There’s a fine line between fact and rumor in crypto; yet isn’t a hint of wishful thinking part of the excitement?
This week, we aim not to overindulge in guesswork. As always, the Big Idea and Dispatch will stay true to form as your reliable sources of information delivered straight to your inbox. Yet, we cannot help but feel a surge of anticipation, a spidy sense tingling, when we spot the prospect of an alignment of stars for a particular asset – suggesting a prime opportunity might be on the horizon.
The spotlight is on Ethereum’s ETH this time, thanks to two tasty developments that have stirred the pot – one for the market chart watchers and one for the blockchain fans among you.
Exhibit A: The Dencun Upgrade
The Ethereum network successfully deployed the anticipated Dencun upgrade on the final testnet before mainnet deployment. The upgrade (now scheduled for March 13) will make Ethereum a much better accommodating foundation for new blockchain protocols i.e. lower transaction fees and faster processing times. Our Head of Blockchain, Niki Angelov, spoke to Blockworks as the event unfolded.
Exhibit B: The ETF Proceedings
Now, call us persistent, but we’ve not given up on the idea of spot Ether ETFs materializing. Not when the SEC itself announced it was “initiating proceedings.” We remember what followed when we heard that previously – one of Bitcoin’s most genuine market rallies. The final decision is slated for May, VanEck’s final deadline date. It’s worth noting that the initiation of these proceedings has coincided with amendments to the joint spot filing by Ark Invest and 21Shares, now featuring a cash creation and redemption mechanism akin to the already approved spot Bitcoin ETFs.
Exhibit C: The GoDaddy Partner
There’s dynamics in the Ethereum ecosystem too. Big dynamics, as GoDaddy, the world’s largest domain name registrar, announced a partnership with the Ethereum Name Service. The aim is to link traditional domain names with Ethereum-based ENS (you know, those fancy .eth extensions). That would open crypto to over 20 million GoDaddy users – news that propelled the ENS token 20% up and into the top 100 cryptocurrencies by market cap.
Without jumping from wishful thinking to irrational conclusions, a look at Ether’s realized volatility (more below) suggests things have been quiet recently.
Can the three sides of the story form a record for ETH in 2024? It’s a Big Idea, but not necessarily a tall order.
Bitcoin played dead for most of the week, but a quick, near 8% eruption Thursday-on showed us all who the King is. Turns out, it was momentary selling pressure from miners that subdued BTC. And with BTC above $45,000, it’s time for a few feel-good remarks:
Bitcoin ETFs saw their ninth consecutive day of net inflows on Wednesday with the total hitting $145M. BlackRock's IBIT received $56M to top the ranks with over $3B under management.
When it comes to outflows, CoinShares data highlights a “significant reduction in momentum of these outflows,” while Bitcoin’s latest move above $44,000 saw 90% of supply reach in-profit.
The Latest In…
Solana (Briefly Down)
It was only last week that we praised Solana’s intense expansion and SOL’s outstanding climb up the market cap charts. But the past week brought an incident of true magnitude:
Solana's “mainnet-beta” paused on February 6, sparking a quick fix from engineers who revived it with version 1.17.20, following outdated validators.
Despite a 3% dip SOL bounced back to $95.14 a few hours later, showing its resilience.
This hiccup, along with past outages in February 2023, June 2022, and September 2021, proves to be just a blip on Solana's journey.
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The Great Token Unlock Continues
Several major projects are primed to unleash substantial token airdrops, that we’re keeping an eye on:
Aptos (APT) will unlock nearly 25M tokens on Feb 11, constituting over 7% of its circulating supply.
The Sandbox (SAND) will unlock 205M tokens worth on Feb 14 for 9% of its circulating supply.
9.5M Avalanche (AVAX) tokens will be unlocked on Feb 21, adding up to 2.6% of its circulating supply. This brings the total unlocked AVAX tokens to 60% as the layer-1 network aims to scale to 100,000 transactions per second (TPS).
The Week’s Most Interesting Data Story
It Comes with Age
We often talk about crypto reaching maturity and this is no more evident than in Bitcoin and Ether’s realized volatility chart below. High values indicate a phase of high risk in markets as realized voltility measures the standard deviation of returns from the mean return of a marketmeasure. Put simply, BTC and ETH are trading market volatility for price stability.
What the Community Is Discussing
Here is one for the macro followers.
What else did you think the man was doing in 2024?