two stablecoins function within the ecosystem.

The Biggest Drop Ever in Retail-Sized Transfers

For years, retail activity has been one of the most consistent growth stories in the stablecoin landscape. Almost every quarter, retail-sized transactions, or those below $250, have reached new all-time highs, reflecting steady adoption in payments, remittances, and peer-to-peer use.

However, in Q1 2026, retail-sized stablecoin transfers declined by 16%, marking the largest drop on record. The most comparable decline occurred in Q1 2022, at the start of the bear market, when retail-sized volume fell by about 12%.

This pullback was likely driven by broader market caution and reduced user activity in a risk-off environment. At the same time, this does not necessarily indicate a reversal in long-term adoption. Instead, it suggests that retail activity is becoming more sensitive to market cycles, aligning more closely with broader crypto conditions rather than growing independently of them.

Conclusion

Q1 2026 made the 2022 comparison hard to ignore. Stablecoin dominance rising sharply, capital rotating defensively, USDT and USDC diverging, automation surging, and retail pulling back — these patterns appeared together in mid-2022, and they are reappearing now. If broader bearish conditions persist through the year, stablecoins could see further demand and dominance gains in the coming quarters. The difference is that the asset class is entering this period from a much stronger structural position, with deeper institutional integration, various regulatory frameworks in place, and yield-bearing products that didn’t exist in the previous cycle.

However, supply growth could face real headwinds. USDT remains under pressure, and the regulatory fight over yield could make certain stablecoin practices less appealing. On the trading side, if current trends hold, 2026 is tracking below 2025 in total volume terms, which is consistent with a bear market environment.&

The more important question heading into Q2 is whether the 2022 parallel plays out in full, meaning roughly a year of slow recovery before momentum returns, or whether the signs already emerging from on-chain accumulation signal a shorter cycle this time.

Sources

The data used for this research consists of publicly available information from DeFiLlama, Visa/Allium, Artemis, CoinGecko, StableWatch, Blockworks Research, CryptoQuant, and GrowThePie. Organic activity is measured as adjusted volume using Adjusted Transaction Methodology. Bot activity combines Bot and Other (Unadjusted) transactions, while internal transfers include internal smart contract transactions and intra-exchange transfers. Retail-sized transactions are defined as adjusted (non-bot) transactions that are less than $250, according to the same Adjusted Transaction Methodology. The observation period for this study was focused on Q1 2026, with data points ending March 31, 2026.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

After two weeks of easing, stress returned hard this week — and it came from every direction at once. Institutional money pulled back, fresh buying capital vanished, and the holders who had finally returned to profit last week are selling at a loss again. The market is back in territory that, earlier this year, preceded some of its worst weeks.

About the Bitcoin Impact Index

The Bitcoin Impact Index measures which groups of Bitcoin holders are under financial stress, how severe that stress is, and whether it’s severe enough to shake confidence in the market’s direction. It combines on-chain holder behaviour, ETF and derivatives activity, and exchange-level liquidity flows into a single weekly score between 0 and 100. Unlike sentiment indicators, it deliberately excludes social media and volume data to focus on what participants are doing rather than what they are saying.

Score bands:

• Normal Rotation (0–24) — routine profit-taking, no structural shift
• Elevated Repositioning (25–49) — specific groups shifting positions, pressure uneven across the market
• High Impact (50–74) — broad stress across multiple holder groups and institutional flows simultaneously
• Critical Impact (75–100) — full capitulation: LTH losses, large ETF outflows, major liquidations, and heavy exchange inflows at once

Week 13 (March 22–28): BII 57.4 — High Impact

The index jumped 13 points in a single week, the sharpest rise since late January. Here is what the data shows.

Negative signal: The holders who just recovered are underwater again

Long-term holders started the week selling at a profit for the first time since January. But by the end of the week, SOPR fell to 0.724, wiping out six weeks of recovery. This means long-term holders are now selling at their deepest losses in three years, and the speed of the reversal indicates a sharp deterioration in confidence.

The broader context makes this more concerning. Bitcoin’s price has been drifting slightly higher over recent weeks, but the share of long-term holders sitting in profit has been quietly shrinking at the same time. As for now, more than 4.6 million Bitcoin owned by long-term holders, or over 30% of what they hold, is sitting in a loss, which is the highest share since 2023.&

This kind of divergence between price action and on-chain conviction has historically been a warning sign. For instance, similar moves occurred in mid-2018 and mid-2022 before price drops by over 25%.

Short-term holders are not faring better, with their realized P/L falling to lowest level since late January. Overall, nearly half of all Bitcoin in existence (47%) is now sitting at a loss. That matches the levels seen during the most stressed weeks of February.

Negative signal: Liquidity flows reversed

One of the bright spots from previous weeks was a surge of fresh capital flowing into exchanges, ready to buy. But last week, almost all of it reversed. Stablecoin netflows swung from strongly positive (+$250 million daily average) to their most negative reading in months (-$292 million daily average). ETF inflows also turned to outflows, while miners, who had been holding for three weeks, started selling again.

One of the few metrics in the index that did not get worse is the amount of Bitcoin moving toward exchanges to sell — that stayed low, at around 20,900 BTC daily average. Holders are stressed, but they are not panicking yet.

Mixed signal: Derivatives calmed down — but not in a good way

Funding rates moved closer to neutral last week, which sounds like an improvement. However, total liquidations nearly tripled to $288M, with long positions making up 61% of those. When funding rates normalize through long liquidations rather than short covering, it is a sign of forced de-risking rather than improving sentiment.

Whale wallets added marginally, and shark wallets held flat — large holders are not panicking, but they are not adding meaningfully either.

What could happen next

The setup resembles late January, just before the market dropped by more than 30%, to $60,000. Back then, the same combination appeared: both holder groups selling at a loss, institutional money pulling back, and stablecoins draining rather than arriving. What followed was the most stressed period of 2026 so far.

The difference this time is that holders are not yet rushing Bitcoin to exchanges to sell. That kept February’s worst moments from becoming even worse, and it is doing the same now. If that restraint holds, the current stress could stabilize rather than escalate.

But if the price continues drifting lower, the pressure will keep building until the support level breaks, and this could cause a repeat of the selloff two months ago.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

About the Bitcoin Impact Index

The Bitcoin Impact Index measures which groups of Bitcoin holders are under financial stress, how severe that stress is, and whether it’s severe enough to shake confidence in the market’s direction. It combines on-chain holder behaviour, ETF and derivatives activity, and exchange-level liquidity flows into a single weekly score between 0 and 100. Unlike sentiment indicators, it deliberately excludes social media and volume data to focus on what participants are doing rather than what they are saying.

Score bands:

• Normal Rotation (0–24) — routine profit-taking, no structural shift
• Elevated Repositioning (25–49) — specific groups shifting positions, pressure uneven across the market
• High Impact (50–74) — broad stress across multiple holder groups and institutional flows simultaneously
• Critical Impact (75–100) — full capitulation: LTH losses, large ETF outflows, major liquidations, and heavy exchange inflows at once

Week 12 (March 15–21): BII 44.3 — Elevated Repositioning

The index ticked up 3.2 points from last week, remaining in Elevated Repositioning. The small change in the headline number masks a much more eventful week beneath the surface — one where the early-week picture looked considerably more optimistic before the week closed on a more cautious note.

Positive signals: fresh money is arriving

Stablecoin netlows to exchanges surged to $250M daily average — the largest reading since November 2025. This suggests that fresh capital is arriving and positioning to buy, not existing holders exiting. When stablecoins flow into exchanges at this scale, it signals that sidelined money is actively preparing to re-enter the market. However, it’s worth noting that large stablecoin inflows have not always translated into sustained price support. In November, a similar surge arrived near a local top and did little to prevent a subsequent decline.

Exchange BTC inflows remained low at 22,754 BTC, meaning the sell-side is still thin. In turn, shark wallets (holders with 100-1,000 BTC) added 31,000 BTC last week, extending an accumulation streak that now spans three weeks.

Mixed signals: long-term holders back in profit but short-term holders moved back in loss

LTH SOPR moved above 1, indicating that long-term holders are, on average, back in profit for the first time since January. However, the BCDD indicator shows that long-term holder activity remains near a three-year low, and holders with coins older than five months account for only around 25% of total spending volume. This means that the vast majority of long-term holders are still sitting tight, not selling, which can support the price.

Short-term holders tell the opposite story. Recent buyers who briefly returned to profit early-week used this opportunity to exit, and the cohort’s realized PnL is now one of the worst in 2026. As a result, the week essentially transferred stress from long-term to short-term holders rather than relieving it altogether, and it is short-term sellers who are driving most of the market’s current activity.

ETF inflows slowed sharply from previous weeks, showing net inflows early on and net outflows later. This suggests ETF investors are primarily following short-term holder behavior, which is a worse scenario for a sustained support of Bitcoin’s price.

Negative signals: derivatives stress ticked up

The derivatives market has now been more aggressively positioned for a price decline than at any other point in 2026, including during February’s stress peak. Leveraged traders are paying a premium to hold their short bets open, and that conviction has not wavered despite two weeks of positive price action. The options market tells the same story: traders are increasingly using direct futures shorts rather than buying protective options, which typically signals higher confidence in a downward move rather than just hedging.

What could happen next

The more likely path is continued choppiness or a drift lower, with short-term holders adding selling pressure on any bounce. A genuine recovery needs two things to happen in sequence: short-term holders need to find relief without immediately selling into it, and leveraged shorts need to start unwinding rather than doubling down. Neither is currently visible.

However, there is some hope for bulls. Despite returning to profitable territory, long-term holders chose not to sell, and just wait. That kind of restraint — sitting on profits rather than taking them — has historically preceded sustained recoveries. If that conviction holds and short-term pressure eventually exhausts, the setup for an upside move could be quietly building underneath the noise.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

All existing UK customers – as well as newly onboarded users – will be served by a UK-registered entity. With its inclusion on the FCA’s official register, CEX.IO can establish deeper partnerships with UK banks, helping reduce the likelihood of blocked deposits or flagged withdrawals.

The migration of CEX.IO’s UK user base will be carried out in phases to ensure a smooth transition. Customers will receive in-app notifications prompting them to accept new UK-specific terms. CEX.IO does not expect the process to affect their existing asset portfolios or interrupt their trading activity.

Operating through a UK-registered entity also means that CEX.IO’s cryptoasset activities for UK users will be carried on within the UK anti-money laundering and financial crime framework.

“We aren’t just checking a box – we’re building a home for crypto in Britain,” said Rich Evans, Managing Director at CEX.IO. “By moving our UK users to a locally registered framework, we’re reinforcing and aligning local accountability with the high standards expected from any UK financial service. This registration lays a solid foundation for everything we plan to build in 2026 and beyond.” The UK is widely regarded as having one of the most rigorous regulatory environments for digital assets globally. According to FCA data, historically 15% of applicants have successfully met the required standards. By securing this status, CEX.IO joins a group of firms capable of meeting the FCA’s ‘high-bar’ expectations for financial crime prevention and consumer protection. Registered firms also gain the ability to communicate their own qualifying cryptoassets financial promotions to UK consumers under the UK’s updated 2026 regulatory standards, ensuring that all communications remain fair, clear, and focused on consumer protection.

Check latest crypto news on Finbold to keep up to date with the latest crypto news.

It draws from three blocks: on-chain holder behaviour (which cohorts are moving coins and at what profit or loss), ETF and derivatives activity (institutional flows, liquidations, funding rates, and liquidation directionality), and exchange-level liquidity (BTC inflows, stablecoin flows, and realised loss density). The index is updated weekly, on a scale of 0 to 100, with the following bands:&

• Normal Rotation (0–24) — routine profit-taking, no structural shift.
• Elevated Repositioning (25–49) — meaningful cohort shifts, limited institutional stress.&
• High Impact (50–74) — LTH and STH both under pressure, ETF/derivatives de-risking.
• Critical Impact (75–100) — LTH capitulation, large ETF outflows, major liquidations, heavy exchange inflows.

Below are readings for all 10 completed weeks of 2026, followed by what the latest data suggests about the current situation.

The lowest index reading in 2026 was 28.8 in mid-January, when ETF inflows were strong and holder stress was moving down. A week later, a sharp selloff began, which illustrates an important point about how to read the index. The headline score reflects what already happened, but the signals inside it can indicate where pressure is building before it fully shows up in price. The highest reading was 69.7 in early February, when long-term holders were selling at a loss, ETFs were bleeding capital, and liquidations peaked. Current readings are sitting roughly in the middle of that range.

*Note: Week 11 figures are partial because the week has not yet ended.

Week 11 (March 9–15): A Fragile Recovery

The index opens the new week at 44.8, continuing in Elevated Repositioning and moving further from the High Impact threshold compared to last week’s 49.4. This continues a broader trend of gradual easing. Although the direction is positive, the improvement is uneven across different parts of the market.

Short-term pressure easing, but long-term holders are the new concern

Short-term holders have scaled back selling at a loss, with their realized P/L ratio recovering close to breakeven. Long-term holders, however, moved in the opposite direction. LTH SOPR dropped to 0.762, the lowest reading in three years. Long-term holders typically distribute coins during strong rallies, when they can lock in profits. When they instead sell at a loss, it usually reflects weaker conviction in further upside.

At the same time, the short-term holder picture can change quickly. Last week, as Bitcoin approached $74,000, STH SOPR briefly reached 1, and many short-term holders used that moment to exit positions at breakeven rather than hold for further gains. Now the market is facing a similar test again. With STH SOPR back to 1 and Bitcoin trading close to $70,000, the key question is whether short-term holders will treat this level as another exit opportunity. If they do, it would suggest that confidence in a sustained recovery remains limited.

Liquidity signals send a mixed message

Despite the improvement in short-term holder behaviour, the liquidity picture moved sharply in the wrong direction. Stablecoin flows to exchanges turned deeply negative at –$187.9M daily average, reversing the positive readings of the past two weeks. Exchange BTC inflows stayed low, which is a positive, but the stablecoin reversal suggests that the buyer interest seen in early March has not yet turned into consistent accumulation.

Derivatives positioning remains deeply negative

Funding rates are still negative at -0.0044, meaning leveraged traders continue to pay a premium to hold short positions. This signal has now persisted for over a month without a decisive resolution, and this week brought no meaningful change in either direction. The divergence between improving spot conditions and persistently bearish derivatives positioning remains the defining unresolved tension in the market.

However, it is worth putting this in context. Although today’s derivatives positioning looks similar to early February, the most intense period in 2026, the spot market stress is far lower. That divergence historically preceded sharp moves in either direction. Episodes of extreme negative funding without corresponding spot deterioration have sometimes resolved as short squeezes, where shorts are forced to cover and price moves sharply higher. But that outcome requires sustained spot buying to hold firm, which the stablecoin data does not yet confirm.

What could happen next

At this point, continued price decline or sideways movement is the more likely outcome. The key thing to watch is whether short-term holders sell again the moment they break even, just like they did near $74,000 last week. If that happens again, it means every price bounce is being used as an exit opportunity, not a reason to hold. Add deteriorating long-term holder conviction, the stablecoin drain, and persistently negative funding rates, and the pressure is pointing firmly downward.

For the picture to genuinely improve, long-term holder SOPR would need to stop falling and recover back above 1, confirming that veteran sellers are exhausting rather than accelerating. Stablecoin inflows would need to return in a sustained way, and short-term holders would need to hold through breakeven rather than selling into it. Right now, none of those conditions are in place. Until they are, any price recovery is more likely to stall than to stick.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

For years, crypto adoption has been measured primarily through the lens of overall user growth — new wallets, rising volumes, expanding markets. But underneath those headline numbers, the composition of who is participating has been quietly shifting. New data from CEX.IO, drawn from a sample of over 3 million users across 150+ countries, reveals that female participation in crypto is not only growing but accelerating at a pace that outstrips the broader market.

Notably, women are more actively moving from passive holding into active trading, but a long-term orientation and holding through volatility rather than reacting to it remains the most popular approach.

What follows is a close look at where that growth is coming from, what female users are actually doing with their portfolios, and what their behavior might signal about the evolving character of crypto participation overall.

1 in 5 Active Crypto Users is Now Female&

In 2024, roughly one in six users (17%) who made a financial operation on the crypto exchange was female. Today, that number is closer to one in five (21%).&

What makes this number more striking is the pace behind it. Female user activity grew more than twice as fast as male activity over the same period — over 70% growth year-on-year for women, compared to 33% for men. Notably, women outpaced men consistently across every age group.

The 35–50 age group stands out as the most active. Women in this bracket account for the largest share of female crypto operations and represent the core of female crypto engagement.&

But the fastest-moving group is the youngest: women aged 18–25 more than doubled their activity year-on-year. Some of that acceleration reflects a lower starting point, but still, young women are entering crypto at a rapidly increasing rate, and they’re arriving faster than their male peers.

Women Doubled Their Financial Footprint in Crypto, With Trading Fueling the Trend

Female-driven financial volume on the crypto exchange grew by more than 118% in 2025, outpacing men’s volume with a 99% growth rate over the same period.

Spot trading played a significant role in this surge. The share of female spot traders grew from around 12% to nearly 13% in 2025. That may sound modest, but the volume story is more impactful. Female spot trading volume more than tripled year-on-year. As a result, women’s share of total spot trading volume jumped from around 3% to over 5%.

Notably, among male spot traders, activity is increasingly concentrated in the 25-35 age group, suggesting younger men are leading trading behavior. But among female traders, the 35–50 group remains dominant, both in activity and in volume.

Meanwhile, the overall share of spot trading within female crypto activity has also grown — rising from roughly 22% to 31% of female volume. This indicates that women are increasingly engaging with trading tools as a bigger part of their crypto journey.

Women in Crypto Are BTC First and Stick More to Their Original Plan

Among female users, Bitcoin is the single most interacted-with digital asset by volume, accounting for 37% of female financial activity. The female top-five asset ranking runs: BTC, USDT, ETH, USDC, XRP — with Bitcoin clearly in front. Among male users, the order is slightly different: USDT, USDC, BTC, ETH, XRP — with stablecoins accounting for nearly half of financial activity. This gap points to a more buy-and-hold orientation among female users, while male activity leans more toward active rotation between assets.

That long-term mindset also shows up in how female users respond — or rather, don’t respond — to market turbulence. When high-impact events hit the market and total spot volumes surge, female users show notably smaller spikes in both activity and volume. This doesn’t mean they’re passive, but rather less reactive to noise and act as a stabilizing force in the market.

Despite a clear preference for Bitcoin, women are actively exploring beyond it. Among top altcoins, assets that saw the biggest increase in female interest in 2025 include AAVE, SUI, XRP, SOL, and ETH.

Conclusion

Female crypto adoption over the past year was broad, spanning every age group, outpacing male growth in both activity and volume, and deepening in engagement as more women moved from passive holding into active trading.

This trend isn’t exclusive to crypto, and a similar shift is underway across traditional finance. Fidelity’s research found that 7 in 10 women own stock market investments, up 18% compared to the prior year. Charles Schwab’s 2025 survey found millennial women are starting to invest earlier than previous generations, supporting the trend of younger women getting more involved in crypto.

The behavioral patterns are also similar. Bitcoin-first thinking and lower reactivity to market volatility mirror what researchers have documented in traditional markets for decades: women trade less, hold longer, and tend to outperform as a result.What makes crypto distinctive is the pace. A four-percentage point jump in female share of active crypto users within a single year is a steeper trajectory than traditional finance has typically recorded. As female participation continues to grow, it may bring a measurably different energy to a crypto space that has sometimes been defined by its excesses.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Stablecoins have historically dwarfed tokenized treasuries by most measures, and their quarterly supply expansion regularly reached tens of billions. However, in Q1 2026 so far, the tokenized treasury market added $2.12 billion in market cap, while stablecoins added just $1.19 billion. For the first time ever, tokenized treasuries are growing faster than stablecoins in absolute terms.

So what changed?

Note: Q1 2026 data is through February 24, 2026.

The Market Turned Cautious and Yield Became the Answer

Crypto markets have been grinding through a difficult period, and investors are responding by rotating toward assets that offer more stability and predictable returns. Tokenized treasuries fit that profile almost perfectly: they are backed by U.S. government debt and generate real yield, which has even ticked up slightly this year.&

Tokenized treasuries currently show eight consecutive quarters of expansion. Moreover, although we are only mid-quarter, Q1 2026 is already on track to become the strongest quarter for tokenized treasuries on record. This indicates that demand is not only sustained, but also accelerating.

As such, since the start of 2024, tokenized U.S. treasuries have grown from $750 million to nearly $11 billion — a roughly 15x increase. Non-U.S. treasuries followed a similar trajectory, surging from just $13 million to over $1 billion over the same period.

Notably, non-U.S. treasuries have been steadily increasing their footprint within the tokenized treasuries market. Their share of total market cap has expanded from roughly 1% two years ago to nearly 9% today, signaling gradual diversification beyond U.S bonds.

Stablecoin Supply Is Shifting Towards Yield As Well

Stablecoin supply is currently showing its worst dynamics in years. In the first two months of 2026, Ethereum has already lost more than $8 billion in stablecoin supply — the worst result since Q2 2022. In turn, USDT and USDC lost $3.2 billion and $0.5 billion in supply, respectively, so far this year.

By conventional measures, this would signal a sector in retreat. But total stablecoin supply has barely changed in the aggregate, because the market is restructuring around yield.

Among the stablecoins posting the largest absolute supply gains in 2026, yield-bearing assets such as USDY, sUSDS, USYC, and syrupUSDC lead the pack. Other top performers are also closely linked to yield-generating mechanisms. USDS, for instance, largely serves as an entry point to sUSDS, while USD1 has benefited from the launch of World Liberty Markets, which expanded its DeFi utility and yield access. So even where the yield is indirect, it is clearly driving adoption.

As a whole, yield-bearing stablecoins showed a 5% increase in 2026 so far, becoming the best-performing segments in the stablecoin sector right now.

What This Signals For the Industry

During bull markets, stablecoins thrive as liquidity vehicles, sitting on the sidelines of active speculation. In a more cautious environment, idle capital has a cost, and both protocols and users are looking for on-chain instruments that work harder. If bearish conditions persist, yield-bearing stablecoins and tokenized treasuries are well-positioned to keep expanding as investors seek stability and consistent returns.

The growth of yield-bearing assets is already registering beyond crypto markets. In Washington, stablecoin yield has become one of the more contentious topics in ongoing U.S. crypto legislation. Specifically, it’s about whether centralized exchanges should be allowed to pay yield on stablecoin balances, a model that banks see as a direct threat to their deposit business. That debate is narrower than what the DeFi-native yield products covered here represent, but it reflects the same underlying shift: yield on crypto assets is no longer a niche feature, it is becoming an expectation — and one that traditional finance is taking seriously enough to push back on through legislation.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

2025 marked a historic year for crypto dealmaking, with combined fundraising and M&A activity reaching nearly $55 billion. The momentum peaked in Q4 2025, which emerged as the busiest quarter the industry has ever recorded. Landmark events included Naver’s $10 billion merger with Dunamu, Polymarket’s $2 billion raise led by Intercontinental Exchange, and Kalshi’s $1 billion fundraising round, which collectively drove this record-breaking quarter.

Compared to 2024, the scale of crypto deals jumped by 350% in 2025. This surge in activity was so unprecedented, nine of the ten largest crypto deals in history took place last year. The only exception within the top ten remains EOS’s $4 billion ICO in 2018, which still stands as the largest ICO ever.&

2025’s largest deals were primarily M&As, IPOs, and strategic investments from traditional financial institutions, highlighting the industry’s maturation and its deepening integration with the broader financial system.

Crypto Fundraising Is Among Leading Sectors in Global Funding

Crypto fundraising reached $35.6 billion in 2025, surpassing the previous peak in 2021 and setting a new all-time high. Considering Crunchbase estimates of global venture funding last year, this would position crypto among the leading funded sectors, behind AI and healthcare/biotech.

One of the most notable divergences between crypto and broader venture markets is its declining exposure to AI. While AI accounts for roughly half of all global venture funding, its share within crypto has continued to shrink, falling from 7% of total crypto fundraising in 2024 to just 2.6% in 2025.&

Instead of AI, the majority of funds in 2025 was allocated to finance-related projects (exchanges, stablecoins, tokenization, etc.), totaling more than $19 billion. Consumer apps (prediction markets, gaming, wallets, etc.) came second with over $6 billion, while infrastructure (hardware, security tools, bridges, etc.) rounded out the top three with over $3 billion.

Another distinctive aspect of 2025 was fundraising distribution. Rather than scattering investments across numerous small projects, VCs are now writing bigger checks to fewer companies. The deal count fell by 36% year-over-year, while the average round size climbed to nearly $36 million, signaling a clear preference for quality over quantity.

This dynamic mirrors a broader trend across the fintech sector last year, where deal count declined by 23%, even as total deal volume increased by 27%. However, the average fintech round size stood at roughly $15 million in 2025, or about 2.4x smaller than in crypto, highlighting crypto industry’s continued appeal.

Crypto M&As Became More Common and Pronounced

In 2025, the crypto industry experienced an unprecedented and rapid rise in M&A volume and count. First of all, it’s important to point out that M&A data is less transparent than fundraising. While 140 crypto M&As were recorded in 2025, about 86% of them did not disclose the transaction amount, making it difficult to estimate the true value of the sector’s activity.&

Still, deals with publicly disclosed values have exceeded $18 billion, representing more than a 10x increase from 2024. For comparison, global M&A value reportedly rose by 40% in 2025.

As a result, M&A now makes up 34% of total crypto deal volume, the largest proportion ever recorded.

This surge in acquisitions signals market maturation. Companies are increasingly buying rather than building, acquiring existing technology, talent, and user bases to accelerate growth. The move from pure innovation to strategic consolidation suggests the industry is entering a new phase of development.

Similarly to fundraising, most of the known deals are in the Finance sector, accounting for 96% of volume and 46% deal count. Notable examples include Coinbase purchasing Deribit, Kraken acquiring NinjaTrader, and Ripple buying Hidden Road.

2026 Outlook

The trends established in 2025 are likely to persist throughout 2026, but the scale of crypto deals may go down similarly to 2022 if broader market conditions deteriorate.

M&A activity will likely accelerate as the industry continues maturing. Larger players with strong balance sheets will use market downturns as opportunities to consolidate smaller competitors or acquire strategic technologies at more favorable valuations. At the same time, fundraising patterns will probably mirror 2025’s evolution toward fewer but larger rounds in general.

Most likely, Finance will remain the dominant category for crypto deals in 2026, with stablecoins, tokenization, and new CeFi/DeFi projects among the most promising subcategories. Stablecoin volume and supply have been actively increasing throughout 2025, and newly established regulatory frameworks like the Genius Act could encourage TradFi to explore stablecoin infrastructure more actively.

Tokenization and RWAs have been one of the fastest growing sectors in DeFi this year, primarily due to increased adoption of tokenized treasuries/gold/stocks, as well as private credit. This category is particularly attractive to investors because it serves as a practical bridge between TradFi and crypto. On one side, it introduces crypto users to conventional asset classes. On the other, it offers traditional investors an opportunity to benefit from 24/7 trading, fractional ownership, and faster settlement times.

Overall, 2026 will likely see an even more selective, strategically-focused crypto investment landscape than in 2025.

Sources

The data used for this research consists of publicly available information from RootData, Blockworks Research, Crunchbase, Lazard, and Coingecko. The observation period for this study was focused on 2021-2025 for general overview, and 2025 for sector overview, with data points ending January 1, 2026.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

• Stablecoin supply grew 49% in 2025, adding over $100 billion and reaching the largest stablecoin dominance in crypto market cap since 2023.
• Ethereum and Tron’s combined market share declined from 85% to 80% as BSC and Solana captured most of the new stablecoin supply momentum.
• USDC has been eating up smaller stablecoins in DeFi interaction and on-chain transfers, while USDT saw increased dominance in trading volume, reaching 82.3%.
• Stablecoins reached $33.4 trillion in aggregated trading volume in 2025, showing a 29% increase compared to 2024’s performance.
• In 2025, USDT’s DEX trading volume exceeded USDC’s for the first time since 2021.

In 2025, stablecoins accelerated their transition from crypto-trading tools to a legitimate global settlement layer. This move was anchored by landmark regulatory progress, including the U.S. GENIUS Act and MiCa’s implementation in Europe, which established the first comprehensive federal frameworks for stablecoin issuers.

TradFi adoption experienced a significant boost as giants like Stripe and PayPal integrated stablecoins directly into mainstream commerce. The market also saw the rapid rise of high-impact new entrants, most notably USD1 backed by the Trump family and USDG supported by Robinhood, Kraken, and Paxos.

The convergence of regulatory clarity and institutional adoption created conditions for stablecoins to achieve a level of legitimacy that would have seemed impossible just years earlier. To explore the further trajectory of stablecoin market, let’s dive into the sector’s current health and major changes in its landscape that defined the past 12 months.

Supply Dynamics

Total Supply Growth

In 2025, total stablecoin supply increased by over $100 billion, or 49%, in the year, surpassing the $300 billion mark. The expansion was particularly pronounced in the third quarter, where stablecoin supply increased by $45 billion, which is the largest stablecoin expansion in its history.&

However, in Q4, it was only $8.1 billion, marking the worst result since Q4 2023. The latter was primarily affected by the increased risk off sentiment and a 22% drop in crypto-backed stablecoin supply.

As such, stablecoins now account for nearly 9% of total crypto market cap, up from 6.4% at the beginning of 2025. Such a rise in stablecoin dominance is quite unusual as stablecoin supply has been historically strongly correlated with crypto market cap, registering 0.8-0.91 in 2020-2022.

However, in 2025, the correlation between crypto market cap and stablecoin supply was only 0.4, which suggests that the sector’s growth was less associated with the waves of crypto bull and bear markets than in the previous cycle. Instead, stablecoins have been establishing themselves more as independent financial infrastructure with sustained demand regardless of market cycles.

Another notable milestone is that stablecoins now represent approximately 1.38% of total U.S. dollar supply, up from 0.95% at the beginning of 2024, highlighting their growing significance in the global financial system.

Supply Growth By Asset

Most of this $100 billion net supply growth in 2025 came from 7 stablecoins, 3 of which — USD1, USDf, and USDG — were launched last year.

Leading Stablecoins

USDT maintained its position as the largest stablecoin, growing by $49.7 billion in 2025 and hitting $187 billion in total supply. While impressive in absolute terms, USDT’s market share in total stablecoin supply actually showed slight erosion, moving from 67% to 61%, as USDC and newer entrants captured a portion of the expanding market.

USDC was the second-largest contributor to supply growth, adding $31.4 billion to reach $75.3 billion by year-end. This growth was partly driven by USDC’s continued domination in DeFi and its regulatory compliance advantages in traditional payment integrations. As a result, USDC’s share in total stablecoin supply increased from 21% to 25%.

Emerging Players

PYUSD emerged as one of the year’s biggest success stories, with supply skyrocketing by 623% to $3.6 billion. This explosive growth was fueled by PayPal’s aggressive expansion strategy in the space and integration across multiple blockchain networks.

USDS, the upgraded version of DAI, also grew substantially to $5.9 billion, up 358% from its levels at the beginning of 2025. The major contributor to this surge was sUSDS, which in a matter of months dethroned sUSDe and BUIDL, becoming the largest yield-bearing stablecoin.

Among the year’s new launches, USD1, USDf, USDG all established meaningful market presence, each surpassing $1 billion supply in less than a year.&

In general, new entrants represented a broader trend toward traditional finance companies entering the stablecoin space, with PYUSD and USDG viewed as part of a growing TradFi-backed cohort bringing institutional credibility to the sector.

Supply Growth By Network

In terms of network distribution, 74% of stablecoin supply growth came from dominant networks such as Ethereum and Tron. However, the stablecoin landscape continued the diversification trend of 2024, as both networks saw their share of total supply decline in 2025.

Dominant Networks

Ethereum captured the largest share of new stablecoin issuance throughout the year, adding more than $51 billion in total supply. This L1 growth was partly fueled at the expense of Ethereum’s L2 networks, which saw only a $2.6 billion stablecoin expansion and a declining share in total stablecoin supply.

The most impactful factor has been an over 98% drop in mainnet fees throughout 2025. With gas prices hovering at historically low levels, Ethereum L1 became more cost-competitive with many L2s. Notably, most of Ethereum’s gains in stablecoin supply occurred during declining fee periods.

Tron maintained its position as the second-largest network, adding $23.6 billion in stablecoin supply. However, since cost-efficiency was Tron’s one of the main competitive advantages for a long time, it has been losing its dominance in 2025 to faster-growing alternatives with lower fees.

Overall, a combined share of Ethereum and Tron in total stablecoin supply decreased from 85% at the beginning of 2025 to 80% in early 2026, with BSC, Solana, and Hyperliquid capturing the most of new stablecoin supply momentum.

Rising Stars

​​Among smaller ecosystems, Solana and BSC gained the most in absolute numbers, each adding nearly $15 billion in stablecoin supply. Both networks saw spikes in stablecoin supply amid local memecoin frenzies to support the momentum, with stablecoin activity primarily landing on DEXs.

Over time, Solana managed to significantly decrease its memecoin dependency, with SOL-Stablecoin and stablecoin swaps becoming a primary source of DEX activity. However, BSC remains memecoin-heavy, with the surged stablecoin supply also finding its use in yield farming, lending, and on-chain transactions. Notably, BSC dominated in active stablecoin addresses throughout 2025.

Aside from Solana and BSC, Aptos and Hyperliquid were among the fastest growing stablecoin ecosystems, registering 266% and 131% jumps in stablecoin supply, respectively.

The rise of newer networks like Aptos, Sui and Hyperliquid, combined with the continued growth of Solana and BSC, points to an increasingly multi-chain future for stablecoins, where users select networks based on specific use cases rather than defaulting to established options.

Trading Volume Dynamics

Total Volume

Stablecoins reached $33.4 trillion in aggregated trading volume in 2025, representing a 29% increase compared to 2024’s performance. Despite this substantial growth, the sector still fell slightly short of the record $35 trillion achieved in 2021, when the bull market drove unprecedented trading activity across crypto markets.

Average daily trading volume across 2025 stood at $91.5 billion, up from $70.6 billion in 2024, reflecting the sector’s sustained role as the primary medium of exchange for crypto trading, with most activity taking place in the second half of the year.

The Rising Dominance of USDT

Perhaps the most notable trend in 2025’s trading landscape was USDT’s increasing concentration of trading volume. For the full year, USDT accounted for 82.3% of all stablecoin trading volume in 2025, up from 79.6% in 2024. In turn, USDC captured 11.2%, while all other stablecoins combined represented just 6.5%.

This USDT concentration intensified throughout the year, moving from 78.5% in January to 86.0% in December. This rise in domination occurred, despite USDT delisting for EU customers on multiple CEXs, as markets became more concentrated during US trading hours.

The trading volume concentration toward USDT was further reinforced by exchange reserve patterns. Throughout 2025, stablecoin reserves on centralized exchanges grew by 23%, surpassing $70 billion.

However, this growth was overwhelmingly driven by USDT, which saw reserves surge by 34%, while most other major stablecoins experienced declining exchange reserves. FDUSD experienced the most impactful drop, losing half of its exchange reserves and 83% of its trading volume in 2025.

The DEX landscape reveals another dimension of USDT’s growing influence. Historically, USDC had dominated DEX trading, leveraging its strong integration with DeFi protocols and preference among on-chain traders. However, 2025 marked a turning point. For the first time since 2021, USDT’s DEX trading volume exceeded USDC’s. USDT recorded $1.14 trillion in DEX volume compared to USDC’s $1.10 trillion.

USDT volume on DEXs surged by over 285% compared to 2024, with nearly 4% of all USDT volume taking place on decentralized exchanges. In turn, USDC saw its DEX share decline from 39% in January to 23% in December. This suggests that while USDC has become increasingly adopted by CEXs, the gap on DEXs was primarily filled by USDT. The major contributor to this shift was BSC network, which saw a 4x increase in DEX volume and primarily featured USDT for transactions.

The increasing concentration of trading volume around USDT indicates that traders are using the path of least resistance for order execution due to its unmatched liquidity depth and widespread support. However, this concentration raises questions about market resilience and competition. As USDT’s dominance grows, alternative stablecoins face steeper challenges in gaining trading traction, even if they may offer regulatory advantages or innovative features.

2026 Outlook

Many of the defining trends of 2025 transitioned from 2024 and are poised to accelerate in 2026. For instance, the diversification of supply toward newer, smaller networks shows no sign of slowing, with these emerging ecosystems continuing to chip away at the dominance of established players.

Stablecoin regulation will likely continue to take shape globally, with Singapore preparing a draft stablecoin legislation and UK consulting on a market framework for stablecoins. Also, the global regulatory landscape may find further clarity in Q1 2026, as FATF is set to release its report on stablecoins.&

Traditional finance’s push into the sector could also intensify this year as stablecoins become the “invisible” back-end for everyday fintech. PayPal, Klarna, Robinhood, Stipe, and Revolut have big plans in 2026, while Visa and Mastercard have both announced plans for stablecoin settlements this year and expect the trend to accelerate next year..

However, the sector’s performance in 2026 remains tied to the broader crypto market. While stablecoins proved more resilient during the market volatility of Q4 2025, their supply growth still largely mirrors the industry’s overall health. A deeper market correction could pressure growth and limit new supply, while a reestablished bull market would likely act as an aggravating factor, pushing stablecoin adoption and total supply well beyond current projections.

Sources

The report utilizes a diverse range of trusted sources, including DeFiLlama, Artemis, The Block, Visa/Allium, CoinGecko, CryptoQuant, Blockworks Research, and GrowThePie. These platforms provided key metrics on supply and trading dynamics to validate market developments across fiat- and crypto-backed stablecoins. The observation period for this study was focused on 2025 annual performance, with data points ending January 1, 2026.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

• Total stablecoin transaction volume hit a record $60.9 trillion, 2x the combined annual volume of Visa, Mastercard, and American Express.
• Stablecoin supply grew 49% in 2025, adding over $100 billion and reaching the largest stablecoin dominance in crypto market cap since 2023.
• P2P stablecoin transfers reached $17.8 trillion, up 109% year-over-year, marking the first year ever they exceeded legacy card networks.
• Bot activity in stablecoin transaction volume decreased from 70% in 2024 to 68.5% in 2025.&
• BSC has been among the biggest winners in stablecoin adoption, showing a 5x jump in volume and 2x surge in supply.
• USDC has been eating up smaller stablecoins in DeFi interaction and on-chain transfers, while USDT saw increased dominance in trading volume, reaching 82.3%.
• Stablecoins reached $33.4 trillion in aggregated trading volume in 2025, showing a 29% increase compared to 2024’s performance.
• In 2025, USDT’s DEX trading volume exceeded USDC’s for the first time since 2021.

In 2025, stablecoins accelerated their transition from crypto-trading tools to a legitimate global settlement layer. This move was anchored by landmark regulatory progress, including the U.S. GENIUS Act and MiCa’s implementation in Europe, which established the first comprehensive federal frameworks for stablecoin issuers.

TradFi adoption experienced a significant boost as giants like Stripe and PayPal integrated stablecoins directly into mainstream commerce. The market also saw the rapid rise of high-impact new entrants, most notably USD1 backed by the Trump family and USDG supported by Robinhood, Kraken, and Paxos.

The convergence of regulatory clarity and institutional adoption created conditions for stablecoins to achieve a level of legitimacy that would have seemed impossible just years earlier. To explore the further trajectory of stablecoin market, let’s dive into the sector’s current health and major changes in its landscape that defined the past 12 months.

Supply Dynamics

Total Supply Growth

In 2025, total stablecoin supply increased by over $100 billion, or 49%, in the year, surpassing the $300 billion mark. The expansion was particularly pronounced in the third quarter, where stablecoin supply increased by $45 billion, which is the largest stablecoin expansion in its history.&

However, in Q4, it was only $8.1 billion, marking the worst result since Q4 2023. The latter was primarily affected by the increased risk off sentiment and a 22% drop in crypto-backed stablecoin supply.

As such, stablecoins now account for nearly 9% of total crypto market cap, up from 6.4% at the beginning of 2025. Such a rise in stablecoin dominance is quite unusual as stablecoin supply has been historically strongly correlated with crypto market cap, registering 0.8-0.91 in 2020-2022.

However, in 2025, the correlation between crypto market cap and stablecoin supply was only 0.4, which suggests that the sector’s growth was less associated with the waves of crypto bull and bear markets than in the previous cycle. Instead, stablecoins have been establishing themselves more as independent financial infrastructure with sustained demand regardless of market cycles.

Another notable milestone is that stablecoins now represent approximately 1.38% of total U.S. dollar supply, up from 0.95% at the beginning of 2024, highlighting their growing significance in the global financial system.

Supply Growth By Asset

Most of this $100 billion net supply growth in 2025 came from 7 stablecoins, 3 of which — USD1, USDf, and USDG — were launched last year.

Leading Stablecoins

USDT maintained its position as the largest stablecoin, growing by $49.7 billion in 2025 and hitting $187 billion in total supply. While impressive in absolute terms, USDT’s market share in total stablecoin supply actually showed slight erosion, moving from 67% to 61%, as USDC and newer entrants captured a portion of the expanding market.

USDC was the second-largest contributor to supply growth, adding $31.4 billion to reach $75.3 billion by year-end. This growth was partly driven by USDC’s continued domination in DeFi and its regulatory compliance advantages in traditional payment integrations. As a result, USDC’s share in total stablecoin supply increased from 21% to 25%.

Emerging Players

PYUSD emerged as one of the year’s biggest success stories, with supply skyrocketing by 623% to $3.6 billion. This explosive growth was fueled by PayPal’s aggressive expansion strategy in the space and integration across multiple blockchain networks.

USDS, the upgraded version of DAI, also grew substantially to $5.9 billion, up 358% from its levels at the beginning of 2025. The major contributor to this surge was sUSDS, which in a matter of months dethroned sUSDe and BUIDL, becoming the largest yield-bearing stablecoin.

Among the year’s new launches, USD1, USDf, USDG all established meaningful market presence, each surpassing $1 billion supply in less than a year.&

In general, new entrants represented a broader trend toward traditional finance companies entering the stablecoin space, with PYUSD and USDG viewed as part of a growing TradFi-backed cohort bringing institutional credibility to the sector.

Supply Growth By Network

In terms of network distribution, 74% of stablecoin supply growth came from dominant networks such as Ethereum and Tron. However, the stablecoin landscape continued the diversification trend of 2024, as both networks saw their share of total supply decline in 2025.

Dominant Networks

Ethereum captured the largest share of new stablecoin issuance throughout the year, adding more than $51 billion in total supply. This L1 growth was partly fueled at the expense of Ethereum’s L2 networks, which saw only a $2.6 billion stablecoin expansion and a declining share in total stablecoin supply.

The most impactful factor has been an over 98% drop in mainnet fees throughout 2025. With gas prices hovering at historically low levels, Ethereum L1 became more cost-competitive with many L2s. Notably, most of Ethereum’s gains in stablecoin supply occurred during declining fee periods.

Tron maintained its position as the second-largest network, adding $23.6 billion in stablecoin supply. However, since cost-efficiency was Tron’s one of the main competitive advantages for a long time, it has been losing its dominance in 2025 to faster-growing alternatives with lower fees.

Overall, a combined share of Ethereum and Tron in total stablecoin supply decreased from 85% at the beginning of 2025 to 80% in early 2026, with BSC, Solana, and Hyperliquid capturing the most of new stablecoin supply momentum.

Rising Stars

​​Among smaller ecosystems, Solana and BSC gained the most in absolute numbers, each adding nearly $15 billion in stablecoin supply. Both networks saw spikes in stablecoin supply amid local memecoin frenzies to support the momentum, with stablecoin activity primarily landing on DEXs.

Over time, Solana managed to significantly decrease its memecoin dependency, with SOL-Stablecoin and stablecoin swaps becoming a primary source of DEX activity. However, BSC remains memecoin-heavy, with the surged stablecoin supply also finding its use in yield farming, lending, and on-chain transactions. Notably, BSC dominated in active stablecoin addresses throughout 2025.

Aside from Solana and BSC, Aptos and Hyperliquid were among the fastest growing stablecoin ecosystems, registering 266% and 131% jumps in stablecoin supply, respectively.

The rise of newer networks like Aptos, Sui and Hyperliquid, combined with the continued growth of Solana and BSC, points to an increasingly multi-chain future for stablecoins, where users select networks based on specific use cases rather than defaulting to established options.

Part 2: Transaction Volume Dynamics

Total Transaction Volume

In 2025, total stablecoin transaction volume reached an unprecedented $60.9 trillion, which is two times larger than the combined transaction volume of Visa, Mastercard, and American Express ($29.6 trillion) over the same period. This also means total stablecoin transaction volume nearly doubled compared to 2024.

Throughout 2025, stablecoins have been confidently surpassing traditional payment providers in transaction volume, with Q4 becoming the most active quarter. This quarter alone exceeded the entire annual stablecoin volume of 2021.

USDC continued to dominate on-chain activity, accounting for 62% of total combined transfer volume in 2025, up from 57% a year earlier. In turn, USDT transaction volume share remained almost unchanged, maintaining 32% in 2025. This suggests USDC has been primarily eating up smaller stablecoins in DeFi interaction and on-chain transfers.

Among smaller assets, PYUSD showed explosive growth, with transaction volume surging to by 233% increase that significantly outpaced its already impressive supply growth, while DAI experienced a contraction partly due to users migrating to USDS.

In 2025, Ethereum cemented its lead by processing $18.6 trillion in stablecoin transactions, which is a 125% increase from 2024. This increase significantly outpaced the network’s supply growth, indicating that Ethereum became increasingly preferred for actual transactions rather than just storage. However, the true breakout was Base, which saw an astronomical 615% surge to $17.2 trillion, rivaling Ethereum mainnet.

Tron, which once dominated stablecoin activity, accounted only for 13% of stablecoin transaction volume in 2025, and was increasingly displaced by more dynamic alternatives such as BSC. The latter showed nearly a 5x surge in volume.&

Solana, on the other hand, saw a 56% drop in stablecoin transfer volume. The major catalyst was faded memecoin hype within the ecosystem and its migration to BSC. As such, memecoins remain a significant driver of on-chain activity, including stablecoins.

Stablecoin transaction volume has also become more “organic,” with bot activity decreasing from 70% in 2024 to 68.5% in 2025. While bots remain dominant for liquidity and arbitrage, their overall share has been primarily declining throughout 2025, signaling an increasing adoption of stablecoins for actual human-driven payments.

P2P Transaction Volume

While total volume accounts for all on-chain activity, P2P transfers offer a clearer view of stablecoin adoption for payments and remittances. This category excludes interaction with smart contracts, internal and external transfers with labeled businesses/exchanges, mint/burn transfers, and other transactions that wouldn’t be treated as P2P.

Despite being a highly-filtered metric, P2P volume still reached a staggering $17.8 trillion, a 109% surge compared to 2024. This means that 2025 became the first year ever when P2P transfers in stablecoins eclipsed legacy giants like Visa and Mastercard.&

After years of progress, stablecoins have effectively moved from a niche crypto-trading tool to a primary competitor to traditional financial infrastructure.

USDT is the undisputed king of P2P transfers, but its share decreased from 78.7% in 2024 to 65.3% in 2025. This was largely due to a surge in P2P operations with USDC, which increased by over 237% last year, as USDC has seen a larger adoption in the EU and other regions.

Notably, a combined share of USDT and USDC decreased from 99% to 97% throughout the year, indicating that smaller stablecoins saw increased adoption in P2P operations. For the most part, these figures were driven by fresh entrants like USD1 and USDG, as well as PayPal’s PYUSD. This indicates that TradFi-backed stablecoins are gradually playing a bigger role in user onboarding to stablecoins.

In the P2P landscape, the network distribution looks quite different from total volume. Tron remains a leader, but its share decreased from 59% in 2024 to 40% in 2025. The drop primarily occurred due to an explosive P2P growth from low-fee alternatives like BSC and Solana, which saw a 441% and 544% increase in transfer volume, respectively.

The 2025 surge in P2P volume signals that stablecoins have reached their “broadband moment.” By outperforming legacy card networks in P2P throughput, the industry has proven that stablecoins can handle the scale of global commerce while offering 24/7 availability and near-instant finality.&

Part 3: Trading Volume Dynamics

Total Volume

Stablecoins reached $33.4 trillion in aggregated trading volume in 2025, representing a 29% increase compared to 2024’s performance. Despite this substantial growth, the sector still fell slightly short of the record $35 trillion achieved in 2021, when the bull market drove unprecedented trading activity across crypto markets.

Average daily trading volume across 2025 stood at $91.5 billion, up from $70.6 billion in 2024, reflecting the sector’s sustained role as the primary medium of exchange for crypto trading, with most activity taking place in the second half of the year.

The Rising Dominance of USDT

Perhaps the most notable trend in 2025’s trading landscape was USDT’s increasing concentration of trading volume. For the full year, USDT accounted for 82.3% of all stablecoin trading volume in 2025, up from 79.6% in 2024. In turn, USDC captured 11.2%, while all other stablecoins combined represented just 6.5%.

This USDT concentration intensified throughout the year, moving from 78.5% in January to 86.0% in December. This rise in domination occurred, despite USDT delisting for EU customers on multiple CEXs, as markets became more concentrated during US trading hours.

The trading volume concentration toward USDT was further reinforced by exchange reserve patterns. Throughout 2025, stablecoin reserves on centralized exchanges grew by 23%, surpassing $70 billion.

However, this growth was overwhelmingly driven by USDT, which saw reserves surge by 34%, while most other major stablecoins experienced declining exchange reserves. FDUSD experienced the most impactful drop, losing half of its exchange reserves and 83% of its trading volume in 2025.

The DEX landscape reveals another dimension of USDT’s growing influence. Historically, USDC had dominated DEX trading, leveraging its strong integration with DeFi protocols and preference among on-chain traders. However, 2025 marked a turning point. For the first time since 2021, USDT’s DEX trading volume exceeded USDC’s. USDT recorded $1.14 trillion in DEX volume compared to USDC’s $1.10 trillion.

USDT volume on DEXs surged by over 285% compared to 2024, with nearly 4% of all USDT volume taking place on decentralized exchanges. In turn, USDC saw its DEX share decline from 39% in January to 23% in December. This suggests that while USDC has become increasingly adopted by CEXs, the gap on DEXs was primarily filled by USDT. The major contributor to this shift was BSC network, which saw a 4x increase in DEX volume and primarily featured USDT for transactions.

The increasing concentration of trading volume around USDT indicates that traders are using the path of least resistance for order execution due to its unmatched liquidity depth and widespread support. However, this concentration raises questions about market resilience and competition. As USDT’s dominance grows, alternative stablecoins face steeper challenges in gaining trading traction, even if they may offer regulatory advantages or innovative features.

2026 Outlook

Many of the defining trends of 2025 transitioned from 2024 and are poised to accelerate in 2026. For instance, the migration of activity toward newer, smaller networks shows no sign of slowing, with these emerging ecosystems continuing to chip away at the dominance of established players.

Stablecoin regulation will likely continue to take shape globally, with Singapore preparing a draft stablecoin legislation and UK consulting on a market framework for stablecoins. Also, the global regulatory landscape may find further clarity in Q1 2026, as FATF is set to release its report on stablecoins.&

Traditional finance’s push into the sector could also intensify this year as stablecoins become the “invisible” back-end for everyday fintech. PayPal, Klarna, Robinhood, Stipe, and Revolut have big plans in 2026, while Visa and Mastercard have both announced plans for stablecoin settlements this year and expect the trend to accelerate next year..

However, the sector’s performance in 2026 remains tied to the broader crypto market. While stablecoins proved more resilient during the market volatility of Q4 2025, their supply growth still largely mirrors the industry’s overall health. A deeper market correction could pressure growth and limit new supply, while a reestablished bull market would likely act as an aggravating factor, pushing stablecoin adoption and total supply well beyond current projections.

Sources

The report utilizes a diverse range of trusted sources, including DeFiLlama, Artemis, The Block, Visa/Allium, CoinGecko, CryptoQuant, Blockworks Research, and GrowThePie. These platforms provided key metrics on supply, on-chain activity, and trading dynamics to validate market developments across fiat- and crypto-backed stablecoins. For P2P transactions analysis, the Artemis data was primarily used, utilizing its approach to define the category and labeling transactions. As for evaluating bot transactions, the report used Visa’s methodology. The observation period for this study was focused on 2025 annual performance, with data points ending January 1, 2026.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

• 41% of young adults prefer complete financial independence over any parental support, even when struggling.
• 43% invest in both traditional products and crypto, with social media influencing 31% of investment decisions.
• Only 25% claim to pay for everything themselves, revealing a gap between ideals and reality.

Generation Z often gets framed as the “struggle generation” — financially pressured, burdened by housing costs, and leaning on parental support. A new CEX.IO survey of 1,200 young adults from the U.S. aged 18–27 explores how parental support shapes Gen Z’s financial lives, and reveals a deep tension between dependence and the desire for autonomy.

If they could, 41% would choose no financial help at all from their parents, preferring to stand entirely on their own despite economic headwinds.&

However, this preference for autonomy stands in stark contrast to current reality. Only 25% claim to pay for everything themselves today, while 34% receive occasional help with major costs and 23% have most main expenses covered by their parents.&

The disconnect between aspiration and circumstance reveals a generation caught between idealism and economic pressure.

The Independence Paradox

When asked to choose between financial comfort with family support versus a tougher road with full freedom, 39% selected the harder path. Another 26% want a phased approach, suggesting that even those accepting help view it as temporary. Combined, 65% of respondents see parental financial involvement as something to minimize or eliminate entirely.&

Among those whose parents cover significant expenses, 43% say parental opinions have little impact on their life decisions and they ultimately follow their own path. Another 20% admit their parents’ views carry significant weight in these decisions. Education and professional training remain the most acceptable form of parental support, followed by emergency help.

Crypto Has a Significant Share in the Investment Mix

This generation’s approach to building wealth reflects their digital-native status. 43% invest in both traditional financial products and cryptocurrency, while another 21% focus primarily on higher-risk assets like crypto and speculative stocks. Only 15% stick exclusively to traditional investments, and just 9% aren’t investing at all.

Social media plays an outsized role in shaping these decisions. 31% say online creators or communities influence their investing choices most, while 23% look to friends and peers.&

Given $1,000 to invest tomorrow, nearly half (49%) would split it between safer and higher-risk options, demonstrating a balanced approach despite their increased appetite for crypto. However, 21% would skip investing entirely and use the money for immediate needs or experiences, highlighting how financial pressure shapes decisions.

Where the “Free” Money Goes

When Gen Z does have “free” money to spend, 51% prioritize experiences like travel, dining, and events over everything else. Only 23% focus primarily on investing for the future, while 13% concentrate on building security through savings and emergency funds. The emphasis on present-moment experiences over long-term planning could reflect an economic anxiety.

The barriers to investing reveal deeper struggles. 37% cite fear of losing money or making bad decisions as their biggest obstacle, while 29% simply don’t have spare money to invest. Another 17% have other priorities like studies, career, or health concerns that take precedence.

The Long View

Looking ahead, young adults split into three camps. 41% focus mainly on stable monthly income to cover current expenses, treating financial freedom as a distant goal. Another 30% want both stability now and a clear path toward freedom, while just 16% actively work toward long-term financial independence through investing and passive income streams. Notably, 13% feel too financially pressured to think beyond survival mode.

What It Means

The 16-point gap between those who want complete independence (41%) and those who’ve achieved it (25%) indicates that Gen Z wants independence but can’t always afford it yet. They inherited an economy where entry-level jobs barely cover basics and the timeline to financial stability has stretched years longer than previous generations experienced.&

As a result, their fierce resistance to ongoing parental support makes sense when you consider the trade-offs. Among those receiving significant help, some admit their parents’ opinions may heavily influence major decisions. So financial dependence isn’t free. That is why many young adults would rather struggle and stay in the gig economy than accept help with invisible strings attached.

In that sense, experimenting with crypto alongside traditional investments (43% do both) starts looking reasonable. Gen Z watched millennials follow traditional advice, get college degrees, invest conservatively, and still struggle to buy homes or clear debt. That is why a safe path may not look as appealing anymore, so taking higher risks may be perceived as a more justified approach just to keep up or achieve financial independence.

When buying a home requires saving for decades and retirement is over 40 years away, prioritizing travel and relationships in your twenties may not feel as irresponsible. For those who spend on experiences over savings (51%), this could be perceived as tangible value now over distant goals that might never materialize.

For Gen Z, autonomy matters more than comfort, and that’s not idealism but a survival strategy.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

In a year when most of DeFi struggled to recover, showing a 2% overall TVL increase, real-world assets quietly became crypto’s standout performer. In 2025, RWA total locked value was up roughly 184%, growing more than 6x higher than lending platforms and 9x faster than bridges TVL. In other words, a significant portion of net growth in DeFi came from RWAs.

And within RWAs, one category stood out more than any other — tokenized gold.

25% of RWA Growth Comes From Tokenized Gold

RWAs now span everything from tokenized bonds, stocks, and commodities, and some of these categories saw explosive growth in 2025, driven largely by institutional adoption or low starting bases. However, among large RWA categories, tokenized gold showed one of the strongest combinations of scale and growth, registering a 177% increase in market cap and 198% surge in total holders in 2025.

In 2025, the tokenized gold market cap added nearly $2.8 billion in net value, moving from $1.6 billion to $4.4 billion in market cap. This means the sector absorbed nearly a quarter of all net RWA growth over the past 12 months, while absolute inflows exceeded those from tokenized stocks, corporate bonds, and non-US treasuries combined.

In turn, the number of tokenized gold holders grew by more than 115,000 in a year, 14 times faster than in 2024. Compared with other major RWA segments, tokenized gold added more holders than tokenized U.S. treasuries and other tokenized bonds. This is because tokenized gold is well-positioned as a category that can scale significantly across both institutional and retail audiences.&

Unlike some tokenized assets, it’s not limited only to accredited investors, has no minimum investment threshold, and offers fractional ownership, allowing investors of all sizes, from institutions to individuals with very small capital, to easily gain exposure by simply purchasing a token.

If Tokenized Gold Were an ETF, It Would Already Be a Giant

Market Cap Dynamics

One might argue that such explosive growth in tokenized gold simply reflects the fact that gold prices saw their largest increase in 46 years. However, while demand for gold was elevated across the board, another reason tokenized gold stands out compared to other RWA categories is its adoption and positioning relative to traditional counterparts. 

The total market value of physical gold surpassed $30 trillion, showing a more than 67% increase in 2025. At the same time, major gold ETFs saw substantial inflows, doubling total assets under management, as investors looked for inflation hedges and geopolitical protection. Yet even against this backdrop, tokenized gold has become an outlier.

Tokenized gold expanded by 2.6 times faster than physical gold, and outperformed most of the top 7 spot gold ETFs. The only major gold ETF that outpaced tokenized gold was iShares Gold Trust Micro (IAUM), registering an over 300% increase in total holdings this year.

Overall, considering the scale, tokenized gold would have already been the 6th largest gold ETF by market cap, and one of the most popular ways to get gold exposure.

Trading Volume Dynamics

If market cap tells one story, trading volume tells an even more striking one. Tokenized gold trading activity accelerated dramatically throughout 2025, with volumes climbing quarter after quarter. By Q4, quarterly trading volume surged to over $126 billion, dwarfing earlier periods.

To put it into perspective, tokenized gold recorded slightly higher trading volume in Q4 than five major gold ETFs combined. Only the largest gold ETF, SPDR Gold Shares (GLD), stands apart, with a $375 billion in trading volume in Q4.

Taking into account the full year, tokenized gold reached $178 billion in trading volume in 2025. Compared to gold ETFs, this would place tokenized gold as the second-largest gold investment product globally by trading volume, ahead of every ETF except GLD, underscoring its rapid emergence as a major liquidity venue.

The growth was also far more dynamic than in traditional gold ETFs. In 2025, trading volume in tokenized gold surged by over 1,550% compared with 2024, nearly ten times faster than the growth seen in the largest gold ETFs, which primarily posted gains in the 100-150% range. Such a massive expansion highlights a structural shift in where incremental gold trading liquidity is increasingly forming on-chain rather than in traditional products.

Increased Market Shift Toward XAUT

Such an explosive growth in trading activity did not occur evenly across the sector. The Q4 spike was largely driven by Tether Gold (XAUT), which accounted for 75% of total trading volume, up sharply from 27% in Q3. The surge followed XAUT’s Q3 reserve attestation, echoing earlier episodes where transparency updates coincided with sharp increases in activity. 

While XAUT dominated the latest volume expansion, the broader landscape remained largely unchanged, with nearly 99% of tokenized gold trading volume still concentrated in a handful of assets.

The market cap distribution shows similar patterns, with rotation at the top but little change in overall market structure. Throughout 2025, XAUT expanded its share in tokenized gold market cap from 41.1% to 52.4%, largely at the expense of smaller tokenized gold projects and tokens with increasingly questioned or unverified reported market cap. However, the three largest assets, XAUT, PAXG, and KAU, still account for roughly 97% of total tokenized gold market cap, underscoring how concentrated the sector becomes despite the emergence of new entrants in 2025.

Beyond the established leaders, 2025 also saw selective but meaningful adoption among newer products. One of the biggest success stories was Matrixdock Gold (XAUM), which saw an over 1,000% surge in market cap, and an increase in holder base from less than a 1,000 to more than 65,000 wallets in 2025. The latter was largely driven by XAUM integration with the Plume ecosystem.

Tokenized Gold Complements, Don’t Compete With Stablecoins

Considering the status of gold as a safe haven asset, one might assume that tokenized gold can be acting as a potential substitute for stablecoins or Bitcoin, especially during market downturn. However, it rather serves as a tactical hedge for traders, or some kind of “middle ground”& between risk-on crypto trading and risk-off stablecoin exits.

October 2025’s trading patterns illustrate this dynamic perfectly. On October 10-11, the crypto market experienced the largest liquidation event in its history, which led to a spike in BTC and USDT volume, with subsequent decrease. In turn, mid-month saw daily tokenized gold volume surge from $537 million to $1.88 billion (a 250% spike) as Bitcoin’s price declined from $122,000 to $106,000.

This inverse correlation signals intentional capital rotation into tokenized gold as a hedge. By late October, as Bitcoin stabilized, tokenized gold volume normalized and continued following the trends of the wider crypto market, confirming its role as a defensive alternative.

The scale matters: tokenized gold represents roughly 1% of Bitcoin and USDT volumes, up from less than 0.1% in January 2025. While this 10x growth trajectory shows increasing adoption, tokenized gold remains a specialized tool rather than a market-moving force. During panic events, USDT still dominates in volumes, maintaining its position as crypto’s true emergency safe haven.

As a result, tokenized gold occupies a growing but complementary role to park capital or increase diversification, with patterns similar to October one also consistently emerging during tariff tensions throughout 2025.

Conclusion

In 2025, tokenized gold transitioned from a niche RWA category into a large-scale gold investment vehicle, rivaling, and in some cases surpassing, established gold ETFs in both growth and trading activity. Its ability to combine institutional-grade exposure with retail accessibility made it one of the most scalable segments within the RWA ecosystem.

While liquidity and market cap remain highly concentrated, the year marked a structural shift: tokenized gold is now more than an alternative to traditional gold products, but an increasingly important liquidity venue in its own right, with scale, usage, and adoption that now place it firmly among the world’s largest gold investment instruments.

Crypto has had a highly visible year, with headline moments ranging from the launch of a Trump-linked memecoin and talk of strategic crypto reserves to multiple companies adopting crypto treasury strategies. Banks, payment providers, and fintech platforms have also expanded crypto services, making digital assets harder to ignore even for non-users. As a result, crypto discussions may come up more naturally at the family table.

Classic memes typically assume that it’s relatives who may start the conversation about crypto. However, according to a survey of over 1,000 active crypto traders, it’s crypto enthusiasts who want to start the discussion and share their own experiences. 34% say they will or would like to bring up crypto during holiday gatherings and conversations with friends and family, and 9% say they might. 

Yet this enthusiasm is paired with a hesitance. While crypto users may want to talk about things& they are accustomed to or interested in, 52% say they feel somewhat uncomfortable discussing crypto with people outside the space, and 11% say the experience can be very uncomfortable.&

This disconnect points that crypto enthusiasts feel the urge to explain, educate, and correct misconceptions, yet they anticipate disinterest or skepticism, potentially making it not worth a shot.

Luckily for most, only 8% believe crypto may come up naturally during holiday gatherings, while a majority (73%) don’t expect anyone to mention it at all.

Fighting the Narrative Disencourages Crypto Discussions

When asked what the public misunderstands about crypto and what can make them feel uncomfortable discussing crypto, 42% pointed to the belief that it’s all scams or gambling. Another 24% cited the perception that crypto is too complicated or only for tech-savvy users. Crypto users know they’re likely to face skepticism at the dinner table — and that uncomfortable expectation helps explain why many hesitate to bring up the subject.

The messaging strategy reflects the defensive posture, indicating that respondents overwhelmingly want to challenge the “gambling” narrative. To do that, 48% of respondents want people to understand that crypto is a long-term investment, not just speculation.

Notably, 75% say the perception they’d most like to inspire is that crypto is risky but useful, a notably cautious stance that acknowledges dangers while arguing for practical value.

Leading With Cross-Border Payments and Personal Stories

Crypto users appear to have settled on concrete, relatable examples to make their case. 37% chose faster and cheaper cross-border payments as the brightest example they’d cite to highlight the utility of digital assets. This reflects broader ecosystem data: stablecoin transaction volume has surpassed Visa’s and Mastercard’s annual transaction totals in 2024. In addition,  remittances and other retail-sized stablecoin transactions remain one of key drivers of grassroots adoption, reaching all-time high in Q3.

Personal experience ranked even higher as a potential conversation tool: 79% say they’d share their own success stories, whether it’s user experience or investment portfolio performance, if this can support the claim.

This emphasis on the personal and practical suggests a community is focusing on what works, what they’ve experienced firsthand, and what might resonate with a general audience rather than diving into utopian visions of decentralization.

Institutional Adoption as Proof of Maturity

To counter the “bubble” narrative, 36% point to institutional treasuries and ETFs as evidence that crypto is maturing and experiencing increased adoption. Another 35% cite major payment companies like Mastercard, Visa, Paypal and Stripe integrating crypto or stablecoins. These reflect a community eager to demonstrate that crypto has moved from fringe experiment to mainstream financial infrastructure.

Yet despite this emphasis on legitimacy and real-world use, only 11% say they want to explain the underlying technology and how it solves problems traditional finance cannot. This suggests a pragmatic pivot away from topics that can face increased skepticism.

What This Means for the Industry

The survey paints a picture of a maturing community still struggling with its public image. Crypto users are enthusiastic, hopeful, and increasingly focused on practical benefits rather than revolutionary rhetoric. But they’re also defensive, uncomfortable, and acutely aware that much of the world may not see them from the best angle.

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Bitcoin’s price saw an over 25% dip since an all-time high in early October, and this pullback might seem like a standard cooldown. However, beneath that surface, liquidity is thinning, demand is fading, and capital is quietly exiting the ecosystem. The issue is market structure weakened in ways that historically preceded deeper corrections, but what are the chances for this to happen?

This report examines Bitcoin’s liquidity landscape to explain why Bitcoin’s “normal correction” may be masking a much deeper liquidity problem.

Realized Cap: Collapse That Makes This Correction Look Different

Over the past two months, Realized Cap’s 30-day change crashed from +$38 billion to just +$4.7 billion, a 88% collapse in fresh capital. Realized Cap values each coin based on its last on-chain movement, offering a cleaner view of true economic inflows than market cap.

This drop is a sharp contrast to earlier phases of the 2024-2025 bull trend:

1. In Q1 2024, Bitcoin absorbed $50 billion long-term holder (LTH) distribution by attracting $80 billion in new realized value.
2. In Q4 2024, $75 billion in LTH selling and transaction activity took place alongside a $90 billion increase in the realized cap.
3. In July 2025, $40 billion in LTH transaction volume accompanied a $65 billion net change in realized cap.

As a result, the largest spikes in LTH profit-taking and activity occurred when Bitcoin was within an uptrend. This limited Bitcoin’s upside momentum, but it didn’t stop the price from updating all-time highs. During correction periods, LTH activity decreased and they transitioned to asset accumulation. That’s the distribution into strength.

4. This time, the dynamics flipped, LTHs distributed nearly $100 billion in value, while realized cap fell. Hence, demand failed to keep up with old supply, and more capital is leaving the market than entering it. That’s the distribution into weakness.

If the 30-day realized cap turns negative, the market could flush out weak hands even further, potentially leading to a deeper correction. Back in January 2022, this coincided with the beginning of a prolonged bear market.

Long-Term Holders: The Largest Asset Distribution Since 2018

Over the past two months, LTH supply dropped from 15.3 million BTC to 14.1 million BTC, experiencing a distribution of 1.2 million coins. The LTH share of total supply declined from 77% to 71%. This is the largest distribution in LTH supply since December 2018, a period when Bitcoin lost almost half of its value.

A significant portion of this distribution was actually selling coins, not just moving them to other wallets. For instance, Spent Volume Age Bands suggests that long-term holders recently recorded their largest selling event ever, increasing downside risk and market exhaustion. The biggest spike in LTH selling activity was fueled by wallets that held Bitcoin for 1-2 years and 3-5 years.

Short-Term Holders: Underwater and Vulnerable

Short-term holders (STH) are often the most reactive in downturns. Their average cost basis currently sits around $103,500, while the spot price hovers roughly 10% below that. Although such a drawdown might not sound extreme, it was enough to intensify asset selling.&

STH MVRV, which measures whether short-term holders are in profit or loss, plummeted to its lowest level since 2022, indicating that recent buyers are now deeply underwater.

More tellingly, short-term holders’ realized losses have reached their highest point since 2022, indicating that these investors are actively selling with losses rather than holding through the volatility. With Realized Profit/Loss Ratio near 0.2, buy-side liquidity essentially evaporated, leaving the market vulnerable to increased volatility as concentrated selling meets minimal demand.

Stablecoins: The Dry Powder That Don’t Deploy

Perhaps the most perplexing aspect of Bitcoin’s correction is the behavior of stablecoins. Over the past two months, total stablecoin supply remained essentially flat near $300 billion, briefly moving down in November.

At the same time, stablecoin reserves on exchanges continued updating all-time highs, recently reaching $80 billion, and showing 15% increase since early October. So this isn’t a story of absent capital, but about present capital refusing to deploy to support Bitcoin’s price.

This creates two possible explanations:

• Lack of conviction — the dry powder exists but holders are waiting for lower prices.
• A velocity problem — the same capital is recycling without new fiat entering the crypto ecosystem.

It’s most likely both to a certain degree. This stablecoin behavior directly explains why Realized Cap is declining. During bull runs, new fiat converts to stablecoins, which then purchases Bitcoin, driving Realized Cap higher. Currently, stablecoin supply is stagnant, so any Bitcoin purchases come from recycled capital entering at lower prices than previous sellers exited. So the market might be cannibalizing itself rather than attracting fresh capital.

Market Depth: More Chances For Rapid Swings

Order book analysis reveals another layer of fragility. The 2% market depth across the top 30 exchanges, measuring how much Bitcoin can be traded within 2% of the current price, has declined 25% over the past two months. This is the largest market depth drop in 2025.

This thinning liquidity creates a double-edged sword. If demand returns, order books with 25% less depth could trigger more explosive upside moves. However, downside risk is equally amplified. If panic selling returns, the price could quickly gap to $81,000 and other major resistance levels.

Three Paths Forward

Consolidation (40% probability)&

It involves Bitcoin ranging between a true mean (now at $81,000, blue line) and a short-term holder cost basis (now at $103,500, red line) over the next 2-3 months.

The 30-day Realized Cap may stay positive, but don’t show significant growth. Stablecoin supply may remain flat, or experience modest changes. Short-term holders could become exhausted and decrease their selling at a loss, while long-term holders may temporarily scale back profit-taking.

The existing data already supports this scenario, with multiple above-mentioned indicators recently registering modest recoveries from highlighted extreme figures. But these recoveries are currently not sufficient enough to claim a trend reversal.

Resolution from consolidation could break either direction. In mid-2021, the breakout above STH cost basis pushed Bitcoin to a new all-time high. In H1 2022, a failed breakout above STH cost basis and subsequent drop below true mean led to a deeper bear market.

Capitulation (35% probability)&

It could trigger if the 30-day Realized Cap turns negative and the price drops below true mean (now at $81,000) in the next 6-8 weeks. This could reinforce the further profit-taking among both long-term holders and short-term holders, or even lead to increased ETF outflows and Bitcoin selling among certain DATs.

Historically, negative Realized Cap periods could also mark local bottoms (green rectangles), suggesting that capitulation can be temporary. However, if Realized Cap fails to strongly rebound to positive values (red rectangles), this could signal a potential bearish dominance.

Bullish Scenario (25% probability)&

It could happen if the 30-day Realized Cap rebounds above previous top at $40 billion, and the price breaks above the short term holder cost basis (now, at $103,500) in the next 6-8 weeks.

Thinner liquidity and market depth can act as a setup for a potential explosive upside. However, this would require a significant bullish catalyst. Global liquidity no longer shows positive correlation with BTC, and the macro environment currently paints a more cautious picture, with Japan’s potential rate hike increasing risk aversion, so it may take time for it to appear.

On a positive note, whales, or wallets holding 1K-10K BTC, showed increased Bitcoin accumulation over the past week, acquiring more than 35,000 BTC. If the current trend remains, this can support a potential Bitcoin recovery.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

According to CEX.IO’s internal data, transaction volumes among crypto card users rose by 33% during Black Friday period, while the total number of transactions grew by 20%, demonstrating that Black Friday drove both higher spending and more frequent card usage. The average transaction value increased by 11% — from €48 to €53, with a spending expansion across most major retail categories.&

At the same time, day-to-day expenses such as groceries, transport, and everyday retail held steady, indicating that seasonal shopping didn’t affect regular spending habits.

Typical Black Friday Categories: Fashion and Department Stores Lead the Charge

Further analysis of merchant category codes (MCC) reveals that crypto card users largely mirrored traditional consumer behavior during Black Friday, with categories that typically perform well among bank card holders showing similarly strong results.

Fashion Spikes Across the Board

Clothing retailers showed one of the strongest Black Friday reactions, recording 210% surge in transaction volume and 35% increase in transaction count. Shoe Stores followed a different pattern: volumes declined by 17%, but the number of transactions jumped 13%, indicating that users hunted for deeply discounted footwear rather than making larger purchases.

Overall, fashion-related merchants captured more than 7% of all Black Friday period spending — up from roughly 5% average in the previous weeks.

Department Stores Behave “By the Book”

Department Stores showed a 128% increase in transaction volume and a 17% rise in transaction count. Average transaction values nearly doubled, suggesting users gravitated toward bundled deals and multi-item purchases that department stores traditionally promote during seasonal sales.

Hobby Supplies and Gift Shops Remain Strong

Miscellaneous and Specialty Retail Stores, covering art materials, hobby supplies, and niche products, unsurprisingly experienced strong performance during Black Friday period, with a 216% volume increase and an 18% rise in transaction count. Gift, Card, Novelty, and Souvenir Shops saw similarly robust growth, posting a 228% jump in volume and 38% increase in transaction count.&

These patterns suggest that users leveraged Black Friday to secure unique or personalized items ahead of the holiday season.

Electronics Saw Smaller-Scale Purchases

Electronics Stores presented a more complex picture, with total transaction volume fell by 13%, yet the number of transactions increased by 17%. This suggests that users primarily purchased lower-priced accessories rather than larger hardware.&

In addition, electronics stores’ relative share might have declined because other categories expanded far more aggressively, reducing its weight in the overall spending mix.

Surprising Categories: Jewelry, Cosmetics, Home Upgrades, and Books Outperform Expectations

Beyond the traditional Black Friday leaders, several categories delivered unexpectedly strong results, revealing more diverse spending behavior than crypto users might be associated with.

Jewelry Surges Beyond Seasonal Norms

Jewelry, Watch, Clock, and Silverware Stores recorded one of the highest jumps among observed MCC codes, with transaction volume rising over 450% and transaction count increasing nearly 125%. This pushed jewelry’s share of total spending up to 0.53%.

While jewelry is often a holiday-adjacent purchase, the magnitude of the increase suggests that users capitalized heavily on Black Friday discounts for higher-value gifts and accessories.

Digital Apps Surge on Sales

Digital Goods – Applications posted a 199% increase in transaction volume and a 54% rise in transaction count during Black Friday. This indicates that crypto adopters leveraged seasonal promotions to purchase premium app subscriptions, software bundles, and digital services.

Home Upgrades See Momentum

Home-focused categories, including Lumber and Building Materials Stores and Furniture, Home Furnishings, and Equipment Stores, registered a 190% transaction volume increase during the Black Friday period, respectively. This suggests crypto card users appear to treat this Black Friday more as an opportunity to invest in home upgrades, with the share of home-upgrade purchases exceeding 1.5% of total spendings.

Books Make a Quiet but Strong Showing

Book Stores experienced meaningful increases, with 73% increase in transaction volume and 67% increase in transaction count, pointing out that physical and digital books are relatively popular among crypto enthusiasts as a gift or for personal consumption.

Day-to-Day Items: Relatively Steady Despite Increased Black Friday Spending

Even with the surge in promotional shopping, everyday categories continued to anchor crypto card activity, showing that these cards are firmly integrated into daily routines.

Groceries, convenience items, and general retail continued to represent the largest share of transactions, although the share of day-to-day items in spendings slightly decreased during Black Friday period — from 50.5% to 46.6%.&

For instance, Grocery Stores and Supermarkets represent over 18% of total transactions, and 9% in total volume. They grew 8% throughout the Black Friday period, indicating that they remained almost unaffected by increased spending during Black Friday period.

Transportation, pharmacies, and money transfers also ticked upward, with volumes rising between up to 40% across these subcategories. The consistency of these everyday transactions shows that crypto cards are not used only for opportunistic Black Friday deals. Crypto users continue to rely on their cards for the same functional, day-to-day needs that bank cardholders do.

Conclusion

The Black Friday data demonstrates that crypto card users have successfully integrated digital payment rails into mainstream consumer behavior. They become more aligned with mainstream European shopping habits and actively respond to seasonal promotions. They also engage more heavily online — around 40% of all transactions during Black Friday period have taken place using e-commerce platforms.

As crypto payment tools continue to grow in adoption, these behaviors suggest a future where spending with digital assets feels indistinguishable from using any conventional card, particularly during high-intensity shopping events.

Methodology

The data used for this research consists of CEX.IO Card transaction records from users across the European Economic Area, where this card is exclusively available. The analysis compares a two-week Black Friday period (November 16-30) with an average of two week periods from early November and previous months. The Black Friday period was defined as November 16-30 to capture the extended sales period, as many European merchants introduced promotional pricing before the traditional Black Friday week as part of their seasonal campaigns.

Transactions were categorized using Merchant Category Codes (MCC), with each four-digit code representing a specific merchant type or industry. For analytical clarity, some MCC codes were grouped into broader categories such as clothing, transportation, etc.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Crypto markets don’t sleep — and neither do many of the people trading them. According to a survey of over 1,000 active crypto traders, late-night price checks, anxiety-driven wakeups, and missed sleep due to market volatility have become routine for a large portion of traders.

One of the clearest signals comes from nighttime behavior. 68% of respondents say they check crypto prices after going to bed either almost every night or literally every night, while only 8% report never doing so. This consistent pattern of late-night monitoring highlights how deeply market activity bleeds into daily life.

4 in 5 Crypto Traders Lose Sleep Waiting for Market Moves

The ripple effects extend well past bedtime. When asked how late they’ve stayed awake because of crypto, 53% said they could stay up until at least 2 AM, while another 33% stay up until 4 AM or later. These habits appear to be systemic as 81% claimed to have lost sleep waiting for a good trade or an anticipated market event.

70% Struggle to Sleep During Market Drops

Market volatility is a major contributor to this behavior. 70% say market drops or liquidation risks noticeably make it harder to fall asleep, while only 14% claim to be unaffected. For many, the issue continues throughout the night — a combined 61% check prices at least once when they wake up, pointing to a loop of alerts, stress, and compulsive re-checking.

Emotional drivers play a large role. The biggest culprit appears to be not fear of loss but fear of missing out: 59% say the fear of missing a pump keeps them awake more than anything else. Liquidation risk, general market anxiety, and chart analysis follow far behind.

Recent Volatility May be Forcing Traders To Stay Awake

Such a behavior seems to be a rational reaction to nighttime volatility spikes. As such, Blockworks data shows that most spot volume still clusters between 14:00–16:00 UTC, or the professional/institutional trading time in the U.S. and EU. However, over the past two months, when the market turned bearish, the highest realized volatility spikes occurred between 18:00–06:00 UTC (grey lines) — precisely when most respondents say they struggle to sleep.&

As bearish sentiment deepened, liquidity thinned outside U.S. and EU hours, creating sharper moves overnight. For traders in Europe, the Middle East, and Africa, this volatility window overlaps directly with typical sleep time, potentially amplifying anxiety and driving late-night price checks.

Chart: Realized Volatility Spikes in Crypto Market Cap (Time by UTC)

Consequences of Bad Sleep in Crypto Markets

Nearly 70% of traders say sleep deprivation has caused them to make a bad trade, and 5% admit it happens repeatedly. In high-volatile markets, the cognitive cost of exhaustion may be far higher than traders acknowledge.

Overall, 77% of surveyed traders report at least a moderate negative impact from crypto on their sleep quality, including 13% who describe the impact as severe.

Notably, respondents overwhelmingly sleep better in bull markets (64%) than in bear markets (10%), reinforcing how deeply mood, sentiment, and price trends influence personal wellbeing.

Conclusion

With volatility increasingly shifting into nighttime hours, crypto traders may be feeling pressured to monitor moves outside working hours, eroding the boundary between markets and rest. The result is a feedback loop where stress, missed sleep, and impaired decision-making could feed into each other, creating risks that extend far beyond price charts.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

What the CoinDesk Benchmark Means

Since 2019, CoinDesk’s Exchange Benchmark has served as one of the most respected and data-driven evaluations of cryptocurrency exchanges worldwide. Designed for institutional-grade assessment, the benchmark analyzes over 100 metrics across eight risk categories, including:

• Counterparty risk
• Market quality
• Security
• Regulatory compliance

The Benchmark evaluates 81 exchanges across both spot and derivatives markets, offering an independent, transparent view of exchange credibility and resilience. Its findings also influence CoinDesk Indices’ eligibility requirements for benchmark reference rates — making it a key indicator of exchange trustworthiness in the broader crypto ecosystem.

CEX.IO’s Strongest Scores: Security and Compliance

In this edition, CEX.IO achieved its highest marks for Security, reflecting our long-standing commitment to safeguarding user assets and data. We also earned top-tier results in categories including KYC/Transaction Risk and Legal/Regulatory Compliance, areas that continue to define our approach to responsible crypto service delivery.

Building on Momentum

As the digital asset landscape continues to evolve, we see this recognition as both a milestone and a motivation — to keep pushing for higher standards of trust, performance, and accessibility for our 15+ million users worldwide.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

The crypto market just lived through its bleakest month of 2025. Over the past 30 days, the Fear and Greed Index averaged 32, spending 27 of those days in the fear or extreme fear zones. This also makes it the worst sentiment stretch the market has seen since 2022.

As such, 2025 has been the most turbulent emotional rollercoaster the market has experienced since 2021. In 2025 so far, there have been 14 events when the index moved by more than 25 points in a week, and in 9 instances, it was a rapid drop toward fear.

Crypto Markets Became More Fearful Than Stocks

The sustained fear backdrop helps explain why October stands out as one of the worst months of the year for crypto in terms of F&G Index fluctuations. Firstly, after Donald Trump announced a 100% tariff on China and U.S.-China trade tensions renewed, the Crypto Fear and Greed Index fell from 64 to as low as 22 — a 66% drop

Shortly after that, another major drop occurred tied to Jerome Powell’s comments on October 29 that there might not be a December rate cut. This led to a 59% drop in Crypto F&G and 45% decrease in Stock F&G. The crypto market’s drop was also additionally fueled by an industry-local event such as a $128 million Balancer exploit on November 3.

The larger drops in the Stock F&G index are quite unusual, as when macro winds turn cold, stock investors typically panic harder and recover slower than crypto investors. For instance, after Trump announced tariffs on nearly all countries in April, the Stock F&G Index dropped by over 80% to a three-year low. In contrast, the Crypto F&G Index declined from 44 to 18 — a 59% decrease.

However, over the past few months, the F&G Index indicates that the crypto market has become more fearful than stocks. By its scale, the latest drops in the F&G Index are close to that seen during the LUNA collapse in mid-2022, which significantly intensified bearish momentum at the time.

Is This Rising Fear Justified?

34% of investors are confident in a market rebound, down from 69% in October

To answer whether or not this fear is justified, CEX.IO conducted a two-stage survey among over 2,000 active users. The first round took place in October, and the second in November, both coinciding with periods when the Fear & Greed Index entered “extreme fear” territory. This approach allowed to track shifts in user confidence and expectations about the crypto market’s long-term performance.

Investor confidence in a strong market recovery fell sharply, with the share of highly confident respondents dropping from 69% in October to just 34% in November.& Moreover, 70% of respondents claim that the crypto market might have already reached the cycle peak, and a deeper correction could unfold.

In both cases, around 70% of participants said they prefer to hold their positions during periods of market fear. However, a growing share indicated a shift toward stablecoins and fiat amid the current “extreme fear” phase, suggesting a rise in risk aversion.

Yet, the poll also revealed that Bitcoin remains the most popular destination for investors looking to navigate uncertainty. When asked where they plan to allocate during this fear cycle, 52% chose Bitcoin, while 15% favored Ethereum and other top altcoins.

The biggest perceived threat comes from the global economic slowdown and trade tensions (63%), underscoring how macro pressures outweigh regulatory or internal industry risks.

Looking ahead, most respondents see macro improvement, or easing inflation and rates (59%), as the key catalysts for a potential revival, followed by improved liquidity and institutional flows.&

Overall, the survey shows a market that’s cautious but not broken — one where fear signals consolidation instead of capitulation.

Exchange Reserves Suggest Fear May Be Overstated

Although the market reached “extreme fear” zones, exchange reserve dynamics hint that current levels of fear may exceed actual market stress. Historically, when panic truly sets in — as seen during the COVID crash in 2020 and the LUNA collapse in 2022 — BTC and ETH exchange reserves surged as traders rushed to offload holdings, while the Stablecoin Supply Ratio (SSR) plunged amid a mass flight to safety. Those moments reflected genuine systemic stress, when fear translated into measurable sell pressure and liquidity drains across exchanges.

This time, however, the picture looks very different. Despite U.S.-China trade tensions and disappointing macro signals, BTC and ETH exchange reserves kept declining — even faster than during earlier macro shocks this year. The SSR dropped by 22% in a month, but the market appears to be holding stablecoin liquidity on the sidelines — waiting for clearer macro signals before re-entering.

As such, this pattern reflects defensive positioning, where the market is increasingly getting ready to re-enter once macro uncertainty eases.

Chart: Exchange Reserves and SSR Dynamics in 2025. Source: CryptoQuant

Fear Is Becoming Rarer But Louder

In total, if we look at the share of the year the crypto market has spent in the fear zone, it appears the market became less accustomed to fear when it returns.&

Over the past few years, the crypto market has spent less time in “fear” territory. Even with heightened macro uncertainty in 2025, the combined “fear” and “extreme fear” periods account for about 31% of the year so far — well below past peaks and even some bullish phases like 2021.

This suggests the market may be gradually becoming less reactive to volatility. However, it also means that when sentiment does swing toward fear, it feels more intense. With fear phases now rarer, each occurrence tends to trigger sharper reactions and outsized narratives about market weakness.

Note: “Extreme Fear” refers to periods when the Fear & Greed Index falls between 0-24, while “Fear” indicates a range of 25-49.

Final Thoughts

The current surge in crypto fear appears more emotional than structural, yet it could become quite persistent, potentially leading to a deeper correction. Trade tensions, macroeconomic concerns, and a lack of new liquidity have clearly shaken confidence. However, unlike during the COVID crash or the LUNA collapse, it’s too early to say about systemic stress.& Confidence in a near-term rebound has weakened, yet few are capitulating outright, suggesting the market is consolidating rather than collapsing.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Halloween is when fear typically takes center stage — and right now, the Crypto Fear and Greed Index is firmly planted in the fear zone. It’s not the first time this has happened, yet this year has been the most turbulent emotional rollercoaster the market has experienced since 2021.

In 2025 so far, there have been 13 events when the index moved by more than 25 points in a week, and in 8 instances, it was a rapid drop toward fear.&

Crypto Markets Became More Fearful Than Stocks

One of the sharpest drops in the F&G Index in 2025 happened this October. After Donald Trump announced a 100% tariff on China and U.S.-China trade tensions renewed, the Crypto Fear and Greed Index fell from 64 to as low as 22 — a 66% drop. For comparison, the Stock Fear & Greed Index saw a 50% decline over the same period.

The latter is quite unusual, as when macro winds turn cold, stock investors typically panic harder and recover slower than crypto investors. For instance, after Trump announced tariffs on nearly all countries in April, the Stock F&G Index dropped by over 80% to a three-year low. In contrast, the Crypto F&G Index declined from 44 to 18 — a 59% decrease.

However, over the past few months, the F&G Index indicates that the crypto market has become more fearful than stocks, also reacting more strongly to one of the worst U.S. jobs reports since the pandemic on August 1. By its scale, the latest drop in the F&G Index is close to that seen during the LUNA collapse in mid-2022, which significantly intensified bearish momentum at the time.

Is This Rising Fear Justified?

Market Survey Suggests Underlying Confidence&

CEX.IO’s survey of over 2,000 active users, conducted when the F&G Index entered “extreme fear” territory in October, reveals that despite market anxiety, confidence in crypto’s long-term resilience remains strong. Nearly 69% of respondents said they are highly confident the market will recover stronger from the current phase.

Still, caution dominates short-term behavior: 70% of participants said they prefer to hold their positions during fear periods, while just 9% keep trading as usual.

The biggest perceived threat comes from the global economic slowdown and trade tensions (63%), underscoring how macro pressures outweigh regulatory or internal industry risks.

Looking ahead, most respondents see institutional inflows and regulatory clarity (59%) as the key catalysts for the next revival, followed by new tech waves like tokenization and AI.&

Overall, the survey shows a market that’s cautious but not broken — one where fear signals consolidation instead of capitulation.

On-Chain Data Points to Healthy Liquidity

On-chain and liquidity data supports the survey results, suggesting that fear levels may exceed actual market stress. Historically, when panic truly sets in — as seen during the COVID crash in 2020 and the LUNA collapse in 2022 — BTC and ETH exchange reserves surged as traders rushed to offload holdings, while the Stablecoin Supply Ratio (SSR) plunged amid a mass flight to safety. Those moments reflected genuine systemic stress, when fear translated into measurable sell pressure and liquidity drains across exchanges.

This time, however, the picture looks very different. Following the renewed U.S.–China trade tensions, BTC and ETH exchange reserves kept declining — even faster than during earlier macro shocks this year. The SSR dropped by about 8%, yet the market mostly held dry powder instead of converting stablecoins into risk assets or panic-selling crypto positions.

As such, this pattern reflects defensive positioning, where the liquidity profile remains healthy, and the market is increasingly getting ready to re-enter once macro uncertainty eases.

Based on past macro shocks of similar scale, it typically takes around 20 to 30 days for the Crypto F&G Index to recover to pre-event levels, suggesting early November as a potential recovery window. However, this recovery could take longer if macroeconomic tensions escalate or if the market slips into a deeper correction phase.

Fear Is Becoming Rarer But Louder

In total, if we look at the share of the year the crypto market has spent in the fear zone, it appears the market became less accustomed to fear when it returns.&

Over the past few years, the crypto market has spent less time in “fear” territory. Even with heightened macro uncertainty in 2025, the combined “fear” and “extreme fear” periods account for about 28% of the year so far — well below past peaks and even some bullish phases like 2021.

This suggests the market may be gradually becoming less reactive to volatility. However, it also means that when sentiment does swing toward fear, it feels more intense. With fear phases now rarer, each occurrence tends to trigger sharper reactions and outsized narratives about market weakness.

Note: “Extreme Fear” refers to periods when the Fear & Greed Index falls between 0-24, while “Fear” indicates a range of 25-49.

Final Thoughts

The surge in crypto fear seems overstated relative to actual market conditions, and it appears to be more psychological than fundamental. While the headlines around tariffs and trade tensions are significant, they lack the systemic nature of Covid or the contagion impact of the LUNA collapse. Investors are quicker to flinch — but they’re not leaving. And that combination tends to set the stage for rebounds once the noise fades.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Tokenized gold hit a major milestone this week, with daily trading volume exceeding $1 billion for the first time. The surge came amid renewed macroeconomic uncertainty from the U.S. government shutdown and escalating U.S.-China trade tension, which drove investors toward safe-haven assets.

Since the start of the shutdown on October 1, gold prices have rallied nearly 10%, fueling growth in tokenized gold markets. Over this period, cumulative tokenized gold trading volume exceeded $10 billion, already surpassing activity seen throughout the entire Q1 2025. For context, the sector reached a record $26.7 billion in trading volume in Q3, meaning it’s now well on track to break that milestone in Q4 if current momentum persists.

Tether Gold (XAUT) led the rally, accounting for nearly 37% of tokenized gold volume in October, up from 27% in Q3 2025, while its holder count grew over 12%, outpacing PAXG.

The heightened activity in October also helped tokenized gold overtake Blackrock’s iShares Gold Trust (IAU), the world’s second-largest gold ETF, which recorded $9.8 billion in volume since the shutdown. This milestone comes on the back of explosive growth in recent quarters: tokenized gold saw a 234% increase in trading volume in Q2 2025, ranking fourth behind GLDM, then surged 43% in Q3, outpacing GLDM and now overtaking IAU.&

Today, only SPDR Gold Shares (GLD), with over $80 billion in trading volume, remains ahead, underscoring how quickly tokenized gold is closing the gap with traditional ETFs and establishing itself as a mainstream investment vehicle.

Notably, all this trading activity is taking place from a relatively small market base. While GLD and IAU have market caps of nearly $125 billion and $60 billion respectively, tokenized gold’s market cap sits just above $3 billion. Despite its smaller size, tokenized gold is trading at a velocity far higher than major ETFs and even altcoins. Current volume-to-market-cap ratios show tokenized gold at 34%, compared with GLD at 5.6% and IAU at 1.5%, highlighting how actively gold-backed cryptocurrencies are bought and sold relative to its size.

This sharp rise builds on trends seen in Q2 2025, when tokenized gold broke from traditional ETF patterns. The increase reflects how tokenized gold is used not only as a store of value but as an active utility asset within the crypto ecosystem. Investors appear drawn by its accessibility and ability to respond quickly to macro shocks, including tariff uncertainty and geopolitical tensions.

Final Thoughts

Tokenized gold is rapidly carving out its place in the broader gold investment landscape. While traditional investment vehicles like GLD continue to dominate in size and recognition, tokenized gold is building a parallel, on-chain market driven by retail and crypto-native investors. With macroeconomic uncertainty fueling demand, the tokenized gold sector could be poised to challenge the traditional hierarchy sooner than many may expect.

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Q3 is typically one of the quieter periods for crypto markets, yet 2025 broke that pattern in spectacular fashion. Far from being a seasonal lull, the quarter became one the most active periods on record for stablecoins, fueled by both regulatory breakthroughs and surging user interest.

Google searches for the term “stablecoin” hit record levels, driven by major regulatory news. The U.S. passed the Genius Act, the most comprehensive piece of stablecoin legislation to date. In addition, the SEC released new guidance on accounting rules, stating that USD-pegged stablecoins could be treated as cash equivalents. These steps gave both investors and institutions more confidence in using stablecoins.

As a result, by the end of Q3, 2025 had already surpassed the totals of 2024 on multiple metrics, with Q4 still ahead. And since the final quarter is historically one of the busiest periods for stablecoins, momentum shows little sign of slowing. But for now, let’s look at Q3 winners and what made it such a standout quarter.

Supply Dynamics

By the end of Q3, the total stablecoin supply climbed close to $300 billion, growing by nearly $45 billion in just three months. This marks the largest quarterly stablecoin expansion in its history.

In relative terms, supply expanded by over 18%, outpacing the wider crypto market cap, which grew by 16% over the same period. This shows that stablecoins are gaining market share and strengthening their position as a backbone of liquidity and trading activity in the industry.

Most of this growth in Q3 came from three tokens — USDT, USDC, and USDe — which together accounted for 84% of the new supply. The standout were USDe and PYUSD, which expanded by more than 173% and 152% in Q3 alone, despite the Genius Act banning yield-bearing stablecoins in the U.S.&

USDe took advantage of rising funding rates, offering more attractive yield, as crypto markets updated all-time highs in Q3. In addition, there’s been an explosive growth of leveraged yield strategies on protocols like Pendle and Aave. It allowed investors to deposit USDe, borrow against it, and then redeposit to amplify returns, creating strong demand for the token.

PYUSD supply increase was supported by its expansion into nearly 10 networks in Q3, primarily through LayerZero’s Stargate Hydra bridge, as well as increased DeFi integration, including the one with Spark.

In terms of network distribution, Ethereum was the clear winner, hosting about 69% of all new stablecoin issuance in Q3. Ethereum also regained the top spot from Tron as the leading network for USDT supply due to decreased fees and record network activity. Tron, in contrast, was the only major network to see a decline in stablecoin supply, suggesting that users and liquidity are migrating toward alternatives.

Among smaller ecosystems, Hyperliquid’s L1 and Arbitrum were the fastest growers. The surge was tied to the rising adoption of Hyperliquid’s perpetual futures trading platform, which relies on USDC deposits through Arbitrum. This dynamic pushed Arbitrum’s stablecoin supply up by more than 88% in Q3, and lifted USDC’s dominance on Arbitrum from 44% to 58%.

Trading Dynamics

Total stablecoin trading volume reached $10.3 trillion in Q3 2025, making it the most active quarter since Q2 2021. In turn, average daily volumes climbed to $124 billion, more than double the levels recorded in Q2. The rebound was initially driven by heightened activity across broader crypto markets, but later in the quarter stablecoins also became a key vehicle for capital rotation as caution began to rise.

As overall activity accelerated, USDT managed to expand its dominance in trading volume. Its share climbed from 77.2% in Q2 to 82.5% in Q3, while USDC slipped from 14.5% to 10.5%. Other stablecoins also lost ground, falling to 7% combined.

A major development also unfolded on DEXs, where USDC had been maintaining a lead in trading since a memecoin boom in early 2024. But in Q3 2025, USDT decisively overtook USDC in DEX volume, surpassing $100 billion in monthly trading volume for the first time. This flip suggests that USDT’s dominance on CEXs is increasingly spilling over into DEXs, potentially encroaching on USDC’s preference in DeFi.

The major catalyst behind this surge has been DEX adoption within the BSC network. BSC share in total DEX volume surged from 13% to more than 43% throughout 2025, primarily in Q2 and Q3. At the same time, token dominance on BSC DEXs shows that USDT volume is 19 times larger than USDC’s, marking it as a go-to stablecoin for trading activity within the network.

Transaction Volume Dynamics

Total Volume

In Q3, stablecoin transaction volume surged to an all-time high of $15.6 trillion, helping 2025 surpass full 2024 levels. Organic transfers grew over 30%, to a new all-time high of $2.9 billion, which is the steepest rise since the post-election rally, indicating increased user adoption of stablecoins for peer-to-peer transfers and everyday payments.&

However, bot-driven activity continues to dominate the landscape, accounting for 71% of all on-chain stablecoin transactions, up from 68% in Q2. The rise in automated transfers was most pronounced in August, and remained elevated through September despite a market cooldown. The surge of bot activity and unlabeled high-frequency transfers could raise questions about a potential increase of wash trading and non-economically-valuable transfers within the stablecoin space.

USDC extended its lead, accounting for nearly 63% of total stablecoin transaction volume in Q3, while USDT slipped to 32.5%, down from 35.2% in Q2. However, most of this surge in USDC activity has been fueled by bot activity, which increased from 80% to 83% over the past three months. In turn, USDT has been the main driver of the organic transfers volume increase.&

For the industry, this divergence highlights both the efficiency and risks of algorithmic liquidity versus the stickiness of retail and trading adoption.

Among smaller stablecoins, DAI’s share diminished sharply, falling from over 6% of volumes in Q2 to just 2% in Q3. Meanwhile, PayPal’s PYUSD quietly gained ground, tripling its transaction volume and share in Q3, albeit from a small base.

On the network side, Ethereum and Base together processed more than $9 trillion in stablecoin transfers in Q3, increasing their dominance to 60%, up from 55% in Q2. In turn, Tron’s share slipped from 16% to 13%, indicating increased users rotation from the network to the Ethereum ecosystem.

Retail-Sized Transfers

One of the most notable trends in organic stablecoin volume was a consistent increase in retail-sized transfers, or those below $250. In September and Q3, they reached a new all-time high, helping 2025 become the most active year ever for retail stablecoin usage. Considering that Q4 typically keeps the rising momentum, this puts retail-sized stablecoin volumes on track to exceed $60 billion by year’s end.

At the same time, USD is the primary gateway into crypto for users worldwide. As a result, as stablecoin adoption increases and the above-mentioned divergence in use cases between USDT and USDC is becoming more pronounced, this increases the retail demand for asset conversions. However, such switching can introduce friction and additional costs.

CEX.IO’s internal figures illustrate the scale of this demand: on its Convert terminal, USD remains the most frequently converted asset globally, with its pairs to USDT and USDC alone accounting for about 40% of total volume. That’s why to reduce this barrier, CEX.IO recently introduced zero-fee, 1:1 conversions between USD, USDT, and USDC.

After obtaining stablecoins, CEX.IO internal data shows that trading remains the dominant use case among retail stablecoin users, with nearly 88% of sub-$250 transactions involving such operations.&

At the same time, a meaningful share of activity is tied to stablecoin-to-fiat trades and on-chain transfers. Both categories point to stablecoins’ growing role in facilitating payments, remittances, and cashing out earnings. Finally, a smaller but steady portion of users engage in savings products, reflecting the appeal of yield-generation and value preservation.&

While still a minority of overall transactions, non-trading activity saw an over 15% increase in 2025, highlighting that stablecoin adoption is gradually expanding into functions beyond trading.

Conclusion

Q3 confirmed that stablecoins are no longer just a supporting tool for crypto markets — they are becoming the core of settlement and even a gateway for retail adoption. Looking ahead to Q4, this momentum is likely to continue, as stablecoin usage has historically climbed in the final quarter for five years in a row. The bigger question now is whether growth will stay concentrated in a few dominant assets and networks, or if signs of broader diversification will emerge. For now, Q3 highlighted an even stronger tilt toward USDT and USDC, alongside Ethereum’s ecosystem, and these trends show no indication of slowing.

Source

The data used for this research consists of publicly available information from DeFiLlama, Visa/Allium, Artemis, Coingecko, Blockworks Research, and GrowThePie. Retail-sized transactions are defined as adjusted (non-bot) transactions that are less than $250, according to Visa’s methodology. In turn, CEX.IO’s internal data was based on the same sample of 3,000 active users to preserve consistency. The observation period for this study was focused on Q3 and 2025 year-to-date performance, with data points ending September 30, 2025.

A similar shift is also visible on shorter and longer horizons. On a 1-year basis, Bitcoin’s realized volatility dropped to around 44%, near an all-time low. That makes it less volatile than 99 of the 100 companies in the index, with only industrial gas giant Linde still slightly lower — though Bitcoin is on track to dip beneath it in the coming weeks. That’s a sharp improvement from just a month ago, when Bitcoin was less volatile than 91% of the index.

On the 1-month measure, Bitcoin also outpaces nearly the entire index, proving more stable than 96 out of 100 stocks. Notably, despite this lower volatility, Bitcoin continues outperforming most stocks in returns, showing it can deliver strong gains with less risk.

Bitcoin Outshines Every Company in Magnificent 7 on Risk and Returns

One of the most prominent examples of Bitcoin’s improved position against stocks is how it stacks up against the Magnificent 7, which includes Apple, Microsoft, Nvidia, Amazon, Meta, Tesla, and Google.

Last year, Fidelity highlighted that “Bitcoin’s volatility does not appear as an outlier” compared to megacaps, sitting in the middle of the pack. Today, Bitcoin’s realized volatility is lower than each member of the group, showing greater stability than the stocks that dominate equity market gains.

But volatility tells only part of the story. To assess whether returns are worth the risk, risk-adjusted metrics are key:

• The Sharpe ratio, which measures returns relative to total volatility,&
• The Sortino ratio, which looks at downside risk specifically,&
• And CAGR, which reflects compounded growth over time.

On these metrics, Bitcoin leads across the board against every member of the Magnificent 7. This week, Bitcoin’s 1-year Sortino rose to 2.38, with a Sharpe of 1.44 — both higher than most Nasdaq stocks.

What makes this shift more telling is the direction of change throughout 2025. Bitcoin’s Sharpe and Sortino have been stable or improving, signaling that returns are being delivered with less downside volatility and better overall efficiency. For the Magnificent 7, the opposite is true: ratios that were elevated at the start of the year have deteriorated. Nvidia, for example, saw its Sortino collapse from 3.19 in January to 1.07 in September, while Apple’s fell from 1.77 to 0.3.&

The only outlier is Google, whose Sharpe ratio temporarily edged ahead of Bitcoin’s thanks to a double-digit price rally over the past month.&

And yet, lower risk hasn’t come at the expense of returns that much. While volatility has cooled, Bitcoin has continued to outperform major stocks, with 1-year CAGR reaching 94%.

Why Bitcoin Is Calmer Than Stocks — and What Comes Next

Bitcoin’s volatility has been steadily declining each year,& and 2025 is no exception. Its 1-year realized volatility has already dropped by 17% since January, while its 1-month measure is down by 30% over the same period. There are two major reasons behind this trend.

First of all, the asset has matured: as Bitcoin’s market cap grows, the same inflows or outflows that once caused sharp swings now disperse across a much larger base. New capital inflows simply do not move the marginal buyer or seller as dramatically as they once did.

Since Bitcoin was confidently outperforming the rest of the stock market and saw an improved liquidity landscape, its scale-fueled volatility was shrinking at a faster pace. That’s also why Bitcoin has been registering smaller-scale bull runs with each consecutive cycle.

Secondly, Bitcoin is increasingly perceived as a store of value asset, not a speculative one. This can be seen amid Bitcoin’s resilience during recent market shocks.

In April, Trump’s reciprocal tariffs announcement sent stock volatility to its highest levels since the COVID crash, with Nasdaq 100’s weekly realized volatility spiking more than fivefold. For comparison, Bitcoin’s equivalent gauge “only” tripled.

Again in August, weaker labor data and a lower-than-expected PPI report doubled S&P 500 and Nasdaq 100 1-month volatility, but Bitcoin’s volatility rose just 70%. These smaller reactions to external shocks have left Bitcoin’s long-term realized volatility looking calmer than most Nasdaq names.

At the same time, Bitcoin’s drawdowns are becoming less severe. Earlier cycles were marked by brutal 70-80% crashes, cementing its reputation as a high-risk asset. However, throughout this cycle, some of Bitcoin’s corrections have been milder than those of the S&P 500 or Nasdaq. This not only reinforces the decline in realized volatility but also shows greater resilience during downturns.

Conclusion

For years, volatility was the one of the most popular factors that kept many institutional investors on the sidelines of Bitcoin, framing it as too unpredictable to fit into traditional portfolios. Yet what was once a weakness may now be turning into a strength: Bitcoin can now look like a relatively safer bet than many mainstream equity options. With its market structure maturing and its reactions to macro shocks becoming increasingly muted, Bitcoin’s volatility is likely to keep declining, reshaping how the asset is perceived in the broader financial landscape.

Sources

The data used for this research consists of publicly available information from TradingView, Fidelity, MarketWatch, and CheckOnChain. Volatility, Sharpe, Sortino, and CAGR comparisons were conducted on September 17, 2025, reflecting market conditions and price dynamics observed at that date.

As Japan Opens up Crypto Regulations, EDCON 2025 Heads to Osaka&

Ethereum’s Flagship Conference Returns September 16-19 with keynotes from Vitalik Buterin and the Ethereum Foundation’s Adrian Li.

When: September 16-19
Where: Osaka, Japan
Info:& https://www.edcon.io/en/

With Japan advancing new legislation reclassifying crypto as financial instruments and institutional interest in Ethereum driving ETH higher, EDCON 2025 returns to Japan for its 8th global edition. EDCON brings the Ethereum community to Osaka for a high-stakes conversation on protocol evolution, financial integration, and the path to real-world adoption.&

Taking place September 16-19 at Congrès Square Grand Green, the event is expected to draw over 6,000 developers, researchers, founders, and policymakers, produced in collaboration with public sector partners and enterprises including the Osaka Innovation Hub.&

EDCON will be held as part of the larger Global Startup Crossroads–Osaka. Events such as the Global Startup EXPO 2025 at the Osaka–Kansai Expo are also scheduled to take place concurrently.&

“Hosting EDCON in Osaka strongly demonstrates our unwavering commitment to supporting local entrepreneurs and driving the adoption of innovative technologies that will shape Osaka’s dynamic future,” said Osaka Prefecture and the Osaka Business Development Agency (Osaka Innovation Hub). “These initiatives perfectly complement the recent progress in Japan’s

cryptocurrency regulations, establishing Osaka’s vibrant business community in a unique position to fully seize new opportunities.”&

This year’s program features keynote speakers including Vitalik Buterin and the Ethereum Foundation with participation from major L2s, DeFi protocols, Japanese enterprises, and financial institutions.&

From Regulation to Real-World Infrastructure&

Japan’s Financial Services Agency (FSA) recently proposed reclassifying crypto as a financial product under the Financial Instruments and Exchange Act (FIEA). The move signals growing institutional alignment and could pave the way for licensed ETFs, lower capital gains tax, and stablecoin integration across banks, fintechs, and public infrastructure.&

This policy shift sets the stage for EDCON 2025’s core focus: building compliant and scalable systems on Ethereum from protocol upgrades to real-world deployment.&

Conference topics will include:&

● Stablecoins & Tokenized Finance: Regulated issuance, Japan’s FX use case, RWA integration&

● Ethereum Protocol & Roadmap: Fusaka upgrade, ZK-EVMs, PeerDAS, blob scaling, zkFOCIL, ePBS, cross-L2 interoperability&

● Crypto x AI: DeFAI, verifiable ML, AI governance & alignment via DAOs

● Cryptography and Privacy: Privacy-preserving identity & reputation, ZKPs, FHE, MPC, post-quantum cryptography&

● Consumer Applications: Wallet UX, mini-app ecosystems and the road to mass adoption&

● Decentralized Acceleration (d/acc): infrastructure sovereignty, DeSci, open-source innovation acceleration&

From Community to Community&

Since its inception, the Community Ethereum Development Conference (EDCON) has been a community-driven gathering, staying true to its mission of fostering communication and collaboration among Ethereum communities worldwide.&

For EDCON2025, the EDCON Team is leading a series of collaborative initiatives in partnership with communities across the ecosystem, each creating unique stages and experiences:&

● Student Session with the Japan Student Web3 Association, bringing together student representatives from around the globe to explore how the next generation can participate in Ethereum.&

● Two Workshops with BGIN on cybersecurity and privacy pool standardization.

● Workshop with Open Build on the theme of open source.&

● Workshop with Uniswap Foundation on Uniswap v4 Hooks

● VC Connect Stage with Web3 Salon | AWAJ, A pitch competition dedicated to emerging Web3 startups.&

● Super Demo with Akindo,will showcase the next generation of Ethereum projects&

How to Register& Get the latest information on passes, as well as speaker, sponsor, and community partner applications at https://www.edcon.io/.

Kaspa Experience: First Kaspa Community Conference

When: September 13, 2025
Where: Berlin, Germany
Info:& https://experience.kaspa.events/

As the crypto industry matures beyond its early promises and speculative mania, a new kind of technology is stepping forward, one that blends internet-level performance with bulletproof decentralization. That technology is Kaspa, and this September in Berlin, the world will experience it up close.

The Kaspa Experience is more than just a community gathering. It’s a showcase of the most advanced proof-of-work blockchain ever built, featuring instant confirmation, 10 blocks per second, and a roadmap scaling far beyond what Bitcoin or Ethereum have achieved. The event highlights Kaspa as the fastest, safest, and most decentralized cryptocurrency on the planet, and the foundation of a new era of financial and data settlement.

“At Wolfy’s Bar, we believe crypto belongs in everyday life—not locked away on charts and exchanges. The Kaspa Experience is our chance to show the world how fast, feeless payments can transform how businesses and communities connect. We’re excited to join other innovators proving that crypto’s real power lies in real-world adoption.”& ~ Wolfy

Beyond Bitcoin. Beyond the Hype.
Over the past 16 years, the world has witnessed crypto rise from cypherpunk ideals to media spectacle. Bitcoin proved sound digital and decentralized money was possible, Ethereum brought programmable contracts, and meme tokens made headlines, but often at the cost of credibility. Kaspa is none of these. It’s the next chapter, maybe another volume.

“We created The Kaspa Experience to prove that blockchain isn’t just code—it’s a living economy. This event is where people will see and touch how fast, practical, and open a decentralized network can truly be. We want builders, businesses, and anyone curious about the future of finance and technology to come and discover how Kaspa can empower their vision.”
~ Ashton Wood, Kaspa Alliance for Transparency

Bitcoin’s price has been on a rollercoaster ride, driven by mixed signals from U.S. economic data. Last week, softer-than-expected CPI figures pushed Bitcoin’s price to a new all-time high, but markets quickly reversed after PPI posted its sharpest increase since 2022. This reignited concerns that the Federal Reserve may keep interest rates unchanged for longer.

This volatility caused Bitcoin to break below its four-month ascending support line (green line) while also forming a second peak in what appears to be a potential Double Top pattern (cyan lines). The key level to watch here is $112,000. If Bitcoin decisively breaks below this support, the Double Top formation points to a possible price target near $101,000, as the price target for this pattern is typically calculated by measuring its height.

However, if buyers succeed in defending the $112,000 level, the correction could be delayed, or the Double Top pattern invalidated altogether. For that to happen, Bitcoin would likely need a strong bullish catalyst, and one key event stands out as a potential market mover — Jerome Powell’s upcoming speech at the Jackson Hole Symposium on August 22, which could ultimately determine whether this pattern holds or breaks.

His comments may also shape the outlook for the rest of 2025. If he signals that rate cuts are back in September with more to follow, markets will likely rally across the board. A neutral “watching the data” stance would keep rate cut hopes alive and leave markets building pressure for a bigger move soon. But if Powell firmly pushes back on cuts, crypto and wider markets could face heavier selling.

Waning Bullish Momentum

Still, even if Powell’s remarks turn out to be favorable for crypto markets, Bitcoin may struggle to reclaim fresh all-time highs without stronger trading momentum.&

Since March, Bitcoin’s price has been following a familiar setup: consolidation phases (cyan lines) followed by bullish breakouts. Yet each breakout produced a smaller upside extension — topping at the 3.414 Fibonacci level in May, the 2.414 level in July, and only the 2 level during the most recent all-time high rally. This pattern highlights a gradual loss of bullish momentum.&

Daily RSI and MACD readings reinforce this view, with both indicators forming lower highs (green lines). Altogether, while Bitcoin still retains upside potential, the room for further gains appears increasingly limited.

A major factor behind its weaker performance has been declining market volume. Over the past three months, daily Bitcoin futures volume dropped 21%, while spot volume slid 22%. This decreased market activity has made each rally less sustainable, limiting the force of upward moves and amplifying downside risks when sellers step in.

Bearish RHODL Momentum Could Delay a Rally

In 2024–2025, RHODL momentum has been making lower highs (black line) and is already in bearish territory. This indicates that long-term holders are realizing smaller relative profits with each upswing.&

This setup is unusual — in past cycles, bearish readings mostly appeared during bear markets and only turned positive after months of consolidation. The current divergence points to three possible paths:&

• A quiet accumulation phase setting the stage for a larger, delayed breakout.&
• Transition into a long stretch of modest, grinding upside.
• A deeper correction similar to the post 2021 bearish market.

Which outcome plays out will hinge on how quickly RHODL momentum recovers — a swift rebound would favor the “big move ahead” scenario, while a prolonged slump would support the slow grind or deeper correction narrative.&

Conclusion

Bitcoin’s next decisive move will depend heavily on Powell’s remarks, volume recovery, and whether long-term holder momentum can rebound. A sustained defense of $112,000 could keep bullish hopes alive, but weakening market structure raises the odds of a drawn-out consolidation. External forecasts reflect this uncertainty — for example, Coinpedia BTC Price Prediction points to both scenarios, with the 2025 price target currently ranging from $72,000 to $168,000.

While riding a price rollercoaster, Ether quietly dethroned Bitcoin as the most-traded cryptocurrency in the spot market, signaling a decisive transition in trader attention. Ether’s dominance in volume has also been increasing with each consecutive week, widening the difference with Bitcoin and other digital assets.

At the time of this writing, Ether’s share of total spot trading volume on major CEXs has been above 32%, its highest level since August 2017.&

On some platforms, Ether’s dominance has been even more pronounced. At CEX.IO, for example, Ether currently accounts for more than 39% of all trading volume in a week, moving from 28% a month ago. Notably, the increase was largely driven by transactions under $3,000, with their share in spot volume recently jumping above 50%. This points to an uptick in retail engagement.

Short-Term Tailwind, Mid-Term Caution

Historically, sustained spikes in Ether’s spot volume dominance have often signaled short-term strength for Ethereum, though they can also precede broader market cool-offs in the mid-term. Over the past five years, Ether’s rising dominance has been closely linked with periods of increase in total crypto market cap, including 6 out of 7 major altcoin seasons.&

With attention now shifting toward Ethereum, the market could be laying the groundwork for another short-term expansion. Considering a potential Fed rate cut in September and that altcoins have been typically outperforming Bitcoin following such decisions, Ethereum could maintain its volume dominance for a while. These insights align with conclusions shared in recent articles on TheHolyCoins.

Capital Rotation Turns Toward ETH

Heightened focus on Ethereum also triggered accelerated capital rotation into ETH. Throughout August, Ether’s net position change climbed by 23%, while Bitcoin’s dropped by about 43%. As a result, Ethereum has now overtaken Bitcoin in capital rotation, indicating that traders are reallocating funds toward ETH at Bitcoin’s expense as well.

While this sounds positive for Ether’s price, this is also a signal for a cautious mid-term outlook, as such a development may mark the later stages of the market cycle. In previous two cycles, Ethereum drew proportionally more capital inflows than Bitcoin in the final months of the bullish cycle. This means that the markets could be approaching a deeper correction phase.

Deeper Ether Liquidity With Bid-Side Strength

Ether saw an improved liquidity landscape on CEXs, which supports the view of potential price recovery in the short-term. For instance, aggregated 2% market depth across CEXs increased by 21% over the past three months. The 2% market depth measures the total value of buy and sell orders within 2% of an asset’s current price, showing how much liquidity is available close to the market.

Although this increase in liquidity has been primarily led by the ask side, the market has recently shifted toward bid dominance. A stronger bid-side cushion suggests firmer buy-side support, which may help absorb volatility and reduce downside risk.

In short, after the latest correction, Ether’s market setup now looks healthier. A follow-through demand will determine whether Ether can turn this liquidity advantage into sustained price strength.

Ether Faces the Largest Selling Pressure in 2025

Despite healthier liquidity conditions, Ether still faces significant selling pressure. Ether’s Net Taker Volume recently registered its lowest point since the post-election rally in late 2024. Net Taker Volume shows whether aggressive buyers or sellers dominate on exchanges, and negative values suggest more aggressive selling. At the same time, Ether’s short position reached a new all-time high on CME, putting additional pressure on the asset.

Such a combination could lead to two potential outcomes: either Ether faces a short-term correction due to selling pressure, or it could see a local short squeeze if bullish momentum stays intact. Either way, Ether appears to be poised for a significant directional move.

Conclusion

ETH’s dominance in spot volume, renewed relative strength vs. BTC, and positive capital rotation all support the bull case for Ether. However, parts of Ether’s market structure remain fragile, warning against complacency and signaling that a correction could still be around the corner.

In the very near term, consider watching for three validation signals:

• Net Taker Volume turning toward neutral/positive,
• Bid-side depth maintaining its lead without a sharp pullback,
• Futures short positioning cooling.

If these conditions hold, the path of least resistance leans to the upside; if not, a shakeout may precede the next leg higher or even push the asset into a deeper correction.

Tether Gold (XAUT) executed the largest single-day supply expansion in tokenized gold history. On August 8, XAUT’s circulating supply jumped by 129,047.917 tokens, worth approximately $436.94 million. This move increased the total market cap of tokenized gold by 20% in one day. This record-breaking issuance pushed XAUT’s market cap ahead of Paxos Gold (PAXG), making it the leading gold-backed crypto asset by value.

The timing of this expansion is notable. A week ago, the U.S. reenabled tariffs on multiple countries, while weaker-than-expected U.S. jobs data fueled concerns over the labor market and stoked safe-haven demand. This lifted both physical gold prices and user activity across tokenized gold assets.

XAUT Becomes the Most Actively Traded Tokenized Gold Asset

Although XAUT has long been one of the largest tokenized gold assets by market cap, it historically lagged behind PAXG in both trading activity and user engagement. In 2025, the competitive landscape became even more challenging as Kinesis Gold (KAU) rapidly captured momentum, posting an explosive $5.5 billion in trading volume in Q2 2025, outperforming XAUT.

However, the situation has changed in Q3 2025. Starting July 25, XAUT began confidently surpassing both PAXG and KAU in daily trading volume. A day before that, Tether published its Q2 attestation report confirming that XAUT was backed by more than 7.66 tons of physical gold. The report appeared to boost market confidence in XAUT’s reserves and transparency, prompting traders and investors to rotate toward the asset from other tokenized gold tokens.

XAUT has also been outpacing PAXG in attracting new tokenized gold holders. So far in 2025, the number of XAUT holders has surged 173%, compared to a 29% increase for PAXG. While PAXG still maintains a larger user base, the gap is closing quickly, shrinking from 15:1 at the start of the year to just 7:1 today.

Tariffs, Geopolitics, and Macro Backdrop Fuel Tokenized Gold Demand

Tokenized gold is once again entering favorable market conditions for its expansion. Earlier this year, Donald Trump’s tariff announcements sparked a multi-week rally in tokenized gold volumes, with PAXG, XAUT, and KAU seeing triple- and quadruple-digit growth. More recently, geopolitical uncertainty, Middle East tensions, and now softer U.S. labor data have kept gold’s safe-haven appeal front and center.

This means the latest supply expansion suggests that Tether is positioning XAUT to meet growing demand from both retail and institutional segments. This demand could come not only from crypto-native audiences, but from gold ETF users, since tokenized gold has been recently capturing their momentum.

For instance, in Q2 2025, the tokenized gold’s total volume exceeded $19 billion, outpacing the quarterly growth rates of SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) for the fourth straight quarter. The gap in trading activity between tokenized gold and IAU has shrunk from 5x in mid-2024 to just 2x in mid-2025.

The Road Ahead

If gold prices remain strong and macro risks persist, tokenized gold could see further market share gains from ETFs, especially among crypto-native investors seeking real-world assets without traditional intermediaries. XAUT’s expansion also highlights a potential shift from passive holdings toward more liquid, utility-driven use cases, such as DeFi collateral and on-chain settlements.

With volumes accelerating, adoption broadening, and competition with PAXG intensifying, the latest supply milestone may not just be a record for XAUT, it could be a sign that tokenized gold is entering a new growth phase.

Public companies are doubling down on crypto. By late July 2025, the total value of digital assets held by public companies surpassed $124 billion, showing a 115% increase this year so far. Furthermore, corporate crypto treasuries are also outpacing overall market growth, now accounting for over 3.2% of the total crypto market cap, up from 1.77% in January.&

Below, we explore major trends shaping this surge in corporate crypto treasuries and what they reveal about broader institutional adoption.

Altcoin Treasuries Saw Over 6,700% Growth in 2025

One of the largest trends was the rapid adoption of altcoins by public companies. At the start of the year, altcoin treasuries among public companies totaled less than $200 million. Today, they have soared to over $10.8 billion, a staggering 6,700% increase.

This explosive growth came almost entirely in the past three months, primarily in July. This month alone, the total value of altcoins held by public companies increased by over $8 billion, or 301%.

Ethereum has been the main driver of this surge in altcoin adoption, accounting for nearly $6.2 billion in holdings, which is an over 5,000% increase since January. But Ethereum is far from alone. Over the past few months, public companies have also announced or built substantial positions in Hyperliquid, XRP, and Solana. Even BNB, Dogecoin, Litecoin, and newer entrants like Sui have found their way into corporate balance sheets, albeit at smaller scales.

As a result, the landscape that was almost exclusively dominated by Bitcoin became much more diverse in a matter of months. Altcoins have grown from 0.3% of corporate crypto treasuries in January to 9% in July, highlighting expanding risk appetite and recognition of crypto’s utility beyond Bitcoin.

Public Companies Accumulated More BTC in 2025 than All U.S. Spot Bitcoin ETFs

At the start of 2025, U.S. spot Bitcoin ETFs held almost $120 billion, nearly double the amount on public companies’ balance sheets ($65.8 billion). By July, this gap narrowed significantly due to faster Bitcoin accumulation by public companies, up 96% year-to-date versus 44% for ETFs. In dollar terms, public companies added $47.3 billion worth of Bitcoin to treasuries in 2025 so far, outpacing the $31.7 billion that flowed into ETFs.

Treasuries taking market share from ETFs means that institutional adoption is becoming more native, with companies moving closer to crypto’s core infrastructure instead of staying at arm’s length. In addition, holding Bitcoin directly on a balance sheet is a less liquid approach, signaling the increase of a long-term strategic commitment to the largest cryptocurrency.

ETH Treasuries Narrowed the Gap with ETFs by Nearly 30x

Compared to Bitcoin, Ether saw an even more dramatic shift in Treasuries vs. ETFs dynamic. At the start of 2025, spot Ether ETFs outweighed corporate treasuries by more than 100 to 1 ($12.1B vs. $120M). By July, the ratio had dropped to less than 4 to 1, with treasuries surging to $6.2 billion and ETFs reaching $21.4 billion.

Most of this movement came in the last two months, when multiple public companies, including Sharplink Gaming, Bitmine Immersion Tech, and The Ether Machine, initiated ETH treasuries for the first time and rapidly scaled up their positions. ETH treasuries jumped by 415% in net value in June, and surged by 919% in July.

The growing gap reduction between Ether ETFs and corporate treasuries is not just about investment flows, but also a deeper shift toward native, utility-driven adoption. For Ethereum specifically, U.S. spot ETFs currently don’t support staking, making direct holdings more attractive since companies can earn rewards and actively engage with the network, rather than passively holding ETF shares.&

In addition, holding Ethereum outright also gives companies more flexibility, as they can use the assets in operations and as collateral instead of just taking advantage of potential price appreciation.

Market Reaction to Treasury Announcements Is Short-Lived

Announcing a crypto treasury can be a double-edged sword for public companies. Historically, these announcements typically spark immediate surges in stock prices, sometimes even triple-digit spikes within minutes of market open. However, these gains frequently fade quickly within the same trading day, leading to single- or double-digit closes or even negative 1-day performance.

This suggests that while the market reacts enthusiastically to the news, investors often sell off the rally just as fast, possibly questioning the long-term business impact of the move. This is especially common among companies that were already struggling with prolonged negative performance, where launching a crypto treasury can look like an attempt to spark hype and stop the bleeding rather than a well-structured strategy.

Table: Stock Price Performance Following the First Asset Purchase/Announcement

The amount of the first crypto purchase is another crucial factor shaping stock reactions. A small, symbolic entry may not impress investors for long, whereas larger and sustained buying tends to drive stronger, more durable price moves. BTCS provides a clear example: its stock barely moved when the company first bought 1,000 ETH. But when it started accumulating significantly larger sums in July, the market responded dramatically, sending its stock soaring.

Final Thought

The doubling of corporate crypto treasuries in 2025 underscores that companies are moving beyond passive ETF exposure and directly embedding crypto into their balance sheets. While this trend highlights growing confidence in digital assets, it also introduces new risks, especially with the surge in altcoin holdings.

Bitcoin, which might be seen as a corporate-safe crypto play, has much larger liquidity and a proven track record as a store of value. Altcoins, by contrast, are far more volatile, less liquid, and heavily tied to emerging ecosystems.&

Although some of these companies may be inspired by the success of pioneers like Strategy, replicating that playbook with altcoins could be far riskier. As corporate crypto adoption deepens, the next phase of this story may hinge not on how fast treasuries grow, but on whether these high-risk allocations can withstand the next major market downturn.

Sources

The data used for this research consists of publicly available information from BitcoinTreasuries, StrategicETHReserve, The Block, SoSoValue, TradingView, CoinMarketCap, CoinGecko, as well as a collection of announcements and press releases of crypto purchases by public companies. Due to the latter, altcoin treasury valuations may potentially contain non-fully-finalized crypto purchases. Treasuries held by private companies, governments, and non-profit organizations were not included in the piece to maintain focus on public companies. The observation period for this study was focused on 2025 year-to-date performance, with data points starting January 1, 2025, and ending July 31, 2025.

The crypto industry is regaining its deal-making momentum, with total deal volume reaching $16.5 billion in the first half of 2025. That’s already more than the $12.2 billion recorded during all of 2024, and ahead of the $10.9 billion seen in H1 2021, the industry’s most active year to date. If this pace continues, 2025 is on course to become the biggest year ever for crypto fundraising and M&A activity.

Below, we explore the main drivers behind this surge and which sectors are attracting the most investor interest.

General Overview

Crypto Fundraising Increased in Scale&

In Q2 2025, crypto fundraising made up 5.3% of global venture funding, the highest share in three years. While total global fundraising remains below 2021’s peak, crypto’s slice of the pie has been growing steadily since U.S. elections, showing renewed investor interest in the space.

What makes this cycle especially notable is the pace of recovery. Crypto industry’s funding rebound in 2025 is outpacing its rise during the 2021 bull market, even though broader venture capital markets are showing signs of caution, and remain hyperfocused on AI. This suggests that crypto is becoming a more resilient and strategically important sector within the global startup ecosystem, not just the one that rises along with the wider IT sector.

As such, venture capital remains the biggest part of crypto deal-making in 2025. But this year brought a key change: instead of many small funding rounds, fewer projects are raising larger sums. While the number of deals is down compared to previous years, the average round has grown to nearly $20 million, which is a sharp rebound from the post-2022 dip.

This shows that investors are being more selective, choosing to back teams with stronger fundamentals or clear growth potential, rather than spreading capital thinly across many early-stage ideas.

M&A Activity Becomes a Driving Force

One of the biggest shifts in 2025 has been the rapid rise in M&A volume. Mergers and acquisitions have already surpassed $6 billion, more than triple last year’s total. M&A now accounts for 36.7% of total crypto deal volume, the highest share ever.

This rising share suggests a maturing market. Instead of just funding new projects, companies are now buying existing ones to gain technology, teams, or user bases. It’s a sign that growth in crypto is increasingly being driven by consolidation and strategic expansion, not just by innovation from scratch.

A Tokenless Trend Gains Ground

Another major trend in 2025 is the move away from token-based fundraising. So far this year, 82% of projects that raised money did so without launching or using a native token, which is a big change from previous cycles when tokens were central to most funding strategies, especially during the ICO boom.

This shows that both investors and founders are now more focused on building real products and generating revenue, rather than relying on tokens to drive hype. And that caution seems justified: 85% of token-funded projects in 2025 are currently showing negative performance, either year-to-date or since launch.&

The move toward tokenless fundraising could also be viewed as an additional sign of market maturing, with investors putting money into teams that prioritize strong business foundations before potentially launching a token.

What Crypto Sectors Show the Highest Investor Interest

As crypto deal activity picks up, the distribution of capital across sectors shows both familiar leaders and new areas of growth.

Fundraising

Finance remains the top category in fundraising, attracting nearly $4.9 billion across 171 deals. This broad category includes investments in both CeFi and DeFi projects, and their dominance in fundraising is in line with past cycles.&

As for other categories, here are key highlights:

• Infrastructure fundraising, which includes hardware, security, bridges, and oracles, was boosted by big deals in the mining sector. Companies like Bitmain and TWL Miner raised major rounds in Q2.
• The Blockchain sector, covering new L1 and L2 networks, saw a dramatic contraction. Once accounting for 10-20% of fundraising, it now makes up just 2% of deal volume. This suggests that investor appetite for launching new networks is at a multi-year low.
• AI-focused crypto projects have been steadily increasing their share of fundraising every year since 2021. This rapid expansion suggests that AI might be playing a bigger role in the crypto landscape in future cycles.

M&A

M&A data is less transparent than fundraising. While there have been 63 M&A deals so far in 2025, about 86% of them did not disclose the transaction amount, making it difficult to estimate the true value of the sector’s activity. However, most of the known deals are in the Finance sector. Notable examples include Coinbase purchasing Deribit, Kraken acquiring NinjaTrader, and Ripple buying Hidden Road.

In terms of deal count, Finance leads with 23 acquisitions, followed by the Service & Tooling category, which includes developer platforms, compliance tools, and analytics providers. Consumer apps such as gaming, wallets, and social platforms rank third in M&A activity.

Final Thoughts

The boom in crypto fundraising and M&A in 2025 is more than a sign of recovery, it highlights the direction the industry plans to move forward. Capital is flowing to fewer but stronger players, M&A is becoming a core strategy, and tokens are no longer a default requirement for early-stage success. The next wave of crypto may be less about explosive innovation and more about refining, scaling, and integrating what’s already been built. This quieter, more strategic cycle could lay the foundation for deeper, more sustainable growth — one that looks less like a hype-driven sprint and more like a long-term build-out of global infrastructure.

Sources

The data used for this research consists of publicly available information from RootData, Blockworks Research, Crunchbase, Coingecko, and Coinmarketcap. The observation period for this study was focused on 2021-2025 for general overview, and 2025 for sector and token overview, with data points ending July 8, 2025.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and

Tokenized gold reached a new all-time high in trading volume in Q2 2025, crossing the $19 billion mark for the first time, amid tariff uncertainty and tensions in the Middle East. This quarter marked a clear acceleration in a trend that’s been quietly building: tokenized gold is rapidly gaining ground on traditional gold investment vehicles, and it is well-positioned to overtake the second-largest gold ETF in volume in the next three months.

Tokenized Gold Has Surpassed Mid-Tier Gold ETFs&

Tokenized gold markets saw explosive growth over the past 15 months. From just $2.4 billion in Q2 2024, quarterly volume ballooned 8 times to $19.2 billion by Q2 2025. This growth far outpaced most top gold ETFs, including SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), whose volumes roughly doubled over the same period. This outperformance suggests a reallocation of activity from legacy ETFs toward on-chain gold products.

The most prominent story lies in the mid-tier ETFs. Despite relatively similar size with some mid-tier ETFs, tokenized gold has been significantly more reactive to tariffs and other geopolitical events in 2025. As a result, while tokenized gold has been experiencing an accelerating surge in trading volume, mid-tier gold ETFs have increasingly lagged behind both their larger counterparts and tokenized competitors, suggesting that they have been hit the most by this tokenized gold expansion.

Due to the rapid growth in 2025, tokenized gold now ranked 4th in trading volume among top gold investment products, overtaking SGOL, AAAU, IAUM, and OUNZ. And it’s on track to surpass IAU and GLDM as early as Q3 2025 if the current pace holds.

Tokenized Gold Is Now Aiming to Rival GLD and IAU&

While GLD still dominates with $232 billion in Q2 volume, the gap is shrinking fast. Tokenized gold volume is now just 12x smaller than GLD, down from 45x one year ago. In turn, the difference between IAU and tokenized gold volume has already fallen from a 5x gap in mid-2024 to just 2x today.

Since Q3 2024, tokenized gold has consistently outpaced both GLD and IAU in quarterly volume growth. For instance, in Q2 2025, tokenized gold volume jumped 253% from the previous quarter, compared to 75% for GLD and 71% for IAU. This suggests that tokenized gold is not simply following the broader trend of renewed interest in gold, but outgrowing it.

Retail Investors Are Fueling the Shift

This surge in tokenized gold volume isn’t just about market structure, but also about who’s buying. While ETFs remain the go-to option for institutions, tokenized gold is being increasingly adopted by retail and crypto-native investors. The clearest signal of that shift comes from Kinesis Gold (KAU), a gold token denominated in 1 gram of gold instead of 1 ounce. KAU’s volume skyrocketed from $40 million in Q2 2024 to $5.5 billion in Q2 2025, showing strong appeal among retail traders.

Other major tokenized gold tokens are seeing a user boom too. The number of PAXG holders grew by 25% in 2025, while XAUT holders jumped 151%, suggesting a wave of new participants entering the market. Rather than large institutional inflows, this growth appears to reflect grassroots adoption, particularly in regions where access to traditional gold ETFs is limited.

Utility, Not Just Store of Value

Despite record-breaking trading activity, tokenized gold still lags behind in market cap. In 2025, GLD’s total market cap rose 36%, while tokenized gold added 29%. This gap suggests that tokenized gold isn’t yet seen as a long-term store of value in the same way as ETFs.

Instead, it’s increasingly functioning as a liquid utility asset within the on-chain economy. Tokenized gold is frequently used in DeFi protocols and collateralized lending — activities where velocity matters more than static holdings.

Macro Tailwinds Could Push Tokenized Gold Over the Edge

This year’s geopolitical shocks fueled interest in both traditional gold offerings and tokenized gold. However, if macro conditions continue to deteriorate, tokenized gold could gain even more traction.

Donald Trump recently extended the U.S. tariff deadline from July 9 to August 1, and this indicates that the story is far from over. If tensions escalate, investors are likely to increase their exposure to gold. Given the rising awareness and growing infrastructure supporting tokenized gold, this next macro spike could be the moment it may surpass IAU in trading volume.

Final Thoughts

Tokenized gold is gradually becoming a core component of the modern gold investment ecosystem. ETFs like GLD still define the top of the market in both assets and mindshare. But the rise of tokenized gold shows that retail and crypto-savvy users are carving out a parallel gold economy on-chain. With shrinking volume gaps, explosive adoption, and global macro catalysts in play, the flippening may arrive sooner than expected.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
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In May 2025, bot activity on Ethereum registered its largest share ever in stablecoin transfers, representing 57% of volume and 31% of transaction count. Bots on Ethereum made over 4.84 million stablecoin transfers, totaling more than $480 billion last month, also reaching all-time high levels.

Increased bot activity helped lift Ethereum L1 back to the center of DeFi activity, boosted existing operations, and caused significant changes in Ethereum’s DEX volume distribution. Here is why this happened — and what this trend could mean for Ethereum going forward.

Low-Fee Environment Fueled the Bot Surge

The most impactful factor that boosted bot activity on Ethereum has been an over 92% drop in mainnet fees in early 2025. With gas prices hovering below 1 gwei in March and April, Ethereum L1 became more cost-competitive in stablecoin transfers not only compared to other L1 networks but even to its L2s. Most of Ethereum’s gains in overall stablecoin activity this year occurred during this record-low-fee period.

However, stablecoin transfers are the most fee-sensitive type of transactions. For example, following the Pectra upgrade in early May, Ethereum L1 saw elevated fees, which led to a 8% decrease in total stablecoin transaction volume and a $1 billion drop in stablecoin market cap. This slowed the growth of bot activity within the network but didn’t reverse it, as the sector was still riding the momentum from the low-fee period.

Chart: Transaction Fee Comparison Between Ethereum and Its L2s

Record-High Bot Activity Helps Reshape Ethereum’s DEX Landscape

Bots were primarily used for automating swaps, arbitrage strategies, and liquidity routing, which contributed to the spike in stablecoin swap dominance on Ethereum’s DEXs. In April and May, stablecoin swaps held the top spot in Ethereum’s DEX activity for two consecutive months for the first time ever, making up 37% and 32% of total DEX volume, respectively.

As a result, USDT and USDC took center stage, increasing its share in DEX volume (green circle). In March and April, USDC even became the most traded asset on Ethereum DEXs.

Ethereum’s transition to a more stablecoin-focused DEX volume& signals a broader transition in Ethereum’s on-chain economy — one that favors utility and payment-focused use cases over speculative trading. In 2025, only two categories saw meaningful DEX volume increases on Ethereum: tokenized assets, which surged by 284%, and stablecoin swaps, up 31%.&

Ethereum Eats Up L2s in the Stablecoin Field

One of the major consequences of Ethereum’s bot expansion and reduced fees was that L1 has been increasingly taking the market share from its L2s.

Stablecoin market cap

So far in 2025, Ethereum mainnet’s stablecoin market cap grew by 11%, while the combined stablecoin market cap on L2s shrunk by 1%. For comparison, in 2024, Ethereum mainnet posted a 65% increase, but L2s collectively surged by 218%. The biggest declines in stablecoin supply among L2s this year have come from Optimism, which lost over $700 million.

Transaction Volume

In total, the Ethereum ecosystem, including mainnet and L2s, processed over $11 trillion in stablecoin transaction volume in 2025 to date, triple the volume seen over the same period in 2024. This brought Ethereum’s share of global stablecoin volume to 60%, up from 40% in 2024, indicating that stablecoin activity has been shifting to Ethereum from other L1 networks as well.

At the time of this writing, L1 and L2s were showing a nearly 50/50 split in monthly transaction volume within the Ethereum ecosystem, with mainnet largely reclaiming positions starting March 2025, or during record-low-fee environment.

Transaction Count

In 2022-2024, L1’s share of stablecoin transactions in the Ethereum ecosystem was primarily declining to as low as 22%, since users increasingly favored L2s for their lower costs. But, in 2025, that trend has also flipped. According to GrowThePie data, Ethereum mainnet recorded over 30 million stablecoin transactions this year, lifting its share in transaction count to 42%.

Chart: Transaction Count Distribution Across Ethereum and Its L2s

Final Thoughts

While bots are often associated with sandwich attacks and frontrunning, Ethereum’s increase of bot activity within the stablecoin field shows that they could be among the major drivers to improve market efficiency, boost stablecoin adoption, and enhance DEX performance — a net positive for users and protocols alike.

Still, stablecoin transfers are highly fee-sensitive, meaning that the network may face a trend reverse and user migration outside Ethereum if fees remain elevated. However, if L1 manages to maintain a low-fee environment over time, this could help Ethereum reclaim further market share in the stablecoin space.

Real-world assets are no longer a side bet in DeFi — they’re becoming the main event. After adding $7.5 billion in on-chain value throughout 2024, the RWA sector matched that figure in the first five months of 2025. On May 13, on-chain RWA value reached $23.8 billion, up from $16.3 billion at the start of the year.&

The surge isn’t just about capital. The number of RWA holders has also crossed a key milestone, surpassing 100,000 addresses, showing a 22% increase in 2025 so far.&

This rapid expansion in both adoption and value comes as most DeFi sectors are seeing stagnation or contraction. With the RWA sector surging by 43% in 2025, its on-chain value briefly surpassed total DEX TVL.

The Drivers Behind the RWA Surge and Biggest Winners

While RWAs as a whole are surging, not all sectors are riding the same wave. In 2025, market uncertainty — not just yield — has become the dominant catalyst, and no asset classes reflect that more than bonds and gold.

Tokenized Euro Bonds Doubled in New On-Chain Value

The sharpest RWA sector spike came from Non-U.S. bonds, which saw a 101% increase in on-chain value in 2025 so far. This sector saw distinct inflection points that coincided with political headlines — most notably, accelerated inflows following Trump’s inauguration and another local jump after a selection of tariffs became effective on March 3-4.

Among Non-U.S. bonds, Euro-denominated ones stand out as the biggest winner, adding $102.6 million in on-chain value in 2025, and already outpacing 2024 on that matter. Most of these inflows went to Spiko’s EUTBL, which now accounts for over 80% of this RWA segment, experiencing 114% and 78% increases in value and holders in 2025, respectively.

However, tokenized Euro bonds account only for 1% of the entire RWA sector, meaning this hasn’t been the biggest landscape mover, despite the local surge.

BUIDL Took Over the U.S. Treasuries Segment

Tokenized U.S. treasuries had a much larger impact on the RWA sector, adding over $2.8 billion in on-chain value throughout this year. Around 79% of these inflows were allocated to BlackRock’s BUIDL, which has been securing the top spot in this segment starting mid-March. March 12, when the EU announced retaliatory tariffs, has also been the turning point in rapid BUIDL expansion, as nearly all of its gains occurred after this date. As such, BUIDL showed a more than 343% increase in new value added year-to-date, outpacing even much smaller funds.

Notably, BUIDL has also been among the leaders in attracting new holders, showing a 57% increase in the first five months of the year. This appears to be remarkable as BUIDL is not available on open markets, and features a much larger entry threshold. According to Amberdata, BUIDL features a minimum investment worth $5 million, while USTB, OUSG, USYC, and TBILL — $100,000. This signifies that the expansion of tokenized U.S. treasuries was primarily driven by institutional investors.

Another catalyst that pushed BUIDL forward was the downfall of USYC, which saw an over 3,000% increase in on-chain value in 2024, and dominated the space between November 2024 and March 2025. USYC experienced an over 73% drop in on-chain value in 2025, which began shortly before Circle’s acquisition of Hashnote, USYC issuer. The USYC drop occurred due to the yield-bearing USD0 stablecoin, which utilizes USYC as a primarily backing asset, and lost 60% of its TVL this year.

Tokenized Gold Overshadowed Its 2024 Performance

In parallel with the surge in fixed-income RWAs, tokenized commodities, especially gold, have emerged as a resilient safe-haven sector, benefitting from the same macro tailwinds. Total market cap for tokenized commodities grew by over $547 million in 2025 to date, with gold-backed tokens accounting for nearly 98% of that growth.&

This momentum has been largely led by Paxos’ PAXG, Tether’s XAUT, and Kinesis’ KAU, which together make up 88% of gold-related trading activity. Among them, XAUT saw the most significant growth in user base, nearly doubling its number of holders (+102%) since January. Despite this, PAXG still dominates the space in terms of holders, outpacing XAUT by nearly 10 times.&

As such, tokenized gold has already managed to beat its 2024 figures in both increased on-chain value and new holders.

While tariff-induced uncertainty served as a major catalyst to boost tokenized gold, activity stayed elevated even after the tariff noise began to subside. On April 22, tokenized gold trading volumes spiked to nearly $400 million, coinciding with gold spot prices hitting an all-time high above $3,500. This is the highest daily trading volume that tokenized gold showed since the U.S. banking crisis in March 2023.

Ethereum Ecosystem Strengthened Its RWA Dominance

In 2025, Ethereum’s role as the central infrastructure layer for RWA has become even more pronounced. The combined Ethereum ecosystem — including both mainnet and L2s — now accounts for over 82% of total RWA value hosted on general-purpose blockchains, up from 75% at the start of the year and 70% in early 2024.&

This growing dominance is driven by two complementary trends: the rise of products originally launched on Ethereum such as BUIDL, and the rapid emergence of new RWA platforms on Ethereum L2s. The most notable example was the debut of Tradable, a private credit-focused platform that deployed over $1.7 billion in assets on zkSync. This single launch catapulted zkSync into the position of second-largest general-purpose blockchain in RWA.

Furthermore, unlike most other chains that depend on a single RWA vertical or flagship project, Ethereum offers the most diversified spectrum of RWA products. This gives Ethereum an inherent advantage: it’s not overly reliant on the success of any one sector. Instead, it acts as the primary execution layer for RWA growth wherever it happens.

While Ethereum dominates the general-purpose blockchain landscape, it’s important to note that in a broader view — including purpose-built blockchains — Provenance technically takes the top spot. This is largely due to its private credit platform Figure, with nearly $10 billion in RWA TVL.

Final Thoughts

RWAs are not only leading the DeFi recovery — they’re setting the pace of it. With over $7 billion in new on-chain value added in under five months, the sector is evolving to become a core infrastructure in both institutional and decentralized finance.&

That said, the sector’s further short-term trajectory will largely hinge on the outcome of the existing tariff uncertainty. If trade tensions escalate, the flight to safe-haven and yield-generating RWAs could intensify even further. But a resolution, or even a de-escalation, could test the sustainability of the current inflows. Either way, RWAs have already proven their staying power as a response to market chaos.

Sources

The data used for this research consists of publicly available information from RWA.xyz, CoinGecko, DeFiLlama, and Amberdata. The observation period for this study was focused on RWA’s 2024-2025 performance, with data points starting January 1, 2024, and ending May 14, 2025.

• The memecoin market cap declined by 58% since its January peak, while its weight within the broader market decreased to less than 2%, as of April 1.
• Memecoins’ share of total crypto trading volume dropped below 4%, as the sector’s total volume fell 63%.
• At its Q1 peak, memecoins briefly made up 11% of total crypto trading volume.
• The DEX volume on Solana and Base became more memecoin-focused in Q1, despite a decline in memecoin-specific volume.
• Political memecoins surged amid the TRUMP and MELANIA token launches but have since dropped 80% in market cap and 99% in volume.
• 21% of all digital assets ever created across all networks have been launched on Pump.fun, but the pace of new token launches significantly slowed down in Q1.
• Raydium turned even more reliant on memecoins after the political memecoin frenzy subsided, with the share of memecoin-related volume increasing from 77% to 83%.

Introduction

Over the past year, memecoins have managed to establish higher baselines in terms of market cap and trading volume after each wave of excitement. However, in early 2025, the sector deviated from this trend. Following the rapid boom-and-bust cycle revolving around political memecoins, the sector erased much of its post-election gains, bringing valuations back to pre-election levels and raising questions about its resilience.

In this report, we examine whether this is just another cooldown before the next wave, or if memecoins are finally losing their grip on the market.

Global Trends

The Weight of Memecoins in the Crypto Market Cap

The memecoin market cap declined by 50% over the first three months of 2025. For comparison, Bitcoin’s market cap fell by 10%, while Ethereum’s dropped by 44% over the same period.

As a result, the weight of memecoins across all major crypto market cap metrics has seen a substantial decline so far in 2025. By April 1:

• The total crypto market cap share fell to 1.8%, marking a 39% decrease.
• Total2 (excluding BTC) share dropped to 4.8%, a 31% decline.
• Total3 (excluding BTC and ETH) share shrank to 6.2%, reflecting a 37% drop.

Memecoins hit a local quarterly peak in market cap on January 18, shortly after the launch of the TRUMP token. Since then, the sector has lost 58% of its value, bringing its market cap back to pre-election levels.

This decline suggests a cooling off of the memecoin sector, with capital rotating toward other crypto segments, particularly Bitcoin and stablecoins, as market uncertainty increased. Additionally, the pump-and-dump cycle associated with the LIBRA token launch further dampened sentiment within the sector.

The Weight of Memecoins in Crypto Trading Volume

Memecoins entered 2025 with relatively subdued trading activity, as post-election user engagement continued its gradual decline. Despite this, the sector saw an even sharper drop in Q1, with trading volume falling 63%. Meanwhile, trading volume for major digital assets like Bitcoin and Ethereum surged in early 2025, further reducing memecoins’ share of overall crypto trading volume. By April 1, memecoins’ share of total trading volume had dropped below 4%, marking a 58% decline.

However, if measured from its quarterly peak rather than January 1, the decline appears even more dramatic. The sector’s trading volume peaked on January 20, during Donald Trump’s inauguration, when memecoins briefly accounted for 11% of all crypto trading volume. Since then, memecoin trading volume has plummeted by over 93%, while its weight in the overall market volume shrunk by nearly 5 times.

This massive drop in activity underscores that the latest political memecoin frenzy has fully evaporated, leaving the sector in a hibernation phase, awaiting a new catalyst to reignite interest.

Local Trends

Memecoin Performance by Network

Solana received the most attention in early 2025, hosting TRUMP, MELANIA, LIBRA, and several other hot memecoins. Its strong user engagement positioned Solana as a key driver shaping the overall performance of the memecoin sector.

As such, memecoins experienced a sharp downturn in Q1 2025, with both market cap and trading volume declining across all major networks. Dogecoin showed relative resilience compared to the rest, suggesting that traders still see it as the Bitcoin equivalent inside the memecoin sector.&

Meanwhile, smaller ecosystems like TON, Tron, and Sui were hit hardest, suffering the steepest losses in both market cap and volume. This indicates that speculative interest in memecoins has continued consolidating around larger chains.

During the political memecoin frenzy in late January, market cap and volume were largely redistributed in favor of Solana-based memecoins. For instance, on Trump’s inauguration day, Solana-based memecoins briefly accounted for 70% of the sector’s trading volume. However, as the frenzy subsided, the market structure essentially “reset,” returning to early January levels.

Memecoins Tighten Their Grip on Solana and Base

Despite a decline in total and memecoin-specific volume, Base became more memecoin-dependent in Q1 2025. Memecoin dominance rebounded to 27% in March after hitting a low of 20% in February. This rapid resurgence of memecoin dominance on Base could indicate early signs of a local memecoin frenzy cycle, as traders shift attention back to high-risk, high-reward assets.&

In turn, Solana saw a decline in memecoins’ share of its monthly DEX volume, dropping from 54% in December to 47% in March. However, this doesn’t mean Solana is becoming less memecoin-dependent — rather, the opposite.

In late February and early March, Solana DEXs experienced a surge in SOL volume, intensifying the asset’s selling pressure at that time. As a result, memecoins share in DEX volume briefly dipped, largely impacting monthly performance.

Starting in mid-March, memecoins have been rapidly reclaiming their positions on Solana, jumping back above 50% share despite stagnant overall volume last month. This mirrors the decline in memecoin volume and market share observed between August and September (red rectangle), which later gave way to a new memecoin hype cycle.

The swift rebound in memecoins’ share suggests that traders are once again gravitating toward speculative assets, indicating that Solana’s reliance on memecoins could strengthen in April. If this trend continues, it may trigger another wave of local memecoin frenzy, further solidifying their role as a key driver of activity on the network.

Source: Blockworks Research

Memecoin Performance by Category

The latest memecoin frenzy also caused major shifts across different thematic categories.

Dog- and cat-themed memecoins, historically dominant in the sector, experienced significant declines, reflecting a broader retreat from legacy meme narratives. The trading volume dropped more than market cap for dog- and AI memes, suggesting that liquidity is drying up faster than valuations, potentially signaling weaker demand and lower trading activity.

Political memecoins were the standout exception, experiencing a 267% and 86% increases in market cap and trading volume, respectively. The jump was driven by high-profile launches like TRUMP and MELANIA, and could have been even more substantial, but the hype rapidly evaporated — market cap and trading volume dropped by 80% by 99%, respectively, from their January peaks.

Political memecoins now account for 5% of the sector’s market cap and 8% of its volume. Although the sector became more reliant on this category, memecoins are well-positioned to decouple from political narratives in the next potential speculative cycle.

The Most Powerful Memecoin Duo (For Now)

Over the past year, Pump.fun + Raydium has been the most dominant force not only in Solana, but the entire memecoin sector. Pump.fun, the most popular Solana-based launchpad, is responsible for over 50% of all SPL tokens created daily, primarily memecoins. Once these tokens graduated by reaching a $69,000 market cap, they were automatically deployed on the Raydium DEX. In turn, Raydium has primarily processed more than 80% of all memecoin trading volume on Solana throughout the last 12 months.

However, in Q1 2025 both platforms decided to reduce their unofficial interdependence. On March 20, Pump.fun announced the launch of its AMM DEX, PumpSwap, while Raydium is working on launching its own dedicated launchpad.&

Although the long-standing synergy between Pump.fun and Raydium will likely weaken over time, this duo remains a critical driver of the memecoin ecosystem to this point. To better gauge market sentiment, let’s examine the performance of both platforms.

Pump.fun Performance

Starting 2024, Pump.fun users have been highly active in launching new tokens, contributing to the platform’s staggering 21% share of all digital assets ever created across all networks. However, while in Q4 more than half of all newly created tokens were launched on Pump.fun, this figure declined to 35% in March.

Despite the slowing pace of new token launches, only 1% of newly created Pump.fun tokens reach the graduation threshold, and this rate has consistently declined throughout Q1 2025. A drop in both the number of newly created tokens and their graduation rate signals reduced momentum in the memecoin sector, with fewer projects gaining enough traction to sustain growth.

This shift aligns with a broader decline in platform activity throughout Q1 2025. Key metrics, including active addresses, trading volume, and revenue, have all seen substantial declines in Q1 2025. However, over the past few weeks, Pump.fun activity has increased by more than 50%, helping to offset some of the Q1 losses.

One of the major catalysts behind the boost was the PumpSwap launch in late March, which saw $2 billion in cumulative volume and generated over $900,000 in revenue since launch. The new platform rapidly became the main trading hub for Pump.fun tokens, reducing Raydium’s volume share for dedicated tokens from 69% to 21% in a few days.

However, the platform’s impact on the wider memecoin sector has been more modest. Although Solana’s memecoin DEX volume jumped by 61% shortly after PumpSwap’s launch, this momentum almost entirely vanished in the following days.

Raydium Performance

Memecoins play a key role in Raydium’s performance, and the platform has become even more reliant on them, even after the political memecoin frenzy subsided. In Q1 2025, memecoin-related activity, while declining, proved slightly more resilient than Raydium’s overall performance. As a result, the share of memecoin trading volume increased from 77% to 83% over the past three months.

Meanwhile, notable divergence emerged — while trading volume plummeted by over 80%, the number of trades dropped by only 30%. This suggests that memecoin traders are still active but have become more cautious, opting for smaller, lower-risk trades.

Final Thoughts

As such, Q1 2025 performance suggests a cooling phase for the memecoin sector, characterized by reduced speculative enthusiasm, lower liquidity, and smaller trade sizes. While this downtrend reflects a shift in trader behavior, it does not necessarily signal the end of the memecoin cycle. Market revivals in this sector often stem from external catalysts, such as major narrative shifts. If fresh narratives emerge or broader market conditions improve, the memecoin sector could quickly regain momentum, making this period of contraction a potential setup for the next wave of growth.

However, while memecoins may see another short hype period within this cycle, it may not be as substantial until the meta approach undergoes significant changes. The sector remains full of pump and dump schemes that rightfully keep traders cautious. The controversial “Libragate” event served as another wake-up call, highlighting a need for the sector to revamp itself.

Although the SEC recently clarified that memecoins are not considered securities, regulators have begun scrutinizing the sector more closely. The memecoin environment could mirror the post-ICO boom of 2017, when an initial wave of excitement gave way to regulatory intervention and a shift in market dynamics.

Sources

The data used for this research consists of publicly available information from CoinMarketCap, CoinGecko, Blockworks Research, Dune, and Artemis. The observation period for this study was focused on Q1 2025, with data points primarily ending April 1.

• U.S. Bitcoin strategic reserve creation (March 7).
• New Donald Trump’s tariffs (March 10-11)
• U.S. inflation data (March 12)

This article examines the key shifts in market behavior amid these events, focusing on trading volume distribution and capital rotation trends.

A Flee to the U.S. Dollar

On March 10 and 11, stablecoins’ share of trading volume experienced heightened fluctuations as a new wave of tariffs hit the market. The initial reaction was a flight to the U.S. dollar, with USD-related pairs temporarily doubling their share in trading volume, reaching 21% in a combined volume with USD-backed stablecoins.

USD-backed stablecoins even saw a slight supply decrease on March 10, suggesting that some market participants had exited the market. However, in the following days, stablecoins quickly regained their dominance, climbing back to a 92% share in combined trading volume, as capital rotated into USDT and USDC.

A temporary 34% decline in stablecoins’ share of total trading volume followed, but the sector swiftly recovered as altcoin holders increasingly shifted into stablecoins on March 11. The top five altcoins (ETH, XRP, BNB, SOL, and ADA) and the memecoin sector saw a rising share in trading volume alongside a decreasing share in market cap, indicating capital rotation away from these assets.

Bitcoin, on the other hand, briefly benefited from this turbulence. It saw a modest increase in both market cap and trading volume during key events — Monday’s tariff-driven uncertainty and Wednesday’s U.S. inflation data release. This highlights Bitcoin’s perceived role as a safe haven among altcoin holders during periods of economic uncertainty.

Potential Tariff Impact Weakening

Although the new tariffs wiped out nearly $300 billion in total market cap within a week, their impact on crypto trading volume was relatively subdued. The market saw a brief 2.5x surge in volume on Monday and Tuesday. For comparison, previous tariffs imposed on Canada, Mexico, and China in early February triggered a 4x volume spike, while EU-focused tariffs led to a 3x increase.

Despite this short-lived boost, overall crypto trading volume remained in a downtrend, recording a 7% weekly drop, with Bitcoin (-23%) and stablecoins (-19%) being the primary contributors. This decline underscores reduced liquidity and weaker capital flows.

A Runaway from Ether&

Among top altcoins, Ether saw the most significant capital outflows relative to its size. Its trading volume share jumped from 13% to 22% within a week, while its market cap dominance declined from 8.70% to 8.15%. This divergence suggests that traders were actively rotating out of ETH, primarily in favor of fiat, stablecoins, and Bitcoin.

Furthermore, Ethereum’s 2% market depth shrank by 14% over the week, reflecting a more fragile order book and an increasing risk of price volatility.&

However, as overall market activity declined, trading volume became more concentrated on Bitcoin and Ether. This suggests that while capital fled from many altcoins, traders continued engaging with ETH — albeit in a more volatile and less liquid environment — reinforcing its role as a core trading asset alongside Bitcoin.

TRUMP Dominance Reached New All-Time Low

Despite a week dominated by Trump-related events, the market has shown little interest in the TRUMP token. Once a major speculative asset, the token briefly commanded 10% of the entire crypto trading volume on Donald Trump’s inauguration day. However, its relevance has since faded, with its trading volume share recently plunging to a new all-time low of 0.51%.&

This sharp decline suggests waning speculative enthusiasm and diminishing liquidity, potentially limiting the token’s ability to stage a meaningful recovery unless a new catalyst reignites interest.

• The crypto AI sector surged by over 395% since November 2023, but it still accounts for just 1.5% of the total crypto market cap.
• AI infrastructure projects historically dominated the sector, but their share drastically declined in a year as AI memes and AI agents gained significant traction, showing over 1,100% and 180% market cap increases, respectively.
• The average daily trading volume for AI tokens increased by 93% year-over-year, though it has dropped 44% from its December 2024 peak.
• AI agent tokens outperformed AI infrastructure tokens by trading volume, and, despite the recent sharp decline, they continue to dominate trading volume within the sector.
• AI tokens underperformed relative to their size, lagging behind much larger AI-related stocks, especially over the past year.
• AI tokens maintain a positive correlation with Big Tech stocks, with Meta (0.91) and Nvidia (0.84) showing the highest, but earnings releases like Nvidia’s showed an inverse correlation.

Introduction

“The reason it is so hard for so many humans to understand crypto assets is because these assets are not for us. They are being built for the machines.” This six-year-old quote resonates deeply with today’s crypto landscape.

On one side, the crypto industry has embraced automation, with the rise of on-chain smart contract utilities and bots playing a growing role in network efficiency. However, digital assets have struggled to establish a widespread presence within the broader AI revolution. While AI advancements from Big Tech giants have fueled investor enthusiasm, the crypto AI sector remains structurally underdeveloped and highly speculative.&

In this report, we’ll explore the changing landscape of the crypto AI sector and its relationship with mainstream AI innovation.

Methodology

The analysis in this report is based on data sourced from CoinMarketCap, CoinGecko, TradingView, and Dune. The market cap and volume trends of AI-related digital assets were compared against broader crypto market movements to assess sector-specific shifts. Due to the non-established categorization of AI tokens, the report offers its own sector distribution divided between AI infrastructure, AI agents, and AI-themed memecoins. Additionally, price correlations with leading AI-focused stocks were examined to determine the influence of external AI advancements.

Market Cap Trends

Total Market Cap

The total market cap of the crypto AI sector has seen a massive surge starting November 2023, jumping by over 395% and driven by growing AI optimism. The sector has largely mirrored the broader crypto market, experiencing two significant rallies in Q1 and Q4 2024:

• The first rally primarily benefited the AI infrastructure segment and market early expansion of AI-themed memecoins.
• The second rally saw a shift in market dynamics, with AI memes gaining even more traction, while AI agents surged alongside rapid adoption of the Virtuals.io platform.

Despite these surges, the sector’s market cap currently remains 56% below its December 2024 peak due to the DeepSeek R1 release and a broader market cooldown.

Throughout the past year, AI-related assets have maintained a relatively small footprint within the crypto market, accounting for around 1.5% of the total crypto market cap. This suggests that while the sector has grown significantly, its gains have mostly been in line with the wider market. However, its share within the altcoin market has slightly improved, rising from 3.14% in January 2024 to 3.58% in January 2025.

Note: The “Total” value represents the overall crypto market cap, “Total 2” — excludes Bitcoin, while “Total 3” — excludes Bitcoin and Ethereum.

Market Cap Distribution by Category

The classification of AI crypto projects remains an evolving process, with debates over naming conventions and categorization criteria. For instance, many AI-related categories on CoinGecko were only established a few months ago, and many projects overlap across multiple categories. In this case, let’s focus on three major categories that have existed for at least a year:

• AI Infrastructure – Projects like Near, Render, and Bittensor, which provide the computing and blockchain layers necessary for AI to function on-chain.
• AI Agents – AI-driven models that can interact online in real-time, along with platforms enabling their creation and deployment.
• AI Memes – Speculative AI-themed tokens, often driven by hype rather than underlying technology.

Historically, AI infrastructure has dominated the sector, accounting for over 86% of the crypto AI market cap in February 2024. However, 2024 marked a shift toward speculative AI narratives, with AI agents doubling their market share and AI memes skyrocketing their share by over 15x.

This shift stems from AI infrastructure’s stagnant performance, and suggests that either the market doubts the long-term value of infrastructure projects, or these projects require more time for widespread utility. Meanwhile, the demand for fresh, high-momentum narratives has propelled AI agents and memes to the forefront.

Notably, a surge in AI agents and memes is closely linked. The AI agent category saw a major boost in Q4 2024, driven by the launch of the first online AI influencer on the Virtuals Protocol platform (e.g., Luna). In turn, AI memes gained momentum, largely fueled by the Terminal of Truth AI agent/chatbot, which became widely known for shilling Goetius Maximus (GOAT) memecoin on social media.

Note: Performance as of February 25, 2025

Market Cap Changes by Asset

On an individual token level, established infrastructure projects continue to hold the largest market caps, with eight still above $1 billion despite the sector’s recent pullback. In contrast, only one AI agent token (FET) currently exceeds $1 billion, and no AI meme tokens surpass $500 million.

That said, market leadership within AI infrastructure is shifting. ICP and The Graph (GRT) have lost ground in the sector’s market cap rankings. Bittensor (TAO) and Render (RENDER) have gained share, reinforcing their position as key infrastructure players.

Although infrastructure projects have a significant margin of safety, AI agents are getting closer to the top positions in market cap. Since December 2024, AI agent launchpad platforms such as Virtuals Protocol (VIRTUAL), Griffain (GRIFFAIN), and AI Rig Complex (ARC) have notably increased their market presence.

Note: The breakdown includes a combination of AI infrastructure (NEAR, ICP, TAO, RENDER, GRT) and AI agent tokens (FET, VIRTUAL, AI16Z, ARC, GRIFFAIN).&

Virtuals Protocol has been the main driver of the sector’s move toward AI agents, with tokens launched on this platform surging from nearly zero to over $3.5 billion in market cap within three months. However, the hype quickly faded, leading to an 87% decline from its peak, suggesting that this may be more of a speculative play than a lasting technological advancement.

This market cap decrease was accompanied by a substantial drop in daily AI agent launches on Virtuals, from over 1,000 in November to less than 10 in February. At the time of this writing, only 2.2% of these AI tokens have graduated, or accumulated 42,000 VIRTUAL tokens to get their own liquidity pool.&

AIXBT dominates among Virtual-launched AI agents, accounting for over 45% of the combined market cap.

Volume Dynamics

Total Volume

The average daily volume of AI tokens saw a significant improvement, increasing by more than 93% since January 2024. However, this growth was undermined by a 41% decline in daily trading volume from the sector’s peak in December.

In December 2024, AI tokens reached an all-time high, with the top 10 assets in the sector registering over $100 billion in monthly trading volume. For comparison, this is equivalent to the entire memecoin trading volume on Solana DEXes that month.

While the sector’s overall market cap followed broader trends, trading activity among AI tokens intensified relative to its size. Over the past year, the AI sector’s share of total trading volume increased from 1.5% to 2.22%, with a significant portion of this increase occurring in the last three months.

Note: The “Total” value represents overall crypto trading volume, “Total 2” — excludes Bitcoin, while “Total 3” — excludes Bitcoin and Ethereum.

Volume-to-Market Cap Ratio

The uptick in trading activity suggests growing interest in AI tokens, but the Volume-to-Market Cap Ratio suggests that AI tokens are not attracting the same level of short-term hype-driven volume as general altcoins and memecoins. The fact that AI tokens aren’t experiencing the same trading frenzy could mean that the sector lacks the viral appeal needed to sustain momentum, making it harder for projects to capture retail attention and drive network effects.

Additionally, if AI tokens remain stuck in a middle ground — not as fundamentally strong as BTC/ETH but not as hyped as memecoins — they risk lagging in speculative market cycles, limiting their potential for explosive short-term gains.

Volume Distribution

Trading volume breakdown between assets also reveals an even more remarkable shift in favor of AI agents. In January 2025, top 5 AI agent tokens outperformed top 5 AI infrastructure ones by monthly trading volume. VIRTUAL played a pivotal role in this trend, briefly securing a 20% share of a combined volume.

Note: The breakdown includes a combination of AI infrastructure (NEAR, ICP, TAO, RENDER, GRT) and AI agent tokens (FET, VIRTUAL, AI16Z, ARC, GRIFFAIN).&

The same month, the VIRTUAL token and AI agents launched on Virtual Protocol briefly made up 28% of the total DEX volume on Base, Ethereum’s Layer 2 network. However, as the initial hype faded, their share shrank to just 8%, with total DEX volume for VIRTUAL dropping by 64% and Virtual-based AI agents plunging by 93%. Despite the sharp decline, AI agents continue to dominate trading volume within the sector.

Big Tech AI vs. Crypto AI

General Observations

While AI tokens are heavily influenced by broader crypto market trends and sector-specific developments, they also have a unique catalyst: breakthroughs in AI technology from top-tier IT corporations. Big Tech serves as a major reference point for crypto AI projects, shaping the overall AI narrative and indirectly driving interest in blockchain-based AI solutions.

Here are some key observations on how this dynamic plays out:

• Mainstream AI breakthroughs don’t cause immediate crypto AI growth — While OpenAI’s ChatGPT launch and GPT-4o announcement boosted sentiment in AI tokens, their immediate impact on crypto AI was largely in line with the broader market. For example, after ChatGPT’s launch, the total crypto market cap saw a 12% increase over the next 7 days, while the crypto AI market cap increased by 10%. However, as ChatGPT saw massive adoption in the months following its launch, it provided a sustained boost to the sector.
• The more attention AI narratives receive, the greater the volatility in crypto AI — Sam Altman’s temporary ouster from OpenAI and the release of DeepSeek both put AI in the spotlight, but with different immediate effects. Altman’s temporary ouster coincided with a 49% surge in crypto AI market cap. In contrast, DeepSeek’s release caused only a slight dip of 2%, but it led to notable volatility in the following weeks as the industry took time to assess its impact.
• Big tech intersections with crypto AI typically cause notable market moves — For example, Elon Musk has long been an impactful figure in the crypto space, and when rumors of his AI initiative emerged in November 2023, followed by the official announcement, crypto AI saw a significant surge. The announcement of xAI and the Grok AI chatbot led to a 35% rise in the crypto AI market cap in a week.

Table: 7-Day Performance of Total Crypto Market Cap & AI Tokens After Key AI Events

AI Stock and Cryptocurrency Performance

Although AI crypto tokens are much smaller in market capitalization and more focused on AI-specific applications than some AI-related stocks, the sector hasn’t fully captured AI market momentum.

Top AI stocks like Nvidia (670%) and Palantir (1,109%) delivered massive gains since ChatGPT’s launch in November 2022. In contrast, the average performance among top AI crypto tokens (403%) over the same period was significantly lower. While some AI tokens, such as FET (954%) and RENDER (634%), saw impressive gains, the sector as a whole underperformed relative to its size.

Note: Performance as of February 25, 2025

When analyzing a shorter investment period, crypto AI tokens appear even more underwhelming. Over the past year, top AI tokens primarily remained in the red, significantly lagging behind Big Tech stocks. Additionally, while some AI stocks fully recovered from a DeepSeek-related sell-off, AI tokens remained largely underwater, failing to capture positive momentum.

Nevertheless, AI tokens continue to exhibit a high correlation with Big Tech stocks. As such, while Big Tech does not act as the primary driver of AI token performance, it serves as an amplifying catalyst. Among the observed stocks, Meta (0.91) and Nvidia (0.84) showed the highest correlation with AI tokens.

Table: Big Tech Stocks vs. AI Tokens Performance Since Key AI Events. Performance as of February 25, 2025

Nvidia Earnings Effect

Earnings season is one of the most anticipated regular events for stock investors, as financial reports often drive increased volatility. Given the high correlation between Big Tech and AI tokens, one might expect similar price action in AI tokens during these events, especially considering reports that Nvidia’s earnings previously boosted crypto AI performance.

However, when comparing Nvidia’s one-day and seven-day post-earnings performances with those of top AI crypto tokens, the correlation actually turned negative (-0.21 for 1D and -0.07 for 7D). While this effect smoothed out over a longer period, the event suggests that Big Tech developments may shift attention out of crypto AI.

Conclusion

Crypto AI remains a niche but evolving sector within the digital asset market. While its market cap has expanded significantly, its long-term growth remains uncertain, as trading volume is heavily driven by short-term speculation, with frequent but fleeting volume spikes rather than steady, organic growth. The rapid rise and fall of volume indicate that capital is not staying within the sector for extended periods, making it vulnerable to liquidity drains and price instability.&

Despite its high correlation with AI stocks, crypto AI’s price movements often diverge from traditional AI market trends, suggesting that its momentum is fueled more by internal hype cycles than by fundamental AI advancements. The shift from infrastructure projects to AI agents and memes highlights changing market priorities, with speculative narratives gaining traction over foundational development.

Looking forward, the sector faces both opportunities and risks. If AI-driven blockchain solutions achieve real-world utility, they could secure a stronger foothold. However, without sustained investor confidence and clear technological advantages, crypto AI risks being overshadowed by both traditional AI innovation and more established crypto narratives.

According to DeFiLlama’s Narrative Tracker, PolitiFi tokens and Solana (SOL) were the biggest winners in January, leading in category performance. The main catalysts behind this surge were Donald Trump’s inauguration and the launch of the official TRUMP token on Solana. At its peak, TRUMP temporarily accounted for over 8% of the entire crypto market’s trading volume, briefly pushing the total memecoin market cap above $115 billion.

The Post-TRUMP Cooldown

However, despite the continued creation of over 60,000 new memecoins daily on Pump.fun, the sector has largely cooled off following the TRUMP frenzy. Since Trump’s inauguration on January 20, the memecoin market cap has declined by 12%, while trading volume has dropped by over 80%.&

Memecoins now represent less than 3% of the total crypto market cap — below post-election levels. Meanwhile, trading volume on Solana DEXes, which were key drivers of the latest memecoin surge, has returned to pre-TRUMP launch levels.

TRUMP’s Impact on Memecoin Volume Distribution

While the mid-January hype may have faded, it reshaped the memecoin landscape. In previous cycles, top-ranking memecoins by volume and market cap were dominated by Dogecoin and various Ethereum-based tokens. In 2024, however, the memecoin boom expanded to other networks, with Solana occasionally leading the sector in trading volume during local frenzies. Historically, though, after these hype-driven spikes, Dogecoin and Ethereum-based tokens have typically reclaimed dominance as trading volume rotated back to more established memecoins.

However, the TRUMP token may have disrupted this pattern. During Trump’s inauguration, TRUMP and MELANIA together accounted for 67.8% of total memecoin trading volume, significantly driving Solana-based memecoin activity. Notably, this surge in volume share was partly fueled by capital rotation from other memecoins, as several tokens, including DOGE, SHIB, and PEPE, experienced double-digit declines amid the TRUMP token’s launch.

Since then, trading volume has gradually rotated back toward memecoins like DOGE and PEPE, suggesting that previous leaders are reclaiming their top spots. Yet, as of February 1, Solana still dominates memecoin trading volume, with TRUMP maintaining the top position, accounting for 20% of total memecoin volume and 42% of Solana’s memecoin activity.

This raises two possibilities: either TRUMP is a game-changer, solidifying Solana’s position as the leading network for memecoin trading this year, or TRUMP’s volume still has room to decline, potentially dragging down the entire category of Solana-based memecoins due to its weight.

TRUMP’s Influence on the PolitiFi Sector

The TRUMP token has also transformed the PolitiFi sector, instantly becoming its dominant asset. It now represents 89% of both PolitiFi’s total market cap and trading volume.

Chart: Market Cap Breakdown in the PolitiFi Sector

With TRUMP in the mix, political memecoins have significantly increased their influence within the sector, now accounting for 5% of the memecoin market cap and 21% of its trading volume. This marks a 14x and 24x increase in market cap and volume, respectively, over the past two months. However, previous spikes in PolitiFi dominance have been short-lived, suggesting the sector could lose its momentum just as quickly as it gained it.

Conclusion

The launch of the TRUMP token has had a profound impact on the memecoin market, reshaping sector dynamics and challenging the long-standing dominance of Dogecoin and Ethereum-based memecoins. While the initial hype has subsided, the TRUMP token significantly influenced Solana’s increasing role in memecoin trading and the growth of the PolitiFi sector. This doesn’t necessarily indicate the complete shift in market trends, since they are historically short-lived, but can better position Solana in further potential memecoin frenzies.

• Stablecoin supply grew over 59% in 2024, reaching 1% of the U.S. dollar supply but lost 13.5% in weight within the total crypto market cap.
• The annual stablecoin transfer volume reached $27.6 trillion, surpassing a combined volume of Visa and Mastercard in 2024 by over 7.68%.
• 70% of stablecoin transaction volume in 2024 was related to bot activity. In Solana and Base networks bot transactions accounted for 98% of the volume.
• Yield-bearing stablecoins now account for over 3% of the stablecoin market, and became a major driver behind a 414% surge in market cap of tokenized treasuries.
• Ethereum and Tron dominance in hosting stablecoins decreased from 90% to 83%, with Base, Solana, Arbitrum, and Aptos capturing most of this share.
• Stablecoins registered over $25.8 trillion in aggregated trading volume in 2024, continuing to gain market share over fiat-to-crypto trading.
• The average daily trading volume among stablecoins soared by over 237% in a year. However, the relative weight of stablecoin volume declined compared to total crypto volumes due to increased adoption of derivative products.
• USDT accounted for 79.7% of stablecoin trading volume on average, and strengthened its positions amid surged stablecoin reserves on centralized exchanges.

Introduction

While memecoins and AI have been among the most profitable crypto narratives in 2024, stablecoins have emerged as one of the most impactful, serving as a major driver of crypto adoption. This adoption has accelerated not only among retail investors, who increasingly use stablecoins for savings and payments, but also among financial institutions.

While PayPal began using its proprietary stablecoin for business transactions, other fintech companies have been catching up, with Stripe acquiring a stablecoin issuance platform, Ripple launching RLUSD, and Robinhood, Kraken, and Galaxy collaborating to create a global stablecoin network. This trend continues to gain momentum, as Revolut considers developing its own stablecoin and Visa introduces a platform to help banks manage their stablecoins.

All of this suggests that stablecoins are set to become an even fiercer battlefield between traditional and crypto-native companies. To assess what to expect from stablecoins in 2025, we examined the current state of the sector and its developments over the past year.

Methodology

To provide an in-depth and comprehensive analysis of stablecoin trends, this report utilizes a diverse range of trusted sources, including DeFiLlama, Artemis, The Block, Visa/Allium, CoinGecko, CryptoQuant, Checkonchain, and GrowThePie. These platforms provided key metrics on stablecoin supply, on-chain activity, and trading dynamics to validate market developments across fiat-backed, crypto-backed, algorithmic, and yield-bearing stablecoins.

In addition, the report incorporated a comparative analysis of network-specific dynamics, capturing the evolving roles of Layer 1 (L1) and Layer 2 (L2) networks in the stablecoin ecosystem. To accurately reflect genuine transaction activity, this analysis highlights both total unfiltered data and adjusted metrics that exclude internal smart contract transactions, internal exchange transfers, and bot-driven activity.

Supply by Categories

Total Supply&

In 2024, the total stablecoin supply increased by over 59%, reaching a new all-time high in September, and surpassing $200 billion. Stablecoins now account for around 1% of the total U.S. dollar supply, up from 0.63% at the beginning of 2024.

The sector showed consistent increase throughout the year, accelerating its pace in Q1 and Q4 to complement the wider market growth during these periods. Despite this, the relative weight of the stablecoin sector to the total crypto market cap decreased from 8% to 6% during the year, as other sectors within the crypto market experienced higher increase.&

Chart: Total Stablecoin Supply Trends in 2024

The supply distribution across top stablecoins has seen slight changes, with USDT remaining a dominant stablecoin, but its share in total supply decreasing from 70.5% to 67.7%. In turn, USDC marked a similar margin of growth to USDT’s decline, registering an increase in market share from 18.4% to 21.5%. This increase in USDC market share partly occurred due to its status as a more preferred stablecoin for decentralized finance (DeFi). In 2024, the total value locked (TVL) across the DeFi sector has nearly doubled, fueling heightened demand for USDC.

As for lower-cap stablecoins, Ethena’s USDe emerged as a standout performer, with its market share skyrocketing by over 40 times to 2.88%, securing its position as the third-largest stablecoin by the end of 2024.

Chart: Total Supply Distribution by Stablecoin

Fiat-Backed Stablecoins

Fiat-backed stablecoins maintained their dominance, but experienced nuanced shifts. The total supply of fiat-backed stablecoins grew by 54.8% in 2024, although their weight in the overall stablecoin market cap decreased from 93.62% to 92.2%. The major catalyst behind this drop was the rising adoption of yield-bearing stablecoins, which primarily utilize crypto-backed collateral and/or algorithmic peg preservation mechanisms.

PYUSD emerged as the leader in supply growth within this category in 2024, primarily due to its expansion to the Solana network mid-year. Solana even temporarily became the largest host of PYUSD, but then supply distribution shifted toward Ethereum.

TUSD saw the steepest decline, with its market cap contracting by over 78%, as the asset lost its top use case following an exclusion from Binance’s launchpool. The TUSD depeg and regulatory issues further escalated the stablecoin drop.

Crypto-Backed and Algorithmic Stablecoins

This category saw explosive growth in 2024, with its total supply increasing by 92%. However, this increase was primarily due to Ethena’s USDe emerging as a transformative force and registering a supply increase of over 6,300%, despite its controversial debut. USDe supply significantly ramped up in Q4, amid rising adoption of Ethereum-based stablecoins and the launch of staked USDe (sUSDe) on Aave. This helped the asset overtake DAI as the largest stablecoin in this category by December, now accounting for a 37% share of the sector.&

Dai experienced a supply reduction due to the launch of USDS in September, its upgraded version that absorbed over $1 billion of DAI’s supply by the end of 2024. However, when combined, DAI and USDS supply reflected a 10% increase compared to DAI’s supply at the start of 2024.

*Dai performance exclude DAI upgraded to USDS

Yield-Bearing Stablecoins

Yield-bearing stablecoins emerged as one of the hottest segments in this space, with its combined market cap surging by over 583% in 2024. This jump was primarily due to adoption of sUSDe, which became the dominant force in this sector, with its market cap increasing by more than 5,800% in a year.&

As such, the weight of yield-bearing stablecoins tripled in a year, now accounting for nearly 3% of the total stablecoin market. Notably, they gained traction despite facing a tightening regulatory environment. At the end of 2023 a U.S. court ruled that stablecoins in combination with related yield protocols such as Terra’s UST are securities.

While sUSDe adopts a “delta-neutral” trading strategy involving long and short positions to generate yield, the wider yield-bearing stablecoin segment followed a different route focused on real-world assets (RWA), especially U.S. Treasuries. The sector of tokenized treasuries surged by over 414% last year, primarily due to the adoption of newly launched yield-bearning stablecoins and RWA projects, including BlackRock’s BUIDL, Paxos’ USDL, Mountain Protocol’s USDM, and Usual Money’s USD0.&

USD0 showed the largest surge among RWA-focused stablecoins, reaching a market cap of $1.7 billion and achieving a 39-fold increase in supply since its inception in June 2024. Due to USD0’s rapid growth, USYC, which serves as a primary backing asset for USD0, became the largest holder of tokenized U.S. Treasury bonds, now accounting for over 40% of the market.

Chart: U.S. Treasury Market Cap Among RWA Projects

Supply by Network

General Distribution

Ethereum and Tron continued to dominate as the primary networks hosting stablecoins, together accounting for over 83% of the market by the end of 2024. However, their combined share fell from 90% at the beginning of the year, highlighting the ongoing diversification of stablecoin adoption across other networks, particularly to Solana, Arbitrum, Base, and Aptos. This shift was particularly pronounced for Tron, which saw its market share decline significantly from 38% to 29%.

Chart: Stablecoin Market Cap Distribution by Network

Dominant Networks

Ethereum’s stablecoin market cap grew by 65% in 2024, reaching a new all-time high. This growth was partly driven by a significant reduction in transaction fees following the Dencun upgrade in March, which enhanced Ethereum’s competitiveness as a stablecoin hub. In turn, post-election optimism surrounding the development of the DeFi space under the new U.S. administration provided further momentum for Ethereum’s stablecoin supply expansion.&

Within the Ethereum network, USDT strengthened its dominance, increasing its share from 55% to 62%, while USDC’s share decreased from 29% to 25%. This shift primarily occurred amid Tether’s aggressive minting in Q4 and supply redistribution from other networks, primarily Tron, to satisfy increased demand.

As a result, the surge in USDT supply was so substantial that Ethereum reclaimed its position as the largest network hosting USDT. This transition is particularly important as USDT accounts for over 98% of the entire stablecoin supply on the Tron network.&

Compared to Ethereum, Tron experienced slower growth, with its stablecoin market cap increasing by only 19% in 2024. This is because Ethereum’s reduced transaction fees partly undercut Tron’s traditional cost-efficiency advantage. Moreover, Tron’s stagnant DeFi ecosystem, evidenced by an 8% decline in TVL during the year, further limited its growth potential.

Chart: Tron’s Stablecoin and TVL Dynamics in 2024

L2 Networks

Ethereum’s Layer-2 (L2) networks became significant beneficiaries of stablecoin expansion in 2024, with their combined stablecoin market cap growing by over 218%. The Dencun upgrade played a key role by drastically reducing transaction fees on L2 networks, with some protocols experiencing cost reductions of up to 99%. This made L2 networks increasingly attractive to Ethereum users to conduct transactions and utilize decentralized applications (dApps).

Among these networks, Arbitrum remained the one with the largest stablecoin supply. However, its share in total L2 stablecoin supply decreased from 65% to 55% due to the rapid rise of Base and the launch of new L2 networks. Base, in particular, saw substantial growth starting in March, fueled by memecoin hype and accelerated DeFi development within the network. Other catalysts included Coinbase’s transition of customer USDC balance to Base, as well the introduction of gasless transactions on Base.&

Chart: L2 Stablecoin Market Cap Dynamics in 2024

Other Networks

Among L1 networks hosting over $100 million in stablecoins, Aptos turned out a standout performer with a four-digit percentage increase in hosted stablecoin market cap. This growth was primarily driven by a massive increase of USDT supply, especially in the fourth quarter. At the start of 2024, USDT represented only 24% of Aptos’ stablecoin supply, but by year’s end, its share had surged to 70%, displacing USDC’s dominance within the network.

In contrast, Solana saw its stablecoin growth primarily driven by USDC, whose share rose from 53% to 74%. This increase aligned with Solana’s overall ecosystem growth, as stablecoins on the network were predominantly used for DeFi and other dApp activities.&

Meanwhile, TON emerged as a notable newcomer in stablecoin adoption. Its stablecoin market cap surged to $1.2 billion following the adoption of USDT in June, with USDT remaining the only stablecoin on the network.

Transaction Volume

Total Transaction Volume

In 2024, total stablecoin transfer reached $27.6 trillion, surpassing a combined transaction volume of Visa and Mastercard over the same period by 7.68%. Notably, stablecoins have been exceeding traditional payment providers throughout the entire year, despite a significant drop in Q3 amid decreased activity on the wider crypto market.

USDC reinforced its position as the preferred stablecoin for on-chain activity, accounting for 70% of the total combined transfer volume. Despite dominating raw transaction volume throughout the year, USDC’s influence waned slightly in Q3 due to a temporary decline in dApp activity. USDT also saw a substantial rise, with its total transfer volume more than doubling; however, its market share fell from 43% to 25%.

Chart: Total Transfer Volume by Stablecoin

Starting in January 2024, Solana surpassed both Tron and Ethereum to become the most active network for stablecoin operations. This surge in activity positioned Solana as the primary driver of USDC’s market share growth, with total USDC transactions strongly correlated to Solana-based activity. USDC accounts for over 73% of Solana’s stablecoin supply.&

Chart: Total Stablecoin Transfer Volume Distribution by Network

Adjusted vs. Unadjusted Transaction Volume

Now let’s distinguish between total and adjusted volume that excludes bot activity, internal smart contract transactions, and internal exchange transfers. On average, 77% of 2024’s total stablecoin transaction volume fell into the unadjusted category, largely driven by bot transactions. The bot activity experienced a fourfold increase compared to 2023, increasing its share from 80% to 90% in the unadjusted category. This means that 70% of stablecoin transaction volume in 2024 was related to bot transfers.

USDC dominated the unadjusted category, making up over 65% of the volume. This underscores the fact that much of USDC’s transaction activity was driven by bots.

Chart: Unadjusted Transaction Volume by Stablecoin

Networks such as Solana and Base, where USDC supply dominates, saw unadjusted transactions represent over 98% of stablecoin activity as of December 2024. Due to the bot activity, Base even managed to surpass Ethereum in total stablecoin transaction volume in Q4 2024.&

Aside from general attributes like high transaction speed and low transaction costs that are essential for a productive bot environment, the rapidly rising DeFi ecosystem and the frequent launch of meme tokens provided fertile ground for bots on Solana and Base. For instance, in December, memecoins accounted for over 56% of DEX trading volume on Solana.

However, it’s important to point out that high bot activity within the network doesn’t necessarily mean “worse” transfer volume. While bots can be used for harmful practices like frontrunning, sandwich attacks, pump and dump schemes, and snipping liquidity pools, they also improve market efficiency through arbitrage. In addition, bots are used by paymasters to cover gas fees on behalf of users, smart contracts to execute recurring transactions, and aggregators to deliver deeper liquidity. As a result, bot dominance in stablecoin transactions could also represent the maturation of certain networks.

Adjusted Transaction Volume

If removing the bot activity from the equation and focusing on adjusted volume, which captures transfers to centralized exchanges (CEXs), decentralized exchanges (DEXs), and DeFi operations, the stablecoin transaction landscape will be completely different. Adjusted stablecoin transfer volume doubled in 2024, though it still lagged behind the growth of bot-driven activity.&

USDT emerged as the dominant stablecoin for “organic” transactions, accounting for over 68% of adjusted transaction volume. In turn, PYUSD showed the highest adoption growth, tripling its share within adjusted transactions, though it still represented less than 2% of “organic” transaction activity.&

In this category, Tron and Ethereum reclaimed their status as the leading networks for stablecoin transactions. Solana’s share of adjusted volume remained below 5%, despite doubling over the year. Meanwhile, Base experienced rapid growth in the second half of the year, becoming the sixth-largest network for “organic” stablecoin activity.

The rapid rise of Base and the increased presence of smaller networks indicate a broader expansion of stablecoin influence across the industry, with smaller platforms gaining traction for “organic” transaction activities. As such, Base became the best performing network in terms of “organic” growth, experiencing a four-digit increase in 2024.&

Trading Volume

Total Volume

Stablecoins registered over $25.8 trillion in aggregated trading volume in 2024, continuing to gain market share over fiat, and solidifying their position as the preferred medium of exchange on trading platforms. The average daily trading volume among stablecoins soared by over 237% in a year, predominantly as a response to increased activity on wider crypto markets.&

Despite increased trading volume, the weight of stablecoins compared to total crypto trading volume has been in decline throughout 2024. The primary reason was increased adoption of derivative products like perpetual swaps or futures that use cryptocurrencies as collateral, reducing the relative role of stablecoins in total trading volumes. Other catalysts behind decreased weight of stablecoins include rising demand on leverage and expansion of on-chain crypto-to-crypto trading without involving stablecoins, especially among memecoins.

Note: The “Total” value represents overall crypto trading volume, “Total 2” — excludes Bitcoin, while “Total 3” — excludes Bitcoin and Ethereum.

Volume Distribution

Despite the presence of hundreds of stablecoins, the market remains highly concentrated, with the top six most popular stablecoins contributing to approximately 99% of total trading volume. Among these, USDT maintained its lead as the most favored medium of exchange, accounting for a 79.7% of stablecoin trading volume on average.&

In early 2024, USDT’s market share on CEXs has been trending downwards, declining from 81% to 66%. This decrease can be partly attributed to growing competition from stablecoins like FDUSD and USDC. The former benefited from Binance’s zero-fee promotions, while USDC increase signaled growing presence of regulated alternatives.&

However, in the second half of 2024, USDT dominance in trading volume has been strengthening amid increased exchange reserves. According to CryptoQuant data, exchange reserves of Ethereum-based USDT surged by over 165% in a year, contributing to its share increase from 75% to 90% in total stablecoin exchange reserves.

2025 Outlook&

As 2024 trends show, stablecoins strengthened their infrastructural role within the crypto industry, acting as a fuel for DeFi adoption and increased crypto trading activity. Building on this expansion, the sector is well-positioned for further increase in 2025, as post-halving years are typically marked by increased trading volumes.&

The previous cycle, which became a turning point for the widespread adoption of stablecoins, indicates that their supply is likely to grow throughout much, if not all, of 2025, as capital rotation into stablecoins extended into the early bearish stages of the market. For example, stablecoin supply continued to increase until March 2022, five months after the market’s cyclical peak. Consequently, even if negative narratives hit the market, stablecoin demand may temporarily remain strong, benefiting from the trend.

During the post-halving year, the stablecoin supply increased at a relatively similar rate as a halving year, suggesting that it may reach $325 billion by the end of 2025 as a basis to support potential crypto market rally. The main variable for this year will likely be regulatory developments in the U.S. and other countries, which currently seems to be a potential amplifier that can boost stablecoin supply even further. Increased venture capital interest into stablecoin projects act as an additional catalyst that may help stablecoin supply reach the widely expected $400 billion market cap.

In addition to market cap expansion, post-halving years are also accompanied by heightened network activity. More than half of stablecoin supply is currently stored for less than a month, indicating high mobility of funds. Although the share of this high-mobile supply decreased from 58% to 51% in 2024, post-halving patterns suggest that stablecoin could be increasingly stored for shorter periods of time in 2025, primarily encouraged by higher on-chain trading activity.

Another trend likely to persist in 2025 is the expansion of stablecoins to non-dominant networks, primarily moving beyond Tron. The upcoming Pectra update, currently expected to launch on the mainnet in March 2025, promises scalability improvements and a more intuitive user experience with lower gas fees. These advancements could further solidify the position of Ethereum’s L1 and L2 networks as key hosts for stablecoin supply.

Meanwhile, Tron has been lagging behind Ethereum in implementing account abstraction and other user experience improvements, leaving cost-efficiency as its primary value proposition. However, as post-Dencun developments have shown, cost efficiency alone may not suffice to maintain Tron’s dominant position, as the network has been losing market share in both stablecoin supply and organic transfer volume.

Additionally, Tron’s significant reliance on USDT could pose challenges for the network. USDT’s share of the stablecoin market is already shrinking, even among fiat-backed stablecoins, and this trend is expected to continue in 2025, as the stablecoin may face headwinds due to potential regulatory disadvantages.&

For instance, Tether didn’t manage to get an e-money license to operate in the EU, while Circle obtained it in July. In addition, USDC is the only stablecoin among the top six regulated under U.S. money transmitter frameworks, giving it a compliance advantage. This regulatory edge could drive increased USDC adoption in traditional payment systems and exchange trading throughout the year. Furthermore, lower-cap stablecoins are also expected to chip away at USDT’s dominance in 2025, with new TradFi-powered stablecoins set to launch and expand their market share.

In summary, 2025 is shaping up to be a more dynamic iteration of 2024, with familiar trends continuing to evolve at a faster pace, driven by increased market diversification and the widely anticipated crypto bull run.

• 70% of Bitcoin’s circulating supply represents free float, potentially mitigating supply shock risks.
• The 1.75 million BTC decrease in LTH supply in 2024 indicates that there is still ample room for LTH selling pressure.
• U.S. spot ETFs absorbed 2.4x the annual mining supply in 2024, but their trading volume represents less than 4% of the market.
• MicroStrategy’s Bitcoin accumulation exceeded half the scale of net ETF inflows.
• Exchange reserves dropped by 21%, while OTC balance increased by 105%, hinting at supply redistribution.
• Around 40% of Bitcoin’s transaction volume in 2024 was linked to exchanges.
• Bitcoin’s USD-denominated 2% market depth increased by 61%, suggesting an improved liquidity landscape.
• CEX.IO quadrupled its market share in 2024, becoming a top 2 exchange in terms of Bitcoin market depth.

Introduction

Bitcoin demonstrated remarkable performance in 2024, recording a more than 121% price increase and registering rising market dominance. The major catalyst behind this move was a supply-and-demand rebalance due to Bitcoin’s halving and the introduction of U.S. spot Bitcoin ETFs.

With Bitcoin’s continued expansion into traditional finance and the anticipation of a potential U.S. Bitcoin strategic reserve, some speculate that Bitcoin could face a significant supply shock in this cycle. These predictions even suggest Bitcoin could challenge the 4-year cycle theory, with its price growing at an unprecedented pace. While such claims arise every cycle, we decided to evaluate Bitcoin’s supply and liquidity landscape to understand its potential risks and opportunities.

Methodology

Our research employed the following resources to provide a holistic view of Bitcoin’s supply and liquidity:&

• Kaiko: To analyze aggregated market depth data and liquidity trends across over 30 major exchanges.
• CryptoQuant: To track flows between crypto platforms, including deposits and withdrawals, and their implications for market sentiment.
• Checkonchain: To assess supply dynamics and on-chain wallet behavior.
• Velo: To analyze cash-and-carry trade efficiency on the Bitcoin ETF market.

Long-Term Holder Supply Developments

Free Float

By assessing the free float supply — the portion of coins potentially available for trading if their owners choose to sell — a clear decreasing trend emerges across cycles. This suggests that an increasing amount of Bitcoin becomes inactive, as more users HODL their coins for extended periods or probably lose access to their wallets, leading to concerns about a potential supply shock. However, the free float supply still represents 70% of the circulating supply, or over 13.76 million BTC, offering a massive potential to enhance existing Bitcoin liquidity.

Post-Halving Behavior

The decrease in free float supply is partly associated with long-term holder (LTH) supply, whose dominance increases with consecutive cycles. However, a notable portion of LTH supply becomes active post-halving, causing a briefly increased transition of coins to short-term holders (STH). Historically, such periods of decreased LTH dominance coincided with bull runs, heightened trading volumes, and improved market liquidity.&

In 2024, the LTH supply decreased by over 1.75 million BTC, now representing 64.4% of the circulating supply. A distinctive feature of this cycle was a sharp dip in LTH supply shortly before the halving, driven by Bitcoin’s unprecedented breakout to a new all-time high. While this decline had stabilized by September, a renewed LTH supply drop emerged in Q4, totaling 1.58 million BTC.

On average, the LTH supply has been losing around 16% in dominance during post-halving rallies. Considering the existing 9% post-halving decline in dominance, there is still ample room for LTH selling pressure in this cycle, which will likely be absorbed by newly joined market participants.

Note: Numbers represent the post-halving period highlighted in the table above.

Most of the LTH selling pressure typically occurs during periods of significant increases in the realized cap. For example, in Q1 2024, a surge of up to $80 billion in the realized cap coincided with a $50 billion decline in LTH supply. This trend escalated in Q4, driving over $75 billion in LTH selling activity alongside a $90 billion increase in the realized cap. Such market behavior serves as a natural counterbalance to Bitcoin rallies, tempering upward momentum and contributing to the formation of local peaks, including 4-year cycle highs.

Looking into 2025

Any potential increase in demand from institutional investors and/or governments in 2025 will likely be met with a considerable increase in LTH profit-taking, pushing the LTH supply lower this year. Taking into account an average decline in LTH supply dominance during post-halving rallies, 1.4 million BTC could be potentially transferred from LTH to STH hands within 2025 bull run, enhancing market liquidity and mitigating the risks of a potential supply shock in this cycle.

ETF Market Dynamics

Rapid Adoption with Exaggerated Narratives

U.S. spot Bitcoin ETFs proved highly successful, accumulating around 500,000 BTC in 2024, and now collectively holding over 1.13 million BTC, or roughly 5.7% of Bitcoin’s circulating supply. This rapid adoption, bolstered by widespread reporting in both mainstream and industry media, raised concerns about a potential supply shock caused by ETFs. In most cases, these narratives compare ETF flows to the newly mined Bitcoin supply, particularly during days of significant inflows. However, a broader perspective reveals that while ETFs are influential, their impact may not be as substantial as often perceived.&

*Q1 performance includes data starting from January 11, 2024, when U.S. spot Bitcoin ETFs began available for trading. The data points are reflected in the amount of BTC over the selected period.

In 2024, net ETF flows outpaced the newly mined Bitcoin supply by approximately 2.4 times. Despite this outperformance, the trend has not been consistent. Notably, net ETF inflows lagged in Q2, even as the Bitcoin halving event significantly reduced the newly mined supply.

If compared to LTH supply dynamics, the weight of ETFs is falling even further. ETFs absorbed at most 35% of LTH supply, primarily in Q1 and Q4. This indicates that other factors, such as direct institutional buying or other non-ETF inflows, potentially played a more significant role in offsetting selling pressure directly. One notable factor has been MicroStrategy, which accumulated over 257,000 BTC in 2024 — an amount exceeding half the scale of net ETF inflows. It is worth noting, however, that MicroStrategy employs a TWAP strategy to minimize its market impact during Bitcoin purchases, meaning their accumulation has had a more subdued influence on price volatility compared to immediate large-volume trades.

In addition, ETFs currently account for less than 4% of Bitcoin’s total trading volume. Although Q1 saw ETFs’ volume briefly surpass spot market volume, they now contribute about half of it.&

Impact of Cash-and-Carry Trade

A substantial portion of ETF inflows in 2024 was driven by the cash-and-carry trade, not only directional investment. This arbitrage strategy involves buying ETFs while shorting Bitcoin futures, capturing the premium between the spot/ETF and futures prices. Since this is a market-neutral trade, which balances supply and demand, it does not exert directional pressure on Bitcoin prices.

In 2024, cash-and-carry trade related to Bitcoin ETFs was typically executed using short positions on CME Bitcoin futures. According to Velo data, the annualized three-month basis in CME’s BTC futures has primarily been in the 5-15% range over the past year. In other words, setting up a cash-and-carry trade would earn investors 5-15%.&

Although 5-15% might not sound like much compared to Bitcoin’s 121% annual growth, it was enough to take advantage of this market inefficiency. By comparing the scale of ETF inflows and CME open interest, it can be seen that ETF activity in Q1 2024 was more directional, reflecting increased interest in Bitcoin exposure. Post-election, the market primarily shifted towards cash-and-carry trades, while in December, directional activity resurged, signaling renewed investor interest in outright Bitcoin exposure.

Looking into 2025

The recent introduction of ETF options could transform cash-and-carry trades in 2025 by offering a more flexible and precise hedging mechanism. While CME futures have traditionally been used for such strategies, ETF options provide an alternative that may reduce reliance on futures. This shift could also mitigate the risk of a Bitcoin supply shock, as these trades utilize derivatives without directly impacting the spot supply.

In this case, ETF flows would appear more like directional investments and may even ramp up, especially as Bitcoin’s post-halving rally seems far from conclusion. However, considering the existing pace, ETF-related activity currently appears insufficient to drive a potential supply shock and rather offsets the decline in native retail activity.

Reserves on Trading Platforms

Exchanges

Another popular supply shock indicator is the amount of Bitcoin stored on exchanges and over-the-counter (OTC) platforms, with some observers pointing out that existing reserves are at record low levels. As such, Bitcoin’s exchange reserves experienced a sharp 21% decline in 2024, reaching levels not seen since 2018, according to CryptoQuant. Over 600,000 BTC were withdrawn from major exchanges, with around 40% of these withdrawals occurring after the U.S. elections.

Spot-focused exchanges were the hardest hit, seeing a 31% reduction in their Bitcoin holdings. In contrast, derivatives-oriented platforms fared slightly better, with a 13% decline, most of which occurred in the final quarter of the year.

However, BTC-denominated daily exchange-related transfer volumes, including deposits and withdrawals, remained stable at 40,000-80,000 BTC in 2024 — a range consistent since 2018. Stable transfer volumes despite significant withdrawals suggest that holders are moving Bitcoin to cold storage rather than liquidating, signaling long-term confidence. In addition, it highlights steady trading behavior, implying the market remains active and balanced despite reduced exchange reserves.

Approximately 40% of Bitcoin’s transaction volume was linked to exchanges, fluctuating from a local low of 29% in April to a high of 49% in November. While still below the 61% peak of May 2023, this new baseline reflects the enduring influence of exchanges within Bitcoin’s ecosystem, even as OTC platforms gain popularity among institutional investors.

OTC Platforms

While exchange reserves saw a decline in 2024, OTC platforms accumulated over 208,000 BTC, increasing their balances by 105% year-on-year. As a result, OTC platforms now hold over 400,000 BTC, their highest level since 2022. This increase could signal preparation for higher demand, especially amid increased buying pressure in Q1.

In addition, this dynamic highlights a potential redistribution of supply from exchanges to OTC platforms. This trend not only diversifies the liquidity landscape but also underscores the market’s evolving dynamics as institutional players solidify their presence.

Looking into 2025

During previous bull runs in 2017 and 2021, both exchange and OTC reserves trended upward alongside increased market activity and revived supply. This historical pattern suggests a potential recurrence in 2025, albeit with a stronger influence from institutional and high-net-worth investors. While the risk of a supply shock remains low for now due to a significant margin of safety on exchanges and OTC platforms, a continued decrease in reserves could amplify upward price movement during this cycle.

Market Depth

Aggregated Market Depth Breakdown

To assess exchanges’ resilience amid record outflows, let’s dive into their liquidity dynamics using the 2% market depth. This metric measures the cumulative volume of bids and asks within 2% of the mid-price, providing a snapshot of liquidity and market stability.

In 2024, the USD-denominated 2% market depth increased by 61%, while the BTC-denominated value decreased by 26%, with a notable drop in Q1 (2). This early-year decline likely stemmed from liquidity reassessments following Bitcoin’s rapid price appreciation, and a shift toward OTC platforms driven by institutional activity.

Local peaks and valleys in market depth can be attributed to several catalysts:

• (1, 9) Altcoin seasons.
• (3) Geopolitical events, such as Israel’s attack on Iran.
• (4, 6) Bitcoin’s rally to challenge an all-time high.
• (5) Yen carry trade unwinding.
• (7) U.S. election results.
• (8) Gary Gensler’s resignation.
• (10) Christmas holidays and/or Bitcoin correction.

Notably, throughout the year, asks exceeded bids approximately 58% of the time, highlighting consistent selling interest. Despite this, buyers aggressively absorbed sell orders, driving price appreciation and signaling a strong accumulation phase. Sellers attempted to capitalize on rising prices, but robust underlying demand prevented a reversal of the bullish trend. The largest disparity between asks and bids occurred in late November, following the announcement of SEC Chair Gary Gensler’s resignation.

Liquidity Changes Between Exchanges

The liquidity landscape across exchanges has also shifted significantly in 2024, with top exchanges consolidating their market share. According to Kaiko data that includes 33 major exchanges, the top three exchanges in terms of 2% market depth now account for 57% of the market, up from 53% at the start of the year. At the time of this writing, these exchanges include Bitfinex, Kraken, and CEX.IO, with the latter quadrupling its market share in 2024.

Notably, since CEX.IO’s trading engine utilizes liquidity aggregated across multiple sources, its market depth increase partially contributed to the rising share of certain exchanges. Much of CEX.IO’s growth occurred in Q4, following an update to its aggregation engine that expanded liquidity sourcing and enabled near-zero spreads on most trading pairs, including Bitcoin.&

Note: The performance from January 1, 2024, to January 1, 2025.

Geographic trends showed that there primarily was a 55/45 parity in market depth between non-U.S. and U.S. exchanges. Following the U.S. elections, U.S. exchanges temporarily dominated market depth, contributing to November’s price rally. Brief spikes in U.S. exchange liquidity were also observed in March, June, and October, coinciding with Bitcoin’s price reaching or approaching all-time highs.

Looking into 2025

When observing liquidity, it’s important to keep in mind that USD-denominated depth remains a key liquidity metric for many traders and institutions. As a result, despite a drop in BTC terms, overall liquidity improved in 2024. This sets up the stage for further enhancement in 2025, as Bitcoin’s cyclic bull runs have been typically associated with increased liquidity.

Larger exchanges are likely to solidify their dominance, building on their recently increased market share. In turn, market depth will likely continue shifting towards U.S. exchanges, as trading becomes increasingly concentrated on U.S. hours.

Conclusion

Although the supply and liquidity developments of 2024 have laid a strong foundation for Bitcoin’s potential upward momentum this year, it appears to be too early to declare the onset of a supercycle, with a massive supply shock and no prolonged bear market. Bitcoin continues to maintain a substantial margin of safety, with millions of BTC poised for sale as market indicators start signaling a potential cycle top. This awaiting supply acts as a natural counterbalance to unbridled optimism, reinforcing the persistence of the 4-year cycle theory. Despite the allure of overbullish expectations, this cyclical framework appears likely to shape Bitcoin’s market dynamics for the foreseeable future.

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• Over the 11 months of 2024, the memecoin sector saw a 330% increase in market cap and a 979% surge in trading volume, outpacing Bitcoin by 2 and 9 times, respectively.
• Memecoins’ share in the altcoin market size and volume surged by over 182% and 350%, respectively.
• AI and cat-themed memecoins emerged as the fastest-growing categories in market size.
• Most political memecoins lost 80% of their trading volume following the U.S. elections.
• TON became the fastest-growing network for memecoins, with trading volume soaring 750-fold over the last six months.
• In 2024, a 10% move in Bitcoin’s price typically triggered a 28.9% average volatility among top memecoins.

Introduction

When reviewing the list of top gainers and losers in 2024, memecoins are likely to dominate both categories. This is due to their staggering issuance: over 60,000 memecoins are created daily, with nearly half launched on Pump.fun. This surge has made entire networks increasingly reliant on memecoins; on Solana, for instance, they account for nearly 80% of DEX volume. The expansion shows no signs of slowing, as networks like Tron and Sui have recently joined the list of major memecoin “benefactors.”

The appeal is simple: frequently emerged stories of wallets turning a few hundred dollars into millions with investments in some “LOL” token sound more compelling for those who might not want to stick in the space for a while, or look for quick profits. As memecoins dominate in crypto-related search interest, they are becoming the new hub for retail traders, even surpassing Bitcoin in attention.&

There’s no question that memecoins have been among the most influential crypto narratives this year. But just how impactful have they become? To find out, we examined the 2024 performance of the memecoins sector to assess their rising market share and behavior during high-volatility events.

Methodology

The data used for this research consists of publicly available information from CoinMarketCap, CoinGecko, CoinGlass, and Artemis. The performance of certain digital assets has been adjusted using data provided by CEX.IO Spot Trading, a trading platform, which offers deep liquidity across 300+ pairs thanks to liquidity aggregated from top-tier crypto exchanges under one roof.&

The observation period for this study was focused on 11 full months of 2024 to show the monthly development of the memecoin sector. As for memecoins and categories established after the March 2024 frenzy, the observation period has primarily been June-November, or the last 6 months.

Part 1: The Weight of Memecoins in the Crypto Market&

Doubled Share in Market Cap

The memecoin sector registered a 330% increase in its combined market cap in 11 months of 2024. This increase is 3 times larger than Bitcoin’s and 9 times larger than Ethereum’s over the same period. As a result, the memecoin sector substantially boosted its share within the crypto market:

• In total crypto market cap — +142%, from 1.3% to 3.16%.
• In total crypto market cap excluding Bitcoin (Total2) — +182%, from 2.71% to 7.62%.
• In total crypto market cap excluding Bitcoin and Ether (Total3) — +167%, from 4.2% to 11.21%.

Most of this growth occurred following the memecoin frenzy in March, which became a turning point in terms of memecoin issuance. For instance, in February, the daily number of memecoins deployed on Pump.fun was limited to a few dozen, but this figure skyrocketed to thousands starting March. This frenzy was driven by the broader crypto rally and the growing feasibility of creating new memecoins. The cost-efficiency of establishing markets on decentralized exchanges (DEXs) on Solana and Base networks further amplified the surge.

Tenfold Increase in Trading Volume

Memecoins experienced even more pronounced growth in trading volume, which rose by 979% on average over the last 11 months, further elevating their position in the broader crypto market:

• A 362% increase in the general crypto trading volume, now representing around 5.27%.
• A 350% growth in altcoin (Total2) volume, reaching 6.52%.
• A 367% surge in Total3 (excluding Bitcoin and Ether) volume, hitting 7.57% in November.

In March and November, memecoin volume almost doubled, while most other sectors lagged behind. In June, while most digital assets experienced a steep decline in volume, memecoins retained significant interest, temporarily securing 5.71% of total crypto trading volume.

Memecoins’ Volume/MCap Outpaces Most of the Market

In 2024, the Volume/MCap ratio saw substantial growth across most cryptocurrencies. Memecoins outperformed the altcoin market (Total2), with their Volume/MCap ratio jumping 150% to reach an average of 11.55%. A high Volume/MCap ratio typically signals greater trading activity relative to market size, but it also tends to increase susceptibility to sudden price swings.

Memecoins’ Volume/MCap ratio momentum primarily ramped up after the March frenzy. At its peak, the Volume/MCap ratio across the memecoin sector soared past 50%, showcasing rapid speculation. In addition, in 2024, it became more common for memecoins’ trading volume to briefly exceed their market cap, a rare occurrence among assets with market caps over $100 million (excluding major stablecoins).

Part 2: Increased Memecoin Diversity in the Crypto Market

Rising Dominance Among Leading Digital Assets

In 2021, memecoin volume and market cap were dominated by just two assets: Dogecoin and Shiba Inu. By contrast, 2024 has seen a surge in top-ranking memecoins, with the average number in the top 100 tripling from 3 in January to 10 in November. Furthermore, there has been a consistent rise each month, reflecting the resilience of interest in the memecoin sector and its expanding influence, despite general volatility.

Broader memecoin zoo

One major driver that boosted memecoins’ influence in 2024 has been the growth of new communities. This led to the formation of different memecoin categories, which haven’t generally been a thing before March 2024. This is because the vast majority of the largest memecoins were dog-themed, representing around 85% of the sector’s market cap in early March. However, their share fell to 72% by November, with AI-related and cat-themed memecoins dominating in the market cap growth over the past six months. By December, their share in total memecoin market cap increased to 3.6% and 3.8%, respectively.

In terms of trading volume, dog-themed memecoins emerged as the fastest-growing category, with a 226% increase over the past six months. However, before the U.S. elections in November, political memecoins were taking the lead in trading volume growth. Following the event, most political memecoins saw a more than 80% drop in trading volume, losing market appeal.

Note: The performance from June 1, 2024, to December 1, 2024.

Moving outside Ethereum

In previous cycles, top-ranking memecoins primarily consisted of Dogecoin and a variety of Ethereum-based tokens. However, the 2024 memecoin boom extended to other networks, with Solana being the largest winner, currently accounting for 15% of market cap and 30% of trading volume within the sector.

Over the last six months, the largest growth in market cap has been observed in TON-based memecoins, with trading volume growing over 750 times, albeit still accounting for a minor share (1% and 2% in total memecoin market cap and volume, respectively).

Note: The performance from June 1, 2024, to December 1, 2024.

New Memecoins Lead in Futures Open Interest

At the start of 2024, most memecoin-related futures open interest was centered on Dogecoin, which held around 65% of the sector’s share. However, open interest later diversified to include newer memecoins, with WIF achieving a staggering 15,000% increase over 11 full months of 2024.

Following the March memecoin rally, market attention in futures shifted toward newly launched assets. Over the last six months, POPCAT, BRETT, and MEW have shown triple-digit growth in open interest, emerging as leading memecoins in the futures market. This growth reflects heightened investor speculation and volatility expectations, particularly among newer memecoins.

Note: The performance from June 1, 2024, to December 1, 2024.

As a result, the memecoin sector turned into one of the fastest-growing in terms of crypto speculation, with the top 10 memecoins now accounting for more than 4% of total futures open interest.&

By November, Dogecoin maintained its position as a leading memecoin in terms of open interest in the futures market, keeping its 65% share. However, this is primarily due to the creation of the Department of Government Efficiency (DOGE) following U.S. elections, which reestablished interest in the Dogecoin market. Before the news about the launch of this institution, Dogecoin’s share in memecoin open interest was around 51%.

Note: The share distribution as of December 1, 2024.

Part 3: Exploring Memecoin Amplifier During Market Volatility

Given memecoins’ rising share in the crypto market, we decided to analyze volatility events to gauge the sector’s sensitivity to market swings. We examined weeks with ±10% price changes for Bitcoin and Ether, using them as triggers for overall market movement. This analysis focused on the performance of the top six memecoins, which collectively accounted for over half of the sector’s market cap and trading volume in 2024. These assets include DOGE, SHIB, PEPE, FLOKI, WIF, and BONK.

Key Insights: Bitcoin Volatility

Bitcoin saw 8 weeks of double-digit price changes in 2024, yielding the following insights:

• Memecoins have outperformed Bitcoin during price surges, but suffered larger drops in downturns.
• DOGE and BONK have shown the strongest correlation with Bitcoin, with an average sector correlation of 0.7.
• The average “memecoin amplifier” effect was 2.89x (or 2.09x excluding a surge in early March). This means that for a 10% Bitcoin price change, memecoins exhibited average volatility of 28.9% and 20.9%, respectively.

Key Insights: Ether Volatility

Ether’s 2024 volatility, with 13 weeks of double-digit price changes so far, suggested the following:

• Memecoins had a higher average correlation with Bitcoin (0.74) during Ether’s fluctuations.
• Memecoins underperformed Ether in more than half of the observed cases, suggesting Ether’s price changes have a limited impact on memecoin performance.
• The average memecoin amplifier effect was 2.65x (1.35x excluding the Week 9 anomaly).

These price swings revealed that memecoins thrive more in Bitcoin-driven rallies than Ether ones. Furthermore, average memecoin amplifiers have been larger during BTC price surges than drops, even excluding the anomaly surge in early March.&

Due to relatively high correlation and sensitivity to Bitcoin moves, the largest memecoins could potentially act as high-risk, high-reward proxy bets on Bitcoin. This is because Bitcoin serves as the primary driver of overall market sentiment, while top memecoins could be viewed as bets on this sentiment. Unlike Ethereum, which is heavily tied to utility-driven projects, Bitcoin’s simplicity as a store of value aligns more closely with the memecoin market’s speculative, hype-driven nature.&

As a result, memecoins can amplify Bitcoin trading by acting as a gateway for retail investors who are looking for higher/faster returns during Bitcoin rallies. This influx can feed back into Bitcoin as traders rotate profits or losses between memecoins and Bitcoin, intensifying both trading volume and volatility.

Memecoin Performance During High-Impact Events

Memecoins have also been more sensitive to high-impact events, often reacting with amplified moves, surpassing both BTC and ETH in either direction. Within a week, memecoin response typically accelerates if there is a broader crypto market rally, or smooths out depending on the performance of top digital assets. For example, during the Yen carry trade unwinding in early August, top memecoins nearly offset losses as Bitcoin quickly rebounded.

Table: Digital asset price performance amid major 2024 events. Note: “Memes” performance includes the average price change of the top 6 memecoins over 1-day and 7-day periods.

Conclusion

Memecoins are no longer a joke — their market share in crypto has surged by 2-4 times over the first 10 months of 2024. In November, the influence of memecoins expanded even further, experiencing a new hype wave. Moreover, this may be just the beginning. Bitcoin’s dominance has been predominantly on the rise throughout this year, with only three brief altcoin seasons so far. In previous cycles, post-halving rallies have coincided with declining Bitcoin dominance and extended altcoin seasons. Consequently, the next 6-12 months could see memecoins flourish even more, potentially establishing a solid sentiment indicator for the entire industry.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Weekly outlook

Bitcoin’s new all-time high

​​November continues to solidify its reputation as one of Bitcoin’s strongest months, with the cryptocurrency recording a 30% price surge so far. This rally has been largely tied to the “Trump trade,” reflecting optimism about the president-elect’s crypto-friendly promises. However, historical data suggested that Bitcoin’s broader trajectory would likely have remained positive regardless of the election outcome. Moreover, the election primarily served as a psychological barrier, delaying investment decisions until its conclusion.

Nevertheless, Bitcoin hit a new all-time high near $93,400 following U.S. CPI data that showed inflation rising by 0.2% to 2.6%. Shortly after, Fed Chair Jerome Powell’s comment that “the economy is not sending any signals that we need to be in a hurry to lower rates.” This briefly pushed Bitcoin below $90,000 and decreased chances of the rate cut in December

As a result, Bitcoin’s price entered a consolidation phase, forming a symmetrical triangle with signs of a bullish pennant pattern. The Volume Oscillator has been declining during this phase, showing upticks on upward moves, indicating that bulls might still have the upper hand. The RSI on a 4-hour chart has been in a descending trend, but a solid breakout above the resistance line (white line) could hint at further continuation of the bullish move.

Notably, this price action resembles Bitcoin’s performance in December 2020, when Bitcoin also jumped by 30% amid the breakout of an all-time high. Back then, the asset experienced a week-long consolidation before resuming its upward trend.&

NVT Golden Cross divergence

As Bitcoin reached new highs, the NVT Golden Cross showed a divergence, falling below -1.6. This could signal either a lag in transaction volume relative to price appreciation (bearish sign), or potential undervaluation (bullish sign).

Source: CryptoQuant

In November, USD-denominated transfer volume doubled, while BTC-denominated one increased by 40%. This suggests a combination of organic network activity and price-driven demand, potentially providing a more solid foundation for further price gains. Thus, the NVT Golden Cross divergence leans toward a bullish signal, indicating that the current pause in momentum may be temporary, with further upward movement likely once this consolidation phase concludes.

Source: Checkonchain

ETFs hint at a potential local bottom

U.S. spot Bitcoin ETFs posted the sixth week of consecutive inflows, totaling $2.04 billion. However, the bullish trend softened after a record daily inflow of $1.3 billion on November 7, culminating in a $400 million outflow last Thursday. Historically, such significant outflows have coincided with local bottoms, suggesting the possibility of renewed upward momentum unless outflows persist.

Source: SoSoValue

Retail investors led in profit-taking near the all-time high

Over the past month, as Bitcoin’s price climbed, retail wallets (<100 BTC) consistently showed a negative 30-day balance change, which accelerated after breaking the all-time high. This suggests sustained selling activity, which has been exceeding other wallet holder cohorts.

In contrast, sharks (100-1,000 BTC) steadily accumulated Bitcoin throughout the period, capitalizing on the upward price momentum. Whales (>1,000 BTC) initially increased their balances before shifting to net outflows, indicating redistribution. Exchange wallets continued experiencing outflows, with Bitcoin reserves decreasing by 2.5% over the last week.

Source: Checkonchain

Is there a pullback potential?

Historically, the 20-day EMA (yellow line) and 50-day SMA (orange line) acted as key dynamic support lines throughout post-halving rallies. For instance, during Bitcoin’s climb from $10,000 to $60,000 in 2020-2021, these levels acted as turning points, reestablishing bullish momentum after local pullbacks. Despite recent consolidation, Bitcoin currently trades far above these averages, suggesting that a pullback could provide a healthier foundation for its upward trajectory.

Furthermore, Bitcoin futures and options markets have reached or approached all-time highs in both volume and open interest. Perpetual futures funding rates and long position premiums are at their highest levels since March. Typically, such spikes preceded pullbacks or short-term consolidations during bull runs. If the correction unfolds, the 20-day EMA could act as a potential target for bears.

Source: Checkonchain

Longer term outlook

Despite the possibility of a pullback, Bitcoin seems to be in a classic post-halving rally. The asset formed a Cup and Handle pattern on the weekly chart suggesting a target of $120,000 if fully realized. The weekly MACD has also produced a bullish crossover (green circle), historically a precursor to prolonged rallies.

In turn, the Pi Cycle Oscillator is currently at levels similar to Q4 of previous halving years.& From this position, it has historically taken Bitcoin about 3-6 months to surpass the 350-day SMA x2, which currently stands near $120,000. Notably, when the 111-day SMA crosses the said moving average, this event historically coincided with the formation of cycle peaks.

Source: Checkonchain

Conclusion

Bitcoin is well-positioned to continue its post-halving rally, showing a convergence of macroeconomic factors, institutional interest, and robust on-chain activity. A bullish scenario suggests that a $100,000 mark could be broken in the coming weeks, but a stronger correction may follow in this case. Conversely, a bearish scenario suggests a retest of the 20-day EMA, which, while slowing the pace to a six-digit price, could strengthen the foundation for a more sustainable bull run.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Weekly outlook

Consolidation before a breakout?

Over the past week, Bitcoin’s price has been flirting with its all-time high (ATH), coming within less than $200 of reaching it. However, Bitcoin failed to break it, consolidating around $73,000, and then dropping to the ascending support line (white line). Declining volume during this phase, highlighted by a symmetrical triangle on the Volume Oscillator, hints at an upcoming strong directional move in both price and volume.

According to VPVR analysis, the closest significant volume clusters are located at $66,500-$68,000 (orange) and $72,000-$72,700 (green). This suggests that Bitcoin could see possible support and resistance in these areas if the asset price bounces off or drops below the ascending support line.

Nevertheless, it is not uncommon for Bitcoin to consolidate near its previous ATH before breaking it decisively. In 2020, for instance, Bitcoin initially stalled near $20,000 before breaking through after a week of consolidation.&

Bitcoin’s price is currently approaching its 20-day EMA (yellow line), a dynamic support level for bullish sentiment, indicating that this pullback could be a healthy setup for the next ATH test. Furthermore, the 50-day and 200-day SMAs formed a golden cross (green circle), typically a bullish signal.&

Meanwhile, the daily MACD is again on the verge of a bearish crossover, indicating potential downward movement. However, this signal could be considered only if bulls fail to defend the 20-day EMA.

The power of the ATH breakout

Historically, breakouts above ATH levels have been followed by sharp swings in Bitcoin’s volatility:

• January 2017 ($1,500 breakout): A 10% weekly drop, followed by a 12% weekly increase.
• December 2020 ($20,000 breakout): A 22% weekly increase, with sustained double-digit gains in the following weeks.
• March 2024 ($69,000 breakout): A 9% weekly increase, though momentum gradually slowed.

One of the catalysts behind this is that Bitcoin’s approach to ATH levels typically brings an increase in search interest (green circles) and media coverage, amplifying attention on the cryptocurrency. While current search levels are relatively low, a renewed rally could re-engage public interest, though this effect might be somewhat muted given the ATH was already reached earlier this year.

Source: Google Trends

Profit-taking by short-term holders

As Bitcoin approached its all-time high, the Short-Term Holder (STH) Realized Profit/Loss Ratio surged to a historic peak, reflecting that recent buyers were taking profits. This level of profit-taking might have acted as a resistance, temporarily holding back Bitcoin from breaking its ATH. However, these dips could attract new buyers, helping sustain market liquidity and supporting future upward momentum.

Source: Checkonchain

On the other hand, long-term holders (LTH) have shown more restraint, with only a modest increase in profit-taking. This indicates confidence in Bitcoin’s longer-term potential, as LTHs likely wait for more substantial price signals or higher levels before selling.

Source: Checkonchain

What’s on the radar?

• U.S. elections (November 5): With slim margins between candidates, heightened tension around the election results could introduce short-term volatility in the market. This event might also serve as a trigger for cautious investors waiting on the sidelines to enter the market, potentially boosting market volume shortly after. However, the broader outlook is likely to remain stable regardless of the winner, with increasing signs of a post-halving rally appearing.
• Federal Reserve meeting (November 6-7): According to FedWatch, two 25 bps rate cuts in November and December are still the most anticipated outcome. Consequently, this week’s decision may have a limited impact on prices unless the Fed makes an unexpected move. Comments from Fed Chair Jerome Powell will likely be a more impactful factor, especially following Friday’s U.S. non-farm payrolls data, which revealed the weakest job growth since late 2020, along with downward revisions to previous months’ figures.
• ETF inflows: U.S. spot Bitcoin ETFs reported their largest weekly inflow since March 2024, totaling $2.2 billion. Although these ETFs were only launched in January, notable inflows typically precede price corrections or tapering net inflows. However, this week may be an exception, falling into a “boom or bust” category, as participants could both be extra cautious amid the U.S.-related events, or find the trigger that might have limited previous inflows.

Source: SoSoValue

Longer-term outlook

When Bitcoin reached a new all-time high in March 2024, it marked the first time the asset updated its cycle peak just before a halving event. Typically, Bitcoin approaches the 0.382 Fibonacci retracement level around the halving period. However, in 2024, it was near the 0.786 Fibonacci level, hitting this mark approximately six months earlier than usual.

Earlier this year, this unusual scenario caused some indicators to turn “weird,” leading to deviations from past cycle patterns. However, after 8 months of consolidation, Bitcoin now appears more in line with previous cycles. For instance, Bitcoin has surpassed its previous cycle peak and is testing its ATH around the same time as in previous cycles (white arrows). Additionally, the weekly MACD recently formed a bullish crossover (green circle) near the ATH, a pattern that has historically preceded classic post-halving bull runs.

Conclusion

With Bitcoin hovering near its all-time high, the market seems poised for a decisive move. Short-term holders taking profits temporarily capped gains, but technical indicators suggest the bullish potential if the 20-day EMA holds. A solid drop below that level could potentially indicate a short-term delay before Bitcoin challenges its ATH again. However, the longer-term outlook remains primarily bullish, with Bitcoin gradually aligning with previous cycles and potentially preparing for a strong upward move.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Weekly outlook

Could a V turn into a W?

Over the past week, Bitcoin has displayed a V-shaped price movement, consolidating within a narrow range between $66,700 and $67,700 before briefly testing both $65,300 and $69,000. In our previous analysis, we highlighted that Bitcoin could see imminent correction and/or consolidation throughout last week, as bullish momentum appeared to weaken.

On the 4-hour chart, the RSI indicator remains in a downtrend (cyan line), suggesting the corrective phase may not be over. At the time of this writing, Bitcoin’s price is trading within the Ichimoku Cloud, with its upper and lower boundaries acting as resistance and support, respectively — indicating market indecision. A breakout outside this cloud could determine whether Bitcoin tests $69,500 or retreats to lower levels.&

While a short-term recovery is possible, it may struggle to gain traction unless the RSI breaks through its resistance. VPVR analysis shows high volume clusters around the 0.236, 0.382, and 0.618 Fibonacci retracement levels, suggesting these as key support/resistance zones.

The daily chart indicates a possible continuation of the correction, as the asset formed a bearish divergence with Awesome Oscillator (AO), and a bearish crossover with MACD. Over the last 8 months, the latter typically coincided with local tops (red circles), hinting at short-term bearish dominance. This could push the price below the 20-day EMA, with the 200-day SMA as a potential target. However, the 20-day EMA, near $66,000, remains a key support for bulls; defending this level could weaken the bearish case.

Futures market speculations are getting riskier

Last week, we noted that spikes in Bitcoin open interest often precede short-term corrections. Following the recent jump, Bitcoin’s futures open interest dropped by 7%, while futures volume remained relatively flat. Meanwhile, funding rates have risen on average, and the estimated leverage ratio has jumped to its highest level since August 2023. This increase in leverage suggests heightened speculative optimism but raises the risk of sharp liquidation cascades.

These conditions suggest that Bitcoin could see increased volatility in the short term. A breakdown below the 20-day EMA or other major support levels could trigger increased liquidations, potentially exerting additional downward pressure and potentially intensifying a corrective phase.

Source: CryptoQuant

Longer-term outlook

Sharks return to the tank

Bitcoin whale activity is intensifying, with whale numbers reaching their highest since January 2021, while whale accumulation levels are at a peak not seen since July 2020. Examining holder cohorts reveals that “sharks” (wallets holding 100-1,000 BTC) have led the recent accumulation, collectively adding over 200,000 BTC in the past three months. Historically, such accumulation by sharks has preceded prolonged bullish rallies, as similar patterns were seen roughly six months after the halvings in both 2016 and 2020, before further upward price movement.

Source: Checkonchain

Revived supply shows bullish signs

Bitcoin wallets with a 2-4 year holding period are increasingly active, now representing about 42% of the recently revived supply, up from 29% three months ago. In past cycles, rising activity among these holders has often foreshadowed a rally, as they tend to become increasingly active 6-12 months before the cycle peak.

Source: Checkonchain

Short-term holders gain momentum

​​Long-term holders (LTH) have added around 1,000,000 BTC over the past three months, either through accumulation or by transitioning to LTH status, and now control over 70% of Bitcoin’s supply. However, over the last two weeks, short-term holders (STH) have been increasing their share of the supply, potentially signaling an upward move. Historically, STH accumulation increases during bull markets (green circles). The current supply distribution between STH and LTH mirrors the 2013 rally, where rapid price gains were followed by a 10-month consolidation before another rally.

Source: Checkonchain

Conclusion

Bitcoin’s price held largely to our neutral outlook from last week, remaining within a narrow range. This week could bring heightened volatility, with bears potentially challenging the 200-day SMA. While a rebound is possible, it may be short-lived unless Bitcoin breaks decisively above $70,000, which would likely require a fresh catalyst. Despite near-term uncertainty, the long-term outlook remains bullish, indicating a potential new all-time high could be approaching.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Fragile Uptober vibes

Price rally with weakening momentum

Bitcoin had its strongest week in two months, breaking above the key resistance of the 200-day SMA and touching an 8-month descending resistance trendline. During this breakout, the volume increased, signaling strong momentum, but has since gradually decreased as the price continued to climb.

A 4-hour chart suggests that maintaining this momentum could be challenging for bulls. Bitcoin has experienced a bearish crossover with the MACD and shows bearish divergence with both the MACD and Volume Oscillator, indicating that buying pressure is weakening, and the upward momentum might be losing steam.

Record open interest amid decreased volume

The recent rally has been driven by a surge in open interest in Bitcoin futures and increased demand for leveraged positions. Open interest reached a new high for 2024, while funding rates hit their highest levels since June. While higher open interest suggests increased market participation, it also indicates more leverage and speculative trading, making the market more sensitive to price swings. Historically, such spikes in open interest have often been followed by short-term corrections, as seen over the past year.

Source: Checkonchain

During this surge, the trading volume of Bitcoin futures has been in a downtrend, suggesting that traders are either holding their existing positions or adding new ones in anticipation of further gains. A decline in volume while open interest rises could imply that remaining market participants are increasing leverage, which could make the market more vulnerable to abrupt price movements. If this trend continues, a correction could be likely, especially if traders begin closing their long positions to secure profits.

Source: Checkonchain

ETF demand concerns

Another major factor in Bitcoin’s recent rally was a significant inflow into U.S. spot ETFs last week, totaling $2.13 billion — the largest weekly inflow in eight months. However, such a surge in ETF inflows is not always a bullish signal. Historically, significant inflows following lower market participation have often preceded price corrections or smaller net inflows. If ETF demand does not remain strong at the beginning of this week, it could be an early indicator of a potential price correction or consolidation.

Source: SoSoValue

Impact of upcoming options expiry

On Friday, October 25, over $5.5 billion in Bitcoin options will expire, marking the second-largest expiry by open interest to date. A large portion of call volume and open interest is concentrated around the $70,000 strike, which could act as a significant resistance level. If bullish momentum wanes, the price might gravitate toward the max pain level, currently around $64,000. However, if Bitcoin breaks above $70,000, options sellers may need to hedge by purchasing Bitcoin, potentially boosting bullish momentum.

Source: Laevitas.ch

Could a new all-time high be around the corner?

Potential Wave 3 development

Before the recent rally, Bitcoin found support in the 0.5-0.618 Fibonacci retracement zone, a level often associated with the formation of Wave 2 in Elliott Wave Theory. Typically, Wave 3 extends to around 161.8% of Wave 1, targeting around $75,000 in this case. If this pattern plays out, Bitcoin could reach above $80,000 in the coming months.&

However, holding above the 200-day SMA remains key to this bullish outlook. A sustained position above this level would make any short-term correction a healthy pause before resuming upward momentum, while a failure could raise doubts about the rally’s sustainability.

MVRV Z-score signals a possible bull run

The Short-Term Holder (STH) MVRV Z-Score recently moved above 0, indicating that, on average, short-term holders are in profit. This could lead to two outcomes: increased confidence among holders, leading them to keep holding, or profit-taking, which might increase selling pressure. Over the last three months, such situations have often coincided with local price tops, particularly when the price dropped below the STH Realized Price. If Bitcoin manages to stay above $63,200, it could signal further bullish momentum.

Source: Checkonchain

Meanwhile, the Long-Term Holder (LTH) MVRV Z-Score is nearing a break above 0. Historically, this has signaled the start of a prolonged bull run, often leading to a cycle peak. An exclusion was Bitcoin’s rally in early 2024 when the asset price updated its all-time high ahead of halving.&

Source: Checkonchain

Conclusion

Recent developments suggest that Bitcoin may face three possible scenarios in the short term:

• Bearish: A price correction to the 200-day SMA, around $63,400, to test the strength of the uptrend.
• Neutral: Price consolidation in a narrow range, potentially between $66,700 and $70,000, serving as a pause before stronger movement.
• Bullish: A breakout above $70,000, which would likely require a new catalyst since current momentum may not be sufficient.

Given the weakening momentum, the bearish or neutral scenarios appear more likely. However, these movements could still be part of a healthy correction within the broader uptrend. The longer-term outlook remains bullish, with the potential for Bitcoin to reach a new all-time high in the coming months, even if a short-term dip occurs first.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

ETH/BTC could be on the verge of another surge

ETH/BTC is currently in its longest downtrend ever, which kicked off following the introduction of the Merge update in September 2022. However, the weekly chart indicates that bearish momentum could be waning. The Volume Oscillator has been registering higher lows while the price made lower lows, indicating a bullish divergence. This signals that Ether buyers may be gradually stepping in, which could lead to either a trend reversal or a slowdown in the downtrend. The RSI shows a similar picture, reinforcing the idea that Ethereum could soon begin outperforming Bitcoin.

VPVR analysis of ETH/USD shows that the largest volume bars are located below the current price, indicating strong support at lower levels. This suggests that if the price dips, buyers are likely to reenter the market. Meanwhile, smaller volume bars above the price indicate a path of least resistance upward. In contrast, the BTC/USD market’s VPVR offers an opposite distribution, with the largest volume clusters concentrated above the market price.

Additionally, Ethereum’s price is approaching a two-year-long support line, which has historically triggered bullish reversals. Although the RSI failed to sustain above the descending resistance line, its temporary breakout still could be viewed as a bullish sign, as a similar situation preceded Ether’s rally in late 2023 (green circles).

Another sign that Bitcoin could potentially underperform not only Ethereum, but the rest of the crypto market is its dominance developments. Bitcoin’s dominance might be trading within a bearish rising wedge pattern, which suggests that it could potentially move from 58% to 52% of the total crypto market cap. The daily RSI also points to a bearish divergence (blue line), reinforcing this outlook.

On-chain data also indicates that the Ethereum network may be on the cusp of increased activity. For instance, in late September, gas fees on the network surged by nearly 500% over just two weeks, temporarily making Ether deflationary. This wasn’t a short-lived spike like the one on August 5, as elevated gas fees continued into early October. Historically, extended periods of rising gas fees have coincided with positive price movements for Ether.

Source: CryptoQuant

ETH/BTC historically surges ahead of altcoin seasons

A potential surge in the ETH/BTC pair may be more than just a short-term rally, as historical trends suggest that Ethereum typically gains momentum against Bitcoin ahead of broader altcoin seasons. An “altcoin season,” or altseason, can be defined in various ways, but the most common metric is when 75% of the top 50 coins outperform Bitcoin over a 90-day period. Using this criterion, the crypto market has seen seven “major” altseasons in the last seven years, each lasting more than a week. Historically, it has taken one to two months for the market to transition from Bitcoin season to these altcoin seasons.

Source: BlockchainCenter

Within these one to two months ahead of major altseasons (orange rectangles), Ethereum has consistently outperformed Bitcoin, with an average increase of 153%. This means that ETH/BTC could be viewed as an early indicator of further altcoin rallies. Notably, larger surges in ETH/BTC have historically led to more sustained altseasons.&

Once the altseason kicks off, Ethereum typically underperforms Bitcoin, leading to a decline in ETH/BTC. Exceptions occurred in the April-July 2017 and March-June 2021 altseasons, where ETH/BTC continued to post new highs, acting as a precursor to further cycle peaks.

The last major altcoin season in January 2024, driven by the U.S. Bitcoin ETFs launch, was lackluster for ETH/BTC, which only saw an 18% gain ahead of the event (cyan rectangle). Most of the gains occurred in the final week, with Ethereum posting double-digit growth, reaching above $2,600 for the first time since May 2022. This jump occurred due to speculation at the time that Ether could soon see its own ETF products.&

ETH/BTC’s relatively weak performance suggests that the typical pattern might not have fully played out, or that Ethereum could be losing its status as a driver of altcoin rallies. Supporting this, the altcoin season indicator was rising in mid-July and mid-September this year, while ETH/BTC predominantly remained in a downtrend.

Conclusion

Despite Ethereum’s historical strength ahead of altcoin seasons, its recent underperformance raises questions about its role as a key driver in altcoin rallies. However, it’s too soon to conclude that Ether has lost this “superpower” without further confirmation from upcoming altcoin seasons. With market indicators hinting at a potential trend reversal for ETH/BTC, this confirmation, or rejection, may not be far off. Ether could still be poised for a comeback, potentially reaffirming its status as an altseason beacon.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Green September = Green Q4

Bitcoin is on track to post its best-performing September ever, with gains exceeding 8% so far. Historically, September has been a tough month for Bitcoin, closing in the red over 60% of the time. However, this year, Bitcoin appears to have broken free of its “SeptemBear curse,” potentially signaling strong performance in Q4.

In the past 11 years, Bitcoin has seen a positive September only three times (excluding 2024), leading to consistent price growth across all Q4 months in all cases. The average price gain in Q4 following the green September is 65%, meaning that Bitcoin could potentially move up to $110,000 by the end of the year if this pattern holds.

Another historical trend favoring Bitcoin’s Q4 prospects is that 2024 is a halving year. During halving years, Bitcoin has consistently posted positive Q4 returns, regardless of September’s performance, with an average gain of 78%. Applying this to current prices suggests Bitcoin could surge to $118,000 in the coming months.

Source: CoinGlass

What fueled the best-performing September for Bitcoin?

U.S. Federal Reserve began its rate cuts

In September, Bitcoin markets were laser-focused on macroeconomic conditions, particularly the U.S. Federal Reserve’s decision to cut interest rates for the first time in four years. The Fed implemented a 50 basis point cut, with its Summary of Economic Projections (SEP) indicating a potential additional percentage-point reduction by year-end. According to FedWatch data, another rate cut is likely in November, with close to equal odds for either a 25 or 50 basis point cut.

The Fed’s decision to lower rates could bolster global liquidity, a factor historically linked to Bitcoin’s price growth. Data reveals that when liquidity is added to the financial system, Bitcoin’s price has increased in 83% of cases over a 12-month period.

Source: BGeometrics

China is considering a massive stimulus package

Following the Fed’s move, the People’s Bank of China (PBoC) announced a 50 basis point cut to the reserve requirement ratio for mainland banks. It also lowered the seven-day reverse repo rate from 1.7% to 1.5% and reduced the minimum mortgage down payment to 15%. Bloomberg reports that China is also considering injecting up to 1 trillion yuan ($142 billion) into its largest state banks to help revive its struggling economy. All of that suggests that China could soon make its most aggressive monetary push since the pandemic.

Moreover, over the past decade, China has typically injected liquidity into its financial system at an accelerated pace in Q4. This increased liquidity tends to favor Bitcoin, whether Chinese market participants view it as a risk asset or a hedge against inflation. This could partially explain why Q4 is historically Bitcoin’s best-performing quarter, with an average gain of 88% over the last 10 years.

U.S. Bitcoin ETFs experienced a significant boost

The synchronized liquidity push from both the U.S. and China has fueled risk markets, including Bitcoin. U.S. spot Bitcoin ETFs saw average weekly inflows of $300 million in September. This influx was driven by funds from BlackRock, Fidelity, Bitwise, and Ark Invest.

Source: SoSoValue

Furthermore, the U.S. Securities and Exchange Commission (SEC) has approved Nasdaq’s application to list options on BlackRock’s Bitcoin ETF. However, full approval is pending the decisions of the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC).

On the one hand, options on spot Bitcoin ETFs could potentially attract more liquidity and offer institutional investors more tools to hedge on Bitcoin prices. On the other hand, this might increase the “paper” supply of Bitcoin, as institutional investors can gain exposure to Bitcoin without having to purchase it directly, potentially reducing demand for the underlying asset.

Does Q4 have a $100,000 potential?

Weekly timeframes suggest further bullish momentum

Back in March 2024, when Bitcoin hit a new all-time high, we noted the potential formation of a Cup and Handle pattern, which now appears to be nearing completion. The asset has touched the 0.382 Fibonacci retracement level — a common target for the handle formation — and is approaching the upper border. To confirm this pattern, Bitcoin must break out of its descending channel and surpass $68,000 with strong volume. A sustained drop below $50,000 would invalidate this pattern.

The weekly RSI also offers a signal that Q4 could turn beneficial for Bitcoin. The indicator has broken above its descending resistance trendline, and this historically acted as a turning point to reestablish bullish momentum. In addition, the asset price bounced off its two-year support line, suggesting that Bitcoin’s existing consolidation might be soon concluded.

The Ichimoku Cloud analysis on the weekly chart reveals Bitcoin’s price is nearing the cloud’s leading spans, which could act as critical support or resistance levels. Notably, in 2021, Bitcoin regained bullish momentum when it touched the upper leading span. This could be viewed as an additional confirmation of the bearish-to-bullish trend reversal.

Option market participants look for $100,000 by the end of the year

October is typically one of Bitcoin’s best-performing months, with an average gain of 23%. Options data reflects similar optimism for 2024, with the next major expiry on October 25 carrying a notional value of $3.8 billion. Most open interest is concentrated at $70,000, while $75,000 and $77,000 levels have recently seen increased volume.

Source: Laevitas.ch

For the December 27 expiry, which holds the highest open interest, call option contracts outnumber puts by a wide margin. The $90,000 and $100,000 strike prices stand out with the most significant volume and open interest, indicating strong bullish sentiment for Bitcoin by year-end.

Source: Laevitas.ch

More on-chain indicators hint at the bullish resurgence

Bitcoin’s on-chain outlook also appears bullish, with multiple indicators showing positive signs.& The Puell Multiple, which compares Bitcoin’s daily issuance to its 365-day moving average and is used to identify tops and bottoms based on miner profitability, recently joined the list. It recently fell below 0.5, indicating a potential market bottom and suggesting a buying signal. Historically, this zone has coincided with key bullish turning points, such as March 2020, July 2021, and late 2022.

Source: CryptoQuant

Furthermore, Bitcoin’s price has moved above the Short-Term Holders’ Realized Price, indicating that short-term holders are in profit, which is historically a bullish signal. For this momentum to continue, Bitcoin needs to stay above $63,200 — the key crossover point.

Source: CryptoQuant

Conclusion

With Bitcoin posting its strongest September on record and benefiting from favorable macroeconomic shifts, such as Fed rate cuts and China’s stimulus considerations, the outlook for Q4 remains optimistic. Historical patterns, bullish technical indicators, and surging demand for Bitcoin ETFs point to the possibility of Bitcoin challenging its all-time high in the short term. However, Bitcoin would first need to move out of the existing consolidation pattern and gain a foothold above $68,000 to support this bullish outlook.&

____________________________________________________________________________

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Table of contents

1. Methodology
2. Key figures:
3. Introduction
4. Part 1: A Road to the Tap-to-Earn Frenzy
5. 1.1. Main Trigger
6. 1.2. Estimated Core Audience Size
7. Part 2. A Portrait of a Tap-to-Earn Game Audience
8. 2.1. Engagement: Strong Involvement
9. 2.2. Crypto Experience: Typically a Newbie
10. 2.3. Crypto Understanding: Mostly Basic
11. Part 3: Are Tap-to-Earn Gamers Here to Stay?
12. 3.1. Main Intention: HODL coins
13. 3.2. Primary interest: Bitcoin and Telegram-related tokens
14. 3.3. Existing portfolio: Doubtfully diversified
15. Conclusion

Methodology

The data for this study, aimed at constructing a comprehensive profile of tap-to-earn gamers, was gathered through a series of polls conducted within the CEX.IO Official Community Channel on Telegram. This community consists of over six million subscribers, with over 99% of them having engaged with our own tapping game, CEX.IO Power Tap.&

A total of 45,537 respondents participated in the survey, with collected responses providing significant insight into the preferences and engagement patterns of tap-to-earn participants. However, since the polls were conducted anonymously on Telegram, we cannot verify the absolute accuracy of individual responses.

To estimate the core audience of tap-to-earn users on Telegram, we extrapolated key findings from the polls and compared them with data from CEX.IO Power Tap. In addition, we incorporated publicly available data from Telegram alongside official reports from over 20 popular tapping games, each with a user base exceeding 10 million and more than 5 million active monthly players.

Key figures:

• 147+ million users are identified as the core tap-to-earn audience.
• 94+ million users with no prior crypto experience have become active tap-to-earn gamers.
• 7+ tapping games are played by the average user.
• 2+ hours per day are spent on tap-to-earn activities by players.
• 40% of players reported that they became involved in crypto within the last six months.
• 29% of tap-to-earn players have never made a single crypto transaction.
• 70% of players stated they intend to hold the coins received from airdrops.

Introduction

Over the last six months, Telegram-based tap-to-earn games has been one of the largest buzzwords in the crypto industry. With some projects beating Guinness World Records in subscriber-based milestones and joining leaders in terms of holder count, these mini-games achieved in weeks what have taken years for some top-tier crypto platforms. They also turned into one of the fastest approaches to building and establishing a community in space.

CEX.IO rapidly identified a new trend to bring masses to crypto, and was among the first global crypto exchanges to join this sector by launching its own tapping game, Power Tap, in May 2024. In less than two days, CEX.IO Power Tap attracted over 1 million players, and is currently enjoying over 30 million users. With CEX.IO Power Tap on board, we received a valuable perspective on the behavior of active tap-to-earn gamers, and decided to share some findings to help the crypto industry better navigate into this phenomenon and understand this audience.

Part 1: A Road to the Tap-to-Earn Frenzy

1.1. Main Triggers

Less than a year ago, in November 2023, a group of developers introduced a beta version of Notcoin with an entirely blank whitepaper, offering users to “mine” coins by tapping their screen. The project initially positioned itself as a memecoin with no clear purpose, reaching over 300,000 users in its first two weeks. However, an actual initial surge happened after Notcoin’s official launch on January 1, 2024, which pushed the number of Notcoin users from 1 million to 15 million in a few weeks. This rapid growth sparked the first wave of similar tap-to-earn projects.

The largest trigger to fuel the hype arguably was Notcoin’s token launch on May 16, 2024, which proved to players that such an activity could have an earning potential. Following this event, Telegram-based tap-to-earn games faced a massive and immediate boost in user activity. For instance, according to the data published by Hamster Kombat, the platform saw an increase from 5 million to 7 million active players in 10 days ahead of the NOT launch. However, after the event and over the same period of time, Hamster Kombat’s active players surged from 10 million to 42 million, continuing exponential growth in the following weeks.

1.2. Estimated Core Audience Size

While Notcoin was instrumental in building the initial core audience of tap-to-earn gamers, the platform is no longer among the top 20 by monthly active users (MAU), with a current player base of 8.7 million. As of this writing, the top 15 Telegram-based tapping games boast a combined MAU of over 422 million, with Hamster Kombat, Blum, Dogs, and Major accounting for half of this total. These largest Telegram-based tapping games include CEX.IO Power Tap, with 16.5 million MAU — it’s more than the combined number of monthly active users on the Bitcoin and Ethereum networks, according to TokenTerminal. The MAU information is drawn from the official Telegram bot data of each participating platform.

However, it’s important to consider that many tap-to-earn games are closely interconnected, often featuring tasks that encourage users to join other similar projects. As a result, players frequently engage with multiple games simultaneously, which may significantly reduce the potential estimates for the actual number of unique active users in the sector.&

Based on official Telegram data and reports by the largest tap-to-earn games, supported by player behavior data from CEX.IO Power Tap, the estimated core tap-to-earn audience stands at over 147 million. This includes active players of the 15 most popular tap-to-earn games who typically interact with multiple titles.

Part 2. A Portrait of a Tap-to-Earn Game Audience

2.1. Engagement: Strong Involvement

53% of respondents stated that they spend over two hours a day playing these games. This indicates that for many players, these games are more than just a casual pastime, but a significant daily activity. In addition, the second-largest group spends 1-2 hours per day playing, further highlighting the level of commitment many players have to these games. Only 15% of tap-to-earn games claimed that they might not interact with a tapping game every day, or spend less than 15 minutes playing.

A key catalyst behind allocating over an hour a day for a tap-to-earn activity could be that 76% of respondents are playing at least five games simultaneously. This indicates that tap-to-earn players are typically exploring similar platforms, likely seeking to maximize their earning potential.

2.2. Crypto Experience: Typically a Newbie

64% of respondents highlighted that tap-to-earn games marked their first interaction with digital assets. With an estimated number of core tap-to-earn players of 147 million, this suggests that this gaming model served as an entry point into the broader crypto space for at least 94 million users. Furthermore:

• 40% of respondents stated that they began being involved in crypto activities less than six months ago.
• 29% of players haven’t done any crypto transactions so far.
• 27% of players performed transactions only as a part of the tapping game activity.

In turn, around a third of tap-to-earn gamers had prior experience with cryptocurrencies, with most of them performing regular crypto transactions. This indicates that such an activity also attracts users already versed in crypto, perhaps seeking new ways to engage with and take advantage of industry developments.

2.3. Crypto Understanding: Mostly Basic

As crypto newcomers prevailed in the sample, we wanted to explore if tap-to-earn gamers possess a basic understanding of crypto fundamentals. The dataset included basic questions on Bitcoin, crypto terminology, and the broader state of the crypto industry. 61% of respondents passed the test, while some displayed questionable positions. For instance, 6% of respondents claimed that only 10 digital assets exist, while 5% were assured that Bitcoin was launched by the U.S. central bank.

*Chart Disclaimer: The “Acceptable” category represents the average number of users whose answers were considered relevant based on the overall dataset.&

Part 3: Are Tap-to-Earn Gamers Here to Stay?

3.1. Main Intention: HODL coins

Although the main focus for dedicated tap-to-earn gamers arguably remains to maximize the rewards from their efforts, they’re unlikely to seek immediate profit.&

Most respondents claimed that they plan to keep the coins they receive after an airdrop, signaling a strong belief in the long-term value of these assets. In addition, half of the respondents who highlighted their desire to keep coins after the airdrop indicated that they would consider staking these assets if there is such an opportunity.

3.2. Primary interest: Bitcoin and Telegram-related tokens

Bitcoin remains the top choice among tap-to-earn gamers, but Telegram-related tokens come close to rivaling the largest cryptocurrency in popularity. The primary driver behind the latter could be the fact that most crypto-tapping activity takes place through Telegram mini apps. Additionally, users’ high engagement with multiple tap-to-earn games and a broader interest in similar projects arguably affected this stance.

In contrast, Ethereum and memecoins showed relatively low appeal among this audience. As a result, tap-to-earn gamers and memecoin enjoyers could potentially be seen as distinct types of crypto enthusiasts, although both activities are perceived to be major drivers of crypto adoption.

3.3. Existing portfolio: Doubtfully diversified

86% of players stated they hold at least one digital asset, with the majority claiming to have a wide array of cryptocurrencies in their portfolio. From one perspective, this suggests that many players are actively exploring and investing in a diverse range of crypto assets. However, considering earlier findings that a significant portion of players engage with multiple games without conducting any crypto transactions, it implies that some participants might view unreleased tap-to-earn tokens as legitimate digital assets.&

The latter could be seen as a somewhat dangerous perspective, as players might begin to question the value of certain tap-to-earn projects if they fail to deliver a functional token, leaving it as merely “a part of the game.” This skepticism could extend to doubts about the broader crypto ecosystem as well.

Conclusion

The rise of tap-to-earn models has significantly expanded crypto’s reach by introducing digital assets to users previously unfamiliar with blockchain technology. With over 422 million monthly active users across the largest platforms, these games have become powerful tools for crypto adoption. However, they also bear a responsibility to maintain credibility by delivering sustainable, functional tokens with lasting value.

For many players, tap-to-earn is more than just a game — it’s a meaningful activity that requires time and effort. Furthermore, 70% of users do not plan to sell their tokens after airdrops, signaling their commitment to deeper engagement with the crypto ecosystem.

Positive developments are already emerging, as some tap-to-earn games evolve beyond simple mechanics by integrating gamified onboarding processes and fostering engaged communities. This transformation suggests that these games could serve not only as entertainment but also as gateways to broader crypto participation. For example, CEX.IO Power Tap is exploring educational initiatives to help users better understand blockchain’s potential. The sector as a whole stands to benefit from adopting similar approaches to foster long-term user engagement and sustainable growth.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our& list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

How It Works

We enable simple cash-in and cash-out transactions by collaborating with MoneyGram, a widely trusted global fintech company. You can now fund your CEX.IO account with USDC using traditional currencies (fiat) at any participating MoneyGram location. Additionally, you can withdraw USDC from CEX.IO and receive cash in hand.

To add USDC to your CEX.IO account

1. Initiate USDC deposit and choose MoneyGram as a payment method.
2. Visit the nearest MoneyGram location and cash in funds.&

To cash-out USDC from your CEX.IO account

1. Withdraw USDC from CEX.IO by choosing MoneyGram.
2. Visit the nearest MoneyGram location to collect funds.

Understanding MoneyGram

MoneyGram is a well-established financial service provider known for its money transfer services and other financial solutions. With both digital platforms and over 430,000 retail locations worldwide, MoneyGram allows consumers to send money internationally, pay bills, and more, ensuring affordable fees and excellent exchange rates. With a customer base exceeding 150 million, it’s a trusted name in the financial world.

Our Vision and Goal

CEX.IO’s mission is to connect users to the cryptocurrency economy through trustworthy and innovative solutions. Our integration with MoneyGram and the Stellar network is another step forward in our continued effort to increase accessibility to the digital economy. This new feature will facilitate diverse asset management methods, as it opens an opportunity for eligible users to enter or exit the digital economy with cash.

Experience this new seamless way to manage your assets via CEX.IO and MoneyGram. For more details, visit our Help Centre.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

How has September shaped markets over the years?

Halving year = green Q4

Bitcoin has its own “September effect,” which historically fares worse than the one seen in the stock market. Over the past 11 years, Bitcoin has experienced an average price decline of over 4% in September, ending the month in the red more than 70% of the time. In comparison, the S&P 500 has posted a negative September in 56% of cases since 1928, with an average decline of just 1.17%.

On the other hand, Bitcoin tends to recover relatively quickly from this difficult month. Historically, there’s a 75% chance that a negative September will be followed by a positive October, and a green September typically leads to gains through the rest of the year. In halving years like 2024, Bitcoin has consistently shown positive Q4 returns, regardless of its September performance.

Source: CoinGlass

Suits continue replacing hoodies

Bitcoin’s price movement was predominantly driven by retail investors in previous cycles. The status quo notably shifted in 2024, with the growing presence of institutional players. Bitcoin’s performance in 2024 was significantly affected by the introduction of U.S. spot ETFs in January, with the asset price being directly correlated with ETF flows. Moreover, Bitcoin saw an increased concentration of trading volume during U.S. market hours, especially at the end of the trading day. Notably, end-of-day trading tends to be dominated by institutional investors on the stock market as well.

Source: CoinGlass

Another distinctive attribute of Bitcoin markets in 2024 is a wider drop in on-chain activity and new addresses, despite the year-to-date price increase. In previous cycles, the number of new and active addresses was positively correlated with Bitcoin’s price, but since January the correlation has turned negative. This acts as an additional confirmation that Bitcoin currently faces less retail participation.

Source: Glassnode

Is this September set to break the mold?

Bitcoin’s September effect will likely hit the market this year, and could be partially fueled by the attitude of institutional investors. A key catalyst for Bitcoin in September is widely expected to be the U.S. Federal Reserve’s potential rate cut. The market is largely anticipating a quarter-point reduction, which could spark moderate Bitcoin volatility. A 50 basis point cut is possible, but it will likely spook wider markets, and could negatively affect risk-sensitive markets like crypto. If the Federal Reserve’s decision remains the main focus for Bitcoin markets in September, BTC’s correlation with the stock market could increase.

Source: Block

Bitcoin is currently moving within a descending channel with reduced trading volume, suggesting a pause in the long-term upward price trend. It has recently dipped below its 20-day and 20-week EMAs, while the RSI remains neutral, signaling that the path of least resistance may be downward. The 50-week SMA currently acts as a major support level, as it did during previous cycles, and has already served as a buffer for Bitcoin’s dip in early August.&

Bitcoin is hovering around the 0.382 Fibonacci retracement level, which acted as a critical support zone during the price consolidation from March to October 2023. If the bears manage to keep the price below this level, it could trigger a decline towards the 0.5 Fibonacci point.

The asset is nearing its two-year support line, which could act as a trend reversal point, and may be tested by late September or early October. A break below this support, especially with increased trading volume, could signal that bearish momentum may persist into early Q4.

In addition, the Active Address Sentiment Indicator (AASI) signals that the market sentiment may be overheated, as the 28-day price change has hit the indicator’s upper boundary. Historically, this has preceded a price drop in the following weeks.

Source: Bitcoin Magazine Pro

Mid-term Bitcoin outlook remains positive

Despite bearish short-term signs, Bitcoin holders remain optimistic about the asset’s prospects. Bitcoin has seen significant outflows from exchanges over the past three months, with exchange reserves continuing their downtrend. This is generally viewed as a bullish signal, as it suggests holders are less likely to sell shortly.

Source: CryptoQuant

While Bitcoin experienced consistent price declines over the past six months, its funding rate has remained largely positive, indicating that many traders expect a rebound. This sustained long positioning reflects confidence, as market participants are willing to pay a premium to maintain their positions, betting on a further price recovery.

Source: CryptoQuant

In addition, there is no crossover of the green and orange lines on the Pi Cycle Top & Bottom Indicator, which typically appears near cycle peaks. The oscillator is far from the red zone, suggesting the potential for Bitcoin to update its all-time high, and reach a new cycle peak in the following 12 months.

Source: Bitcoin Magazine Pro

A setup for Q4 and months ahead

The main defining factor for Bitcoin’s price in the following weeks and/or months will be the direction of the descending channel breakout. The height of the channel is used to identify the potential price target following the breakout.&

Hence, if the asset breaks and sustains below the lower border of the channel, this may open the gate to $40,000, and could be treated as a bearish scenario. Conversely, the bullish outcome implies a potential price target near $86,000.&

A much more bullish scenario includes the potential formation of the Flag pattern. Bitcoin experienced a strong volume within the flagpole and decreased volume during the flag body formation, qualifying for the Flag pattern setup. It will be considered confirmed after a breakout of the flag body in the direction of the established trend with a significant volume increase. The Flag pattern typically signals that the further price movement may be as large as an initial flagpole, or up to $150,000 in this case. However, keep in mind that the actual price target may vary depending on the volume.

Conclusion

September may be seen as an extension of the summer’s subdued market movements, potentially acting as the final hurdle before Bitcoin’s historically strongest quarter. Although near-term indicators point that Bitcoin’s September effect could turn valid this month, Bitcoin’s Q4 prospects look rather positive. If historical trends hold true, Bitcoin may experience a strong rally as the year progresses, and prepare the ground for a potentially bullish 2025.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

The game has drawn in more than 24 million new users since its launch. Because crypto began with, and continues to involve (for the most part) mining, we felt that a hands-on experience would be the most beneficial to understand what mining is, and more importantly — how it actually works.&

What is the CEX.IO gaming simulator and why does it exist?

The goal of the simulator is to immerse players in real-world-like conditions, with a crucial difference: all of the benefits, none of the risks. Just like in the real world, players can continue tapping away and stay on the same level, or they can reuse the capital and potentially get much more.&

Real-life crypto follows the same logic: mining is the cornerstone of the real-life crypto world. Therefore, to truly understand cryptocurrency, one must first understand and experience firsthand how mining works at its most fundamental level.&

Subsequently, updates will ensue to walk players through all of the main aspects and possibilities of crypto as we know it today: staking, trading, investing, financial tools, TradFi, DeFi, and the like.

How does the CEX.IO gaming simulator work?

Initially, users (players) have several ways at their disposal to earn in-game currency: tapping, completing various tasks, referring friends, and more. Although very straightforward, this strategy is unlikely to empower players to succeed indefinitely, which is contrary to a gamer’s psychology (they usually always want more).

To move forward and achieve more, players need to start using their accumulated capital. They do this by building their mining pools and begin mining in-game BTC (the rate of which is the same as in the real world). Next, they exchange their in-game BTC for more in-game fiat, to get more mining power, and in turn, mine even more virtual BTC (identical to what they would need to do with actual BTC).

Like in the real world, moving successfully through these cycles is the only way to overcome the plateau, unlock higher levels, and accumulate big in-game capital. Ultimately, the end-goal for players is to accumulate as much in-game capital as possible, which they can then potentially exchange for real-value assets during the airdrop (planned for the end of Q4 2024).&

The goal (value) of the CEX.IO gaming simulator

Most mini-games of this type are created to enable players to simply accumulate in-game assets, which can be exchanged for real-world tokens at some point. Such an approach caters to and corresponds with the mindset of real-life mass users: you owe only as much as you can earn.

However, the CEX.IO gaming simulator was designed for a different purpose. Instead of simply accumulating in-game money, we ideally want players to stop thinking about “how much can I earn?”, and, instead, start thinking about, “how can I sustainably get ahead and become financially independent?”&

By playing the game, we hope our users will adopt this new, groundbreaking way of thinking, and apply what they learned in the game to real life. Therefore, the goal (and true value) of the CEX.IO gaming simulator, is to equip our players with the skill and confidence they need to stop being mere observers, and start being active participants in the world of cryptocurrency (and their own lives)!&

We invite you to play, tap, get your friends to join the gaming simulator, and build your very own mining community, along with a financially free future!

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.
The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.

Market spotlight: U.S. spot Ether ETFs debut is widely anticipated on July 23

After two months have passed since their approval by the U.S. Securities and Exchange Commission (SEC), it seems the wait is almost over for the potential launch of spot Ether exchange-traded funds (ETFs).

According to Bloomberg analyst Eric Balchunas, the SEC requested final S-1 form submissions from spot Ether ETF applicants, which must include details on the fees issuers plan to charge for their crypto funds. In updated filings, asset managers disclosed the following fees:

• Seven out of 10 funds feature time-based and AUM-based fee waivers, with several managers offering temporary zero fees. This resembles the situation associated with the launch of spot Bitcoin ETFs.
• Grayscale maintained its 2.5% fee, which is significantly higher than other asset managers.
• The SEC approved the launch of Grayscale’s mini ETH and ProShares’ ETF, although the latter has not yet provided the necessary fund details. The agency also reportedly granted “preliminary approval” to BlackRock, Franklin Templeton, and VanEck.

Balchunas anticipates that the SEC will officially approve the S-1 forms on July 22 after trading hours, allowing the spot Ether ETFs to begin trading on July 23. Sources at two issuers also confirmed this information to industry media. It is also widely expected that all spot Ether ETFs will launch simultaneously, mirroring the SEC’s approach with spot Bitcoin ETFs. There remains a possibility that the regulator could reverse its decision, although this seems unlikely at this stage.

In its “State of Ethereum” report, Grayscale highlighted that Ether exchange-traded products (ETPs) outside the U.S. typically accumulate 25-30% of the assets in Bitcoin ETPs. This suggests that U.S. products may attract up to $4 billion in net inflows over the first four months if the trend holds. Citi is a bit more bullish, forecasting 30%-35% of Bitcoin ETFs’ net inflows, or around $5 billion over the first six months.

While these projections may seem modest, the crypto community remains optimistic about Ether’s short-term performance. Kaiko reported that Ether could outperform Bitcoin after the launch of ETFs, while Bitwise anticipates that Ether may reach $5,000 by the end of this year.&

However, keep in mind that Grayscale’s ETHE currently has $10 billion in AUM. Due to high fees, the market will likely see capital flowing out of Grayscale’s product in the first weeks or months after the ETFs’ potential debut. This outflow, similar to what occurred with its Bitcoin ETF, could put significant pressure on Ether markets. Consequently, Ether’s performance might be limited until the migration of funds from Grayscale’s ETF concludes.

Other noteworthy market events

The SEC dropped its investigations into Paxos and Hiro Systems

On July 11, Paxos, a stablecoin issuer, announced that it had received an official notice from the U.S. Securities and Exchange Commission (SEC), indicating that the agency would not pursue enforcement action against the company in its investigation of Binance USD (BUSD). This decision was likely influenced by a recent court ruling in favor of Binance, which determined that BUSD sales did not constitute a securities offering.

Despite this outcome, uncertainties remain about the SEC’s stance on whether stablecoins are considered securities. SEC Chair Gary Gensler previously likened stablecoins to money market funds and other types of securities.

Around the same time, the SEC concluded another investigation, involving the Bitcoin scaling network Stacks, and its original developer, Hiro Systems. The closure of this investigation is a notable relief for Hiro Systems, which had been under scrutiny despite claims from Stacks (formerly Blockstack) network contributors that their token sale was “SEC-qualified.”

FTX and CFTC agreed to a $12.7 billion settlement

Bankrupt crypto exchange FTX and the U.S. Commodity Futures Trading Commission (CFTC) agreed to a $12.7 billion settlement, bringing an end to a 19-month-long lawsuit. As part of this agreement, the CFTC will receive nothing, as long as FTX adheres to its reorganization plan. Consequently, FTX will pay up to $12.7 billion to creditors, depending on the available funds.

The settlement is broken down into $8.7 billion in restitution, and $4 billion in disgorgement. The latter will be “subordinated to the prior payment of claims of all creditors,” according to the filing. A hearing on the settlement is scheduled for August 6 in the Bankruptcy Court for the District of Delaware.

Squarespace exploit could put over 200 DeFi front ends at risk

On July 11, several decentralized finance (DeFi) apps were targeted in a domain registry attack. The attacker successfully took over the DNS registry for Compound Finance, and made an unsuccessful attempt to do the same with Celer Network. The breach was discovered when security researchers found that the Compound interface was redirecting users to a malicious site equipped with a drainer app designed to steal users’ tokens.

Initial investigations indicated that the attacker was focusing on domain names hosted by Squarespace, putting any DeFi app using its domains at risk. Ido Ben-Natan, co-founder and CEO of Blockaid, estimated that approximately 228 DeFi protocol front ends could be vulnerable. These include Pendle Finance, dYdX, Polymarket, Satoshi Protocol, Nirvana, and LooksRare, among others.

One sentence news

• Uniswap publicly launched its wallet browser extension on Google Chrome.
• Goldman Sachs is reportedly planning to launch three tokenization projects by the end of the year.
• ApeCoin announced the launch of its “Testnet Curtis,” which will pave the way for the mainnet.
• South Korean lawmakers proposed a delay in crypto tax implementation until 2028.
• Stripe expanded its crypto integration into the European market, enabling shoppers to buy cryptocurrencies, including Bitcoin, Ether, and Solana, using a credit or debit card.
• Core Starknet developer, StarkWare, submitted a proposal to enable staking on the network.

Notable price performances

This week has been overwhelmingly positive for crypto markets, pushing up the total crypto market cap by over $250 billion:

• The BTC price jumped by over 11%, following the end of the German government’s selling pressure, as well as strong consecutive inflows in U.S. spot ETFs.
• Bitcoin-associated tokens, STX and SATS, experienced 12% and 50% gains respectively, after the SEC dropped its investigation into Hiro Systems.
• The WLD price surged by over 45%, after Tools for Humanity, the developer behind Worldcoin, extended the lock-up period for WLD tokens allocated to team members and investors.
• XRP saw an almost 30% price jump, after CME and CF Benchmarks announced the launch of indices and reference rates for the asset.
• The MKR price soared by 30%, amid MakerDAO’s tokenized treasury plan and increased interest from top RWA players.
• Memecoins temporarily reclaimed its status as one of the best-performing sectors, with WIF, PEPE, and FLOKI showing over 20% price increases.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

More specifically, these concerns were put into overdrive by a confluence of factors best described as the tug-of-war between big tech companies, government intervention, and the civil liberties of online communities. After their experience founding Russian social media site VKontakte (VK) in 2006, the Brothers Durov saw firsthand how the desire for connection can be perverted by powerful actors. These conditions worked to set the founding of Telegram, and its subsequent contributions to the crypto space, into motion.

Alternatives to Web 2.0

Since the dawn of the internet, humans have sought to foster communities through emerging digital channels. From message boards, to email, to various social media iterations, the web’s ability to preserve and share information has always been inseparable from interpersonal connection. As technology mutated alongside people’s understanding and use of these platforms, where and how access was achieved helped guide this evolution.

Where chatting online once meant being tethered to a desktop computer, smartphones made access ambulatory, and lowered barriers to entry for a global network. With increasing accuracy, active and passive interactions across myriad fields illustrate the flow and virality of ideas, and crystalize user personas around their digital breadcrumbs.

While the rise of big data promised a more curated online experience, data exhaust from seemingly banal actions opened the door to Web 2.0’s era of what scholar Shoshana Zuboff identified as surveillance capitalism. In practice, major online shopping, search, and social media companies treated user data as any other raw material to commercialize or sell to third-parties.

This worked to accelerate the web’s transformation into an ads-based environment, which over time decimated media outlets, polluted feeds, and cluttered query results. These externalities were dumped on end users, as knock-on effects such as upticks in disinformation and clickbait-style content strategies became industry standard. In hindsight, it should have been more obvious that trusting immense stockpiles of personal information to a handful of entities would yield mixed results.

These conditions created fertile ground for alternative means of communication that prioritized a combination of encryption, data protection, and decentralization to take back the web experience. Arriving in tandem with Bitcoin, blockchain technology, and a healthy distrust of certain institutions, solutions that attempted to marry desires for ironclad financial and information control were becoming viable.

A succession of dominos ranging from redefined social paradigms, damage to beloved platforms, and interrupted service functionality resulted in many dissatisfied users seeking a return to reliable online life. The Durovs were among these disgruntled masses after clashes with Russian heads of state over VK led to their relocation in the Middle East. Going forward, the pair endeavored to devise a platform that eluded capture by powerful interests, and maintained firmly planted on the side of its users. It’s here that Telegram enters the chat.

TON: The Open Network

Launched in 2013 for iOS and Android, Telegram offered a variety of encrypted messaging services for peer-to-peer and wide audience communication. Groups of like-minded individuals, such as crypto enthusiasts, could share information and compare notes on current trends and historical lore with greater autonomy and privacy than with competing providers. In turn, Telegram enabled the creation of broad and niche topic channels run by influencers, celebrities, government entities, and corporations to build followings and stay connected to their fan bases, customers, and constituents.

Sporting an interface reminiscent of early internet instant messaging programs, Telegram’s sleek, intuitive design updates traditional text-based models to include emojis, video, audio, and file sharing. With free versions capable of multimedia campaigns and nimble content integration, it’s no wonder Telegram has become an integral hub in the crypto ecosystem.

Along with ease of use, Telegram’s emphasis on encryption and user-first network parameters align with many of crypto’s core principles, which helps explain the messaging app’s appeal within the industry. Those who gravitate toward the digital economy appear to likewise prefer enhanced security, and the ability to exert greater control over their data. To this end, Telegram’s approach toward content moderation and ease of dissemination dovetail to create a fruitful environment for alternative media pipelines and community building outside the mainstream.

But as with any tool, Telegram’s use by disparate groups has run the gamut. On the one hand, pro-democracy dissidents in regions experiencing government overreach have been able to circumvent censorship and gain followings on Telegram. Conversely, content valorizing extreme acts of violence, perpetuating fraud, and advancing political radicalization have also flourished as a result of Telegram’s unwavering commitment to free expression and user anonymity. Despite these unfortunate byproducts of network freedom, Telegram’s privacy policy demonstrates the universality of certain values, as the app continues to enjoy pervasive use.

From its inception, Telegram Co-Founder and CEO, Pavel Durov, has been a vocal crypto advocate, and aimed to position the company as a central pillar of the community. The Open Network, or TON, was initially conceived as an ecosystem powered by a native token called Gram. Unfortunately for the Durovs, the U.S. Securities and Exchange Commission (SEC) took issue with the structure of TON’s proposed distribution model for Gram tokens. This resulted in the project being reconceptualized, and Gram tokens removed from the equation. After a company reconfiguration and shuffling of entities to required jurisdictions, Toncoin (also referred to as TON) was launched by the non-profit TON organization in September 2021.

Hiccups aside, Telegram has been working steadily since 2017 to achieve a unique blockchain that prioritizes the protection of participant data. The network’s novel proof of stake consensus mechanism has been described as a “blockchain of blockchains” through its unique use of sharding to increase scalability and throughput. By relying on cloud storage and end-to-end encryption for select communications, Telegram remains an industry leader for those seeking privacy and ease-of-use in their online communities. And as luck would have it, the latest industry trend is endemic to the platform, leading many participants to have their first crypto experience as Telegram users.

Tapping into the Future

Recently, Telegram has been at the forefront of advocating for Web3 and crypto adoption through a permutation of its flagship bot capabilities. First introduced in 2015, bots enabled users and channel moderators to automate a variety of actions, facilitate payments, deploy in-app games, and supply real-time chat functions. The play-to-earn model currently dominating the crypto landscape since the debut of Notcoin (NOT) has caused a significant uptick in participation among first-time users.

Capitalizing on the addictive quality of completing simple tasks, many downstream alternatives have rushed to ride Notcoin’s coattails. Mimicking Telegram’s streamlined aesthetic, the games are stripped to their most fundamental parts, with rewards issued through the simple action of tapping one’s device. In this way, Notcoin equated token “mining” with tapping a coin icon that appeared in a bot program shared with followers via a dedicated Telegram channel. In the wake of NOT, many iterations have adopted a similar approach.

This raises a somewhat related rhetorical question: At what point does a hunk of metal hurtling through the sky become a plane? In some ways, this is the query every new cryptocurrency is aiming to answer when attempting to launch an economy from scratch. While NOT is currently trending among the top 100 digital assets, it seems some in the project’s circle are experiencing existential doubt. In a recent interview with The Block, Sasha, the project’s founder, declared this wave of tap games will be a fading trend. 

Elaborating further, Sasha acknowledged Notcoin’s uncertain future, and predicted that “only the games that have sustainable models will [likely] survive.” This may sound curious from someone who managed to be first-in-flight on the tap game market. Then again, while the Wright Brothers had countless wrecked aircraft resulting from trial and error, the laws of aerodynamics are less fickle than those of a self-sustaining economy.

Thankfully, the relative efficacy or utility of digital assets such as NOT have done little to discourage the hype around these projects, which continue to flood the market. The hydra-like proliferation of tap games speaks to their effectiveness as a rallying point for participants at every stage of their crypto journey. However, if Sasha’s frontline experience is any indication, where this development will lead is an open-ended question. In some cases, users are comfortable continuing to stockpile game rewards and establish their squads against competing tappers, while others prefer knowing next steps. But for many participants, this is par for the course in crypto.&

While there’s a certain anticipation for the future – whether in the form of a token listing or airdrop – the journey itself can lend its own self-actualization. In fact, beneath the tech-speak and branding, what’s more DeFi than a let-it-rip-and-see-what-happens approach to crypto innovation? Perhaps phrased a different way: Is it possible to not have all the answers while proposing a potential solution? For apps like Telegram and its litany of bot games, this appears to be the case.

In many ways, that’s been Telegram’s approach from its onset. While it maintains a robust commitment to privacy and encryption, Telegram’s extension of services to all parties has mitigated some downsides to online life, while exacerbating others. Its latest tap bot games offer another helpful analog. While they’ve unquestionably helped break down barriers for how would-be participants view and interact with crypto, next steps are yet to materialize. On the other hand, perhaps it’s not the responsibility of figures like Durov and Notcoin’s Sasha to dictate the terms of one’s crypto experience.&

Rather, perhaps innovators are better suited to provide the tools and leave users empowered to define and settle upon their most prudent application. By avoiding familiar patterns that caused Web 2.0 to stagnate, Web3 can center the interaction and exchange of value and information that liberates our online experience from top-down control. While such outcomes are pending, and will likely lead to some unsatisfying conclusions, growth is rarely painless, and often occurs in fits and starts. Then again, letting a fear of falling stymie one’s capacity for flight is just another way to admit defeat. And when the future itself is truly up in the air, there’s no better time to experiment with new possibilities that could finally put the imagined horizon within reach.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility. 

Market spotlight: Minus $200 billion in the total crypto market cap

Looking at crypto prices this week, it seems that someone spilled ketchup. Most digital assets were dressed in red, leading to a $200 billion drop in the total market cap.&

Here’s what arguably caused the downward-sloping parade.&

U.S. macroeconomic news

On June 7, the U.S. Labor Department reported stronger-than-expected U.S. jobs numbers that cast doubt over interest rate cuts. The latter is considered a key prerequisite for a liquidity influx into risk assets and crypto. After this news, Bitcoin took a nosedive from its two-month high to $69,000.

Multiple central banks have already begun rate cuts in 2024, including the EU and Canada, but the U.S. Federal Reserve remains a holdout. During the June 12 meeting, the Federal Open Market Committee (FOMC) kept rates steady, but hinted that a single rate cut could happen this year.

Meanwhile, the U.S. consumer price index (CPI) stayed flat in May, beating economist forecasts. Bitcoin briefly soared above $70,000 on this news, but couldn’t hold onto that level.

Liquidations

Last week, we highlighted that cascade liquidations could occur if Bitcoin’s price turned down, as open interest in futures markets has been at all-time highs. As such, liquidations typically act as an aggravating factor, which may accelerate the price momentum in a certain direction. Many long liquidations may move the asset price lower, and vice versa.

According to Coinglass, crypto markets saw substantial long liquidations over the last seven days, with $360 million on June 7, and over $200 million on June 11, coinciding with the largest price drops. Despite a reduction, Bitcoin futures open interest remains above $34 billion, suggesting potential for further liquidations. 

Bitcoin ETF strategies

U.S. spot Bitcoin exchange-traded funds (ETFs) experienced the longest streak of inflows in their history (19 days), accumulating $4 billion worth of BTC. In addition, these products recently acquired eight times more BTC than the amount newly mined, marking their largest buying week since mid-March.

Sounds like a Bitcoin bull’s dream, right? Not so fast. There were several reports that certain traders might be shorting Bitcoin futures on the Chicago Mercantile Exchange (CME), while taking long positions in ETFs. For instance, Bitcoin’s open interest on the CME has grown in tandem with the cumulative ETF inflows.

This strategy is known as cash and carry arbitrage, and it aims to profit from the premium in the futures market relative to the spot market. This could also mean that ETF inflows are not entirely bullish, limiting Bitcoin’s price performance.

Local crypto catalysts

The above catalysts were dedicated to Bitcoin, but what about other digital assets? They are likely to be affected by Bitcoin’s performance, as many altcoins are closely correlated with the largest cryptocurrency. 

However, there are still some separate indicators that arguably pushed down certain digital assets:

• Spot Ether ETF issuers are still waiting for the U.S. Securities and Exchange Commission (SEC) to comment on their S-1 filings. The expected feedback, anticipated by June 7, has been delayed, potentially pushing down ETH prices.
• GameStop’s recent slide arguably caused a temporary selloff in the memecoin sector.
• AI tokens, including RNDR, FET, and AGIX, saw double-digit weekly drops, amid Apple’s conference that some AI enthusiasts found disappointing.
• CRV lost 40% in a week due to liquidation risks tied to loans associated with Curve’s founder, Michael Egorov. And yes, this isn’t the first time this has happened.

Noteworthy market events

Robinhood set to acquire Bitstamp for $200 million

Trading platform Robinhood announced its plans to acquire Bitstamp in a potential $200 million deal, to better position its crypto business for expansion outside the U.S. If all goes according to plan, including regulatory nods and winks, the deal could be wrapped by the first half of 2025.

Founded in 2011, Bitstamp is considered the oldest operating crypto exchange, and one of the largest in Europe in terms of trading volume. It comes with 50+ licenses and registrations globally, and could allow Robinhood to waltz into the institutional crypto space without breaking a sweat. In addition, Bitstamp offers over 85 assets on its spot trading platform, along with staking and lending services, which could significantly bolster Robinhood’s crypto offerings.

Robinhood’s desire to expand in the realm of Bitcoin and its restless siblings seems natural, as crypto trading accounted for 20% of the company’s total revenue, and saw a 224% increase in volume, according to its Q1 2024 earnings report. The kicker is that this $200 million deal is arguably the largest acquisition in the crypto industry to date, but the number is just a fraction of Bitstamp’s 2018 valuation, when the platform was reportedly worth $500 million.

Paxos introduced a yield-bearing stablecoin

Paxos unveiled Lift Dollar (USDL), a yield-bearing stablecoin that promises “risk-free” returns aligned with U.S. Treasury bonds. USDL is issued on the Ethereum network, and pays yield programmatically, on a daily basis, to token holders.

According to Paxos CEO Charles Cascarilla, Lift Dollar is structured similarly to other Paxos stablecoins: PayPal USD (PYUSD) and Pax Dollar (USDP). This means they are pegged to U.S. dollars, and backed by cash and short-term U.S. government securities. USDL is regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).

As a testing ground, Paxos first launched the USDL stablecoin in Argentina, empowering users to earn about 5% annual yield, close to the current effective federal funds rate.&

Cardano is about to enter its Voltaire phase

The Cardano network is gearing up to enter the final phase of its roadmap — Voltaire. Cardano founder Charles Hoskinson highlighted that this upgrade will transform the network into a fully decentralized blockchain ecosystem. This is because the reins of blockchain will pass from the development company, IOHK, to the community by introducing governance, voting, and treasury management functionality.

The upcoming Chang fork, rumored to be scheduled for this month, will set the stage for the “Age of Voltaire,” which sounds a bit like the Age of Enlightenment but with more blockchain and fewer wigs. Hoskinson assured the community that the network is “Chang fork ready,” and is just waiting for 70% of the system’s stake pool operators (SPOs) to upgrade their nodes.

The Chang fork will reportedly introduce essential tools and infrastructure to support this new phase. It will provide network participants, including ADA holders, with governance authority, granting powers to propose and vote on Cardano improvements using the staking and delegation process.

Fried.tech announced migration to its own blockchain

Web3 social network Friend.tech announced its collaboration with a crypto infrastructure service provider, Conduit, to develop its native blockchain. The new blockchain will feature FriendTech’s native token as a “fully transferable gas token.” While the protocol didn’t specify a timeline for this move, the team mentioned that it will keep everyone in the loop “over the coming months,” as development of the blockchain progresses. 

Last month, Friend.tech co-founder Racer hinted at a possible departure from the Ethereum layer 2 (L2) network Base, where the protocol is currently hosted. According to Racer, Friend.tech’s relationship with Base has been rocky, with the social network feeling alienated from the ecosystem.

One sentence news

• Kraken reportedly aims to raise $100 million before potentially going public next year.
• Telegram announced the launch of Stars, a new in-app token for purchasing digital goods and services.
• Base surpassed Optimism in terms of total value locked (TVL), becoming the second-largest Ethereum layer 2 (L2) network.
• ZKsync developers unveiled a major airdrop of 3.675 billion ZK tokens to early users and contributors of its Ethereum L2 network.
• Loopring experienced a $5 million security breach of its two-factor authentication service, “Guardian,” for its smart wallet application.
• Lido partnered with Symbiotic and Mellow Finance to introduce restaking vaults.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Market spotlight: Bitcoin jumped above $70,000, moving out of the consolidation pattern

In our previous weekly overview, we noted moderate optimism within the Bitcoin market, despite a slight price decrease. This week, sentiment has grown even more positive:

• U.S. spot Bitcoin exchange-traded funds (ETFs) recently registered the second-highest recorded daily inflows, and are within striking distance of their longest streak (17 days).
• Thailand’s securities regulator approved the first spot Bitcoin ETF in the country, while the first ETF with direct Bitcoin holdings began trading in Australia.
• Large purchases of Bitcoin call options, with a strike price above $74,000 in June, suggest that market players anticipate the asset reaching a new all-time high this month.

These factors likely contributed to Bitcoin’s bounce off the lower border of the symmetrical triangle, breaking upwards from the pattern. The latter suggests that a consolidation period might be ending, with upward movement potentially following. The pattern’s price target is near $76,000, which surpasses the current all-time high.

However, several factors could limit Bitcoin’s potential. June is historically the second-worst month for Bitcoin in terms of price performance, and is typically accompanied by decreased liquidity. This could lead to increased volatility, and/or limit established momentum.&

In addition, Bitcoin futures premiums moved out of the neutral range, hitting a seven-week high. Open interest in Bitcoin futures markets also surged, indicating significant leverage, which could result in increased liquidations. With the market predominantly optimistic, and more long positions in place, cascade liquidations could occur, causing a whipsaw.

In summary, a combination of potentially decreased liquidity, increased leverage, and expectations of a new all-time high sound like a theoretical recipe for a massive move ahead. While a bullish outcome appears more likely, there is a risk that Bitcoin may not reach a new all-time high if there isn’t enough momentum, and/or if ETF inflows slow down.

Noteworthy market events

U.S. spot Ether ETFs accelerated toward their launch

A few weeks ago, the U.S. Securities and Exchange Commission (SEC) approved eight spot Ether ETFs, though their launch is still pending due to a bureaucratic nuance. Over the last week however, there’s been some progress in this domain, bolstering anticipation of their launch:

• BlackRock, Franklin Templeton, VanEck, and Invesco Galaxy filed updated S-1 forms, required for their spot Ether ETFs to begin trading.
• Depository Trust & Clearing Corporation (DTCC) has already listed Fidelity’s, VanEck’s, Franklin Templeton’s, and BlackRock’s ​​spot Ether ETFs. This step is considered one of the final ones before the launch of said products.
• Grayscale filed an updated S-3 form to convert its ETHE trust into a spot Ether ETF.
• In a newly amended S-1 form, the previously named Ark 21Shares Ethereum ETF was changed to 21Shares Core Ethereum ETF. This indicates that Ark will not proceed with an Ether ETF application, leaving its former partner 21Shares to continue independently.
• Hashdex has withdrawn its Ether ETF application.

Amid all this news, Bloomberg analyst Eric Balchunas stated that the launch of spot Ether ETFs by the end of June is “a legit possibility.”

Mastercard’s Crypto Credential service went live with pilot crypto P2P transfers

Mastercard rolled out a pilot of its Crypto Credential service, letting users in Latin America and Europe conduct peer-to-peer crypto transfers. This service enables customers to utilize personalized crypto addresses instead of typical blockchain addresses. Such a feature is akin to the Ethereum Name Service (ENS), and is dedicated to facilitating the transaction process.

As part of Mastercard’s Crypto Credential standards, users are verified and receive an alias for transactions. The system checks the recipient’s alias and wallet compatibility, resembling a paranoid friend who triple-checks everything. If there’s a hiccup, it gives users a heads-up to prevent any “Oops, wrong wallet!” moments.

Japanese exchange DMM Bitcoin suffered an over $300 million hack

The crypto industry recently experienced the eighth-largest crypto theft in its history, bigger than any of 2023’s exploits.&

In a blog post, Japanese crypto exchange DMM Bitcoin disclosed a security breach that resulted in the loss of approximately 4,503 BTC, valued at around $308 million at the time.&

The exchange temporarily halted new account openings, new spot buy orders, and all new leveraged orders. In addition, the processing of crypto withdrawals has been suspended. Withdrawals in Japanese Yen are still being processed, albeit more slowly than usual.

DMM Bitcoin assured customers that all BTC deposits are guaranteed, and the company has shared a funding plan to cover losses.

Notably, DMM Bitcoin is not the only Japanese crypto exchange that has suffered a substantial hack. Some of the most prominent examples are Mt.Gox’s 2014 incident, which still affects the industry, and Coincheck’s 2018 hack, which is considered the largest crypto heist in Japan’s history.

Uniswap hit the snooze button on a fee-switch proposal vote

On May 31, the Uniswap Foundation postponed a vote regarding UNI staking and delegation rewards, because an unnamed stakeholder “raised a concern.” The organization highlighted the need for thorough due diligence due to the irreversible and sensitive nature of the proposed upgrade, but it didn’t specify a new timeline for the vote.

The delay hasn’t won any popularity contests in the crypto community. Some critics claim the governance process is being manipulated, while others see this delay as a potential threat to decentralization.

Despite the foundation calling the decision “unexpected” and offering apologies, this isn’t their first time rescheduling a vote on the “fee switch.” This proposal would redirect a modest amount of protocol trading fees to token holders. It seems like the interests of token holders are once again at odds with certain Uniswap “stakeholders,” making for some family drama at the decentralized dinner table.

One sentence news

• BlackRock’s IBIT surpassed GBTC as the world’s largest Bitcoin ETF.
• PayPal’s PYUSD stablecoin is now available on the Solana network.
• Gemini announced a distribution of $2.18 billion to its Earn program users.
• The EOS community approved a proposal to cap the token supply at 2.1 billion tokens, meaning that nearly 80% of the total EOS supply will be burned.
• U.S. President Joe Biden vetoed the SAB 121 repeal, sparking criticism from crypto industry members.
• Artificial Superintelligence Alliance’s token merger, which includes FET, AGIX, and OCEAN tokens, will be completed on June 13.

Notable price performances

• TON and BNB updated their all-time highs, becoming the only assets in the top 10 to show double-digit gains this week.
• ORDI and STX enjoyed over 20% price increases, following renewed interest in Bitcoin-based BRC-20 tokens.
• FLOKI price surged by 30% in a week, amid another $12 million investment from DWF Labs into the Floki ecosystem.
• JASMY saw a 50% price jump, arguably due to speculation that Apple partnered with the project. However, this information remains unconfirmed.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

To this end, the addition of CEX.IO Card to the company’s product ecosystem taps into Mastercard’s established payment rails to facilitate off-chain purchases with digital assets. Participants in the European Economic Area (EEA) can integrate our new crypto debit card via CEX.IO App to initiate transactions online and on-the-go, anywhere Mastercard payments are accepted. While CEX.IO recently celebrated 10 years of serving as a trusted bridge between traditional and decentralized finance, this expansion further solidifies this aim for EU-based users. For the first time, eligible CEX.IO users may apply their crypto holdings directly to acquire real-world goods and services through an all-in-one, improved, and intuitive mobile app interface. To help commemorate this milestone, CEX.IO Founder and CEO, Oleksandr Lutskevych, was quoted in Yahoo! Finance when the press release revealing this accomplishment was picked up by the outlet.

Between major company announcements, CEX.IO’s Head of Communications, Becky Sarwate, had the opportunity to share insights with Cointelegraph about Aave’s unfolding posture toward MakerDAO’s new stablecoin, DAI. This nuanced relationship combines the intricacies of tokenomics with a historical, risk-averse alignment away from repeating Terra/Luna-style black swan events. By taking the long view, her analysis struck a diplomatic chord, and acknowledged the difficult conditions each project created for the other. Ultimately, Becky highlighted how prioritizing the protection of participant value is paramount to fostering the trust necessary to avoid knee-jerk over-corrections, and side-step calamity. In turn, communities should better position themselves to adapt to change, and debate improvements from all angles before moving forward.

In a similar vein, Alex’s second appearance in Yahoo! Finance also encouraged restraint when news of the Market Research Team’s latest Q1 2024 COMPASS report hit the wire. Generative AI and Its Downstream Effects dedicates its entire focus to how emerging technologies are impacting the crypto space and beyond from a human-first perspective. Given the rampant ubiquity of large language models (LLMs), image generators, and various chatbot “personal assistant” solutions, the Team took a peek behind the curtain and assessed possible ramifications of broad integration. While the report itself pulls from numerous publicly available sources, subsequent reporting has continued to explore the environmental impacts, and performance gaps relative to industry expectations.&

As a veteran of the crypto space, Alex has seen many trends rise and fall in the interim. From this vantage point of earned wisdom, he called for sober considerations to avoid falling victim to claims buoyed by wishful thinking. Rather, participants and affected communities should be asking tough questions, and weighing all potential externalities before putting their faith in imagined futures.

Explore our May media highlights via the links below.

Business Insider: Best Cryptocurrency Exchanges of May 2024

The company graced the pixels of Business Insider after again landing among the outlet’s monthly assessment of “Best” crypto exchanges. Along with high marks for offering an intuitive product ecosystem, the review highlighted the ongoing success of the listings program for its robust menu of vetted markets.

Read the full review here.

Yahoo! Finance: CEX.IO Launches Mastercard-branded Crypto Debit Card

On May 2, the announcement heralding the official launch of CEX.IO’s crypto debit card was picked up by Yahoo! Finance. Optimized for Mastercard-enabled purchases, CEX.IO Card is available for EEA-based participants to make everyday payments with their crypto holdings, via CEX.IO App. The outlet quoted CEO and Founder, Oleksandr Lutskevych, who helped situate the release of Card alongside CEX.IO’s suite of crypto products and services.

“‘We want the crypto landscape to be welcoming to newcomers and experienced users alike. That’s why we created the CEX.IO Card – our most intuitive solution yet for bridging the gap between the familiar world of traditional finance, and the exciting potential of decentralized finance.’”

Cointelegraph: MakerDAO and Aave’s DeFi conflict reopens over DAI’s perceived risk growth

On May 13, CEX.IO’s Head of Communications, Becky Sarwate, spoke with Cointelegraph about Aave’s adjusted loan-to-value requirements for MakerDAO’s stablecoin, DAI. Offering both contemporary and historical analysis, Becky unpacked Aave’s evolving posture, and how MakerDAO’s recent commitments to Ethena’s USDe stablecoin could be raising concerns.

“‘In many ways, Aave was put in a very difficult position, as on the one hand MakerDAO extended DAI’s line of credit from 100 million to a possible short-term ceiling of 1 billion tokens, which introduces significant risk.’ She added that this risk was compounded by the organization’s decision to put some of the newly minted DAI into Ethena’s synthetic dollar USDe. This algorithmic stablecoin has sparked skepticism in the market as it aims to replicate a common hedge fund strategy.”

Yahoo! FInance: CEX.IO’s Q1 2024 Industry Report Examines AI’s Impacts on the Crypto Ecosystem and Beyond

On May 16, Yahoo! Finance picked up the announcement of CEX.IO’s Q1 2024 industry report, the latest installment of the company’s market research series, COMPASS. Generative AI and Its Downstream Effects examines how emerging technologies are impacting crypto from a human-first perspective and careful historical analysis. For Alex’s second appearance on the outlet this month, he highlighted the report’s attention to macro-level concerns that could result from wide scale implementation.

“The advent of crypto in the global transacting landscape opened the floodgates to new dimensions of innovation and advancement, but it hasn’t all been smooth sailing. Rather, sober trial and error proved essential to identifying the right course of action. As with any new technology, it’s incumbent on all users to determine how AI’s success is defined, and which parties stand to gain, and lose, through its implementation.”

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility. 

In this article, we’ll cover everything you need to know to solve the mystery behind crypto ETFs, with a look at current market dynamics. But before we get technical, here’s how you can try to understand this often complex and abstract offering.&

What are crypto ETFs? The ELI 5 approach

Imagine you own a piece of land you’d like to farm. Unless you’re very experienced, you’ll likely face numerous challenges. For instance, you’ll need to think about what to plant, when to do so, how much, etc. Additionally, you’ll need specialized farming equipment, such as a tractor, a combine harvester, and the like. Ensuring adequate storage for the seeds and saplings is another consideration. And then there’s every farmer’s worst nightmare: unpredictable weather.&

If you were to go it alone, there is a chance you’d do well. However, in farming — just like with anything in life (including crypto) — there are no guarantees. The best you can do is attempt to minimize risk, and improve the chances of your crops succeeding.&

With that in mind, you consider an alternative: what if, instead of facing all of these challenges by yourself, you hire a more experienced farmer to work your land for you? While there’s no way to predict weather conditions, several other benefits to this alternative are obvious: for example, your new hire will likely already have the know-how and experience to do the job. You can rely on them to give you timely information while proactively and reactively working the land.& This enables you to minimize involvement in the process, while retaining ultimate control over the farm and crops.&

Come harvest time, you could potentially sell excess crops to a merchant. Either way, you’ve minimized your input in the process (including the risk of it failing), while improving the chances of having a successful harvest.

What does farming have to do with crypto ETFs, you ask? Think of owning farmland as funds you’d like to put in crypto. Then, hiring a farm hand while you watch from a distance is like putting your funds in a crypto ETF.&

The best part is, farming your land by yourself, and/or doing so with a more experienced farmer are not mutually-exclusive choices. The same idea applies to owning/holding cryptocurrencies in a wallet, while placing other funds in a crypto ETF. Now that that’s out of the way…

What is an ETF?

ETF stands for Exchange-Traded Fund, meaning that it’s publicly traded (like stocks) on traditional exchanges. An ETF may hold just one or multiple assets, such as stocks, commodities, or in the case of crypto ETFs — cryptocurrencies. The primary goal of an ETF is to mirror the performance of the asset(s) it holds.&

For most individuals, ETFs facilitate exposure to a collection of assets, instead of buying each one individually. In other words, they are designed to provide participants with a way to create a diversified portfolio of assets, including commodities, bonds, stocks, cryptocurrencies, and other securities.&

In traditional financial markets, you’ll encounter various ETF types: Index ETFs, Fixed Income ETFs, Commodity ETFs, Foreign market ETFs, Alternative investment ETFs, and more. However, today’s topic is a specific type of these funds, crypto ETFs. Let’s see what they’re all about.

Bitcoin and Ethereum ETFs&

Now that you have a general understanding of what an ETF is, let’s dig deeper and explain what some crypto enthusiasts struggle to comprehend: BTC and ETH ETFs.

For the most part, you can think of a crypto ETF as a unique spin on traditional ETFs (explained above). For instance, a Bitcoin ETF tracks the value of BTC. As such, it provides an opportunity to gain exposure to this cryptocurrency through traditional stock market exchanges.&

Similarly, Ethereum ETFs facilitate access to the price movements of ETH, or a basket (collection) of cryptocurrencies that includes Ethereum. Generally, both BTC and ETH ETFs are largely structured like traditional ones, meaning individuals can buy and sell shares on stock exchanges throughout the trading day.&

Note that the most significant aspect of crypto ETFs is that owning shares of these funds does not mean directly owning the underlying cryptocurrencies. A big difference for crypto enthusiasts. We’ll elaborate on this a bit later, including the current legislative conditions surrounding crypto ETFs.

How do Bitcoin ETFs work?

As their name implies, Bitcoin ETFs hold BTC as the primary asset, providing individuals with exposure to Bitcoin’s price movements without them having to own the cryptocurrency directly. Like stocks, individuals can buy and sell units or shares of a BTC ETF on traditional stock exchanges.

Licensed financial institutions issue Bitcoin ETFs. When doing so, they must purchase and hold actual Bitcoin to back the funds. A Bitcoin ETF does not assign a random value to its shares.&

Therefore, when an individual purchases shares of a Bitcoin ETF, the ETF purchases the corresponding amount of BTC. In the process, the ETF’s price closely follows Bitcoin’s actual market price. Custodians are responsible for securely keeping the purchased bitcoins.&

Additionally, and similar to how a stablecoin’s pegging works, the issuer of the Bitcoin ETF ensures that they are on par with the BTC stored with the custodian, on a 1:1 basis.&

What Bitcoin ETFs exist today?

Due to differing regulatory landscapes, global BTC ETF adoption varies between jurisdictions. For instance, the top BTC ETFs available in Europe include:&

• FiCAS Active Crypto ETP
• VanEck Vectors Bitcoin ETN
• 21Shares Bitcoin ETP
• WisdomTree Physical Bitcoin
• ETC Group’s BTCE

The first Bitcoin ETF in the U.S. was ProShares Bitcoin Strategy ETF, approved by the U.S. Securities and Exchange Commission (SEC) in October 2021. Other popular ETFs in this part of the world are:

• First Trust SkyBridge Bitcoin ETF Trust
• Invesco Bitcoin Strategy ETF
• VanEck Bitcoin Strategy ETF (XBTF)
• Valkyrie Bitcoin Strategy ETF (BTF)

When it comes to Asia, the first Bitcoin asset ETF in this region was CSOP Bitcoin, introduced by the Hong Kong Exchanges and Clearing Limited (HKEC).

Differences and similarities between BTC and BTC ETFs

We’ll start with the differences, which include regulation, trading, and the nature of ownership.

The differences

• Regulation. In some jurisdictions, engagement with Bitcoin varies greatly. There may or may not be established legal and regulatory frameworks. In regions& where they’re available, Bitcoin ETFs are subject to strict regulatory oversight.
• Trading. Buying and selling BTC is possible any time, anywhere — directly from another BTC owner, or through a cryptocurrency exchange (like CEX.IO). Conversely, BTC ETF shares can only be bought and sold during official trading hours on traditional stock exchanges.
• Nature of ownership. If you purchase BTC, you own this digital asset directly. Managing and accessing your BTC holdings requires private keys, which you control. However, if you buy shares of a BTC ETF, you do not own Bitcoin & — you merely hold shares in a fund that owns Bitcoin. Managing the BTC falls under the authority of the fund’s custodian.

The similarities

Similarities between cryptocurrency and the exchange-traded fund include the nature of involvement, digital form, and BTC price exposure.

• Nature of involvement. In one way, purchasing shares of a BTC ETF is similar to purchasing BTC on a crypto exchange. The risks and potential benefits associated with price changes still exist. The difference is that, through a BTC ETF, you don’t own the actual BTC.
• Digital nature. You can’t hold either product physically. Both BTC ETFs and Bitcoin exist only in digital form.
• BTC price exposure. With Bitcoin and Bitcoin ETFs, the pattern of BTC price changes dictates whether you potentially gain or lose your holdings.

Pros and cons of crypto ETFs

Bitcoin and Ethereum ETFs inherently feature upsides and drawbacks. Considering both is critical when looking to make the most informed decision.&

Pros

• Liquidity. As a result of typically high volume, partaking in crypto ETFs can usually be done straightforwardly, when the market is open.&
• Tax/accounting. Dealing with potential tax issues surrounding cryptocurrency transactions may pose a significant challenge for both individual and institutional crypto enthusiasts. Due to their traditional financial market origins, ETFs are often accommodated in existing securities accounting and taxation frameworks.
• Diversification. Some crypto ETFs provide exposure to not only Bitcoin, but other blockchain-related assets or companies as well. Those looking to diversify their holdings may use ETFs to gain exposure to a larger number of assets within the sector.
• Regulation. ETFs are usually overseen by regulatory authorities, adding a degree of psychological legitimacy and safety in the minds of some market participants.
• Technical expertise. Admittedly, the process of buying cryptocurrency on a centralized or decentralized exchange can, at times, be very technical — especially for completely inexperienced individuals. Knowing how to use a cryptocurrency exchange, set up and utilize a crypto wallet, protecting private keys – all of these aspects are often more straightforward through a BTC ETF.

Cons

• Associated fees. An ETF typically features management fees, as users are paying for the perceived expertise and convenience of fund managers. While generally modest, these fees can add up over time. This aspect is mostly non-existent when it comes to holding BTC and other cryptocurrencies outright.&
• Rehypothecation risk. Buying into a BTC ETF translates to purchasing shares/units of a fund that owns Bitcoin on your behalf. However, the fund may engage in rehypothecation: a practice of lending these assets out to other parties, which could add another risk level to your holdings. Currently, the U.S. SEC does not allow U.S. spot BTC ETFs to engage in rehypothecation.& &
• Custody. Ultimately, one of the cornerstones of blockchain technology, aside from decentralization, is self-custody. Holding BTC and other crypto assets directly means you have complete control over them. Buying into a BTC ETF essentially means relinquishing self-custody, as the fund manager holds the Bitcoin.&
• Volatility. Buying units/shares of a BTC ETF does not eliminate the inherent risks associated with cryptocurrency price volatility. As always, it is critical to make your decision according to ample research, and your unique risk appetite.

What’s the difference between BTC Spot and Futures ETFs?

The short answer is: the way that each tracks the price of Bitcoin and other underlying assets they may hold. Here’s everything you need to know about both types of exchange-traded funds.

Spot BTC ETFs

Sometimes referred to as physical ETFs, the goal of spot ETFs is to track Bitcoin’s price by holding the actual cryptocurrency. Theoretically, they purchase Bitcoin, and then issue shares to users based on the actual value of the Bitcoin they hold. Therefore, these ETFs are designed to ensure users have unobstructed access to Bitcoin’s price movements.

On the one hand, these exchange-traded funds provide users with a straightforward way to buy, sell, and trade BTC without having to deal with the complexities of buying and storing bitcoins directly. Additionally, since spot BTC ETFs are regulated, they usually provide a level of oversight and transparency.

On the other hand, there’s always the potential for loss or theft of the Bitcoin held by the fund. Since the underlying BTC is held in a cryptocurrency wallet, security breaches are always a possibility, not to mention the inherent price fluctuations of Bitcoin.

Futures BTC ETFs

These ETFs are also sometimes called derivatives-based ETFs. Unlike the previous type, futures BTC ETFs don’t hold the actual cryptocurrency. Instead, these funds track Bitcoin’s price through futures contracts, which are agreements to buy or sell an asset at a specific time in the future. In doing so, crypto enthusiasts can try to anticipate the future price of an asset without actually owning it.&

But, how do futures contracts work exactly? Here’s a real-life example of a futures contract, in line with the farming analogy from the beginning of this article.

Imagine a farmer knows in June that they will harvest a certain amount of corn in September. They plan on selling the harvested crops to a merchant. Therefore, the farmer and the merchant agree on a future contract: the farmer agrees to deliver a predetermined amount of corn to the merchant in September, and the merchant pays the farmer an agreed-upon price in June. By implementing such a futures-type contract, both the merchant and the farmer can mitigate the risk of future price changes.

Following this logic, futures BTC ETFs enter into contracts to buy or sell BTC at a predetermined price and date, based on the price movements of BTC futures contracts.&

Advantages of futures BTC ETFs include their inherent usability potential in volatile markets, especially when traders may anticipate a decline in the price of Bitcoin. These funds can simultaneously provide traders with a more efficient way to gain exposure to this cryptocurrency.

On the downside, futures BTC ETFs carry the risk of rollover and contract expiry. Since futures contracts have expiration dates, the ETF must sell the expiring contract and buy a new one, as each contract approaches its expiration date. Known as rollover, this process may lead to potential tracking errors and increased costs.

To simplify the similarities and differences between spot and futures BTC ETFs, here’s a graphic overview:&

Brief overview of the current crypto ETF market in the U.S.

More than a decade since the first filing, all 11 applications for U.S. spot Bitcoin ETFs were simultaneously approved by the U.S. Securities and Exchange Commission (SEC) in January 2024. In the week preceding the approval, ETF issuers were engaged in a “fee war” to attract the first clients.&

The SEC granted “accelerated approval,” which meant that these ETFs could become available for trading the following business day. ETF issuers and respective exchanges were eager to open, so spot Bitcoin ETFs began trading on January 11, 2024.&

Currently, both BTC and ETH futures ETFs are already on the market. However, on May 23, 2024, the SEC officially approved eight spot ETH ETFs to be listed on their respective exchanges. But, as often happens in financial markets, bureaucracy caused a snag.

The regulator greenlighted only 19b-4 filings, while applicants also need S-1 registration statements to be approved to begin ETF trading. Therefore, ETFs are approved (19b-4), but also delayed (S-1). Additionally, some crypto enthusiasts point out that there are still chances of potential denial of ETFs.&

U.S. spot Bitcoin ETFs account for over 85% of the entire accumulated value (1 million BTC) among global spot BTC ETFs. Additionally, spot BTC ETFs have by far the largest amount of assets under management among crypto ETFs.&

As of this writing, more than 600 firms have revealed some form of involvement in U.S. spot Bitcoin ETFs. However, retail investors currently account for most inflows to them.

Final thoughts

Uncharted territory. This term would be the most adequate to describe the current crypto market situation, bolstered by the unpredictability of the regulatory landscape. The conversation thus far has primarily been focused on spot ETFs, but, in theory, their approval could potentially result in increased stability and liquidity, including mainstream adoption to the cryptocurrency market.&

As always, CEX.IO will keep a watchful eye on the crypto tides, and ensure you have the latest and most accurate information to make the most informed decisions.&

May the markets trend in your favor (and may the weather be favorable for your harvest)!

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Market spotlight: Mt.Gox made its first BTC transfer in over five years

Established crypto enthusiasts might know that there is a “boogeyman” in Bitcoin markets called Mt.Gox. Once every few months, the ghost of this defunct crypto exchange appears with news related to “further compensation,” sometimes frightening market participants about “increased selling pressure potential.” Shortly afterward, the ghost of Mt.Gox retreats behind the curtain, typically making only minor progress regarding actual Bitcoin compensation.

However, it seems that this 10-year story may be gradually ending. On May 28, Arkham reported that Mt.Gox initiated a transaction of $9.62 billion worth of BTC from dozens of wallets. This marked the first movement of these funds in more than five years.

The same day, Mt.Gox’s trustee published a statement, confirming that the transfer was in preparation of Bitcoin repayments to creditors. Former Mt.Gox CEO Mark Karpeles also clarified that the movement of funds was part of the distribution process. Mt. Gox’s final repayment deadline is October 31, 2024.

Could Mt.Gox repayments cause a sell-off?

We covered the situation regarding Mt.Gox’s Bitcoin repayments more than a year ago, on this very blog. At that time, we pointed out that Mt.Gox collapsed when BTC’s price was around $800, meaning all creditors will be in profit, and may thus have an incentive to sell their digital assets.

However, it is unlikely that all creditors will jump off crypto, because:

• Mt.Gox users are early Bitcoin supporters, and this group typically focuses on much more than just BTC’s price performance.
• Many creditors opted to receive repayments in digital assets, even while they had an opportunity to obtain cash faster.

Since we wrote last year’s post about events surrounding Mt.Gox, Bitcoin’s price has more than tripled, meaning that creditors have more value on their claims. Love of crypto and the variables above aside, some still may be more encouraged to sell.

Even so, Mt.Gox’s Bitcoin repayments remain unlikely to move the BTC price significantly. Bitcoin now has U.S. spot exchange-traded funds (ETFs) behind its back, which continue to show massive demand, accumulating $143 million worth of BTC every trading day on average. Over 1 million BTC has been absorbed throughout this year so far, and Bitcoin’s price is still near its all-time high. In addition, Mt.Gox’s 142,000 BTC may not reach open markets at the same time, minimizing the impact of the distribution event.&

Instead of Bitcoin, Mt.Gox’s compensations could have a larger effect on Bitcoin Cash. It has less liquidity and lower adoption, and Mt.Gox creditors essentially received it as “a free bonus,” which may create less attachment. But again, depending on the distribution process, any selling pressure could be mitigated almost entirely.&

In any case, it’s nice to see progress, and Mt.Gox creditors could soon receive their Bitcoin payouts after 10 years of waiting. Perhaps, this particular boogeyman will finally retire.

Other noteworthy market events

First crypto ETPs began trading on the London Stock Exchange

On May 22, asset managers WisdomTree and 21Shares announced that the U.K. Financial Conduct Authority (FCA) greenlighted the listing of their Bitcoin and Ethereum exchange-traded products (ETPs) on the London Stock Exchange (LSE). On May 28, these products began trading on the exchange, making history as the first crypto ETPs in the country.&

Of course, there’s a catch. Only professional and institutional investors can join the fun. In 2021, the local regulator banned retail customers from trading crypto derivatives.

Solana validators will start receiving full priority fees

Solana validators voted in favor of a proposal to receive the whole pie of transaction priority fees, instead of a 50/50 split between burning fees and rewarding validators.

Priority fees are optional, and allow users to increase the chances of their transactions getting processed faster, ensuring they jump to the front of the execution queue. This change is designed to motivate validators to focus on network security and efficiency, rather than dabbling in arbitrage strategies that involve reordering or excluding transactions.

However, this new proposal might have a downside: SOL could become more inflationary. According to Laine, a Solana staking validator, this change could inflate the effective rate to around 9.9% annually, from the current 5.3%.&

However, this is not a complete “SOL goes brrr” situation, as a 50% burn of the base fees remains intact.

Telegram unveiled the launch of its new internal cryptocurrency

According to a message sent to developers, Telegram is set to launch its own internal digital currency, called Stars, on June 12, 2024. This new asset will be used to pay for digital goods and services in bots and mini-applications. This initiative came after Apple notified Telegram of violations to its policy, which prohibits accepting certain payments from customers.&

Users will be able to purchase Stars in the App Store or Google Play, and then use them for digital purchases in Telegram. Meanwhile, developers will be able to withdraw funds in new currency using TON.

However, the reaction from bot owners was less than stellar. They pointed out that the App Store and Google Play charge a 30% commission within their internal purchasing mechanisms, making purchases of digital goods and services less attractive for Telegram users.

One sentence news

• JPMorgan does not expect the U.S. Securities and Exchange Commission (SEC) to approve more spot crypto ETFs, while Standard Chartered predicts that Solana and XRP might be the next candidates for approval.
• MetaMask plans to integrate Bitcoin support within the next month.
• Floki developers introduced a Telegram-based trading bot tool that allows FLOKI holders to trade any token on the BNB Chain network.
• Hong Kong’s regulator is considering allowing staking for spot Ether ETFs.
• Kabosu, the dog who inspired the DOGE meme, passed away.
• Uniswap Foundation disclosed its assets ahead of the fee mechanism vote.

How is Bitcoin doing?

After the approval of Ether ETFs by the SEC last week, crypto markets had a hangover, with multiple top digital assets, including Bitcoin, experiencing a one-digit price decrease. News about Mt.Gox’s transfer also contributed to a BTC price drop of 3% in a week.

Bitcoin is arguably consolidating inside a symmetrical triangle, indicating a period of uncertainty, or a pause in the established trend. Some analysts also claim that this could be a bullish flag rather than a symmetrical triangle, suggesting a further continuation of the uptrend.

U.S. spot Bitcoin ETFs currently show over 10 days of consecutive net inflows, which could support the bullish view. In addition, Bitcoin futures interest reached a 16-month high, while futures premiums are slightly above the neutral range. This hints at moderate optimism within the market.

Other notable price performances

• Notcoin (NOT) re-entered the top 100 digital assets by market cap, showing a more than 130% price increase. Potential catalysts behind this move are considered to be the opportunity of NOT staking, the introduction of new missions (some are associated with other games), and the general tap-to-earn hype within the industry.
• CHZ saw a 20% price surge, amid the anticipation of the UEFA football championship.
• Memecoins temporarily reclaimed their status as one of the best-performing sectors, with BONK, FLOKI, and WIF showing over 15% price increases. But they then lost most of their weekly gains.
• TIA enjoyed increased social activity, which arguably helped the asset register an almost 20% weekly price jump.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Market spotlight: Ether gained Solana’s market cap in a day

On May 21, Ether’s price enjoyed an almost 20% single-day price increase, boosting the asset’s market cap by $80 billion, which is roughly equivalent to Solana’s total market value. This marked the largest one-day market cap increase in Ethereum’s history, and likely happened because of exchange-traded funds (ETFs).

Source: BoldLeonidas

Not so long ago, there was consensus across the crypto community that U.S. spot Ether ETFs were unlikely to be approved in May 2024, a decision deadline for certain applications. Some prediction markets displayed as little as a 6% chance of a potential approval this month.

However, on May 20, a few days before the said deadline, market anticipations made a 180. Bloomberg analysts Eric Balchunas and James Seyffart reported “chatter” that the U.S. Securities and Exchange Commission (SEC) was asking applicants to accelerate their 19b-4 filings, which are required for ETF listings.&

As a result, analysts increased their odds of a potential spot Ether ETF approval to 75% (from the previous 25%). Shortly afterward, the Wall Street Journal and CoinDesk confirmed this statement, citing their own sources.&

In fact, a lot of new details emerged in a day:

• CBOE published amended 19b-4 filings in response to feedback from regulators. The applicants include Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, and Franklin Templeton.&
• Fidelity and Grayscale removed staking rewards from their filings, suggesting that spot Ether ETF investors might not be eligible for them. Staking removal was considered one of the key elements to achieve a potential approval.
• Some spot Ether ETFs were listed on the Depository Trust and Clearing Corporation (DTCC) website. For instance, this move was one of the final steps before the spot Bitcoin ETF approval in January 2024.

And then, on May 23, the SEC officially approved eight spot Ether ETFs to be listed on their respective exchanges. However, there is some bureaucratic nuance.

The regulator only greenlighted 19b-4 filings, while applicants also need approved S-1 registration statements to begin ETF trading. So Ether ETFs turned into Schrödinger’s cat, where ETFs are approved (19b-4) and delayed (S-1) at the same time. Furthermore, some crypto enthusiasts point out that there are still chances for ETFs to be potentially denied. As a result, Ether and Bitcoin prices showed some turbulence in a narrow range following this news.

According to James Seyffart, a potential S-1 approval could take weeks, or even months, but the analyst remains optimistic about a positive outcome. If the S-1 filings are approved, Seyffart anticipates that spot Ether ETFs could attract 20% of the flows seen by spot Bitcoin ETFs. In contrast, Balchunas projects a more modest range of 10-15%.

However, from a historical standpoint, such estimates could be viewed as too optimistic. In Hong Kong, where both spot Bitcoin and Ether ETFs recently began trading, Ether products rapidly moved from 23% to only 7% of the combined volume. In addition, CoinShares regularly reports how Bitcoin accounts for over 90% of all weekly flows in digital asset funds (even before the launch of U.S. spot Bitcoin ETFs).

So even if the Ether ETF drama concludes with a positive outcome, there is still a chance that the initial demand could disappoint some crypto enthusiasts. Moreover, Grayscale has almost $11 billion in its ETH trust, which could mirror the story of GBTC outflows within the first months of ETF trading.

Although Ether ETF approval could pave the way for other digital assets to obtain similar products (there have been claims about Solana already), it might have a smaller impact on crypto markets than the decision to list BTC ETFs in January 2024.

Other noteworthy market events

CME may introduce Bitcoin spot trading

According to the Financial Times, the Chicago Mercantile Exchange (CME) Group is planning to launch Bitcoin spot trading alongside its current futures offerings. The Chicago-based exchange, which is leading in open interest for BTC futures, has reportedly been in talks with traders interested in a regulated marketplace for Bitcoin transactions.

If the CME adds this service, it would provide another avenue for Wall Street players to gain greater access to digital assets, complementing spot Bitcoin ETFs. Notably, Coinbase shares fell nearly 8% in a single day following this announcement.

MakerDAO plans to launch a “fully decentralized” stablecoin

MakerDAO founder Rune Christensen announced plans to introduce a new stablecoin called PureDai, aimed at providing a fully decentralized alternative to Dai. The launch is anticipated to take place in a few years.&

Key features of PureDai include:

• Deployment on the Ethereum network, with layer 2 (L2) protocols and cross-chain bridges enabling its transport to other blockchains.
• The exclusive use of decentralized assets, such as Ethereum (ETH) and Lido-staked Ether (stETH), as collateral.
• Decentralized oracles for price feeds to prevent manipulation.
• A free-floating peg, meaning it may not be directly tied to the U.S. dollar.
• It will be released alongside another stablecoin, NewStable, which MakerDAO plans to introduce soon.
• PureDai will be launched in its final, immutable form, functioning independently from MakerDAO without the need for future upgrades or changes.
• Dai holders will be able to upgrade to PureDai.

Notcoin lost 60% of its value after its debut

On May 16, TON-based Notcoin (NOT) was initially listed on multiple crypto exchanges, achieving over $1 billion in trading volume within a single day. The asset briefly entered the top 100 digital assets by market cap, marking it as the biggest gaming token release of 2024 so far.

Notcoin is linked to a free-to-play, Telegram-based game where users earn tokens by launching a Telegram bot and tapping on the screen. Its straightforward design has attracted 35 million total users, and peaked at over six million daily active users. However, once NOT became available on open markets, it saw a 60% drop in value, as some users wanted to monetize their taps.

As the next potential steps of Notcoin development, the project’s co-founder highlighted the burning of unclaimed NOT tokens, offering its infrastructure to third-party developers, and the launch of new games. The first game developed on the Notcoin platform is set to release in the coming weeks.

Fun fact: on May 17, 552,586 Notcoin users donated $6.8 million worth of NOT to Telegram founder Pavel Durov as “tokens of appreciation.” Durov stated he would hold these tokens until their value reaches $680 million. This move looks like an inverted Shiba Inu story, which happened the same day three years ago.

One sentence news

• Gemini Earn is set to start distributing held customer funds by the end of this month, following the court’s approval of Genesis’ bankruptcy.
• Uniswap Labs and Across Protocol introduced ERC-7683, a new Ethereum token standard that aims to simplify cross-chain transactions and interoperability.
• Web3 platform Gala Games suffered a $200 million exploit, which temporarily plummeted its GALA token by nearly 15%.
• U.S. Senators passed a resolution nullifying the SEC’s crypto rule, which requires banks to keep customers’ digital assets on their balance sheets, alongside capital maintained against them.
• IOTA announced the launch of its “IOTA 2.0” testnet, which will enable the network’s migration from proof of work (PoW) to proof of stake (PoS).
• Worldcoin migrated to a new open-source system to improve the protection of sensitive information, and, in doing so, reportedly deleted older iris codes it had previously collected.

How is Bitcoin doing?

The Ether ETF speculation brought increased optimism across the entire crypto market, boosting Bitcoin’s price performance as well. The BTC price temporarily climbed above $71,000, before consolidating within a narrow range. Another catalyst, which arguably reestablished BTC’s rally, is a renewed interest in U.S. spot Bitcoin ETFs. Last week, they registered the largest weekly inflow since March, and currently maintain net inflows throughout this week.&

The falling wedge pattern, which we covered last week, has almost worked out, as its price target remains near $74,000, and/or the asset’s all-time high. According to CryptoQuant, the amount of Bitcoin stored on crypto exchanges reached a seven-year low, fueling speculation about a potential supply shock. However, if bears take the initiative, the crossover point of 20-day EMA and 50-day SMA could act as a potential support level.

Other notable price performances

• Ethereum-related tokens, including UNI, ARB, and LDO, dominated the top gainers club.
• PEPE continued to update its all-time high, registering a more than 35% jump.
• LINK surged by almost 20%, following a report that the world’s largest settlement system completed a data tokenization pilot program for U.S. banks with Chainlink’s technology.
• AI tokens, including NEAR and GRT, experienced one-digit gains ahead of Nvidia’s earnings report.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Market spotlight: GameStop outperformed Bitcoin’s yearly gains in a single day

Let’s time travel back to January 2021: expanded COVID lockdowns, masks, and GameStop’s short squeeze. The latter was a classic David vs. Goliath story, where Redditors fought against hedge funds using the Robinhood app, and the Buy button near the GME ticker. Despite obstacles created since that heady time, including blocking access to said button, GameStop still managed to surge by over 1,000% in a month.

As with any compelling story, there’s a main character. Keith Gill, also known as Roaring Kitty or DFV, is widely considered the one who sparked the 2021 rally. There’s even a movie about it. But just a few months after the initial GameStop frenzy, Gill stopped posting on social media, and the GME stock price entered a prolonged downtrend. 

On May 13, 2024, after three years of silence, Roaring Kitty made a post on X (formerly Twitter). The post didn’t make a fundamental or technical case for buying GameStop’s stock. In fact, the tweet didn’t even reference GameStop, or include words at all. Nevertheless, the GME stock more than doubled in price within a few days of this post, and its trading was stopped multiple times due to significant volatility. 

Furthermore, the wave spread to other meme stocks, even touching the crypto market in the form of memecoins: 

• DOGE, SHIB, FLOKI, WIF, and BOME temporarily joined the leaders in terms of trading volume.
• The PEPE price hit a new all-time high, becoming the largest weekly gainer among the top 100 digital assets.
• The Solana-based GME memecoin surged by over 2,000% in a few days, while the token named KITTY skyrocketed by 6,000%.

Notably, when GameStop’s stock rallied in 2021, memecoins also experienced a corresponding jump. Some believe that this event laid the groundwork for memecoin mania throughout that year. And considering that short squeeze veterans prefer Robinhood as the platform of choice for performing their operations, the recent Uniswap integration of Robinhood Connect could open a new pathway for onboarding meme stock bandwagoners to the crypto market. 

However, speaking strictly in Captain Obvious terms, 2021 is not 2024. Back in January 2021, the entire GameStop phenomenon was a novelty, leaving many uncertain about the possibility of an epic short squeeze to come. And although it did happen, GameStop’s rally didn’t last long. Over the last three years, GME returned to pre-hype levels (before the recent new surge).&

Moreover, this entire 2021 arc of the story could be the convergence of (pandemic-induced) boredom, social media influence, and novelty. Is the fresh surge a one-time recurrence, or a tricky new element of financial markets? GameStop’s performance will tell.

Of course, mainstream media outlets claim the hype is already fading, as GameStop’s stock price plunged 18% after the initial jump. However, this kind of correction after a more than 100% price increase seems quite reasonable, as some may question (again) the sustainability of GameStop’s upward trajectory.

When it comes to memecoins, they don’t need a particular event to kick off a surge. Like memes, they may steal the spotlight briefly, but frequently. As a result, when this latest GameStop rally eventually cools, traders will most likely find another catalyst to buy and create new memecoins, or might just use boredom as a motivator.

Other noteworthy market events

FTX wants to distribute 118% of returned funds to creditors, but there’s a catch

Bankrupt crypto exchange FTX filed a new recovery plan, stating that 98% of its creditors will receive at least 118% of their claims back in cash. The remaining creditors will receive 100% of allowed claims. Full recovery plus interest is considered a rare outcome in U.S. bankruptcy proceedings, so some view this as a victory.

Here is a super oversimplified explanation of how this agreement was proposed:

• When FTX collapsed in November 2022, its customers had around $8 billion in assets on the platform. Meanwhile, the company’s assets consisted mainly of tokens (with some exclusively associated with FTX), and selling them at the time wouldn’t have been enough to cover the exchange’s liabilities.
• The company filed for bankruptcy, and this stopped users from receiving any money. Essentially, FTX claims turned into long-term loans, as bankruptcy is not typically a fast process.
• Over the next two years, new leadership began managing the FTX portfolio, gradually assessing and/or selling different entities, including real estate, businesses, venture capital, and some crypto assets.
• At the same time, crypto experienced a massive rally over the period: Bitcoin updated its all-time high, while Solana (which plays a notable role in the FTX portfolio) surged by over 10 times since the exchange’s bankruptcy filing.
• FTX’s plan proposes reimbursing creditors for the value of their assets at the time of its bankruptcy — when crypto prices were near the cycle’s bottom. As a result, the company takes advantage of price appreciation, offering creditors receipt of their funds back in cash, although some prefer in-kind repayments. 

So in a sense, bankruptcy helped FTX HODL crypto long enough to achieve “full compensation with interest.” FTX forecasts that the total value of repayment will be between $14.5 and $16.3 billion. This plan could become effective within 60 days, after its potential approval by a Delaware bankruptcy court.

However, not all FTX creditors are happy. Sunil Kavuri, a representative of the largest FTX creditor group, recommended voting against this compensation plan, arguing that the debtors owe FTX customers up to $10 billion more in value, due to price appreciation of associated digital assets.

Notably, following the new plan announcement, FTX claims witnessed a remarkable surge, trading between 101%, and 112% of their face value. For comparison, in the immediate aftermath of the FTX bankruptcy, many creditor claims traded for as little as three cents on the dollar, because people were unsure they would ever receive any money at all. 

EigenLayer performed a controversial airdrop of its EIGEN token

On May 11, EigenLayer, a restaking platform with over $14 billion in total value locked (TVL), opened the first airdrop claims for its native EIGEN token. The project announced that over 113 million EIGEN tokens were distributed within “season one,” with 8.9 million staked/delegated in hours.

After claiming, EigenLayer users will be able to stake and delegate their tokens to an EigenDA operator. It will initially function as the only autonomous validator set (AVS), with plans for expansion to additional AVSs in the near future.

However, the initial rollout failed to meet the expectations of many users, resulting in widespread criticism.

• According to tokenomics, 45% of the total EIGEN supply will go to the community, with a third of this amount allocated through a series of airdrops. However, the monthly unlocking rate for airdrop participants will only be 5%, causing a backlash in the community. To address this, EigenLayer added 28 million more EIGEN tokens to the airdrop pool.
• The airdrop excluded users from 30 countries, including the U.S., Canada, and China. In addition, the project warned about potential bans for using VPN services. EigenLayer cited regulatory concerns, but some users still considered this decision unfair.
• Unlike most airdrops, where tokens can be moved rapidly after their claim, all airdropped EIGEN tokens will remain non-transferable outside the platform until September 30, 2024.

Vitalik Buterin proposed EIPs with new gas and transaction types

On May 7, Ethereum co-founder Vitalik Buterin proposed Ethereum Improvement Proposal (EIP) 7702. It suggests a new transaction type that allows regular Ethereum accounts to turn into smart contract ones for a single transaction, with their original state restored afterward.

Fun fact: EIP-7702 serves as an alternative to EIP-3074, and Buterin came up with this new proposal in 22 minutes, just before a developer call to discuss EIP-3074. Like EIP-3074, the new proposal also features batches (combining several transactions) and fee sponsorship (letting someone else pay the transaction fee).

A week after this, Vitalik Buterin introduced another proposal — EIP-7706. It suggests a new gas category for transaction calldata. By introducing this feature, the Ethereum network would assign specific costs to the data transmitted in transactions, separate from the costs associated with executing contract code or storing data.

One sentence news

• The European Securities and Markets Authority (ESMA) is exploring the possibility of integrating cryptocurrencies into the €12 trillion UCITS market.
• Lightning Labs announced successful tests of Taproot Assets, moving a step closer to enabling stablecoins and other tokenized assets within the Bitcoin blockchain.
• Optimism’s Superchain obtained the support of layer 3 (L3) networks.
• LocalMonero, a peer-to-peer crypto exchange for the privacy-focused cryptocurrency Monero, announced winding down its operations.
• Japanese investment firm Metaplanet adopted Bitcoin as a reserve asset.
• BitMEX launched options trading, aiming to capture market share from Deribit.

How is Bitcoin doing?&

Over the last week, Bitcoin was predominantly registering lower highs, experiencing increased volume during price drops. However, on May 15, after the release of softer U.S. inflation data, the BTC price bounced off above $66,000. Some analysts believe that this could drive Bitcoin to all-time high levels. This thinking corresponds to the perspective that Bitcoin might have broken the falling wedge pattern, which has been in place for the last two months. The pattern’s price target is near $74,000.

At the same time, Kaiko reported that Bitcoin miners could be under pressure to increase BTC selling, as Runes hype cooled. In addition, current on-chain indicators suggest that Bitcoin is experiencing a phase of consolidation and potential correction, according to Glassnode. 

Other notable price performances

• TON temporarily saw a 20% weekly price increase, but then lost half its gains. TON’s rally was arguably associated with the Notcoin airdrop and Pantera Capital’s undisclosed investment in the TON ecosystem
• RNDR experienced a double-digit rally following Apple’s brief mention of Render-powered 3D design software, Octane.
• SOL moved by over 13% in a week, amid increased TVL and memecoin trading activity.
• FTM, IMX, and GRT joined top weekly gainers, after one-day price jumps.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

In many ways, the previous several weeks have centered on refinement, a strengthening of core values, and diligent, focused effort. With the reveal of CEX.IO Card now fully public, and the next installment of the Market Research Team’s COMPASS report series set for an imminent release, results are already underway. Despite executing on multiple fronts, and ensuring all our ducks remain firmly planted in a row, we’ve continued to enjoy positive industry recognition, and offer key contributions to pressing conversations. Afterall, there’s no sense in resting on one’s laurels when thought-leadership, like any garden, demands regular attention.

Last month kicked off with Business Insider once again listing CEX.IO among the “Best Crypto Exchanges” in their monthly round-up. In addition to maintaining our 4.45/5 rating, the outlet acknowledged our comprehensive menu of listings as perfect for curious newcomers and seasoned aficionados alike. For those who follow our official social channels, the steady drumbeat of new token arrivals should come as no surprise. And in truth, we’re just getting started.

Our Head of Communications, Becky Sarwate, followed the news from Business Insider by having comments published in The Coin Bureau that reflected on current trends in the digital economy. The ebb and flow of crypto adoption, regulation, and the many applications of so-called “generative AI” dominated the conversation, with Becky offering measured takes on their big picture impacts. Finding the most prudent course forward can be daunting amid overlapping factors, but informed analysis often provides much needed clarity.

To a similar end, CEX.IO’s Global MLRO and Head of Financial Crime, Mark Taylor was featured by The Associated Press ahead of his appearance at a panel organized by C5. With over 30 years of law enforcement experience, Mark joined fellow crypto fraud prevention specialists to discuss ways the space is responding to digital asset theft, and how exchanges can work to reconcile affected parties. His comments to The AP established critical framing for his appearance at the event, and worked to raise awareness about the evolving fight against fraud in the crypto space.

Explore our April media highlights via the links below.

Business Insider: Best Cryptocurrency Exchanges of April 2024

The company received another piece of repeat recognition from Business Insider, which included CEX.IO among its monthly round-up of “Best” exchanges. For this edition, the outlet revamped its customary rating system in favor of superlatives that center noteworthy services, and highlighted our “Cryptocurrency Selection” as a defining feature.

Read the full review here.

The Coin Bureau: Future of Crypto: Analyzing Adoption, Regulation and AI

On April 2, CEX.IO’s Head of Communications, Becky Sarwate, had comments published by Coin Bureau where she joined fellow leaders to reflect on the current state of the crypto industry. With a number of interlocking forces at play, Becky detangled their many nuances without losing sight of the big picture. Given the ecosystem is always undergoing developments around interoperability, adoption, and digital asset regulation, Becky reminded readers of the benefits to pausing, and taking a look around.

“However, Sarwate argues that such a development would primarily resonate with active crypto users, doing little to engage the general public. Instead, she suggests exploring how blockchain technologies can transform traditional sectors as a means to generate broader interest. Not only could this help non-engaged participants become crypto-curious, but additional vectors have the potential to rebrand crypto as more than a speculative instrument.”

AP News: CEX.IO’s Mark Taylor, Global Head of Financial Crime to Join Panel Organized by C5

On April 23, CEX.IO’s Global MLRO and Head of Financial Crime, Mark Taylor, was featured by AP News ahead of his panel appearance at Crypto and Digital Asset Fraud & Recovery. The panel, “The Fight Back Begins – Private and Public Sector Law Enforcement Team Up to Take the Fight to the Fraudsters and Recover Assets for Victims,” took place on Friday, 26 April in London, where Mark spoke alongside fellow leaders at the intersection of crypto and law enforcement.

“‘For too long, bad actors have felt empowered to exploit undefined parameters in the crypto ecosystem, often at the disadvantage of unsuspecting participants,’ Taylor said. ‘Establishing a unified front against on-chain fraud that centers on wealth recovery is a bold step toward leveling the playing field, and creating a safer transacting environment for those seeking emerging opportunities in the digital economy.’”

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Market spotlight: A crypto sell-off ahead of Bitcoin halving

Crypto markets currently resemble tomatoes in a blender. Most digital assets in the top 100 by market cap saw double-digit price drops, including BTC and ETH. As a result, the total crypto market cap lost more than $300 billion in a week, according to Coinmarketcap.&

Notably, Bitcoin’s dominance hit a three-year high, indicating that altcoins were the largest victims of this crypto market sell-off.

Here are a few catalysts that arguably turned digital assets into a crimson sea:

• Tensions in the Middle East — Over the weekend, Iran launched a massive air attack on Israel in retaliation to the bombing of its consulate in Damascus on April 1, and crypto markets were among the first to react. Bitcoin lost around 7% in a few hours, while numerous altcoins dropped by 10% or more. Stablecoins and gold-backed tokens temporarily witnessed increased trading activity following the event.
• Risk aversion on TradFi markets — A fear of a new potential international conflict, higher-than-expected inflation in the U.S., and a possible delay of The Federal Reserve’s interest rate cuts are all raising investors’ concerns. These developments could put risky assets under increased pressure.
• Bitcoin halving — Bitcoin historically experienced downward movements ahead of its halving, and this move could be a part of a so-called Bitcoin halving correction.
• U.S. spot Bitcoin ETFs — Over the last four trading sessions, they experienced net outflows. Most U.S. spot Bitcoin ETFs temporarily showed zero flows, potentially indicating decreased interest among market participants. GBTC didn’t stop experiencing outflows, although Grayscale’s CEO claimed that they might be stabilizing.
• Liquidations — This is considered an aggravating factor, as cascade liquidations typically occur after increased volatility. According to Coinglass, over $2 billion in liquidations of long positions happened over the last week.&

As a result, this fueled increased bearish sentiments within the community, with some analysts claiming that a larger correction could be on the horizon. In addition, the recent BTC price action indicates a theoretical formation of a triple-top pattern, with $50,000 as a potential target.&

However, some market observers remain optimistic, as Bitcoin historically experienced a price rally within 12-18 months after past halving events. Furthermore, the market experiencing a price consolidation following Bitcoin’s rally to a new all-time high could be considered a healthy development.&

Lower timeframes also hint at a possible price rebound, as the RSI and Awesome Oscillators (AO) formed a bullish divergence (cyan lines).&

Other noteworthy market events

Uniswap received Wells notice from the SEC

Another potential catalyst that impacted a sell-off in crypto markets could be a legal action against the largest decentralized exchange (DEX), Uniswap.

The U.S. Securities and Exchange Commission (SEC) sent Uniswap a Wells notice, signaling a potential enforcement action. In response, Uniswap Labs’ founder Hayden Adams said he is “not surprised” by this development, and is “ready to fight.”

Certain members of the crypto community treated the SEC’s claims against Uniswap as an attack on the broader DeFi ecosystem, and echoed solidarity with Uniswap, emphasizing industry unity in the face of regulatory challenges. Marvin Ammori, Uniswap’s Chief Legal Officer, criticized the SEC’s move as an “abuse of power,” highlighting perceived weaknesses in the agency’s arguments against the platform.

Following this event, UNI’s valuation experienced a more than 30% weekly price drop. While some crypto enthusiasts are hopeful this case could help define DeFi’s status in the U.S., others think the SEC might not stop on Uniswap, and could move further into the DeFi space. This perspective might be a potential driver of double-digit price drops across other DeFi tokens, especially DEX ones.

Hong Kong approved spot Bitcoin and Ethereum ETFs

Last week, multiple Chinese asset managers indicated their interest in providing spot Bitcoin ETFs through subsidiaries in Hong Kong. It seems now they can do so.

On April 12, Bloomberg reported the imminent approval of spot crypto ETFs in Hong Kong. Three days later, Hong Kong’s Securities and Futures Commission (SFC) approved applications from several Chinese asset managers to introduce spot Bitcoin and Ether ETFs. This event temporarily caused a slight price recovery in Bitcoin and Ether markets.

Notably, Hong Kong’s crypto ETFs will support in-kind creations, allowing the issuance of new ETF shares using BTC and ETH, in contrast to U.S. spot Bitcoin ETFs, which presently permit only cash creations. ETF analyst Rebecca Sin suggested that this aspect could spark increased inflows and trading volume for associated products.

However, Bloomberg ETF analyst Eric Balchunas tempered some of the excitement, highlighting that the Hong Kong ETF market is relatively small and inaccessible to Chinese locals, at least officially. He also pointed out that these ETFs could potentially carry 1-2% fees, and experience wide spreads due to lower liquidity. Consequently, he anticipates that Hong Kong ETFs may struggle to attract more than $500 million.

According to OSL Digital Securities, Hong Kong’s digital asset platform that acts as the sub-custodian for two ETF issuers, new products may be launched as early as this month.

MarginFi faced massive outflows amid CEO resignation

While many were anticipating Bitcoin’s halving, one of the largest Solana DeFi protocols, MarginFi, experienced its own type of halving — a 50% decrease of its total value locked (TVL) in a week.

On April 11, Edgar Pavlovsky announced his resignation as CEO of MarginFi, citing disagreements with the company’s practices as the primary reason for his departure. MarginFi moved quickly to reassure its users that the change in leadership would not disrupt the platform’s operations. However, this sudden exit triggered users to withdraw over $150 million from the platform in a day.

Pavlovsky’s resignation coincided closely with accusations leveled against MarginFi by SolBlaze, a Solana liquid staking protocol. SolBlaze alleged that MarginFi had acted in bad faith by failing to distribute tokens to users as outlined in SolBlaze’s depositor reward guidelines. Nevertheless, SolBlaze later confirmed that it had resolved communication issues with the MarginFi team.

Ethereum’s next upgrade could allow private key recovery

Losing private keys is like Voldemort in the world of crypto — something one doesn’t want to mention, or encounter. This could be one of the largest fears that stops many crypto enthusiasts from choosing a self-custodial wallet. But Ethereum contributors plan to change this situation.

Ethereum developer Tim Beiko confirmed that EIP-3074 will be integrated into the upcoming Pectra upgrade, scheduled to take place in late-2024 or early-2025. This enhancement will introduce new functionalities for wallets, including a mechanism for recovering lost private keys.

To utilize this recovery tool, users must initially transfer ownership of their assets to an invoker contract via a digital signature. This contract will then execute future transactions and function calls on the user’s behalf. While ownership is delegated, the message within the digital signature will enable the user to reclaim their assets if they lose or forget their seed phrase.

Another feature introduced in EIP-3074 is that users wouldn’t need to keep ETH in their wallets to send transactions, as the entity behind the invoker contract can pay for transactions “upfront.”

DeFi developer 0xngmi said that the main downside of this EIP is the ability “to fully drain an address (all tokens, all NFTs, all DeFi positions) with just one bad signature.”

One sentence news

• Solana developers rolled out the first batch of updates to fix issues related to network congestion, but the amount of failed transactions currently remains relatively high.
• Chainlink introduced Transporter, a bridging app designed to transfer tokens and messages across different blockchains by utilizing its cross-chain interoperability protocol (CCIP).
• Crypto exchange OKX announced the public mainnet launch of its Ethereum-based layer 2 (L2) scaling network.
• Coinbase and Google Cloud joined EigenLayer as operators after its mainnet launch.
• AI protocols SingularityNet, Fetch.ai, and Ocean Protocol gained community approval to merge their tokens, and create the Artificial Superintelligence Alliance.
• Stablecoin issuer Circle enabled USDC transfers for BlackRock’s first tokenized fund.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Gaining access to trading services

As preliminary steps before utilizing our award-winning ecosystem, new users are required to create an account and get verified. CEX.IO is known for its commitment to regulatory compliance, backed by over 30 licenses obtained across the U.S. As a result, customers from almost every U.S. state can join CEX.IO and explore its services with peace of mind.

Once verified, users will be able to access services within the CEX.IO ecosystem. To start trading, customers need to fund their accounts by purchasing or transferring digital assets.&

CEX.IO enables U.S. clients to buy crypto through the Instant Buy service using Visa/Mastercard debit/credit cards, Google/Apple Pay, and PayPal. Alternatively, users can deposit any supported cryptocurrency with minimal effort to access trading opportunities.

After funding the account, customers can exchange crypto via the Convert service in the CEX.IO Wallet, and use the CEX.IO Spot Trading platform.

Keep in mind that, at the time of this writing, the trading experience for CEX.IO users from the U.S. is limited to crypto only, amid the evolving regulatory landscape in the region. This means U.S. clients can only exchange digital assets for other cryptocurrencies (e.g.: BTC/USDT, ETH/USDT, ADA/USDT).

Spot Trading

Our Spot Trading platform is built for crypto trading, as it offers dynamically deep liquidity and a wide array of trading tools, including:

• A variety of order types — CEX.IO Spot Trading features Market, Limit, and Stop Limit orders. Limit orders can also be customized using additional conditions such as Good Till Cancel (GTC), Good Till Date (GTD), and Immediate or Cancel (IOC). 

• Sub-accounts — Spot Trading users can create up to five (5) sub-accounts to diversify trading strategies and customize their approach. Learn about situations for which sub-accounts may come in handy here. 

• Multi-functional price charts — Adepts of technical analysis can utilize advanced charting features without leaving the trading terminal.&

• Trading fee balance — An opportunity to save on trading fees by participating in various CEX.IO activities. Read how the trading fee balance works in this guide.

At the time of this writing, U.S. customers can explore 20 markets on CEX.IO Spot Trading. We’re constantly working to expand the list of supported markets in the region.

How to place an order

Head over to the Trade page and proceed with these instructions:

• Utilize the market selector located on the left side of the trading terminal, to pick your desired market.
• Customize your order parameters, indicating whether you aim to purchase or sell an asset, along with specifying the order type, trade amount, and any other specifics based on the chosen order type.
• Click the confirmation button below the order details to move it to the order book, where the trade will be executed.

For more details on how to utilize the web terminal for crypto trading, check this article. CEX.IO App users can find a step-by-step guide on how to use Spot Trading here. 

What’s the difference between supported order types?

• Market order — When selected, the user essentially asks to buy/sell an asset at the best available price immediately. Learn how to place a market order with this guide.
• Limit order — This is the equivalent of saying, “Hey, I want to buy/sell an asset at this specific price or better.” The order will be executed once there is a match in the order book, which might not happen right away. Find detailed information about limit orders in this guide.
• Stop Limit order — It turns into a limit order, once a predetermined stop price is reached. More insights on stop limit orders can be found in this guide.

Get up to 200 USDT by starting trading on CEX.IO Spot Trading

New Spot Trading users can receive up to 200 USDT on their trading fee balance by making their first trade on the platform. For that, just click the Get my reward button on the promotion page, deposit funds, and execute the first order on Spot Trading. Eligible users will be rewarded for each of these actions separately.

Don’t miss out on this opportunity to enhance your trading journey — join Spot Trading today and claim your reward!

Convert service

If trading is not your thing, you can simplify the process of exchanging crypto by using the Convert service. Just select what assets you would like to swap, and one cryptocurrency will be instantly converted to another. With the Convert service, eligible participants have access to all exchange selections for supported assets, meaning they can perform anything-to-anything swaps.

In order to make an asset conversion with the Convert service via web browser, you need to:

1. Go to the Wallet page, and click the Convert button near the desired cryptocurrency.
2. Select a combination of assets you want to convert.
3. Click Convert to make an instant conversion.

For a detailed explanation of how to use this service via CEX.IO App, refer to this guide.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Market spotlight: Ethena’s TVL surpassed $2 billion

After the launch of its USDe “stablecoin” in February, Ethereum-based protocol Ethena experienced a massive rally, and was one of the top newsmakers:

• Ethena’s total value locked (TVL) increased by almost 10 times, surpassing $2 billion.
• USDe skyrocketed to become the fifth largest “stablecoin” by market cap (although the Ethena team prefers the term “synthetic dollar”)
• Ethena’s native token, ENA, has more than doubled in price, since its airdrop on April 2. ENA holders can also lock their tokens to receive a 50% rewards boost.
• MakerDao raised DAI’s debt ceiling to $1 billion, to allocate funds to the USDe and sUSDe markets.
• Ethena announced the integration of its platform with Binance, ByBit, OKX, and Bitget, empowering their users to lock USDe for a 20% reward boost.

Doubts about sustainability

According to Ethena’s website, the existing sUSDe annual percentage yield (APY) is 37.1%, which is a significant increase from the initial 27.6%. While seeing such an alluring yield opportunity, some crypto enthusiasts remain skeptical about Ethena’s sustainability. For instance, Andre Cronje, a DeFi architect who created Yearn.finance and Keep3rV1, shared his concerns about using perpetual contracts and yield-based collateral within Ethena’s framework.

Since the USDe launch, many have referred to Ethena and USDe as the next potential Terra and UST, which experienced a death spiral in 2022, and evaporated more than $60 billion in value in a few days. Furthermore, TardFiWhale, an on-chain investigator who predicted Terra’s collapse a few months before it happened, demanded $1 million to expose critical flaws in Ethena’s approach, highlighting the severity of the issues.

However, while Terra’s founder, Do Kwon, gained a reputation for disparaging the project’s critics, the Ethena team appears to be more transparent about its potential risks. On its website, Ethena disclosed threats associated with the protocol, which include but are not limited to, funding rates, custody, and liquidations. 

When addressing comparisons with Terra, Ethena’s founder, Guy Young, said that USDe’s APY is set by the market, not internally, referring to Anchor’s 20% for Terra’s UST. In addition, he stated that UST was essentially backed by LUNA token, while Ethena is “fully collateralized by Ethereum, Bitcoin, and corresponding hedges.” Despite this, Young confirmed that Ethena may show a much more modest performance in bear markets.

Conclusion

In general, Terra flashbacks remain strong within the crypto community, which is a good thing, as it matures the industry, and could help dodge unfavorable events in the future. UST had a market cap of $18 billion at its peak, and USDe’s current $2.3 billion might not look like a significant threat. But as Ethena grows, it raises risks of a potential contagion to the wider crypto market in the case of a negative scenario, since collateral might be used to preserve the peg of USDe.&

As for now, Ethena leaves more concerns than confidence, but it’s only a few months old. Perhaps, as the protocol survives more market events, this perspective could change. What remains clear is that focusing on the project’s yield may have significant consequences, and users must first get acquainted with the project’s risks before blindly jumping into it.

Other noteworthy market events

Solana continues facing troubles with transaction processing

While some Solana community members were mocking Ethereum supporters, the Solana network has been facing the highest transaction failure rate in its history.

According to a Dune dashboard, on March 4, over 75% of all “non-voting” Solana transactions failed. Many Solana users were vocal on social media about transaction issues within the ecosystem, but Helius CEO Mert Mumtaz claimed that the vast majority of these failed transactions were “bot spam.” He stated that 95% of failed transactions were initiated by trading bots, which “fail in arbitrage.” 

However, Mumtaz added that because of the volume of spam activity, increasing the commission wouldn’t help Solana users speed up transaction processing, and will most likely lead to a “waste of money.” The Solana community continues waiting for a fix, since the rate of failed transactions currently remains around 60%.

Solana CEO Anatoly Yakovenko vented his frustration on social media about addressing congestion bugs on the network. Solana developers said that a much-anticipated fix is scheduled to roll out around April 15. Consequently, various Solana-based projects postponed their launches.

In a move to accelerate transaction processing on Solana, validators also endorsed a proposal to reduce the latency of consensus “votes.”

Ripple plans to launch its own stablecoin

Ripple unveiled its strategy to introduce a stablecoin pegged to the U.S. dollar by the end of this year, aiming to challenge the dominance of Tether’s USDT and Circle’s USDC in the market.

Developers assure that Ripple’s stablecoin will be fully backed by U.S. dollar deposits, U.S. Treasuries, and cash equivalents held at U.S. banks.&

To build trust, Ripple intends to undergo third-party audits monthly, providing attestations to validate its reserve holdings. The stablecoin will be rolled out on both the XRP Ledger and the Ethereum blockchain, utilizing the ERC-20 token standard for enhanced compatibility and functionality.

Restaking platform EigenLayer launched on the Ethereum mainnet

On April 9, the restaking platform EigenLayer and its data availability layer, EigenDA, were launched on the Ethereum mainnet. According to EigenLayer’s blog post:

• Restakers can now delegate their entire stake to their preferred operator.
• Operators can opt in to run an actively validated service (AVS). 
• AVSs can enroll for the beta version of EigenDA.&

Notably, the mainnet launch didn’t include in-protocol payments for AVSs and slashing penalties.

According to DeFiLlama, EigenLayer maintains around $13.5 billion in total value locked (TVL), being the second-largest DeFi protocol in terms of TVL. 

One sentence news

• Multiple Chinese asset managers indicated their interest in providing spot Bitcoin exchange-traded funds (ETFs) through subsidiaries in Hong Kong.
• PayPal announced the launch of its international payments service Xoom, expanding the use of its PYUSD stablecoin.
• Japanese firm Metaplanet followed Microstrategy’s steps, purchasing $6.5 million worth of Bitcoin as a core treasury asset, and faced a 90% surge in its stock price in two days.
• Solana NFT marketplace Tensor launched TNSR, its native governance token.
• BlackRock added major U.S. banks, including Citi and Goldman Sachs, as participants of its spot Bitcoin ETF. 
• Blockchain-based social media protocol Friend.Tech saw a resurgence in activity and TVL in anticipation of the token launch.

Notable price performances

Ethereum has been slightly outperforming Bitcoin

The ETH price recently managed to outperform Bitcoin’s on a weekly basis, temporarily reaching $3,600. This helped the ETH/BTC pair bounce off its multi-year lows, but the market is currently retesting an established support line (white line).

The weekly timeframe provides mixed signals. The RSI formed a bullish divergence, suggesting that Ether may continue outperforming Bitcoin in the short term. In turn, the ETH/BTC market is on the verge of the death cross, hinting that Bitcoin might soon dominate in terms of price performance.&

If ETH/BTC sustains above the support line, it could try to explore the 0.06 level. If failed, the following targets for bears could be 0.046 and 0.038 levels.

TON surpassed Cardano by market cap

The TON price experienced a more than 35% weekly surge, helping Toncoin become the ninth-largest digital asset by market cap, surpassing Cardano (ADA). One of the catalysts could be the allocation of one million TON to reward participants who pass verification through palm scanning. 

Another driver could be rumors that Tether (USDT) might arrive on the TON network, as Telegram’s CEO Pavel Durov and Tether’s CEO Paolo Ardoino will share the stage at the Token2049 conference in Dubai. The event will take place on April 18-19.

The Volume Oscillator (VO) hints that the recent price jump was accompanied by decreased volume, while the RSI suggests a potential bullish divergence formation. As a result, the asset might try to retest the middle of the Bollinger channel on a daily chart, which currently acts as dynamic support.

AAVE price took advantage of the “fee switch” initiative

The AAVE price jumped by over 15% in a few days, reaching the $131 resistance area. This rally occurred amid discussions regarding the activation of a “fee switch.” 

In DeFi protocols, a “fee switch” refers to a feature or mechanism that would facilitate the distribution of fees collected from transactions or other activities to token holders. According to Marc Zeller, Aave Chan Initiative founder, there could be more details about a potential fee switch activation next week.

However, AAVE failed to sustain above $131, causing a price correction. The daily MACD suggests that the path of least resistance could be downward. But a daily chart hints at a potential formation of an ascending channel, indicating bulls might soon make a comeback.

UNI price dropped following SEC’s lawsuit

The UNI price lost almost 15% of its value in a day, after the U.S. Securities and Exchange Commission (SEC) sent Uniswap a Wells notice, a notification that the regulator is planning an enforcement action. Following this event, Uniswap Labs founder Hayden Adams said he is “not surprised” and “ready to fight.”

The asset price approached the oversold level on a daily timeframe, and reached the 0.786 Fibonacci point. The lower border of the Bollinger channel on a daily chart was broken, suggesting that the asset may soon experience a rebound to $10.70.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Market spotlight: Memecoins have recorded over 1,300% in returns so far in 2024

Memecoins have become one of the most influential narratives in the crypto industry:

• According to CoinGecko, memecoins have been the most profitable sector in the crypto industry in 2024 so far, outpacing the next closest industry segment by almost five times. Among the top 10 best-performing altcoins, three of them are less than a month old.
• Memecoins helped Solana flip Ethereum in terms of trading activity on decentralized exchanges. Solana’s blockchain actually faced transaction processing troubles due to the local memecoin frenzy.&
• Memecoins are considered one of the major drivers of increased user activity on Ethereum’s layer 2 (L2) network, Base.
• L1 and L2 networks, including Avalanche, Arbitrum, and BNB, explored creating memecoin funds to push network adoption.

Does all this mean the market entered an altcoin season? Most likely, no. Back in 2021, one crypto enthusiast described the path to the altseason in the following way.

According to this path, the memecoin frenzy is considered a part of the altcoin season. However, some indicators suggest that the crypto market could be still in phase 1, which is considered the longest:

• Bitcoin dominance remained relatively strong over the last six months, sustaining above 50%.
• Bitcoin has been predominantly outperforming Ethereum so far in 2024.
• Only a few other sectors showed better performance than Bitcoin in 2024, including memecoins, real-world assets (RWA), DeFi, and AI. Large caps were behind Bitcoin for the most part.

Nevertheless, this cycle still appears to be different, arguably due to spot Bitcoin ETFs. Their anticipation, and then rapid adoption, were some of the major contributors that elevated Bitcoin’s price to a new all-time high ahead of the coming halving. This happened for the first time in Bitcoin’s history.

The recent memecoin frenzy also hints that this cycle could be “weird” compared to previous ones. Some consider memecoin mania a Trojan horse, which could introduce crypto to a wider audience, but perhaps boost the speculative vision of the industry. The latter could potentially make the potential bull run of altcoins shorter and faster in this cycle, compared to previous ones.

Other noteworthy market events

L3 narrative saw a boost following the Degen Chain launch

Memecoins fans also recently found a new frontier to explore — layer 3 (L3) networks.

On March 28, crypto infrastructure provider Syndicate launched Degen Chain, which serves as a specialized ultra-low-cost network to perform transactions using the DEGEN token. The latter is currently considered a community token among Farcaster users. Farcaster is running on Ethereum’s L2 Base, therefore making Degen Chain an L3 network.&

A few things to know about Degen Chain:

• It rapidly gained popularity, attracting over 130,000 addresses, and more than $50 million in total value locked (TVL), within a few days post-launch.&
• The DEGEN token price has more than quadrupled in just four days, as it is used as a native gas token within the network.&
• This L3 network was flooded with memecoins, which saw over $40 million in daily trading volume.

This rapid adoption propelled Degen Chain into the limelight as one of the pioneering L3 chains, sparking discussions regarding the feasibility and potential of such networks.

The general idea behind an L3 network is to have a blockchain that can quickly and reliably execute a specific array of tasks. Advocates cite advantages such as the low cost of native bridging, custom gas tokens, and specialized state transition functions (although these features can be achieved using L2s as well).

Nevertheless, dissenting voices, including Polygon Labs CEO Marc Boiron, argue against the necessity of L3 networks. Boiron claimed that L3s are not required for scalability, and that they primarily serve to divert value away from Ethereum onto the L2 networks. Some echoed his sentiments, calling ​​L3s “centralized servers settling on other centralized servers (L2s),” and drawing parallels to Web2, but with higher fees and substandard user experiences.

In any case, the L3 sector is still nascent. Key players in this ecosystem include Orbs, Xai, zkSync Hyperchains, and the recently introduced Degen Chain.

SingularityNet, Fetch.ai and Ocean Protocol plan to create an AI alliance and merge their tokens

Artificial Superintelligence Alliance. It sounds like the name of a faction from a video game with Terminator’s Skynet vibes. However, this might also become one of the largest AI-related events in the crypto industry.

SingularityNet, Fetch.ai, and Ocean Protocol, three prominent AI protocols collectively valued at around $7.5 billion, decided to merge through a community vote. If the merger is approved, it will result in the creation of the Artificial Superintelligence Alliance and the ASI token, which will replace SingularityNet’s AGIX token, Fetch.ai’s FET token, and Ocean Protocol’s OCEAN token.

Each project will bring unique attributes to the potential alliance. Fetch.ai contributes its autonomous AI agents, Ocean Protocol offers its data sharing and monetization capabilities, while SingularityNET brings its R&D expertise in AI integration.

The alliance will be led by the SingularityNet CEO, Ben Goertzel, while the Fetch.ai network will be a bastion for the ASI token. The latter will essentially be a rebranded FET token, which will be swapped to ASI at a 1:1 ratio. AGIX and OCEAN are set to be converted at a 1:0.43 ratio.

On April 2, a governance proposal became available to FET and AGIX token stakers. It will remain open until April 7 for FET holders, and April 16 for the AGIX community. OCEAN token holders will not participate in the vote, since they relinquished control of the token following the minting of the max supply.

Ethereum BLOBs are now used to create inscriptions

It’s quite ironic when a feature developed to fix a certain issue becomes a trigger of the same problem. Something similar recently happened within the Ethereum ecosystem.

On March 13, Ethereum developers rolled out the Dencun upgrade, which introduced so-called BLOBs to make Layer 2 (L2) transactions cheaper. Shortly after their launch, L2 fees significantly dropped. However, developers also saw another potential in BLOBs: an opportunity to create inscriptions, much like Bitcoin Ordinals.

BLOB-based inscriptions rapidly began to stress-test the feature, recently causing a spike in fees in certain L2 networks. On March 27, Base fees temporarily reached $300, amid the inscriptions flood. According to the Dune dashboard, inscriptions now account for the largest portion of BLOB transactions in total, nearly 40%.

Notably, inscription hype emerged despite BLOBs being “ephemeral,” as they will be removed from the network after 18 days (although some nodes can still maintain their data). The increased interest and usage caused BLOBs to operate at full capacity, with a 100% utilization rate.

One sentence news

• Former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison.
• Ethena Labs commenced an airdrop, distributing $450 million worth of ENA tokens among eligible wallets.
• Bitwise filed for a spot Ether ETF with the U.S. Securities and Exchange Commission (SEC).
• U.S. District Judge Katherine Failla allowed the SEC to pursue its lawsuit against Coinbase, but dismissed the regulator’s claim that the crypto exchange acted as an unregistered broker when offering its Wallet application.
• Ethereum co-founder Vitalik Buterin shared the next steps for protocol simplification, known as the Purge.
• Google now allows users to search wallet balances on Bitcoin, Arbitrum, Avalanche, Optimism, Polygon, and Fantom blockchains.

Notable price performances

Bitcoin reestablished its price correction

Bitcoin registered its seventh green month in a row for the first time in a decade, showing a 16% monthly price increase in March. However, the BTC price failed several times to break $71,500, with price performance resembling a triple top pattern. In addition, the U.S. dollar index hit 105 for the first time in four months, while stronger-than-expected U.S. manufacturing data was reported. As a result, Bitcoin welcomed April with a correction below $66,000.

The asset price moved below the 20-day EMA with increased volume, and reached the 0.236 Fibonacci point, indicating the bears might have an upper hand. The RSI reached the midpoint on a daily chart, but approached an oversold level on lower timeframes, suggesting that there could be a slight price rebound in the coming days.&

WIF became the third-largest memecoin

Dogwifhat (WIF) maintains its status as the best-performing asset among the top 100 digital assets by market cap, showing more than 2,400% year-to-date growth. This week, the WIF price also joined top gainers, which helped the asset to surpass Pepe (PEPE) and become the third-largest memecoin.&

The largest WIF whale, with an unrealized profit of over $130 million, continues holding the asset, while some prominent figures in crypto claim that the memecoin might reach $10, fueling the fear of missing out (FOMO) within the WIF community.

However, the asset formed a bearish divergence on a daily chart, while MACD experienced a zero cross on a four-hour timeframe. This suggests that bullish momentum may be fading, and a deeper price correction might follow.

LTC price jumped amid its recognition as a commodity

In a recent legal action against KuCoin, the U.S. Commodity Futures Trading Commission (CFTC) declared Litecoin a commodity. Following this event, the LTC price experienced& double-digit upward movement in a day, and reclaimed a psychological level of $100.

However, the LTC and BTC correlation then began to decrease, which has historically led to the altcoin’s price drop. MACD formed a bearish divergence on a daily chart, and is on the verge of a bearish crossover. If the price moves below the 20-day EMA, the 50-day SMA could act as the next potential target.&

MNT price reached a new all-time high

On March 27, the MNT price set a new all-time high, approaching $1.50. The catalyst behind this move is considered to be the launch of Mantle’s reward station, which empowers MNT holders to lock their tokens in a vault to accumulate rewards.

Following this move, the asset price experienced a consolidation in the $1.16-$1.34 range. Further price movement could depend on which of these levels the asset price breaks first. If the $1.34 resistance level is broken, bulls could try to retest the all-time high. If MNT moves below $1.16, it could open the road to the middle of the Bollinger channel on a daily chart.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

In their monthly sweep of the industry, CEX.IO was listed among the “Best Cryptocurrency Exchanges of March 2024,” for another round in the outlet’s spotlight. In lieu of their accustomed numerical rankings, this iteration centered the company’s “Cryptocurrency Selection” as a key advantage when choosing CEX.IO services. With the recent relaunch of our legacy trading platform as CEX.IO Spot Trading, we’ve continued to roll out new listings that respond to community demand. Without resting on our laurels, this is crucial information as we seek to identify other areas for refinement in the months ahead.

On the heels of Business Insider came the announcement that CEX.IO had been shortlisted for “Best Exchange of the Year,” by Hedgeweek’s Global Digital Assets Awards 2024. This thrilling development revealed our placement alongside fellow industry leaders in a contest settled democratically through a community vote. Participants will have until April 19, 2024 to make their voices heard for who they believe should take this title home. We encourage everyone to cast their ballots before the deadline to help ensure a strong showing.

In addition to avenues of positive recognition, two CEX.IO thought leaders had high-profile comments featured on Cointelegraph in March. The company’s Global MLRO and Head of Financial Crime, Mark Taylor, was the first to weigh in, offering insight into the prevalence of fraud in memecoin markets. With the largely unregulated space providing myriad opportunities for bad actors to exploit unsuspecting participants, Mark cautioned against flippant transactions, and rushing into poorly researched positions. Rather, his comments prioritized careful planning, and drove home the importance of prudent action whenever assessing potential opportunities.

Pursuing a similar line of thinking, CEX.IO’s Head of Communications, Becky Sarwate, helped retail participants prepare for Bitcoin’s upcoming halving event, by situating the current moment. With the recent catalysis of market sentiment, and unprecedented interest from large asset managers in the form of BTC exchange-traded funds (ETFs), retail enthusiasts could be feeling increased pressure to explore or increase their participation. Becky’s comments offered broader understanding of competing economic forces, and touted the advantage of defined exit strategies for traders considering greater market exposure. Even if crypto can feel like it teeters on madness, it’s best not to rely on luck.

Explore our March media highlights via the links below.

Business Insider: Best Cryptocurrency Exchanges of March 2024

The company received another piece of repeat recognition from Business Insider, who included CEX.IO among their monthly round-up of “Best” exchanges. For this edition, the outlet revamped its customary rating system in favor of superlatives that center noteworthy services, and highlighted our “Cryptocurrency Selection” as a defining feature.

Read the full review here.

Hedgeweek: CEX.IO Shortlisted by Global Digital Asset Awards 2024

CEX.IO has been shortlisted for “Best Exchange of the Year” by the Hedgeweek Global Digital Assets Awards 2024. We’re honored to be included among such esteemed industry colleagues, but only one can prevail in the end. To show your support for CEX.IO, cast your vote by Friday, April 19th, 2024 to help us bring this award home.

Cast your ballot here.

Cointelegraph: DeFi pump-and-dump schemes rake in millions, harm industry credibility

On March 7, CEX.IO’s Global MLRO and Head of Financial Crime, Mark Taylor, had comments published in Cointelegraph discussing the rise of pump-and-dump schemes in memecoin markets, and what precautions the industry could take to better protect participants. Acknowledging the attraction that many feel to the space as a pathway toward financial freedom, Mark reiterated that transacting in emerging markets requires constant vigilance to avoid potential pitfalls. Given the proliferation of incidents, and reports of dire experiences by victims, Mark advised memecoin traders and crypto-curious newcomers to behave as if scams were always around the corner.

“It’s crucial for leaders to understand that every instance of fraud or collusion is a blow to industry credibility. Participants who choose the digital economy to hold and transact value are often doing so to avoid the banking sector, which they view as an untrustworthy system.”

Cointelegraph: Bitcoin halving hype: How retail investors can prepare

On March 26, CEX.IO’s Head of Communications, Becky Sarwate, had comments published in Cointelegraph ahead of Bitcoin’s next halving event, expected in April. With enthusiasts and newcomers alike caught up in the excitement, Becky helped contextualize the road ahead, what users can expect, and whether to temper their expectations. Despite the ongoing market rally, and institutional backing in the form of BTC ETFs, Becky encouraged participants to strike a balance between bullish sentiment, and having a firm exit strategy.

“These structural bulwarks slow the trickle of BTC discovery and anchor its circulating capacity to avoid a glut in supply. As interest rates cool, traders and institutional investors will have more capital to deploy across speculative markets.”

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Market spotlight: Bitcoin’s U-shaped price movement

Bitcoin is preparing to register its seventh green month in a row for the first time in a decade. However, current price action gives mixed signals on whether bullish momentum has the potential to be maintained.

Historically, Bitcoin has experienced a price correction prior to halving. It was around 20% in 2020, and 40% in 2016. When Bitcoin recently updated its all-time high, reaching $73,750, it arguably entered a pre-halving danger zone. Shortly afterward, a 16% price correction happened, accompanied by record weekly outflows from digital asset funds.&

Some called it a “pullback for ants,” as such price fluctuations could be considered insignificant within a wider Bitcoin rally. For instance, Bitcoin experienced four 20% dips in 2023, but still showed a more than 150% price increase over that year.

Once the asset rebounded from $61,000 and reclaimed $71,000, amid reestablished positive inflows to U.S. spot Bitcoin ETFs, some market participants turned more optimistic, claiming that the correction might be over. However, a 16% drop may be insufficient to be treated as a pre-halving correction.&

The Volume Oscillator (VO) on a daily chart indicates that Bitcoin updated its all-time high with decreasing volume. In addition, the recent price correction and recovery were accompanied by consecutively lower volumes. This suggests that bullish momentum may be fading, which could potentially lead to a trend reversal.

In addition, Bitcoin remains in the overbought zone on a weekly timeframe, indicating that there is still a chance for a deeper correction.

Bitcoin’s recent price movement resembles a sloping cup on a four-hour chart, which may lead to the formation of a bullish cup and handle pattern. The Ichimoku Cloud indicator on the same timeframe also suggests that there is a potential for upward movement continuation in the short term.

As a result, while longer-term timeframes hint that a deeper correction might appear, there is still room for an upside move in the short term.

Noteworthy market events

Ethereum Foundation might be under SEC investigation

While the Ethereum Foundation members participated in the ETHTaipei 2024 event, presenting the rainbow staking concept, and discussing the gas limit increase, the crypto community paid close attention to regulatory actions against the second-largest cryptocurrency.

On March 20, several crypto industry media outlets reported that the Ethereum Foundation was under scrutiny from an undisclosed “state authority,” after a disclosure refuting such claims was removed from the organization’s website. Concurrently, Fortune published an article, indicating that the U.S. Securities and Exchange Commission (SEC) issued subpoenas to numerous U.S. companies to obtain additional data about the Ethereum Foundation. It’s theorized this action was taken to potentially support the classification of ETH as a security.

Some interpreted this as an attack on Ethereum, while others suggested that this could contradict prior regulatory actions. The events sparked a new wave of discussion on whether or not Ether ETFs will be approved.

Some claimed that subpoenas could explain the SEC’s apparent reluctance to engage with potential issuers of spot Ether ETFs. Earlier this month, Bloomberg analysts stated that Ether ETFs likely won’t get approved in May 2024 because of the latter. According to Polymarket, May’s ETF approval odds decreased to 28%. However, some crypto enthusiasts remain positive that spot Ether ETFs have a good chance of approval this year.

U.S. DOJ charged KuCoin and its founders for violating anti-money laundering laws

U.S. authorities continued to follow Pokemon’s “Catch them all” strategy against certain crypto platforms.

On March 26, the U.S. Department of Justice (DOJ) announced charges against KuCoin founders Chun Gan and Ke Tang, for their alleged failure to implement an anti-money laundering (AML) program at the crypto exchange. The DOJ claims that this negligence resulted in KuCoin being exploited for illicit activities, including money laundering and terrorist financing.

According to the indictment, KuCoin processed more than $5 billion in suspicious transactions associated with activities such as darknet black markets, malware, ransomware attacks, fraud, and sanctions violations, since its inception in 2017.&

In addition, the indictment asserts that KuCoin deliberately evaded U.S. AML regulations by falsely claiming to have no U.S. customers, despite allegedly having a significant customer base in the country. The DOJ unveiled criminal charges alongside a civil enforcement case filed by the U.S. Commodity Futures Trading Commission (CFTC).

Following this news, KuCoin pulled the classic trio, stating that it is aware of these reports, continues to operate, and user assets are safe. According to Nansen data, KuCoin saw a net outflow of over $780 million across multiple chains in a day, after the U.S. DOJ lodged charges against it.

Incorrect reports about the EU banning anonymous transactions and self-custodial wallets went viral

The crypto community sometimes relies too much on the “too long; don’t read” (TL;DR) concept, especially when it comes to regulatory rules. The latter typically features enormous documents, written in legalese, also known as legal language many people don’t understand. And as this situation demonstrates, the TL;DR approach may open wide room for misinterpretation.

The European Union’s (EU) Committee recently passed the Anti-Money Laundering Regulation (AMLR) bill. Following this news, industry media reported that “payments to self-custody wallets and anonymous transactions are now illegal,” citing a statement from Patrick Breyer, an EU parliament member.

The topic went viral and sparked active discussions in the crypto community. However, some swiftly countered the fervor, dismissing it as misinformation. Patrick Hansen, the EU Strategy and Policy Director at Circle, clarified that the AMLR isn’t exclusively a crypto-focused regulation, but rather a comprehensive framework targeting anti-money laundering and counter-terrorist financing across sectors.

Hansen highlighted that AMLR applies to entities classified as “obliged,” including crypto-asset service providers (CASPs) regulated under the Markets in Crypto-Assets legislation (MiCA). He emphasized that all CASPs, such as centralized crypto exchanges and custodial wallet providers, will be obligated to adhere to standard KYC and AML procedures, as well as restricted from offering accounts for privacy coins and serving anonymous users.

Fantom prepares to launch the Sonic upgrade, enabling 2,000 TPS

Michael Kong, the CEO of Fantom Foundation, announced the upcoming launch of the Sonic upgrade, poised to achieve 2,000 transactions per second (TPS), with sub-second finality. The existing Opera version of Fantom facilitates 200 transactions per second, meaning that Sonic may offer a tenfold increase in the network throughput.

Sonic’s deployment aims to bolster DeFi activities on Fantom by introducing features like support for liquid staking tokens. In addition, the team intends to utilize Sonic as a “shared sequencer” for both layer 1 (L1) and layer 2 (L2) networks.

The upgrade is anticipated to launch in late summer or early fall this year.

One sentence news

• Polygon’s zkEVM network experienced an outage, and failed to produce blocks for nearly 24 hours.
• The Floki Inu (FLOKI) team unveiled its roadmap for 2024, aiming to introduce debit cards, digital accounts, and educational platforms for users.
• The London Stock Exchange (LSE) announced its plans to launch exchange-traded notes (ETNs) for Bitcoin and Ether on May 28.
• The SEC asked a U.S. judge to approve the assessment of $1.95 billion in fines and penalties for Ripple.
• Worldcoin open-sourced the core components of the orb software, and introduced the Personal Custody privacy feature.
• Tether announced the establishment of a new division focused on AI initiatives.

Notable price performances

BCH price jumped ahead of halving

While Bitcoin’s coming halving has been in focus, it seems that some forgot about Bitcoin Cash and its halving, which is scheduled to take place next week. But this week, the event attracted increased attention, which helped the BCH price to surge by almost 30%. Bitcoin Cash entered the top 15 digital assets by market cap.

However, a bearish divergence formed on a daily chart (white lines). This suggests that Bitcoin Cash may struggle to sustain upward movement, and a price correction might soon take place.

ICP price took advantage of AI smart contracts

The ICP price temporarily jumped by over 80% in a week, becoming one of the top gainers, among the top 100 digital assets by market cap. The catalyst behind this move is considered to be the introduction of the first blockchain-based AI smart contract. These contracts are currently running on the ICP’s testnet, but the project plans to allow developers to run them on other networks soon.

After touching the $21 level, the asset price started to experience a correction. MACD made a bearish cross on a four-hour chart, suggesting that downward movement has the potential to continue.&

TON price almost doubled in a month

The TON price maintained its upward trend, experiencing a 20% weekly increase. Amid this, Toncoin became one of the best-performing non-memecoin altcoins, showing an almost 100% price surge over the last 30 days. A potential driver behind the latest upward price action could be TON Foundation’s community rewards initiative, worth over $100 million.

However, there are signs that the asset may experience a slight correction, as a bearish divergence formed on a daily chart. The 20-day EMA currently acts as a dynamic support.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

The commitment to a simple, intuitive application that supports customers at every stage of the crypto journey is unwavering. And so today, we’re excited to announce the latest significant update to our Exchange App. We’ve listened to your feedback and completely reimagined the interface, making it more accessible and friendly to users of all experience levels.&

This is so much more than a cosmetic facelift. We’ve added several new features designed to enhance the crypto experience, including the ability to use CEX.IO Savings* on the go. Furthermore, with this update, we’re setting the stage for the future, with additional expansion of our app functionality underway.

And to highlight that our mobile app offers more than just trading functionality, we’ve rebranded the CEX.IO Exchange app to CEX.IO App. All legacy Exchange app features and services will remain available, with a fresher and more convenient interface.

When will the update be rolled out?

The updated app will become available to all global customers within the next 30 days. CEX.IO App (formerly Exchange app) users will receive a notification, stating the need to update their application. That’s all you need to do to enjoy the upgraded experience. It’s that simple!

Do I need to do anything else to prepare for the update?

Other than responding to a notification that it’s time to update your app, no additional action is required.

If you’d like to prepare to take advantage of the app’s new features and general functionality before the update, consider checking these guides to learn how to transfer, trade, and perform other actions through the new interface.

But wait, attentive members of our community might wonder. Haven’t we seen the CEX.IO App before? Yes, indeed. We’ve had a live, fully-functional beta version of the app for some time. So if you’ve experienced it, you’ll recognize the interface and functionality that will be introduced with the coming release.

Once the update to the newly-rebranded CEX.IO App (formerly CEX.IO Exchange app) is fully launched, users of the beta version will be encouraged to transition to the integrated app. The beta version will be sunset and removed from all app stores.

We’re excited to undertake this next phase of our evolution with you!

Follow us on social media, and join the official CEX.IO Community on Telegram to stay updated on all the latest developments.

*CEX.IO Savings is currently not available in the U.S. Check the list of supported jurisdictions here.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Market spotlight: Bitcoin moved above $69,000 in a moment

There is no universal Bitcoin price, and as such there are certain differences between platforms. Depending on which site you use to check it, there may be conflicting reports as to whether Bitcoin recently updated its all-time high price.

A super difficult eye test: look at the image below, and determine if Bitcoin reached a new high on CEX.IO.

The answer is yes. However, it happened by a very tiny margin, and one might need a magnifying glass, or significantly zoom in on the chart, to find the difference.&

In the few hours after the asset moved above $69,000, its price dropped by almost 10%, then rebounded back to $66,000. Trying to account for the situation, there were jokes that some crypto enthusiasts just wanted to sell at $69,420 (meme amount) for fun.

Nevertheless, Bitcoin had a massive rally over the last month, gaining over $20,000, or more than 50%. Here are some of the potential catalysts behind this jump:

• Soaring ETF inflows — U.S. spot Bitcoin ETFs recently set record trading volumes nearly every day. In addition, inflows exceeded $500 million in five out of six last trading days. BlackRock’s spot Bitcoin ETF, IBIT, managed to amass over $10 billion in BTC in just seven weeks, which made it the fastest-growing ETF in history.
• Supply shock claims — Some crypto enthusiasts spread the narrative that multiple over-the-counter (OTC) desks, as well as the retail-focused CashApp, ran out of BTC. Many met this speculation with skepticism, and called it misinformation. In any case, as Bitcoin approaches halving, the impression that supply shock could be a price driver remains, especially amid the recent surge in ETF inflows.

However, there are signs that a price correction, or consolidation, might soon follow:

• The Crypto Fear & Greed Index hit 90, suggesting that the market could be overheated.
• According to Glassnode data, BTC in accumulation addresses have been declining for the first time since Q1 2023.
• Kaiko reported an imbalance in order books, which indicates the potential building of limit orders for selling an asset.

In addition, a textbook version of the cup formed on a weekly chart, which suggests a potential formation of the cup and handle pattern. The handle means a slight downward or sideways slope with decreased volume, which follows the U-shaped cup. Once the handle is formed, the asset typically reestablishes upward movement. The 0.382 Fibonacci point could act as a potential target for the handle formation.

However, if the price manages to update the all-time in the coming weeks, and sustain above it, it could potentially invalidate the cup and handle pattern. March is historically beneficial for Bitcoin, showing 12% average monthly gains, while Bitcoin’s price tends to rally after reaching an all-time high. 

Noteworthy market events

Gemini Earn customers will reportedly receive 100% of their assets

It seems that the Gemini vs. Genesis drama over the Earn product is about to reach its final season.

Gemini settled with the New York State Department of Financial Services (NYDFS), agreeing to reimburse Earn customers with at least $1.1 billion. As part of the agreement, Gemini will allocate $40 million to Genesis, the service provider facilitating Earn’s operations, to support its ongoing bankruptcy proceedings. In addition, the crypto exchange will pay a $37 million fine to NYDFS for various compliance failures.

“Gemini commits to working through the bankruptcy process to ensure that Earn customers make a full recovery of their virtual currency,” NYDFS said in a statement. 

According to the Gemini Earn page, if the decision is approved by the bankruptcy court, all Earn users will receive 100% of their digital assets back in kind. Furthermore, Gemini also promised that users will receive “any appreciation of assets since they lent them into the Earn program.”

Binance faced regulatory troubles in Nigeria

On February 21, Bayo Onanuga, adviser to Nigeria’s president, called for a ban on Binance and other crypto exchanges. He stated that they contributed to the manipulation of the local currency, the Nigerian naira, whose value fell by almost 70% over the past few months. The same day, Binance users in Nigeria reported difficulty accessing the exchange.

Shortly afterward, two Binance executives arrived in Nigeria to deal with the block of the platform’s website in the country. On February 28, they were reportedly arrested. 

After these events, there were reports that Nigeria demanded a $10 billion fine from Binance. However, a Nigerian government representative called it a misquotation about the platform’s harm to the local economy. The Nigerian House of Representatives Committee on Financial Crimes also summoned Binance CEO Richard Teng, to address concerns about terrorism financing and money laundering. 

Following all this, Binance decided to cease Nigerian naira operations through March 8.

L2 network Blast launched its mainnet

When Ethereum’s layer-2 (L2) network, Blast, announced early access in November 2023, it became an instant hit. The platform attracted over $40 million in the first hours after the bridge launch, and managed to accumulate over $2.3 billion in the following months. However, some called it a Ponzi scheme, with “unsustainable” returns, and “suspicious” invite rewards.

Initially, there was also no withdrawal functionality, but the project clarified that it would arrive after the mainnet launch. And, on February 29, Blast’s mainnet went live, unlocking deposited crypto funds.

According to DeFiLlama, there was a massive $1.6 billion drop in total value locked (TVL) following the mainnet launch, fueling concerns about the project’s viability. However, according to Coindesk, most of the funds were simply moved to a new address associated with the Blast network, not withdrawn from the platform entirely. 

Tether launched a recovery tool to migrate USDT between blockchains

On March 4, Tether announced the launch of its blockchain recovery plan to ensure stable access to USDT, in case of disruptions faced by one of 14 currently supported networks. According to the announcement, users would be able to receive their USDT on another network, after verifying ownership of their addresses on an unresponsive blockchain.

The process involves cryptographically signing a migration request. Tether said that this feature is supported for popular browser extension wallets, and hardware wallets such as Ledger and Trezor.

One sentence news

• Telegram plans to launch an ad revenue-sharing platform, built on the TON blockchain.
• Merrill Lynch and Wells Fargo reportedly started offering spot Bitcoin ETFs to clients, while Morgan Stanley is considering adding them to its brokerage platform.
• German stock exchange giant Deutsche Boerse launched a crypto spot trading platform, Deutsche Börse Digital Exchange (DBDX), which is focused on institutional clients.
• Uniswap introduced limit orders, and announced the launch of its browser-based self-custodial crypto wallet.
• The Delta hardfork was successfully deployed, significantly reducing fees across Optimism-based chains.
• Spot Bitcoin ETF issuer VanEck entered the NFT space, with the launch of its own marketplace and digital assets platform.

Notable price performances

DOGE price reached the highest point since January 2022

Memecoins were some of the best-performing crypto assets over the last few weeks. As a result of this rally, some lower-cap memecoins such as dogwifhat (WIF) and Floki (FLOKI) managed to enter the top 100 digital assets by market cap. Some viewed this new memecoin mania as an early sign of a potential altcoin season. 

The DOGE price temporarily showed a more than 70% weekly gain, and reached $0.21, which is the highest point in more than two years. However, DOGE’s bullish momentum, as well as that of other memecoins, has recently started to calm. 

The Volume Oscillator (VO) approached a zero level on a daily chart, while the RSI formed a bullish divergence on lower timeframes. This suggests that a price consolidation, or even correction, has the potential to follow.

NEAR price took advantage of a new AI token rally

Two weeks ago, we mentioned that AI tokens saw a new wave of optimism amid OpenAI’s Sora release, and Nvidia’s stock performance. This time, we note that many of them experienced double-digit gains, amid the anticipation of Nvidia’s AI-focused GTC24 conference. Some crypto projects confirmed their participation, including Near Protocol’s CEO Illia Polosukhin as a speaker.

As a result, NEAR’s price jumped by over 20% in a day, showing a more than 40% weekly increase. The 20-day EMA currently acts as dynamic support, meaning the asset might retest it if there is fading bullish momentum.

FTM price jumped following a legal action against Multichain

In July 2023, Multichain experienced an exploit, which resulted in a total loss of $210 million across various blockchains, with Fantom claiming one-third of that amount. Following this event, the Fantom Foundation filed a lawsuit against Multichain, and, in January 2024, a Singaporean court granted a default judgment ruling in Fantom’s favor.

According to a Fantom Foundation blog post, the organization is now taking legal action to liquidate Multichain, and recover assets lost in the exploit. Fantom said the court’s judgment is associated only with its own losses, but it plans to use this legal victory to pave a path for all users to pursue compensation from Multichain. 

This helped the FTM price to surge by over 70% in a week, becoming one of the top climbers.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

After being included among the “Best Cryptocurrency Exchanges of February 2024” in another nod from Business Insider, a trio of Yahoo! Finance headlines followed heralding product and reputational achievements. Founder and CEO, Oleksandr Lutskevych, was quoted when the announcement of CEX.IO Spot Trading, the company’s latest product offering, was amplified by the outlet. This rebrand of our celebrated Exchange Plus platform extends expanded functionality and listings to additional jurisdictions, most notably the U.S.. Highlighting a period of careful refinement, Alex praised the hard work that went into bridging regulatory demands with an intuitive, user-centric crypto experience.

On the same day, a piece by Insider Monkey was also published on Yahoo! Finance ranking the “15 Best Bitcoin Wallets iPhone and Android,” which praised CEX.IO services. The author tallied pros and cons from the perspective of a savvy crypto enthusiast, and noted how CEX.IO App’s top line security and sleek design enable hassle-free transactions. Combined with a competitive fee structure, the outlet awarded our services with an Insider Monkey Score of 1, in addition to the kind words.

Then, rising Vice President of Product Management, Alexandr Kerya, rounded out our run of high-profile Yahoo! appearances when CEX.IO’s partnership with Web3 wallet, Wigwam, was picked up by the outlet. The self-custodial solution offers expanded access to decentralized finance, NFT market places, and play-to-earn gaming platforms all through a secure browser extension. After a string of successful product launches, Kerya helped situate how Wigwam constellates within the CEX.IO ecosystem.

And lastly, CEX.IO’s Director of Lithuania and Head of Corporate Payment Solutions, Arina Dudko, had a piece published on HackerNoon that explored a major theme from our Q4 2023 COMPASS report. Delving once again into the crypto regulatory landscape across key jurisdictions, Arina argued that these common sense protections could help encourage greater confidence from industry participants. This was Arina’s third published piece on the outlet interrogating emerging legal frameworks, and how they could serve to empower retail users along their individual crypto journeys.

Explore our February media highlights via the links below.

Business Insider: Best Cryptocurrency Exchanges of February 2024

While we had our hearts set on Valentine’s Day, Business Insider bestowed some industry love by again including CEX.IO in their monthly round-up of leading exchanges. With our 4.45/5 rating still holding strong, here’s to keeping that spark alive and burning ever-brighter in the months ahead.

Read the full review here.

Yahoo! Finance: CEX.IO Rebrands Exchange Plus, Launches Spot Trading Service for Eligible U.S. Participants

On February 6, CEX.IO Founder and CEO Oleksandr Lutskevych, was quoted in Yahoo! Finance when the announcement of the company’s latest product offering was picked up by the outlet. CEX.IO Spot Trading, a rebranding of Exchange Plus, unveiled new listings and expanded access to additional jurisdictions seeking intuitive crypto services. With regards to the evolving regulatory climate, Alex noted how careful planning helped ensure all government and customer expectations were met before the product rollout.

“‘After a brief rollback of our services in the U.S. to assess the regulatory landscape, we’re thrilled to restore a cornerstone of CEX.IO’s best-in-class crypto offerings in a compliant manner…Our dogged commitments to regulation and customer satisfaction helped ensure that refinements continue to center the user experience.’”

Yahoo! Finance: 15 Best Bitcoin Wallets For iPhone and Android

February 6, a piece published on Insider Monkey ranking CEX.IO among the best mobile Bitcoin wallets was also amplified on Yahoo! Finance. After presenting general context on the state of crypto markets, the author outlined a series of value-adds for curious participants looking to expand their crypto journey with a trusted guide. Citing the company’s longevity in the industry, and commitment to providing a user-centric experience, CEX.IO was awarded with an Insider Monkey score of 1.

“CEX.IO offers a number of notable features, including a regulated platform license, support for a large number of cryptocurrencies, and top-tier security features such as multi-signature security. The wallet has a strong focus on security and boasts to have never lost any of its user’s funds since its launch in 2013. In addition, it has relatively low trading fees. The fees are based on 30-day trade values and are calculated daily. The highest trading fee by CEX.IO is 0.25% for takers and 0.15% for makers if the value of a cryptocurrency is less than $10,000.”

Yahoo! Finance: CEX.IO, Wigwam Partnership Expands DeFi Access to the Global Crypto Community

On February 13, Alexandr Kerya, Vice President of Product Management at CEX.IO, was also quoted by Yahoo! Finance when the announcement of the company’s partnership with Web3 wallet solution, Wigwam, was picked up by the outlet. With the aid of a self-custodial browser extension, Kerya highlighted how expanded access to NFT marketplaces, Play-to-Earn games that offer in-dApp purchases, and other integrated DeFi services could empower CEX.IO users.

“‘This is an exciting time for the company, as we’re making progress in a lot of uncharted territory…Our award-winning product ecosystem gives Wigwam a firmer operational foundation, and establishes a longer runway to propel us into the next frontier of decentralized finance.’”

HackerNoon: In 2024, Crypto Regulation is Key to Boosting Participant Confidence

On February 29, Director of CEX.IO’s Lithuanian entity and Head of Corporate Payment Solutions, Arina Dudko, had a piece published on HackerNoon exploring a theme from the company’s latest Q4 2023 COMPASS report. With key regions implementing greater regulatory oversight across the industry, Arina argues that these guidelines and comprehensive legal frameworks will help boost participant engagement with crypto verticals.

“Most jurisdictions currently exploring heightened regulations have experienced the implosion of a homespun crypto hero, and are not in any rush to re-live such trauma. That’s why many of these legislative packages set their sights on common sense measures that demarcate official oversight and lean heavily on consumer protections. It’s at this crossroads that crypto leaders could choose to send a strong message by working with officials to ensure a smooth transition. Rather than just asserting user-centric values in mission statements, the industry should embrace and be receptive to regulation if it means protecting and growing the global crypto community.”

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Market spotlight: Liquid restaking TVL jumped by a factor of 40 in just two months

While various projects are building layer 2 (L2) networks, some “layer 4” development is already happening in the Ethereum staking field.&

The liquid restaking sector recently became one of the hottest topics in crypto, jumping from $100 million to $3.9 billion in terms of total value locked (TVL), over the last two months. Protocols such as Ether.fi, Renzo, Kelp, Puffer, and others have seen a substantial increase in deposits. Puffer attracted over $1 billion in TVL, in just three weeks since its launch.&

Let’s briefly explore what’s behind this hype.

What is liquid restaking?

First of all, don’t confuse liquid staking with liquid restaking. Although they’re similar by design, they offer different reward sources.

Liquid staking is a way to generate rewards by locking crypto in liquid staking protocols such as Lido DAO and Rocket Pool. These platforms lock ETH on users’ behalf, and offer liquid staking tokens (LSTs) that represent users’ deposits and generated rewards. These LSTs can be used in DeFi services, and/or be converted for ETH. So liquid staking offers participants an opportunity to use their crypto in other activities, while their funds are staked.&

The same principle applies to liquid restaking. Essentially, liquid restaking platforms serve as conduits between users and restaking platforms, primarily EigenLayer. The latter offers users an opportunity to lock ETH and LSTs to earn rewards for securing so-called “actively validated services” (AVSs). These AVSs could represent other networks, oracles, etc.&

As a result, with EigenLayer, projects can “borrow” Ethereum’s proof of stake (PoS) mechanism instead of creating their own infrastructure to secure the network. However, restaked tokens (deposited into EigenLayer) can’t be used for DeFi and other on-chain activities. Therefore, they’re illiquid. How do you fix this? Create liquid restaking tokens (LRTs).&

So, liquid restaking protocols allocate users’ funds to EigenLayer, and offer LRTs in exchange. These LRTs represent users’ EigenLayer deposits and generated rewards, which they can move and utilize in DeFi services.

Risks of liquid restaking&

EigenLayer recently experienced a rapid increase in TVL, surpassing Uniswap, and reaching almost $8 billion. However, none of EigenLayer’s AVSs are live yet, meaning depositors aren’t receiving restaking interest on their allocations. Instead, they receive “restaking points,” which represent a somewhat vague accumulation that users anticipate will grant them eligibility for future EigenLayer rewards.

Although there is no clear understanding of what these EigenLayer points could be, the liquid restaking sector essentially revolves around them. There are services that are built up to exchange and lend these points. Furthermore, liquid restaking platforms also offer their own points, which typically don’t have a clear purpose either.

So for now, restaking and liquid restaking exist only on paper. The largest risk is that AVSs might fail to deliver proper services (slashing), and/or satisfy depositors’ anticipations. There is the possibility that speculated airdrops from AVSs may not even happen, potentially rendering accumulated points useless.&

However, some argue that Ethereum staking rewards also became available after almost two years of Beacon chain’s existence. Before Ethereum’s Merge update, which arrived in September 2022, there was an entire liquid staking industry, with thousands of ETH locked, and many established crypto platforms onboard. Now, liquid staking is the largest DeFi sector in terms of TVL. Liquid restaking platforms arguably want to repeat this success.

Other noteworthy market events

Ethena faced controversy due to USDe’s promised yield

While some play with high-risk products, others heavily criticize them.

On February 19, Ethena Labs launched its USDe stablecoin on the public mainnet. After its official debut, USDe saw a more than 20% increase in market cap in just a few days, reaching $340 million. The project is backed by multiple venture capital firms, and major crypto-native platforms.

According to Ethema’s website, USDe offers a 27.6% annual percentage yield (APY). The platform supports USDT, FRAX, DAI, crvUSD, and mkUSD tokens, which can be converted into USDe when deposited. The latter can be locked in Ethereum staking, or deposited in DeFi protocols to receive additional income. The USDe reward is calculated every week depending on the chosen strategy.

The alluring yield opportunity stirred widespread concerns in the crypto community. Many remembered Anchor, which offered a 20% yield in UST stablecoin, and is considered one of the primary factors behind the death spiral of UST and Terra (LUNA). According to 0xngmi, a pseudonymous DefiLlama code contributor, the real concern lies in the potential inversion of yields, rather than just the high stablecoin yield offered by Ethena.

Responding to these concerns, Conor Ryder, Ethena’s Head of Research, stated that the protocol was deployed with settings grounded in historical testing that did not entail any artificially imposed risks.

U.S. banks reportedly want a slice of the Bitcoin ETF action

The fear of missing out (FOMO) doesn’t spare anyone, even big banks.

On February 14, a trade group coalition including the Bank Policy Institute, American Bankers Association, Financial Services Forum, and Securities Industry and Financial Markets Association sent a letter addressed to U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler. The coalition drew attention to the recent approval of spot Bitcoin exchange-traded funds (ETFs) in the U.S., pointing out the absence of U.S. banks as asset custodians for these approved products, despite their involvement with other ETFs.

In their letter, the coalition asked the SEC to consider modifications to its guidance regarding the accounting treatment of crypto asset custody responsibilities. With proposed updates, U.S. banks are seeking to make crypto custody more cost-efficient, and gain permission to participate in certain crypto activities, such as serving as custodians for Bitcoin ETFs.

Decentralized exchange FixedFloat was exploited for $26 million in BTC and ETH

Since February 17, numerous FixedFloat users have reported frozen transactions and missing funds. Initially, the team attributed these significant outflows to “minor technical issues” and transitioned their services into maintenance mode. Subsequent on-chain analysis revealed that over $21 million in Bitcoin and nearly $5 million in Ether were drained from the exchange.

Following this discovery, the platform confirmed that it had fallen victim to a hack. They announced that their team is actively working to address all potential vulnerabilities, enhance security measures, and conduct a thorough investigation into the incident. As of the time of this writing, the FixedFloat website remains under maintenance and is inaccessible.

Operating as a decentralized crypto exchange without requiring user registration or KYC verification, FixedFloat primarily attracts users from the U.S.

One sentence news

• Honduras’ National Banking and Securities Commission (CNBS) issued a ban prohibiting financial institutions in the country from engaging in crypto trading, or holding digital assets.
• Uniswap Foundation tentatively set Uniswap v4’s launch for Q3 2024.
• Circle said it would discontinue minting USDC on the Tron network, “to ensure that USDC remains trusted.”
• Ethereum’s L2 network, Starknet, faced a backlash from its community, due to eligibility criteria for the STRK airdrop.
• VanEck’s spot Bitcoin ETF experienced a 14x jump in daily trading volume.
• Stellar network’s developers initiated a phased rollout of Soroban smart contracts.

Notable price performances

ETH price broke the $3,000 level

The ETH price reached $3,000 for the first time since April 2022, as crypto enthusiasts anticipate potential Ethereum ETF approval in the U.S., as well as the Dencun upgrade. In addition, Ether’s open interest in futures markets increased by over 40% over the last two weeks, according to Coinglass.

The weekly RSI moved to the overbought zone. This event preceded the reach of the asset’s all-time highs in previous cycles. Notably, in both cases, Ethereum formed a bearish divergence (yellow lines) when approaching the cycle’s peak.&

In addition, a lagging span (green line) crossed a downside Ichimoku Cloud on a weekly chart, indicating that upward price movement is likely to follow. The next potential target for bulls could be around $3,650.

FIL price took advantage of Solana’s partnership

In a strategic move aimed at bolstering data scalability and accessibility, Filecoin has announced its integration with the Solana blockchain. According to a post by Filecoin on X, Solana’s integration includes saving its block history using Filecoin’s capabilities. This event helped the FIL price jump by over 30% in a week, reaching the local high near $8.&

The asset’s price movement suggests that a cup and handle pattern could potentially form. This is a longer-term formation that consists of a U-shaped cup, and a handle with a slight downward or sideways slope. The volume decreases in the handle, indicating a period of consolidation before a further breakout. At the time of this writing, Filecoin has been experiencing decreased volume.

As a result, a price correction has a chance to follow, with the $6.50 level as a potential target for the handle formation. If the pattern works out, the asset might then break the $8 resistance level.

FET price approached an all-time high amid boosted AI narrative

AI tokens were some of the best-performing crypto assets over the last week, with some tokens showing a more than 40% increase. The catalyst behind these jumps is considered to be text-to-video generator Sora, which was recently unveiled by OpenAI, and sparked a new wave of interest in AI-related projects.

In addition, the performance of top AI tokens has been correlated with Nvidia’s rise since January 2023. Nvidia’s stock price jumped by over 200% in a year, and the company temporarily became the third-largest in the world by market cap, partly due to its involvement in AI initiatives.

One of the major beneficiaries of the increased AI buzz was Fetch.ai (FET). Its price surged by over 65% in a week, approaching an all-time high. The asset reached the overbought level, which could limit potential upward movement in the short term. In addition, a bearish divergence was arguably formed on lower timeframes, hinting that a price correction, or consolidation, could soon follow.

LINK price wasn’t significantly affected by BlockFi’s selloff

On February 21, bankrupt crypto lender BlockFi reportedly transferred $46 million in LINK to Kraken to sell them, as a part of its liquidation plan. This ignited discussions on how it could impact price performance, considering that whales sometimes use such events to accumulate digital assets.&

That day, whale activity increased by over 175% in 24 hours, suggesting that large token holders used BlockFi’s selloff to buy LINK. The LINK price first experienced a slight decrease, testing the 0.382 Fibonacci point, but then bounced to $19.&

The asset price also moved out of the oversold zone, indicating a potential bearish-to-bullish trend reversal. For that, the asset would need to break a descending RSI resistance line (cyan line).

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Market spotlight: Bitcoin breached a $1 trillion market cap

On February 14, Bitcoin gave a Valentine’s Day gift to its holders by moving above a $1 trillion market cap for the first time since 2021. Last week was also Bitcoin’s best-performing in four months, jumping by over 13%. At the time of this writing, Bitcoin continues to smash resistance levels like cookies, climbing above $52,000.

As a result, there’s currently a carnival on crypto streets, with some anticipating an imminent breakout of Bitcoin’s all-time high:

• U.S. spot Bitcoin ETFs attracted more net inflows over the last four days, than during the entire first four weeks of trading. There was also news that spot Bitcoin ETF inflows have been outpacing newly-mined BTC by 10 times, hinting at a potential supply shock.
• Bitcoin’s open interest surged to $21 billion, the highest point since November 2021, but leverage remained relatively low, limiting liquidation risks.
• According to Google Trends, Bitcoin searches recently dropped, reaching bearish market levels, despite the price surge. This suggests that the rally was predominantly driven by institutional and crypto-native market participants, leaving room for potential retail interest.

Bitcoin dominance also broke the descending resistance line (cyan line). In 2023, this event coincided with a new wave of Bitcoin rallies.

However, there are also signs that the price may soon drop. Bitcoin approached 95% of all supply held in profit, which historically marked local price tops. The Crypto Fear and Greed Index reached the “extreme greed” territory, the highest level since Bitcoin’s all-time high.

Bitcoin’s price reached the upper border of a downward Ichimoku Cloud on a weekly chart. In two previous cycles, this level identified the peak of a pre-halving price rally. In addition, the weekly and four-hour RSIs arguably formed a bearish divergence. The daily RSI reached the overbought zone.

This suggests that there could be a price correction before Bitcoin’s halving in April 2024. The 20-week EMA could act as a potential target for bears in the longer term. However, after halving, Bitcoin typically reestablishes its upward trend.

Noteworthy market events

ERC-404 hype spiked Ethereum gas fees

ERC-404 has an astounding origin story. Its concept was inspired by a failed crypto project called Emerald, which was “hacked,” resulting in the loss of user funds. Furthermore, Emerald was introduced by “a fake developer” who reportedly used ChatGPT to run the project. A few crypto enthusiasts created a new project, Pandora, based on the same concept, calling it ERC-404.

You might think that something like that would be destined to fail. However, on February 9, Ethereum gas fees reached an eight-month high, offering $60 on average per standard transaction. The major catalyst behind this move is thought to be ERC-404 hype, which began on February 5, with the launch of Pandora. In less than a week, this asset surged by more than 6,000%, reaching over $30,000 at its peak. Such performance “opened Pandora’s Box,” causing the launch of multiple ERC-404 tokens.

Here is a brief overview of ERC-404:

• ERC-404 is an experimental token standard that combines features from both fungible ERC-20 tokens, and non-fungible ERC-721 tokens (NFTs). It facilitates the creation of fractionalized NFTs that can be freely traded. When ERC-404 tokens are traded, the associated NFTs are either minted or burned.
• ERC-404 is an “unofficial” token standard, meaning it is not widely supported on most platforms, and has not undergone a comprehensive external audit. This has raised security concerns, but ERC-404 creators are reportedly working to gain official recognition for their token standard.
• While some see ERC-404 as a potential game-changer for NFTs, which could address various liquidity issues, others point out its inefficiency. The average cost of transferring ERC-404 tokens is reportedly three times higher than that of ERC-721 (NFT) tokens.&

On February 13, Pandora developers announced a v2.1. update, which could make ERC-404 transactions more cost-efficient. At the same time, a group of developers introduced an alternative to the ERC-404 token, called DN-404, which they estimate will result in a 20% reduction of the transaction fee impact.

Bakkt warned it might be unable to stay in business

Back in 2018, there was great fanfare surrounding the launch of Bakkt, a crypto custody and trading platform, which was founded by an owner of the New York Stock Exchange (NYSE). Some called Bakkt a “Bitcoin savior,” enabling the opportunity to buy coffee in Starbucks with BTC for example, and offering a gateway for institutions.&

However, in a regulatory filing with the U.S. Securities and Exchange Commission (SEC), Bakkt said there is doubt over whether its available cash can sustain ongoing operations for the next 12 months. In a document, the company explained this conclusion, stating that there is “significant uncertainty associated with the ongoing expansion to new markets, and the growth of the revenue base.”

Bakkt is currently seeking to sell up to $150 million of securities, which could ease its problems.

PlayDapp was exploited for reportedly “$290 million” worth of PLA tokens

There is an early potential candidate for the Top Hacks of the year.&

On February 9, an unknown attacker minted 200 million PLA tokens ($36.5 million) from an unauthorized wallet. According to Cyvers, a blockchain security firm, the hacker managed to add their address as a minter on the Web3 gaming platform PlayDapp. To address the issue, PlayDapp took action by transferring all PLA held by the platform to a new wallet.

In an attempt to resolve the situation, the PlayDapp team reached out to the attacker, offering a reward of $1 million for the return of stolen funds. However, when the offer escalated to a $1 million bounty with threats of involving law enforcement, the hacker responded by creating an additional 1.59 billion PLA tokens, valued at $253.9 million, on February 12. They attempted to launder these tokens through various cryptocurrency exchanges.

Before the attack, the total circulating supply of PLA was around 577 million tokens. This means it’s unlikely the hacker will be able to successfully sell such a large quantity of minted PLA tokens. To mitigate the impact of the situation, the PlayDapp team informed all partner exchanges about the incident.

Starknet lifted the veil on airdrop details for 1.3 million wallet addresses

The wait is over for some airdrop hunters.

In December 2023, Ethereum layer 2 (L2) scaling network Starknet announced the airdrop of its native token, STRK, stating that it plans to allocate 1.8 billion tokens to community members and stakeholders. Since then, anticipation has been high within the Starknet community regarding the criteria for eligibility, causing the network’s total value locked (TVL) to almost double.

On February 14, the Starknet Foundation revealed the airdrop details, scheduling its launch for February 20, 2024. As per the foundation’s announcement, nearly 1.3 million Ethereum wallets will qualify for the initial phase, receiving over 700 million STRK tokens. Participants who engaged with Starknet before November 15 are set to receive allocations ranging from 500 to 180,000 STRK, based on their level of involvement with the network.

One sentence news

• Ethereum developers set March 13, 2024, as the date for the Dencun upgrade launch on the mainnet.
• Dymension network launched its mainnet, accompanied by an airdrop of DYM tokens worth over $390 million.
• Ripple announced its acquisition of Standard Custody & Trust Company, a U.S.-based digital asset custodian.
• A $1.4 trillion asset manager, Franklin Templeton, joined the spot Ethereum ETF race.
• Synthetix founder, Kain Warwick, said that the team is considering the launch of their own chain, Snaxchain, to unify Synthetix features.
• The SushiSwap team announced the launch of a decentralized derivatives exchange, Susa, based on the Layer N solution.

Notable price performances

ETH price jumped amid increased interest in staking

Ethereum staking has been recently booming:&

• Staking deposits exceeded withdrawals for 20 days in a row, helping Ethereum hit a new milestone — 25% of all ETH is now held in staking.
• There are almost 9,000 validators in the queue, waiting to join Ethereum staking. This is the highest number since October 2023. Validators need to wait nearly three days to enter.
• According to DeFiLlama, multiple liquid staking, as well as restaking, protocols saw a double-digit TVL increase in a week.

The major catalyst behind this move is considered to be anticipation of the Dencun upgrade, which is dedicated to turbocharging Ethereum’s L2 networks, and increasing the overall Ethereum network’s throughput.

As a result, the ETH price jumped by over 15% in a week, breaking a local high, which was set in mid-January 2024. Trading volume more than tripled amid this move. The daily RSI broke its descending resistance line, but has already moved to the overbought zone. The asset broke the upper border of the Bollinger channel on a daily chart, suggesting that a potential price consolidation, or correction, could follow.

SOL temporarily reclaimed the status of the fourth-largest digital asset

The SOL price temporarily surpassed BNB by market cap, after showing a double-digit price increase in a week. The asset broke the psychological level of $100, and arguably formed an inverse head and shoulders pattern. Trading volume has been decreasing throughout the pattern formation, but hasn’t seen a substantial increase, after breaking a neckline (orange line).

Considering the pattern’s height, its formation suggests that the price could try to test the $130 level. However, the asset approached the overbought level on a daily chart, and hints that a bearish divergence may occur on a weekly timeframe.

STX registered 10 green daily candles in a row

As a Bitcoin-related altcoin, the STX price took advantage of recent BTC performance. In addition, Stacks recently enjoyed an over 40% weekly increase in TVL, hitting a new all-time high. As a result, the asset became one of the top climbers, showing a more than 55% weekly price increase.

The daily RSI reached the overbought zone, meaning that the following upward movement could be limited. However, trading volume continues to increase, suggesting that bullish momentum has the potential to be maintained in the short term.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Picking up where the COMPASS series left off in 2023, this installment explores five critical topics impacting, and impacted by, the crypto space. From developments in AI, industry regulation, the launch of BTC ETFs, energy consumption, and crypto’s public perception, the Q4 report paints with a broad brush without sparing key details. CEX.IO’s Founder and CEO, Oleksandr Lutskevych, was quoted in the release announcing its publication, which received wide coverage from legacy and industry outlets alike. By diverging from on-chain analysis and value-based assessments of the crypto space, this edition of COMPASS presents possible coordinates for the ecosystem’s ongoing refinement in the months ahead.

But COMPASS wasn’t the only source of generative thought leadership to kick off 2024. CEX.IO’s Head of Communications, Becky Sarwate, spoke with Cointelegraph to unbox crypto index funds, and explore their utility in relation to a menu of participant needs. While quick to note that such an arrangement differs from actual asset ownership, Becky praised the ease and peace of mind these verticals can offer. But in the end, the question for Becky remained: is losing the freedom of discovery worth the (sometimes) smoother sailing?

Explore our January media highlights, and find your COMPASS via the links below.

Business Insider: Best Cryptocurrency Exchanges of January 2024

Starting the New Year off on a high note, Business Insider once again highlighted CEX.IO’s commitment to the user experience in their monthly round-up of top tier exchanges. With our 4.45/5 rating still holding strong, we’re committed to upward movement in the months ahead.

Read the full review here.

Cointelegraph: Crypto index funds simplify investing but challenge blockchain ethos

On January 8, CEX.IO’s Head of Communications, Becky Sarwate, spoke with Cointelegraph on the pros and cons of placing value in crypto index funds. After acknowledging the convenience of buying into a curated bucket of assets, Becky cautioned participants not to conflate such an arrangement with outright ownership. Where crypto index funds can alleviate the always-on aspects of trading, Becky offered the notion that a sense of wonder and discovery for participants could be lost in the balance.

“Purchasing a few select assets exposes participants to the potential for acute gains if the assets perform well and abrupt losses if their value trends downward. For those trading individual coins, these risks are felt and overcome directly. While one may be less likely to end up seeing massive gains overnight with an index fund, the same goes for excessive losses.”

Yahoo! Finance: CEX.IO’s Q4 2023 Industry Report Offers Clear-Eyed Perspective for the Crypto Ecosystem

On January 30, CEX.IO Founder and CEO, Oleksandr Lutskevych, was quoted by Yahoo Finance announcing the company’s Q4 2023 market analysis report. Ever the visionary, Alex extolled the latest edition, COMPASS: 5 Thoughts for the Crypto Space in ‘24 and Beyond, for its breadth and coherence across multiple lines of inquiry. Featuring discussions on regulation, ETFs, energy consumption, and crypto’s public perception, this edition of COMPASS deviated from on-chain diagnostics and value-based assessments in favor of social and philosophical questions.

“‘After 10 years of providing award-winning services to participants at every stage of their crypto journey, we wanted to examine the space from our unique vantage point,’ said Oleksandr Lutskevych, Founder and CEO of CEX.IO. ‘The latest COMPASS report provides coordinates to navigate the current crypto landscape with greater understanding, and sharper tools for self discovery.’”

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility. 

Market spotlight: Bitcoin price moved out of a narrow range

Over the last seven days, Bitcoin was predominantly consolidating between $42,000 and $43,400. The price movement was so tight, it sparked speculation that it could be the “calm before the storm.” Trying to find potential catalysts for increased volatility, some suggested Chinese New Year Week as a possible harbinger of price fluctuations.&

China’s Lunar New Year falls on a different date every year, and this event marks the beginning of a week-long national holiday in China, also known as “Golden Week.” This period, for whatever reason, is typically accompanied by higher volatility and lower volume in the crypto market. In 2024, the Golden Week will take place from February 10 to February 17.

Here’s how Bitcoin’s price behaved amid Chinese New Year Weeks of the past:

• Before 2021, Bitcoin typically experienced a price decrease shortly before the holiday. However, after 2021, the tides seemed to turn, as Bitcoin price has since predominantly shown a slight increase while approaching the event.&
• Bitcoin enjoyed consistent, positive performance over the last nine years during Chinese New Year Week. According to 10xResearch, if Bitcoin was historically bought three days before the Golden Week, and sold at the end of it, the average return would have been +11%.
• After China’s New Year Week, Bitcoin has typically moved downward. Sometimes the crash evaporates all the gains obtained during Golden Week (i.e. 2021, 2022, and 2023). That’s why this event is sometimes called the “inverted” Santa Claus rally.

It is debatable whether or not Chinese New Year Week will still have a significant impact on Bitcoin markets. Chinese yuan is no longer the top fiat currency in Bitcoin trading, and China is not leading in Bitcoin hashrate anymore. This is arguably due to China’s ban on crypto transactions and mining in 2021.

However, according to Reuters, Chinese citizens recently rushed into Bitcoin, amid the local stock market’s turmoil. This could potentially provide Bitcoin with a new wave of demand.

Nevertheless, some of the Golden Week’s patterns have arguably started to show themselves. On February 7, or three days before the Chinese New Year, Bitcoin saw a 4% price increase, which helped the asset move out of its narrow range.&

The four-hour chart hints at the formation of an ascending triangle. However, it seems that the asset approached the pattern’s target (equal to the triangle’s height). In addition, the RSI reached the overbought zone, which could limit upward movement in the coming days.

Bitcoin broke a descending RSI line on a daily chart, which we mentioned in our previous market overview. This suggests a potential bearish-to-bullish reversal in market momentum. However, for that, the asset might first need to sustain above $43,400. The weekly chart continues to hint that Bitcoin may see another price correction before halving.

Noteworthy market events

Farcaster saw a more than 10x increase in daily active users

Farcaster recently became one of the hottest topics in crypto, as it was reportedly mentioned in crypto Twitter/X more often than any other crypto project, including Bitcoin. According to the Block data, daily active Farcaster users grew from approximately 2,700 on January 25, to over 29,700 by February 5. The surge was associated with the introduction of the Frames feature on its social media application Warpcast, on January 26, 2024.

Wait, Farcaster, Warpcast, Frames, what are these?&

• Farcaster is a protocol for decentralized social apps, which stores data like usernames, profile pictures, posts, reactions to posts, and friends/followers. Users can build an app that engages with this data, and transfer their activities across different apps. To put it simply, imagine if you were able to carry over your subscribers and posts across Facebook, X (formerly Twitter), Reddit, Discord, etc.
• Warpcast is the most popular app built on Farcaster, and is considered a Twitter clone.
• Frames effectively turn Farcaster-based posts into interactive mini-apps. For instance, users can mint NFTs, play Web3 games, run e-commerce shops, and make crypto purchases, all without the need to leave the platform.

Some crypto enthusiasts consider it a potential “killer app,” as many social media platforms deprioritize external links. Others viewed Farcaster as another round of temporary crypto social media hype, with some comparing it to friend.tech.&

While Farcaster is arguably decentralized, apps built on top of it could be centralized. Farcaster doesn’t have a native token, but some Farcaster-based apps have been offering airdrops of their tokens to early users. The latter partly contributed to Farcaster’s hype.

Solana experienced its first network outage since February 2023

A few years ago, there were a lot of memes circulating the suggestion that Solana had “working hours,” due to frequent outages the network faced throughout its operation history. Last year, some questioned whether or not these memes are still relevant, as Solana was enjoying its longest run of 100% uptime.

However, on February 6, 2024, at 09:52 UTC, the Solana blockchain stopped processing blocks, breaking its 346-day streak of no incidents of this kind. According to Solana’s status page, the network had a major outage for almost five hours. Of course, this inspired another wave of “Solana down” memes.

Laine, a software developer and Solana validator, clarified that Solana’s mainnet experienced “a performance degradation.” In a follow-up post, Laine announced the beginning of a network restart. Validators were asked to update their software to v1.17.20 to address the issue. Once 80% of the validators made the upgrade, the network restarted.&

FTX scaps relaunch, plans to “fully” repay customers

It might be time to say bye to FTX 2.0.

According to a recorded court hearing, FTX attorney Andy Dietderich said the exchange could “cautiously predict” full repayment to users and creditors. He also said that “after an exhaustive effort,” there is currently no plan to restart FTX, as there was “no investor ready to commit the needed capital to restart the offshore exchange.”

The “full recovery” of customer assets will be reportedly based on prices at the time of FTX’s actual bankruptcy. For instance, it would be around $17,000 for Bitcoin, and approximately $1,250 for Ethereum. FTX Creditor Committee lawyer Kris Hansen said that many FTX clients and creditors don’t consider it “full” compensation, but he acknowledged that this was a necessary decision.

FTX lawyers plan to introduce a detailed compensation plan later this month.

EigenLayer lifted a staking cap, causing its TVL to surge

Liquid restaking protocol EigenLayer temporarily removed its 200,000 ETH per-protocol staking cap. In a blog post, the project said that this move was designed to “invite organic demand.” As a result, EigenLayer’s total value locked (TVL) nearly doubled in just a day, surpassing $4 billion. This made EigenLayer the sixth-largest DeFi protocol, according to DeFiLlama.

Lido’s stETH tokens led the pack, accounting for approximately 80% of new deposits into the protocol. A new staking cap will be applied on February 9, 2024. EigenLayer also said that it plans to permanently remove the deposit limit at some point in the future.

One sentence news

• Celsius declared it has “emerged” from Chapter 11 bankruptcy protection in the U.S., and is poised to distribute $3 billion worth of crypto and cash to creditors.
• Ethereum Name Service (ENS) partnered with GoDaddy to allow the Web3 community to link their “.eth” domains to traditional Web2 URLs, at no extra cost.
• Jupiter faced rug-pull allegations, as the JUP price plummeted after an airdrop.
• Genesis asked a bankruptcy court for permission to sell $1.4 billion in GBTC shares.
• According to The Wall Street Journal, Facebook and Instagram might soon follow Google’s lead, and allow the promotion of U.S. spot Bitcoin ETFs.
• The U.S. Securities and Exchange Commission (SEC) adopted a rule that could place DeFi liquidity providers, who allocate $50 million or more, under the regulator’s supervision.

Notable price performances

LINK price reached a two-year high

The LINK price approached the $20 level, after showing a more than 20% weekly price increase. This helped the asset move out of the established rectangle (yellow channel), which had been in place since November 2023.&

The rectangle is considered a neutral pattern that depends on the direction of the breakout. In most cases, it continues an established trend. The recent breakout suggests that LINK could continue its upward momentum.

However, the asset formed bearish divergences on four-hour and weekly timeframes. In addition, the daily RSI approached the overbought zone. This indicates that LINK’s rectangle breakout could be a bullish trap, and deeper correction could soon follow.&

AAVE price could be inside a falling wedge

The AAVE price experienced a double-digit drop over the last 30 days, moving to the 0.618 Fibonacci point, and the 200-day SMA. The asset’s correction resembles a falling wedge pattern, which suggests that a price rebound could soon occur. This pattern is considered confirmed after the breakout of the resistance line. The pattern’s price target is typically equal to the height of the wedge.&

The daily RSI is still inside a downtrend, and is far away from the oversold zone, meaning there could still be space for downward movement. However, the asset formed bullish divergences on four-hour, and lower, timeframes. The latter hints that a potential breakout of the wedge’s resistance line could happen in the short term.

FLR temporarily became a unicorn, reaching a $1 billion market cap

The FLR price saw a massive bullish run in recent months, surging by more than 350% since October 2023. One of the catalysts that helped the asset maintain its upward momentum was Google Cloud, which joined the Flare network as a validator.

In its latest jump, the FLR price again broke the upper Bollinger band on a daily chart, suggesting that a price correction to the middle of the channel could follow. The asset showed similar behavior throughout its four-month rally. If the price moves below the middle of the Bollinger channel, it could push the asset to the ascending support line (cyan line).&

The weekly RSI also reached the overbought zone, hinting that the FLR rally might be approaching its end.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

The foundational reason for deciding to update our Spot Trading platform was to provide our customers with deeper liquidity. Compared with our legacy CEX.IO Exchange, we’ve achieved this goal. However, we continue working to improve our approach to make your trading journey even smoother, and more productive.

Sometimes our community members ask how this deep liquidity is achieved, and what’s under the CEX.IO Spot Trading hood. Given the recent rebrand of Exchange Plus to Spot Trading, we think it’s the perfect time to reintroduce our trading platform, and share some insights.&

Since everyone comes from a different background, and level of experience,& we’ll combine the ELI5 (Explain Like I’m Five) approach with a few technical details. And we’ll use pineapples as an accessible example. Yummy!

A pineapple delivery network (liquidity sources)

What do you do when you want to buy a pineapple? Typically, you go to the closest grocery store, or your favorite supermarket. The price may not be the best, or there are not enough pineapples available (a lack of liquidity). So you hear from your friend that the price is better elsewhere. But it may be too far or overwhelming to get there.&

However, what if your favorite marketplace, in addition to the pineapples they already have, offers you access to the inventory of other supermarkets, without needing to go there? You’ll get more pineapples, at potentially better prices, and a convenient way to buy them. That’s what our trading platform is doing, but with crypto instead of pineapples.

CEX.IO Spot Trading sources two liquidity providers: the CEX.IO trading engine, and CEX.IO Prime. The trading engine offers unique liquidity from market makers (they place their orders directly via market making API), with resting limit orders from Spot Trading.& &

All Spot Trading users have access to this trading engine via API, a web terminal interface, and our mobile application. This means anyone could be a market maker on CEX.IO. For instance, when you place a limit/stop limit order (which is not executed immediately) on our Spot Trading platform, you contribute to increasing the CEX.IO trading engine’s liquidity.&

On the other hand, CEX.IO Prime aggregates liquidity from the most liquid sources outside the CEX.IO ecosystem. These sources include other centralized and decentralized exchanges, liquidity pools, etc.

As a result, what users see in the Spot Trading terminal is an attractive mix of liquidity provided by the CEX.IO trading engine, as well as CEX.IO Prime.

Chasing the juiciest fruits (best prices)

Let’s say you need to buy 10 pineapples right now. You’re looking at the stall (order book), and want to pick the juiciest ones (with the best possible price). You ask a store representative to give you those (by placing a market order), and they immediately go find them.&

Furthermore, the clerk may go the extra mile, slicing the most delicious parts from different pineapples like a fruit ninja, to create the best pineapple available. Once again, it’s done immediately. In these cases, the juices could slightly leak (price slippage), but you can protect yourself from such situations (with our max slippage feature).

When paying for the10 pineapples at checkout, you could “tip” the store employee (pay a trading fee), or use your coupon (trading fee balance) to save funds. Now you can enjoy your pineapples, and/or put them in your fridge.

This simple example reflects CEX.IO Spot Trading’s power under the hood. It uses our own, proprietary Smart Router technology, which detects the best price between the CEX.IO trading engine and CEX.IO Prime. If the user’s order can be fully, or partially, executed with a better price on CEX.IO Prime, then Smart Router will send it there. Otherwise, the order will be filled using the CEX.IO trading engine.&

Notably, CEX.IO Prime can execute a single order, using several external liquidity sources at the same time, to achieve the best possible price. However, if available prices are equal, the CEX.IO trading engine will be prioritized against CEX.IO Prime to stimulate market-making provided by our users.

Making rare varieties (markets) common&

Let’s say you have specific tastes, and finding and acquiring the variety of pineapple you like/need can be difficult, and/or expensive. No worries, we have this case covered too!

The CEX.IO ecosystem features a so-called Converter, which empowers us to create new markets from existing ones. These new markets might not exist elsewhere.

For instance, let’s say there is a X/Y market, which could be uncommon, and, hence, not liquid. However, X/USDT and Y/USDT are quite popular. As a result, we can potentially combine both of these markets to create a new X/Y pair, with deeper liquidity on the CEX.IO Spot Trading platform.&

By the way, this feature also powers the Convert service in the CEX.IO Wallet, which empowers you to make anything-to-anything swaps.

Conclusion

In essence, the technologies integrated into our trading platform are purposefully adopted to provide our users with the best possible crypto prices, while offering a wide spectrum of markets with deeper liquidity. With our hybrid system of liquidity providers, we empower our users to become market makers of any magnitude, and capitalize on market opportunities within the broader crypto landscape.

The flexibility embedded in our approach allows us to swiftly adapt to evolving market conditions, seamlessly introduce new digital assets, and establish new markets. Through this brief exploration of the inner workings of CEX.IO Spot Trading’, we strive to showcase our commitment to delivering a platform that not only meets, but anticipates the dynamic needs of our users for pine… wait, cryptocurrencies.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

• BTC/USDC
• BTC/USDT
• DOGE/BTC
• DOGE/USDС
• DOGE/USDT
• ETH/BTC
• ETH/USDC
• ETH/USDT
• LTC/BTC
• LTC/USDC
• LTC/USDT
• WBTC/BTC
• WBTC/USDC
• WBTC/USDT
• XRP/BTC
• XRP/USDC
• XRP/USDT
• BCH/BTC
• BCH/USDC
• BCH/USDT

More pairs are in the works and will be available soon! In the meantime, we have a few more exciting updates to share.

We believe in staying sharp, always on the lookout for solid crypto information, developments, and potential opportunities. At a time when other crypto exchanges and companies are struggling to keep pace, we’re charging ahead of the pack. 

Case in point, our platform was recently approved for a Money Transmitter License in the U.S. District of Columbia, joining CEX.IO’s 30+ accreditations across the United States.&

Our U.S.-based users have always been able to buy and sell crypto through a variety of convenient means. But now, trading on our Spot Trading platform is also available in the region!&

Follow along as we delve deeper into how our trading platform caters to varying risk appetites among U.S.-based crypto enthusiasts, empowering all users to pursue emerging opportunities.&

What makes CEX.IO Spot Trading different?

CEX.IO Spot Trading features a variety of tools designed to empower beginners as well as established traders. However, providing our customers with deeper liquidity was the foundational purpose of this platform.&

So what is this deep liquidity, and how does it work? Let’s look at a straightforward example.

Imagine you want to buy milk. Typically, you might choose to visit the nearest supermarket. The upside? The store may be close to your home. The potential downside? The price may not be the most affordable, or the store could be out of milk altogether (a lack of liquidity).&

Now, imagine a slightly different scenario: you visit your nearest supermarket, and instead of being able to buy only the milk on the shelves, the store also offers access to other supermarkets’ inventories — in one place. This hypothetical scenario has three distinct advantages:

• A greater selection of milk
• Potentially better prices
• One-stop shop availability

If you observe the example above and swap the word “milk” with “crypto,” you’ll arrive at an understanding of how our CEX.IO Spot Trading platform achieves deep liquidity. Turns out it’s not a hypothetical scenario at all!

The technical side of CEX.IO Spot Trading

Our trading platform uses the CEX.IO trading engine, and CEX.IO Prime as its liquidity provider.&

On the one hand, the CEX.IO trading engine engages market makers to provide unique liquidity. Market makers place their orders directly via the market making API, with resting limit orders from Spot Trading.

Access to this trading engine is available to all Spot Trading users via our revamped mobile application, a web terminal interface, and API. Therefore, anyone can be a market maker on CEX.IO. For example, if you use our Spot Trading platform to place a limit/stop limit order (which is not executed immediately), you’re helping to increase the liquidity of the CEX.IO trading engine.

On the other hand — and, complementary to the CEX.IO trading engine — CEX.IO Prime uses the most liquid sources outside the CEX.IO ecosystem to aggregate liquidity. Examples of these sources include liquidity pools, decentralized exchanges, other centralized exchanges, etc.&

Consequently, the CEX.IO Spot Trading terminal displays a potent mix of liquidity provided to our users — internally and externally.

We’ll offer more in-depth guides on how to trade on our platform, specific to& U.S.-based users, soon. In the meantime, keep reading to learn how to make your CEX.IO ecosystem experience even more seamless, by streamlining your payment methods.&

New to CEX.IO? Here’s how to pair a debit card

To create a CEX.IO account, U.S.-based users should have their Social Security Number and a government-issued ID ready. You can complete this process effortlessly via a web browser. Once the verification process is complete, you’ll unlock the ability to pair a credit or debit card with your account. Here’s how to do that.

Pair a card via web browser

Here are the necessary steps to pair a credit/debit card with your CEX.IO account using a web browser:

• Visit CEX.IO and Login to your account
• Click on Wallet, in the Products tab
• Go to Add Funds in the upper right hand corner of the screen
• Navigate to, and click on, Select Payment Method
• Select Debit Card at the bottom of the pop-up
• Enter your card information, and click on Add Card.

Note that you can also enable/pair additional payment methods, such as PayPal, Google Pay, and Apple Pay. The process is almost identical to the steps outlined above, and is generally intuitive and straightforward.&

Pair a card via the CEX.IO App

Here’s how to pair a preferred card from the CEX.IO App:

• Tap the Profile icon in lower right corner of the app home screen
• In the menu, tap on Card Manager
• Choose your preferred card currency, and click on Add Card at the bottom of the screen
• Fill out the card details, then click Proceed
• Enter your card information and complete the process

We hope you’ve enjoyed this burst of good news, and exciting improvements to your crypto experience. We have a lot more to come!

In the meantime, may the markets trend in your favor.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Market spotlight: Bitcoin bounced off $39,000, amid a new wave of optimism

Bitcoin’s price registered a fifth green month in a row, showing a 0.6% increase in January 2024. At first glance, that percentage may not seem substantial. However, for the first time in over 10 years, Bitcoin experienced a green January, following a September-December rally.&

Bitcoin experienced six consecutive green months only one other time during its reign — between October 2020, and March 2021. Could Bitcoin repeat this run by staying green in February 2024?&

Crypto markets saw a new wave of general optimism, which was predominantly fueled by Bitcoin. BTC price bounced off $39,000, and saw a 1.5% increase of its market dominance. Here are some potential catalysts behind the move:

• GBTC outflows — They dropped by 70% since the peak, and have been showing consecutive decreases almost every trading day. Inflows into all other U.S. spot Bitcoin ETFs began outweighing GBTC outflows. This sparked speculation that increased selling pressure, which was arguably inspired by Grayscale’s product, might be approaching its end.
• Google ads — Starting January 29, Google allowed the promotion of “cryptocurrency coin trusts” that target U.S. customers. As anticipated, numerous asset managers, including BlackRock and VanEck, began advertising their Bitcoin ETFs. Many speculated that this could boost public awareness about U.S. spot Bitcoin ETFs, and potentially affect inflows to these products.
• USDT flux — According to CryptoQuant, there is a correlation between USDT circulating supply and Bitcoin’s price. When the USDT supply increases, this typically, positively affects Bitcoin price. Over the last 30 days, the USDT supply increased by over $5 billion.

Despite these positive developments, bears might continue to dominate the market in the short term. After bouncing off the 0.382 Fibonacci point, Bitcoin’s price failed to sustain above $43,300. The recent price movement resembles an ABC correction pattern, suggesting that the 0.5 Fibonacci point could be the next potential target for bears.

The daily RSI is within a downtrend, and is far away from the oversold zone, meaning there could still be space for downward movement. If the asset breaks RSI’s descending resistance line (white line), this could hint at a potential bearish-to-bullish reversal in market momentum.

Noteworthy market events

Bitcoin ETF issuer Bitwise disclosed its wallet address

On January 24, Bitwise announced on its X (formerly Twitter) account that it became “the first U.S. Bitcoin ETF issuer to publish its Bitcoin addresses, empowering anyone to verify BITB holdings and flows.”

The crypto community widely welcomed this move. As a way to support it, many community members sent meme amounts of BTC (6969 and 42069 satoshis), as well as Bitcoin inscriptions, to Bitwise’s wallet. This meant that Bitwise’s ETF temporarily became “overcollateralized.” These donations could be shared with ETF investors, potentially in the form of fee cuts.

While endorsing Bitwise’s dedication to transparency, crypto enthusiasts were also concerned about security. Some were “shocked” by the lack of test transactions, and questioned the asset manager’s use of multisig. Others were worried that Bitwise could theoretically receive “sanctioned Bitcoin,” causing potential troubles for the ETF issuer.&

Solana’s DEX Jupiter temporarily became the largest in terms of trading volume

On January 29, Solana-based decentralized exchange (DEX) Jupiter surpassed the combined trading volume of Uniswap V2 and V3 protocols, reaching $480 million in a day. At the time of this writing, Jupiter holds second place in terms of trading volume, after Uniswap V3.

But how did Jupiter achieve this? Here’s a brief overview of events:

• Two weeks ago, pseudonymous Jupiter founder Meow announced that an airdrop of the platform’s native token, JUP, would take place on January 31. Before its launch, they also announced an airdrop of a “real memecoin” to test the platform.
• This memecoin turned out to be a token called WEN, which refers to a popular “Wen, airdrop?” phrase. Any Solana user who had interacted with Jupiter in the past six months, as well as owners of Solana’s Saga phone, were able to claim WEN within a few days. This means around one million wallet addresses were eligible for the airdrop.
• The WEN airdrop sparked increased trading activity on Jupiter, helping it to reach top rankings. Almost 40% of WEN tokens reportedly remained unclaimed, and were subsequently burned.
• The JUP token was launched on January 31, as anticipated. Within the initial circulating supply of 1.35 billion tokens, one billion JUP was allocated for airdrops.

As a result, two massive airdrops to a wide audience helped the platform enjoy the hype.

Polygon Labs introduced AggLayer, which is set to launch in February

On January 24, Polygon Labs shared details about its AggLayer solution, which “synthesizes the benefits of both integrated (monolithic) and modular blockchains using zero-knowledge (ZK) technology.”

According to the Polygon Labs team, the solution empowers:

• Connected L1 and L2 networks to gain access to liquidity, via a single pool.
• Developers to expand their reach to users through seamless cross-network transactions.
• End users to explore the crypto ecosystem similarly to the modern Internet — a unified environment that does not require cumbersome bridges.

Polygon Labs plans to launch the AggLayer mainnet in February, during the Aggregation Day event.

Stellar delayed the launch of its Ethereum-style smart contracts

On January 25, the Stellar Development Foundation (SDF) notified the ecosystem of a bug that was discovered in Stellar Core v20.1.0. The bug could theoretically affect applications and services based on new “Soroban” smart contracts. At the time, the SDF said the vulnerability posed “little risk” given the phased rollout plan.

However, after receiving feedback from its developer community, the SDF decided to delay the upgrade launch, according to a blog post. A fix for the bug is anticipated to be available within the next two weeks. The SDF announced that the next vote related to the smart contracts release will take place on February 20, 2024.

One sentence news

• The U.S. government filed a notice to sell over $130 million in Bitcoin, linked to Silk Road forfeitures.&
• The first spot Bitcoin ETF application was submitted to Hong Kong’s regulator.&
• According to Bloomberg’s ETF analyst Eric Balchunas, Charles Schwab could soon launch its own spot Bitcoin ETF.
• Hong Kong’s SFC labeled Floki and its staking program a suspicious investment product.
• Abracadabra Finance reportedly experienced an exploit, resulting in the loss of over $6.4 million in crypto assets.
• Solana introduced Token Extensions, enabling greater customization over token development on the chain.

Notable price performances

SOL price jumped amid increased TVL and user activity

Over the last week, Solana enjoyed increased user activity, amid airdrops of tokens associated with the Jupiter decentralized exchange. Solana’s total value locked (TVL) jumped by over 20% in a week, according to DeFiLlama.

This helped the SOL price move out of the descending channel (white channel), and retest the psychological level of $100. However, bulls failed to sustain the price above said level, hinting that it could be a false breakout. The daily Awesome Oscillator (AO) experienced a zero cross, suggesting that bulls may have an upper hand. However, the daily and weekly RSIs continued showing signs that price correction could stay for a while.

XRP price dropped amid Ripple executive’s hack

On January 31, on-chain analyst ZackXBT reported that Ripple was arguably hacked, resulting in a theft of over 112 million worth of XRP. Shortly thereafter, Ripple co-founder and executive chairman Chris Larsen said that his personal accounts had been hacked, not Ripple’s. He also clarified that the company notified exchanges, asking to freeze stolen funds.

Following this event, the XRP price dropped by over 5% in a day. Other catalysts behind the price drop could be the formation of a bearish rising wedge pattern (white lines), and reportedly increased selling pressure from XRP whales. However, the asset formed a bullish divergence (cyan line) on a four-hour chart, suggesting that a price rebound could soon follow.

DYDX experienced another major token unlock

The dYdX platform recently enjoyed positive developments, temporarily surpassing Uniswap in terms of trading volume, and adding liquid staking on its dYdX Chain. However, the DYDX price continued to experience lower highs, struggling to break the descending resistance line (green line).

On February 1, 2024, over 10% of the DYDX token supply was unlocked. Small token unlocks typically don’t significantly affect asset prices, but large ones (above 1%) are widely considered factors that could drive prices lower. The previous major DYDX unlock happened on December 1, 2023, which arguably fueled the following downward movement. This suggests that the asset could soon try to retest, or even break, the 200-day SMA.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

While politics can be off-putting, residents can now opt to shed their partisan cloaks and seize emerging opportunities outside the arena. Devoid of mudslinging, grandstanding, and, for the most part, pontificating, the crypto ecosystem speaks in a language of innovation, gains, and losses.&

The new license joins CEX.IO’s 30+ accreditations across the United States, and expands best-in-class crypto access for D.C. residents. CEX.IO’s award-winning crypto products and services offer intuitive on-ramps for curious participants to explore the digital economy alongside a trusted guide. For over a decade, CEX.IO’s reputation for reaching across the aisle, and building bridges between traditional finance and decentralized networks, has defined its soaring reputation. By encouraging a path of regulation and thorough due diligence, CEX.IO’s commitment to providing a user-centric experience has earned the support of over six million participants world wide. And for those who’ve seen their fair share of administrations, the platform’s advanced features can help call the next session of your crypto journey into order.

Like the many issues that can lead a person to run for office, crypto enthusiasts are also looking to solve problems. Whether cutting remittance red tape, experimenting with peer-to-peer transactions, or acquiring goods and services, all can function as avenues toward change. As great (and less great) minds clash over the issues of the day, residents of the U.S. capital can now escape to the digital economy when the discussion drags on. Afterall, politics, like baseball, shares the courtesy of publishing the results once the game is over.

A few provisions before we vote to adjourn: Buy, Sell, Swap, and Store features are available through a web browser, and on-the-go via the CEX.IO App. While we’re still working to get Staking and Savings Services through some gridlock, we hope the wide array of possible payment methods proves attractive. For the latest ecosystem updates, follow the company’s official channels, and stay tuned for more exciting announcements, this election season and beyond.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

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In this week’s crypto highlights, we explore the price movements of BTC, AVAX, DOGE, and UMA. Additionally, this recap includes other notable industry news items that occurred over the last seven days. Without further ado, let’s dive into the latest market developments.

Market spotlight: Bitcoin dropped by 20% since U.S. spot ETF launch

Imagine that people wished, “let this happen and we’re going to the moon,” and/or “a ton of capital is about to flow into Bitcoin.” Then imagine that when the event occurred, Bitcoin’s price failed to surge. It actually faced a 20% drop.

Of course, some might be upset, but such drops are typically viewed as common and not a big deal. In addition, we’ve highlighted in multiple blog posts that this could happen. But why was there a drop?

• ETF anticipation rally — Bitcoin’s price almost doubled over the last five months, moving from $25,000 to $49,000. Almost 90% of Bitcoin was held in profit, meaning it would be logical to anticipate a certain portion of profit-taking. In this scenario, a 20% correction looks reasonable, maybe even healthy. However, such drops are becoming less frequent.&
• Disappointment — Spot Bitcoin ETFs outperformed their gold equivalent in terms of inflows in the first trading days. They also displayed record trading volume compared to other TradFi assets. Still, the initial results weren’t as good as some anticipated.
• Grayscale — Last week, we mentioned that the U.S. spot Bitcoin ETF launch currently resembles the release of once-locked GBTC funds, rather than the opportunity to put money into ETFs. That’s still the case. Grayscale continues to dominate in spot Bitcoin ETF trading volume. GBTC’s outflows have been larger recently, than inflows in all other similar U.S. products. For instance, FTX reportedly sold around $1 billion in Grayscale’s spot Bitcoin ETF shares. Although over $4 billion has already left GBTC, after the ETF launch, there is the possibility that this trend could continue for a while.
• Mt.Gox — Bitcoin temporarily moved below $39,000 amid the news that the Mt.Gox exchange, which collapsed in 2014, inched toward Bitcoin redemptions. According to the existing Mt.Gox plan, the platform will distribute assets of 142,000 BTC, 143,000 BCH, and 69 billion Japanese yen. Payments will continue to take place through October 2024. For some, this means a potential GBTC 2.0, or another opportunity for long-term Bitcoin holders to cash out, after years of waiting.

These are not all the catalysts that inspired Bitcoin to go diving, but they’re considered some of the major ones. Now, let’s get back to price.

The recent 20% correction pushed Bitcoin to the 0.382 Fibonacci point. Currently, the asset is trying to sustain above it, but the daily and weekly RSI hint that bears may continue to dominate in the short term. The $37,000 level could act as the next potential target for this group.

However, Bitcoin’s price closed the CME gap formed in December 2023 by moving below $39,000. In addition, on January 24, GBTC outflows were “only” $425 million, which is the lowest amount since the ETF launch. This sparked speculation that the GBTC selloff might soon stop dumping the crypto market. With a new potential wave of optimism, Bitcoin could try to retest the 20-day EMA.

Noteworthy market events

Terraform Labs filed for bankruptcy in the U.S.

It seems that Terraform Labs, the entity responsible for the LUNA and UST cryptocurrencies, has thrown the towel.

The company initiated Chapter 11 bankruptcy proceedings in the U.S., saying that the decision is a strategic move aimed at sustaining its operations and continuing its support for the Terra community and ecosystem. According to the filing, the organization’s estimated assets fall within the range of $100 to $500 million, aligning with its liabilities.

The company is currently entangled in a legal battle with the U.S. Securities and Exchange Commission (SEC). The regulator accused both Terraform Labs, and its founder Kwon, of selling unregistered securities and committing fraud. Earlier this month, a judge sided with the SEC on some of the accusations, labeling UST, LUNA, and MIR as securities.&

Ethereum’s Nethermind bug sparked centralization worries

On January 20, a bug in Nethermind, Ethereum’s client software used by validators to interact with the network, kicked some Ethereum validators offline. Nethermind developers quickly fixed the problem, and asked affected users to update their software. Earlier this month, a similar incident impacted Besu, another client software, which is used by around 4% of Ethereum validators.

The back-to-back outages have reignited a discussion around Ethereum’s client diversity. The community has been speculating that a potentially critical bug in the Geth client could halt the entire Ethereum network. Geth is like Bayern Munich in the Bundesliga over the last 10 years. It completely dominates the space. While Geth has encountered bugs before, it’s never experienced critical outages akin to those witnessed by Nethermind and Besu.

After the Nethermind bug, some Ethereum community members began encouraging a switch from Geth. Some went even further and said that they would not use the services of any staking providers that rely on Geth. Notably, Geth’s share dropped from 84% to 78%, while Nethermind’s increased from 8% to 14%, over the last few days.

Manta Network experienced a DDoS attack, faced money laundering allegations

For most projects, an initial token issuance is a day of celebration. However, things were different for layer 2 (L2) blockchain, Manta Network.

On January 18, Manta Network experienced the listing of its native token, MANTA, on multiple exchanges. The same day, the network faced a widespread DDoS attack. As a result, a large queue of transactions accumulated in the network, which led to an increase in transaction time and gas prices.

At the same time, the Manta Network faced accusations of money laundering following its listing on the second-largest South Korean exchange, Bithumb. Users allegedly discovered a 2 million MANTA transfer to the personal wallet of a member of Manta’s South Korean unit. The funds were deposited on Bithumb, accounting for 75% of the exchange’s balance.

Five minutes after the Bithumb listing, the MANTA price jumped to $230. Manta’s team member then allegedly sold tokens, and received 2094.7 ETH (over $4 million), which were transferred to his or her own wallet. According to Kaiko, MANTA prices varied significantly less on other exchanges. Manta responded that it allocated part of the community funds to its South Korean division, as part of its current tokenomics model.

Despite the controversial launch, the MANTA token showed a 20% weekly price increase, and joined the top 100 digital assets by market cap.

Trezor disclosed 66,000 users could be affected by a phishing attack

Developers of the Trezor hardware wallet reported an incident involving a third-party support provider, leading to a data breach affecting approximately 66,000 customers. Individuals who engaged with Trezor’s support team at any point since December 2021 may have had their data compromised. The unauthorized access allowed the attackers to obtain the names/pseudonyms, and email addresses of users who sought assistance from customer support.

The Trezor team sent emails to all victims warning of possible phishing risks. At least 41 users received direct email messages from the attacker, requesting sensitive information related to their recovery seeds. Trezor emphasized in its communication that genuine team representatives will never solicit users to share recovery seeds.

One sentence news

• According to Bloomberg’s ETF analyst James Seyffart, the SEC could approve options on spot Bitcoin ETFs next month.
• According to Coindesk, MetaMask is currently testing a “transaction routing” feature, which could “shake up how Ethereum works.”&
• Crypto exchange OKX said it will compensate users who were affected by a recent flash crash of its OKB token.
• Frax Finance plans to deploy its own Ethereum L2 network, called Fraxtal, in February.
• Chainlink integrated Circle’s Cross-Chain Transfer Protocol (CCTP) into its interoperability protocol, to ensure a high level of security for USDC transfers across chains.
• The Monetary Authority of Singapore (MAS) announced that it will not allow the listing of spot Bitcoin ETFs for retail investors in the country.

Notable price performances

AVAX dropped by 40% since its 2023 high

Like many other altcoins, AVAX experienced a price rally in Q4 2023. The asset reached its peak last year on December 23, then dropped by 40%. Some of the catalysts behind this move include decreased network activity, and a 20% drop in total value locked (TVL).

At the time of this writing, the AVAX price is moving inside a descending parallel channel (white channel), and is trying to defend the 0.5 Fibonacci point (yellow line). The daily RSI moved to negative territory, but not oversold, meaning that a price correction might follow.&

However, such descending channels typically contain upward movements. If the asset breaks upward from the descending channel, it could potentially push the price to $40.

DOGE price experienced a rollercoaster due to an X Payments account

The DOGE price jumped by 15% on January 20, 2024, amid the creation of the @XPayments account on X (formerly Twitter). Despite a lack of posts, the account quickly amassed over 100,000 followers. The community has been speculating that Dogecoin could be added as a payment method on the social media platform.&

However, the asset lost almost all of its gains in the following days, as hype faded. If the DOGE price fails to sustain above the $0.075 support level, it could try to retest the 200-day SMA. The weekly and daily RSI is near 50, which could be a sign of an undetermined trend.

UMA price jumped by over 200% in a week

While most digital assets joined Bitcoin in its diving endeavor, UMA differentiated itself, showing a more than 200% weekly price jump at a certain point. On January 18, Uma teased a MEV-focused solution called Oval. It aims to help lending protocols “reclaim over $100m of free money lost each year to MEV,” according to Uma co-founder Hart Lambur.&

The tool was launched on January 23, and UMA’s local high was reached the same day. Afterward, the asset started experiencing a price correction, moving below the 0.382 Fibonacci point. The Awesome Oscillator (AO) on a four-hour chart formed a bearish divergence, and made a zero cross, suggesting that downward movement has the potential to continue. UMA’s price slide was accompanied by decreased volume.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

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Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Market spotlight: First results from U.S. spot Bitcoin ETFs

On January 10, the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin exchange-traded funds (ETFs), and they began trading the following day. But not without a little drama.

While Robinhood and other market participants wanted to offer spot Bitcoin ETFs “as soon as possible,” the second-largest asset manager Vanguard said it won’t allow its users to trade them. There were also numerous rumors that UBS, Citi, Edward Jones, and Merrill Lynch might follow Vanguard’s lead. Citi and UBS then reportedly said they would open access to spot Bitcoin ETFs.&

Some users were not happy with what they view as babysitting, and moved to Fidelity and other more crypto-friendly competitors. All this tension aside, here are spot Bitcoin ETF results from the first three trading days (January 11-16), and a few takeaways:

• Spot Bitcoin ETFs saw almost $10 billion in total trading volume, with Grayscale’s GBTC accounting for more than half. On day one, new products showed $4.6 billion in volume, but this figure decreased over consecutive days.
• Grayscale predominantly faced outflows, resulting in around $1.17 billion leaving GBTC in the first three days. Other asset managers typically saw inflows, with BlackRock, Fidelity, Bitwise, and Ark 21Shares taking the largest portions. In general, U.S. spot Bitcoin ETFs faced more inflows than outflows.
• According to CoinShares, digital asset funds saw the largest inflows in more than two years, but they did not break the record set at the launch of futures-based Bitcoin ETFs in October 2021. Some European and Canadian funds reportedly saw outflows arguably in favor of U.S. products.
• Most issuers of fresh U.S. spot Bitcoin ETFs now hold more than 1,000 BTC, with BlackRock accumulating over 16,000 BTC. GBTC, which was originally launched in 2013, currently holds around 606,000 BTC.
• Most U.S. spot Bitcoin ETF shares dropped in price by over 10%.

Disappointment?

In covering the results of a third trading day, Bloomberg’s ETF analyst Eric Balchunas said that spot Bitcoin ETFs saw three times more trading volume in a day, than the 500 ETFs launched in 2023 combined. That’s quite impressive, however people seem to be more focused on inflows.

Shortly before the SEC’s approval, some experts argued that BlackRock alone could attract $3 billion in its first trading day. There were also claims predicting $2-4 billion in inflows in the first two days. Others anticipated inflows of $50 billion to $100 billion to Bitcoin ETFs this year. However, over the first three trading days, net inflows (it’s a lagging metric) in all spot Bitcoin ETF funds were around $782 million. So there may be some performance disappointment.

As we mentioned earlier, loud statements could trigger a scenario where frustration with ETF launch results temporarily pushes Bitcoin’s price lower.

Escaping Grayscale

As GBTC dominates in trading volume and outflows compete with others’ inflows, it might seem like the main effect of ETF approval was the ability to move money out of Grayscale, rather than to put money into ETFs. At least, it looks that way right now.&

For most of its history, GBTC’s standout feature has been the ability to put Bitcoins in, without the opportunity to take them out. Grayscale has wanted to offer withdrawals to its users for a long time, which is why it battled with the SEC to convert its trust into a spot Bitcoin ETF. And now, GBTC, which accumulated over 26 billion in Bitcoin, allows people to withdraw.

It’s an open question as to how many more assets under management are going to leave Grayscale, either for users to fix potential profits, or to move to competitors with lower fees.

Other noteworthy market events

Circle filed for IPO in the U.S.

Circle, the issuer of the second-largest USDC stablecoin, confidentially submitted paperwork for an initial public offering (IPO) in the U.S., aiming to become a publicly-traded company. Details regarding the number of shares to be offered, and the expected pricing range are currently undisclosed (make it $1 per share, just for fun!).

CEO Jeremy Allaire emphasized that going public is a fundamental strategy for Circle, which is focused on enhancing trust and transparency within the firm. This IPO filing follows a prior attempt in 2022, when Circle pursued public listing through a merger with a special purpose acquisition company. The deal was subsequently terminated.

TUSD depegged amid reserve concerns& &

Over the last week, some crypto community members speculated that the TrueUSD (TUSD) stablecoin was not so “true.”

On January 15, the TUSD stablecoin fell below its $1 peg by over 1%. The event coincided with an unusually high volume of TUSD selling on Binance. At a certain point, Binance traders sold $451 million worth of TUSD, and bought approximately $300 million TUSD, in a day. This suggests around $151 million in net selling pressure.

According to the Protos report, the stablecoin’s attestation system showed several errors in its API, and was unable to calculate the dollar value of its collateral assets. This sparked community concerns about the state of TUSD’s reserves.&

In response, the TUSD team said that “regular attestations are ongoing,” and that “short-term arbitrage opportunities” might be associated with Binance Launchpool activities.

A $15 billion XRP transfer turned out to be a failed exploit

On January 14, a blockchain-tracking X (formerly Twitter) Whale Alert account reported a 25.6 billion XRP transaction in a now-deleted tweet. That amount is nearly half of XRP circulating supply, and the allegation was movement of that supply from an unknown wallet to Bitfinex. The Whale Alert team later deleted the post, stating that there was an issue with proper reading of the Ripple node response.

The transfer did actually exist, however it was just for a few cents worth of XRP. The Bithomp blockchain explorer showed the transaction failed, as the sender “did not have enough liquidity.”&

According to Bitfinex’s Chief Technology Officer Paolo Ardoino, the idea was seemingly to trick Bitfinex into accepting a large transfer as real, which could have possibly opened the door to a hack. Ardoino explained that this was a “partial payments exploit” attempt, and the attacker assumed that the exchange’s software was not configured correctly to process such transactions.&

The attacker reportedly tried this same trick with other exchanges as well. According to blockchain data, they attempted to transfer 58.9 billion XRP on Binance, but this transaction failed similarly.

One sentence news

• The U.S. Internal Revenue Service (IRS) paused its $10,000 cryptocurrency reporting rule for businesses and professional traders.&
• CoinShares exercised an option to acquire Valkyrie Funds, an issuer of a recently approved U.S. spot Bitcoin ETF.
• Venezuela pulled the plug on its Petro cryptocurrency, ending a five-year experiment.
• X (formerly Twitter) no longer supports NFT profile pictures.
• During an AMA session on Reddit, Ethereum co-founder Vitalik Buterin considered an increase of the network gas limit to 40 million, from the current 30 million (+33%), to boost throughput.
• The Fantom Foundation announced that it had reduced the validator staking requirement from 500,000 FTM, to 50,000 FTM tokens, or by 90%, following a governance vote.

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Notable price performances

Bitcoin price may have reached a pre-halving rally peak

On the first trading day of U.S. spot Bitcoin ETFs, Bitcoin’s price temporarily jumped to $49,000, and then dropped below $42,000. At the time of this writing, the asset was predominantly moving sideways, between $42,000 and $43,000 over the last week.&

According to Glassnode, the recent drop could be associated with profit-taking made by long-term holders, and “overheated” open interest in long positions on derivatives markets. CryptoQuant also reported that price correction has the potential to continue, as “several on-chain metrics and indicators suggest that a new rally could not be in the cards.”

With the latest jump to $49,000, the BTC price also reached the upper border of a downside Ichimoku Cloud, which we first covered a few months ago. This level identified the peak of a pre-halving price rally in two previous cycles, suggesting that Bitcoin price could potentially experience correction until halving in mid-April. Back in November, we highlighted $36,000, as a potential halving target based on performance in previous cycles.

In addition, the daily RSI is currently moving inside a downtrend, entering a negative zone. However, it hasn’t yet reached the oversold zone, meaning there still could be room for price correction.

SUI price rallied amid a TVL surge

The SUI price became one of the top climbers, showing an almost 25% weekly, and 100% monthly increase, respectively. Notably, the network’s total value locked showed similar performance within said periods.

As a step to bolster its ecosystem, Sui recently joined forces with Stork, an off-chain data feed oracle. Stork will supply real-time pricing data to application developers, decentralized exchanges (DEXs), and lending protocols that operate on Sui’s blockchain.

The asset reached the overbought zone on a daily chart, and formed a bearish divergence with RSI on a four-hour timeframe. This suggests that SUI could experience price consolidation, or even correction, in the short term.

CHZ price jumped following M&A anticipation

On January 9, CHZ, the native token of the Chiliz network used to purchase Fan tokens on Socios.com, bounced off the 200-day SMA, showing gradually increasing trading volume.&

On January 16, its trading volume more than quadrupled after Alexandre Dreyfus, the CEO of Chiliz, said the project “will look at some aggressive M&A in 2024.” This helped CHZ join the top climbers club this week, showing a more than 20% price increase.

However, the asset has already started to experience a correction, moving below the 0.236 Fibonacci point. This price decline was accompanied by decreasing volume, suggesting that bulls might still have an upper hand. However, the asset may first need to retest the 50-day SMA (orange line).

LDO dropped by 15%, after a month-long rally

From December 19, 2023, to January 11, 2024, the LDO price doubled, moving to $4. The asset formed a bearish divergence with RSI on a daily chart, and a price correction followed. Starting January 11, LDO dropped by over 15%, resulting in one of the largest weekly declines among the top 100 digital assets by market cap.

As a result, the asset approached the 20-day EMA, which currently acts as a dynamic support. The Awesome Oscillator (AO) on a four-hour timeframe suggests that the price could rebound from the 20-day EMA, or the 0.382 Fibonacci point, as a bullish divergence was formed. In this case, the asset could retest $3.42. But if the 0.382 Fibonacci point is broken, bears could potentially push the price to $2.73, or even an ascending support line (white line).

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

Exchange Plus is currently not available in the U.S. Check the list of supported jurisdictions here.

Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

Below, we briefly delve into these new additions, exploring the possibilities they bring:

• Arbitrum (ARB) — Arbitrum offers a scalable and decentralized Ethereum layer 2 (L2) solution, with optimistic rollups to make transactions faster and more cost-efficient. Available pairs: ARB/USD, ARB/USDT, ARB/BTC.&
• Celo (CELO) — The platform enables crypto transactions with just a phone number, which is used as a wallet address. Available pairs: CELO/USD, CELO/USDT.
• Enjin Coin (ENJ) — Enjin provides an ecosystem of blockchain-based gaming products that empowers game developers to tokenize in-game items. Available pairs: ENJ/USD, ENJ/USDT, with reduced 0.10% fees.
• EOS (EOS) — A third-generation Layer 1 (L1) blockchain with low latency and high performance, that doesn’t charge transaction fees. Available pairs: EOS/USD, EOS/USDT, EOS/BTC.
• Flow (FLOW) — A permissionless Layer 1 blockchain platform that enables developers to create decentralized Web3 applications. Available pairs: FLOW/USD, FLOW/USDT.&
• Hedera (HBAR) — It utilizes a hashgraph consensus algorithm, where instead of selecting a single validator to choose the next block, the community of nodes comes to an agreement on which transactions to add. Available pairs: HBAR/USD, HBAR/USDT.&
• NEAR Protocol (NEAR) — A carbon-neutral blockchain with human-readable account names that adopts sharding technology, to offer high-scaling solutions for building and running decentralized applications (dApps). Available pairs: NEAR/USD, NEAR/USDT, NEAR/BTC.
• Theta Network (THETA) — A decentralized network with a dual-token model that focuses on video streaming, and incorporates various incentive mechanisms for bandwidth and content-sharing. Available pairs: THETA/USD, THETA/USDT, THETA/BTC.
• Aptos (APT) — Aptos was built using the Libra/Diem technology developed at Meta and claims that its network can maintain 160,000 transactions per second. Available pairs: APT/USD, APT/USDT.
• Velo (VELO) — A Stellar-based financial protocol aimed at promoting borderless asset transfers and digital credit issuance. Available pairs: VELO/USD, VELO/USDT.
• GMX (GMX) — A decentralized exchange (DEX) launched on Arbitrum, and focused on spot and perpetual trading. GMX/USD, GMX/USDT.&
• Fetch.ai (FET) — A decentralized machine learning (ML) network with a crypto economy that offers tools to build, deploy, and monetize artificial intelligence (AI) services. Available pairs: FET/USD, FET/USDT.&
• FIO Protocol (FIO) — It serves as a decentralized layer within the broader blockchain ecosystem, providing essential workflow, data, and confirmations that precede transactions on various other blockchains. Available pairs: FIO/USD, FIO/USDT.&
• Frax Share (FXS) — FXS functions as a governance token within the Frax Protocol, a fractional algorithmic stablecoin system. It accumulates fees, seigniorage revenue, and surplus collateral value as part of its role in the ecosystem. Available pairs: FXS/USD, FXS/USDT.&
• Hashflow (HFT) — A DEX that offers seamless token swapping across various blockchains, and focuses on achieving zero slippage. Available pairs: HFT/USD, HFT/USDT.&
• Oasis Network (ROSE) — A privacy-first blockchain that offers tools for confidential smart contracts and the development of privacy-focused dApps. Available pairs: ROSE/USD, ROSE/USDT.&
• Siacoin (SC) — A decentralized cloud storage platform that empowers users to rent data storage space from each other. Available pairs: SC/USD, SC/USDT.&
• Sei (SEI) — A Layer 1 blockchain designed for the seamless exchange of digital assets within diverse domains such as gaming, social media, and NFTs. Available pairs: SEI/USD, SEI/USDT.
• Stacks (STX) — A blockchain platform that broadens the capabilities of Bitcoin by facilitating the implementation of smart contracts and dApps on the Bitcoin network. Available pairs: STX/USD, STX/USDT.&

All above-mentioned digital assets are available for buying, selling, and converting via the CEX.IO Wallet, as well as trading on Exchange Plus. Deposits and withdrawals are coming soon for respective cryptocurrencies.&

Our team continues exploring the space to offer more gateways to the multifaceted crypto economy. Follow us on social media, and/or sign up for company updates, to be aware of the latest developments within the CEX.IO ecosystem.

Note: These assets are also currently not supported for U.S. customers.

Exchange Plus is currently not available in the U.S. Check the list of supported jurisdictions here.

The web content provided by CEX.IO is for educational purposes only. The information and tools provided neither are, nor should be construed as, an offer, or a solicitation of an offer, or a recommendation, to buy, sell or hold any digital asset or to open a particular account or engage in any specific investment strategy. Digital asset markets are highly volatile and can lead to loss of funds.

The availability of the products, features, and services on the CEX.IO platform is subject to jurisdictional limitations. To understand what products and services are available in your region, please see our list of supported countries and territories. This page includes additional links to information about individual products, and their accessibility.&

Market spotlight: the SEC approved all 11 spot Bitcoin ETF applications

After more than a decade since the first filing, U.S. spot Bitcoin exchange-traded funds (ETFs) were approved by the U.S. Securities and Exchange Commission (SEC). And not just one, but all 11 applications simultaneously.

The hype was so big that the link to the approval document occasionally didn’t work, showing an error message. Some even thought that it was another fake, but it wasn’t.

In a statement released on January 10, SEC Chair Gary Gensler confirmed the approval of spot Bitcoin ETFs, but not without some barbs. He said “while we approve the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin,” highlighting that the asset is “also used in illicit activity” (cash is as well, and on a larger scale, but whatever).

Notably, the approval happened with a tiny margin. It turned out that Gary Gensler, Hester Peirce, and Mark Uyeda were the commissioners (out of five) who ultimately voted “yes” to spot Bitcoin ETFs. That means Gensler might have been the ultimate decider. Caroline Crenshaw, one of the commissioners who voted “no,” stated she was “deeply concerned” about this decision. Considering Gensler’s tone of voice in the approval statement, some suggested he was “forced” to vote “yes” due to significant market pressure and expectations.

Fee war

In the week preceding approval, ETF issuers were fighting a “fee war” to attract the first clients. The approval of so many similar ETFs at the same time is not common in the TradFi world. The closest event of this kind was the approval of futures Ethereum ETFs in October 2023. As a result, applicants were trying to stand out somehow.

When fee schedules were released, some experts immediately called them “lower than expected.” But most applicants cut proposed fees even lower, after other asset managers shared their schedules (some even cut fees multiple times in a few days). In addition, many of them will completely waive their fees for a certain period of time, or until a certain threshold. Considering the proposed fees, these ETFs may even attract institutional market participants, who already use crypto-native custody services.

Some other interesting takes:

• BlackRock reportedly seeded $10 million for its ETF, but there are rumors that it has $2 billion in capital lined up from existing Bitcoin holders who want to rotate to its ETF within the first week.
• VanEck and Bitwise pledged to donate 5% and 10%, respectively of their potential profits from spot Bitcoin ETFs, to fund open-source Bitcoin development.
• Grayscale dropped its fees from 2% to 1.5%, meaning it will offer the most expensive product among its competitors. Grayscale has $27 billion of assets under management (AUM) in its Bitcoin trust, and it might see large outflows with the launch of alternative products.

So ETFs were approved and…

The SEC granted “accelerated approval,” meaning that these ETFs could become available for trading the following business day. ETF issuers and respective exchanges were eager to open, so spot Bitcoin ETFs began trading on January 11, 2024.

The first days of trading are considered very important, as they show initial demand for the product, and whether or not it was overhyped. However, first inflows are typically lined up by asset managers in advance. After that, the adoption among financial advisors, pension funds, and other market participants could become crucial for ETFs.

According to Edelman’s research in 2023, 47% of financial advisors possess Bitcoin in their personal portfolios. However, only 12% actively advocate for its inclusion in their clients’ investments. Edelman also highlighted that 77% of advisors expressed their intention to recommend a spot Bitcoin ETF to their clients.

Nevertheless, don’t forget that ETF approval was not the only factor driving recent BTC prices. There are less than 100 days until the next Bitcoin halving, which is expected to occur in mid-April.&

Other noteworthy market events

The SEC’s X account was reportedly “hacked,” posting fake spot Bitcoin ETF approval

It seems that the securities regulator has security issues. Ba dum tss!

On January 9, the SEC’s X (formerly Twitter) account posted a now-removed tweet, claiming that the regulator had approved spot Bitcoin ETFs. Approximately 15 minutes later, SEC Chair Gary Gensler said the regulator’s account was compromised, and the commission hadn’t yet approved the listing and trading of spot Bitcoin exchange-traded products.

Some didn’t believe it, and assumed that it was an “intern’s fat fingers,” remembering Cointelegraph’s mistake. Others thought that a “hacker” posted a scheduled message earlier than expected, but the SEC said the unauthorized tweet “was not made by the SEC or its staff.” There was also speculation the SEC could use this event as a reason to decline or delay ETF approval, because leaving the post would be less damaging to its reputation if in fact that SEC still planned to approve it (some 3D chess moves it seems).

Shortly afterward, X’s safety team said that SEC did not have two-factor authentication (2FA) enabled, and it was a SIM swap attack. Of course, the crypto community reminded Gary Gensler of his own recommendations that enabling 2FA is a must.

In general, the crypto community predominantly responded to this event with memes. The “compromised” SEC tweet was even inscribed onto the Bitcoin blockchain to immortalize this… incident. However, certain U.S. senators raised concerns about the SEC’s internal cybersecurity procedures, demanding clarification.

Ethereum developers shared an updated project roadmap, specified testnets upgrade schedule

Ethereum co-founder Vitalik Buterin shared the Ethereum roadmap for 2024, outlining the project’s continued focus on six main components: the Merge, the Surge, the Scourge, the Verge, the Purge, and the Splurge. If you think this sounds like some kind of “Wunschpunsch mega magic,” you’re not alone.

In layman’s terms, these Ethereum components mean:

• The Merge — a move toward the decentralized proof of stake (PoS) network.
• The Surge — a boost of transaction throughput by making layer 2 (L2) faster and cheaper.
• The Scourge — mitigation of centralization concerns related to liquid staking and other practices within the network.
• The Verge — improving transaction verification to make data structure more efficient.
• The Purge — cleaning old network data and history. It’s not just a teenager’s move (with web browsers). This could significantly help optimize the Ethereum blockchain size, which is already near 1 TB.
• The Splurge — making hot fixes along the way.

In addition, Ethereum developers confirmed the testnet upgrade timelines for the next hardfork called Dencun, which is focused on turbocharging L2s. The Dencun upgrade will begin testing on:

• Goerli — January 17
• Sepolia — January 30
• Holesky —& February 7.&
• Mainnet — TBD.

IRS now requires reporting data about crypto transactions worth at least& $10,000

According to a new rule that went into effect on January 1, 2024, U.S. businesses and professional traders who receive over $10,000 worth of cryptocurrencies will need to report their transactions to the Internal Revenue Service (IRS), within 15 days.&

This includes the name, address, and Social Security number (SSN) of the sender, as well as the amount, date, and nature of the transaction. Those who fail to file a report within 15 days of a transaction could be charged with a felony offense.

Currently, the IRS has not issued any official guidance regarding the reporting methods of this change. There is also uncertainty surrounding whether the ruling applies solely to crypto exchanges, or extends to those who receive cash payments from crypto transactions.

Forbes reported that this rule specifically addresses payments received from other U.S. individuals or entities. Shehan Chandrasekera, CoinTracker’s Head of Tax Strategy, mentioned that the rule applies to those engaged in activities in a business-like manner. He clarified that if you are “a simple crypto investor without a trade or business,” you are not impacted by this rule.

One sentence news

• A team of former Citigroup executives plans to offer Bitcoin-backed securities, similar to American depositary receipts (ADRs), that reportedly don’t need to be approved by the SEC.
• South Korea’s Financial Services Commission (FSC) proposed an amendment that would effectively prohibit local citizens from purchasing cryptocurrencies using credit cards.& &
• The proposal of a Bitcoin Core developer, Luke Dashjr, to filter out Ordinals transactions was shut down, after causing acrimonious debate among Bitcoin developers and the community.&
• Visa announced the launch of a new loyalty service that will allow brands to create digital wallets for customers to store reward points.
• A special economic zone in Honduras formally acknowledged Bitcoin as a unit of account, permitting its use for assessing the market value of goods and services.
• Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex were sent “show cause” notices by the Indian government, and their apps were removed from the local Apple App store.

Notable price performances

BTC price volatility before ETF approval, and sideways movement after that

Over the last week, it seems that fake news and loud statements brought more volatility to Bitcoin markets than real events. On January 3, Bitcoin suffered a flash crash below $41,000, amid speculative reports that spot ETF applications would be denied. This drop was accompanied by almost $700 million in daily crypto liquidations.&

When ETF issuers made “final” amendments to their filings, and released their fee schedules, the Bitcoin price jumped to $47,000. The “compromised” SEC tweet caused another wave of fluctuations, first pushing the price to $48,000, then back to $45,000. After the real SEC approval, Bitcoin was predominantly moving sideways. It seems BTC just wanted to chill a bit, after recent wild rides. The initial ETF demand could help define whether or not BTC approval was priced in, as well as further BTC price direction.