Author: Faith Yakubu

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The total supply of USD-pegged stablecoins has soared to $165 billion, reaching its highest level in almost two years as new tokens flood the market, intensifying competition. Ethena’s USDe stablecoin, with a market cap of around $2.4 billion, has contributed to this growth, stabilizing the market at its current level.

This milestone, achieved last Thursday, reflects a significant uptick in stablecoin supply since late June 2022, nearing the previous all-time high of over $180 billion. While Tether’s USDT and Circle’s USDC remain dominant, the stablecoin market is diversifying with new entrants. USDT maintains a commanding 70% market share, according to DeFiLlama data.

The emergence of Ethena’s stablecoin launched just over two months ago, and PayPal’s collaboration with Paxos for its stablecoin introduction in August 2023, have contributed to the expanding stablecoin landscape. Ripple’s recent announcement of its plans to launch a USD-pegged stablecoin further underscores the market’s growth potential. Ripple forecasts the total stablecoin market to skyrocket to $2.8 trillion by 2028.

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In the wake of the recent Bitcoin halving, miners are contemplating a transition towards artificial intelligence (AI) to potentially boost their revenue streams, according to a report by CoinShares.

The halving event, which occurred recently, is expected to significantly increase costs for miners, with electricity and overall production expenses nearly doubling.

To counter these rising costs, mining companies are exploring the potential of AI operations, leveraging energy-secure locations for potential higher returns. BitDigital (BTBT), Hive (HIVE), Hut 8 (HUT), TeraWulf (WULF), and Core Scientific (CORZ) are among the companies mentioned by CoinShares that are either already generating income from AI or have plans to do so.

The report suggests a trend where Bitcoin mining operations may migrate to stranded energy sites while investment in AI expands in more stable locations.

Pre-halving, the weighted average cash cost of production was approximately $29,500 per Bitcoin. Post-halving, this is projected to rise to about $53,000. Similarly, the average electricity cost of production per Bitcoin is expected to increase from around $16,300 to approximately $34,900.

CoinShares forecasts a potential rise in hash rate to 700 exahash by 2025. However, immediately after the halving, a 10% drop in hashrate is anticipated as miners shut down unprofitable machines. Hash prices are also expected to decline post-halving to $53 per hash/day.

Despite these challenges, miners are actively managing financial liabilities and using excess cash to pay down debt, indicating strategic financial planning amidst changing market dynamics.

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Bitcoin transaction fees have experienced a significant decline following the recent halving event, providing relief to users and miners alike.

Initially, after the halving, fees soared to unprecedented levels, reaching as high as $146 for medium-priority transactions and $170 for high-priority transactions.

However, recent data from Mempool.space indicates a remarkable reduction in fees, with medium-priority transactions now costing $8.48 and high-priority transactions priced at $9.32.

This substantial decrease in transaction fees comes as a relief to Bitcoin users, who were facing exorbitant costs in the immediate aftermath of the halving.

Additionally, the hash price index, a metric reflecting miners’ potential earnings from a given amount of hash rate, has also declined significantly post-halving. This drop from $182.98 per hash/day to $81 indicates a substantial decrease in mining profitability.

While miners had hoped that the introduction of the Runes protocol, designed to create fungible tokens on the Bitcoin blockchain, would offset revenue losses post-halving, initial results suggest otherwise.

Despite expectations, floor prices for the Runes NFT collection have plummeted by nearly 50% in the last 24 hours, indicating a lack of significant activity and revenue generation from the protocol.

In contrast, ordinal collections like Bitcoin Puppets and NodeMonkes have seen increases in floor prices, highlighting the uncertainty surrounding the revenue potential of different NFT projects in the post-halving landscape.

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Market volatility has led to over $152 million in cryptocurrency liquidations over the past day, with the wider cryptocurrency market witnessing over $290 million in liquidations within the same period. Of these liquidations, approximately $154 million were from long positions.

Bitcoin’s liquidations soared to over $108 million as the asset dipped below the $60,000 mark before rebounding. Presently, it struggles to maintain its position above $64,000. Coinglass data reveals that liquidations were almost evenly split between bitcoin longs and shorts, totaling just over $54 million and $53 million, respectively.

The largest digital asset by market capitalization increased by around 5.3% in the past 24 hours, trading at $64,739 at 5:22 a.m. ET, according to The Block’s Price Page. The GM 30 Index, representing a selection of the top 30 cryptocurrencies, rose by 4.46% to 129.97 in the same period.

According to The Block’s halving countdown, Bitcoin’s upcoming halving event, where the miners’ block subsidy reward gets halved, is less than 100 blocks away. Analysts from 21Shares suggested that Bitcoin may continue in a lateral movement until geopolitical concerns, such as conflicts in the Middle East and control of oil transportation routes, stabilize.

The analysts observed that if geopolitical risks stabilize, bitcoin is expected to continue its upward trend post-halving. This is anticipated to be supported by increasing institutional interest in digital assets, particularly driven by U.S. spots and recently approved Hong Kong ETFs.

Coinbase analyst David Han emphasized the impact of macroeconomic factors, particularly heightened geopolitical tensions, on short-term crypto activity. “The recent elevated correlation of altcoins against bitcoin underlines this, indicating bitcoin’s anchor role in the space even as it firms its position as a macro asset,” Han stated in this week’s Coinbase Monthly Outlook report.

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Tether announced its intention to enhance peer-to-peer payments on Telegram by extending its dollar-pegged USDT and gold-backed XAUT tokens to the TON network, catering to Telegram’s vast user base 900 million.

Originally initiated by Telegram, the TON network has experienced rapid expansion, fueled by incentives to onboard Telegram users. Tether, the entity behind the $108 billion market cap USDT, disclosed plans to integrate the dollar-pegged stablecoin and its gold-backed counterpart XAUT natively on The Open Network (TON), a blockchain closely associated with the messaging app Telegram.

Tether’s transparency page revealed that $10 million worth of USDT has been authorized on the TON blockchain, with $3 million already issued. This strategic move aims to facilitate “borderless, peer-to-peer payments” among Telegram’s extensive user base and bolster the burgeoning TON ecosystem, enabling users to leverage the stablecoins in decentralized finance (DeFi) applications.

Paolo Ardoino, CEO of Tether, emphasized the significance of this expansion, stating that the launch of USDT and XAUT on TON would enable seamless value transfer. This move aims to increase activity and liquidity while offering users a financial experience akin to those found in the traditional financial system.

The Open Network operates as a decentralized layer-1 network initially spearheaded by Telegram but operating independently due to regulatory concerns. Recent months have witnessed a surge in TON’s ecosystem, propelled by incentives for Telegram user adoption, with monthly active addresses surpassing 1.7 million from less than 100,000 six months ago.

Despite a momentary dip of up to 15% in the TON token following the announcement, it remains up 7% over the past 24 hours and has tripled in price this year, amassing a market capitalization of nearly $25 billion. Telegram’s crypto wallet supports various blockchains for deposits and withdrawals, with trading fees substantially reduced to encourage TON adoption.

Ramp Network, a fintech firm bridging crypto with traditional banking infrastructure, announced plans to facilitate purchases and withdrawals of USDT on TON following the announcement. Starting with fiat-to-USDT on TON on its platform, Ramp Network intends to integrate with third-party wallets supporting TON-based assets and later incorporate off-ramp capabilities.

Szymon Sypniewicz, CEO of Ramp Network, articulated the company’s vision, stating, “Crypto transactions should be as simple as texting,” underscoring the potential to enhance the lives of millions within the TON ecosystem through accessible, low-cost crypto transactions.

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Bitcoin rebounded following a period of heightened geopolitical tension, which initially triggered sharp declines in cryptocurrencies.

The digital asset experienced a temporary drop of over 6% to $59,643 on Friday but later stabilized, reaching $64,640 by 10:55 a.m. in New York. Other tokens like Ether, Solana, and the meme-crowd favorite Dogecoin also regained stability.

Israel’s retaliatory strike on Iran, occurring less than a week after Tehran’s rocket and drone attacks, caused ripples across global markets. Reports indicating the safety of nuclear facilities in Isfahan, Iran, helped alleviate some concerns. Traditional safe-haven assets such as bonds, gold, and the dollar saw reduced gains, while stocks recovered from session lows.

The ongoing conflict in the Middle East is overshadowing the anticipated Bitcoin halving scheduled for later on Friday, which will reduce the token’s new supply. Historically, halvings have driven up the price of Bitcoin. However, with Bitcoin reaching a record high in mid-March before the event, there are doubts about whether the expected impact is already factored into the market.

Stefan von Haenisch, head of trading at OSL SG Pte, suggested that continued violence between Israel and Iran could prompt a general risk-off sentiment across the crypto market. Nonetheless, he noted that it might require a substantial downward movement to reverse the bullish sentiment surrounding the halving.

Strategists from JPMorgan Chase & Co. and Deutsche Bank AG have indicated that the quadrennial halving is already largely priced in by investors. Ahead of the event, a series of three-month-old spot-Bitcoin exchange-traded funds in the US have recorded five consecutive days of net outflows.

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Coinbase, the prominent cryptocurrency exchange, is making a strategic move by relocating its New York office from Hudson Yards to One Madison in Manhattan’s Flatiron District. The decision comes as part of a larger plan to expand its workspace, according to a source familiar with the matter who spoke to The Block.

The Commercial Observer recently reported on Coinbase’s new rental agreement, which entails an eleven-year lease for a 67,208-square-foot space at One Madison. This marks a significant upgrade from its previous office at 55 Hudson Yards, which the company has leased since 2021.

While Coinbase has not publicly commented on the reason for the relocation, sources indicate that the new office space is approximately twice the size of its Hudson Yards location. However, there are no immediate plans to change the company’s remote-work policy or increase its New York-based team size.

Coinbase’s headcount has remained relatively stable this year, with 3,416 employees as of the end of 2023. It remains uncertain whether Coinbase will terminate its existing lease at Hudson Yards or wait for it to expire.

Although specific rental costs for One Madison were not disclosed by Coinbase, recent deals in the building suggest premium rates. In comparison, the average asking rents at Hudson Yards are slightly lower, reflecting the competitive real estate landscape in Manhattan.

Coinbase’s move coincides with favorable market conditions for tenants, as Manhattan landlords are offering concessions to address high office vacancy rates. Despite regulatory challenges in the past, Coinbase’s financial performance has improved, with the company posting profits in the first quarter of 2024 amid a surge in cryptocurrency prices.

This relocation is part of Coinbase’s broader strategy, as the company continues to expand its footprint. In addition to the New York office move, Coinbase also secured a 40,000-square-foot space in California’s Bay Area last summer.

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Tether, the issuer of the world’s largest stablecoin, is undergoing a reorganization to reflect its expansion into various aspects of the digital asset space. The company has formed four divisions – Data, Finance, Power, and Edu(cation) – to signify its broadening focus beyond stablecoins.

According to Tether, these divisions represent its diversified mission, with each division serving a distinct purpose. The Data division will handle strategic investments in technology, including artificial intelligence (AI). Finance will oversee the USDT stablecoin, which boasts a market cap exceeding $100 billion and holds a significant role in crypto markets. Power will encompass investments in bitcoin (BTC) mining, while Edu will focus on educational initiatives.

The establishment of these divisions marks a paradigm shift in Tether’s approach, signaling its commitment to financial empowerment and sustainable solutions. Tether aims to adapt to the evolving needs of individuals, communities, and economies by investing in responsible Bitcoin mining, AI infrastructure, and decentralized communication platforms.

While Tether has already been active in these areas, the formation of distinct divisions underscores its growing emphasis on interests beyond its flagship stablecoin. In the past year, the company has made investments in BTC mining operations in Uruguay, a payment processor in Georgia, and AI initiatives through partnerships with data cloud provider Northern Data Group.

Despite its expansion efforts, Tether continues to face scrutiny over the transparency of the reserves backing USDT. The company’s commitment to transparency and accountability remains a subject of ongoing discussion within the crypto community.

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Crypto exchange Binance is reportedly contemplating a comeback to India’s market after being banned in late 2023, with the potential re-entry subject to a penalty of around $2 million, as per the Economic Times report on Thursday.

The platform’s prospective return hinges on its registration with the finance ministry’s Financial Intelligence Unit (FIU), responsible for overseeing virtual asset commerce. Binance intends to comply with relevant legislation, including the Prevention of Money Laundering Act (PMLA) and the crypto taxation framework, after previously neglecting these regulations, according to a source cited by the outlet.

While physical presence in India is not mandatory, all virtual asset service providers (VASPs) are subject to Indian regulations, as clarified by the Ministry of Finance. This includes compliance with reporting, record-keeping, and other obligations outlined in the PMLA.

India has been actively integrating the crypto sector into its financial system, introducing regulations last March mandating Know Your Customer (KYC) data collection from crypto companies. Additionally, VASPs with Indian operations, regardless of their location, must register as reporting entities with the FIU and adhere to the PMLA.

Prime Minister Narendra Modi has advocated for global regulations governing cryptocurrencies, underscoring India’s commitment to regulatory clarity in the crypto space.

Before its ban, Binance reportedly held a dominant market share in India, accounting for nearly 90% of the estimated $4 billion in cryptocurrency holdings among Indian citizens. Its popularity was attributed to its non-compliance with Indian tax regulations, as it facilitated trading without the 1% tax deducted at source (TDS) levied by registered exchanges. The introduction of the TDS prompted a significant migration of users to offshore crypto exchanges, including Binance.

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Social media indicators are signaling a shift toward bearish sentiment among cryptocurrency enthusiasts regarding the future trajectory of Bitcoin’s price.

Historically, periods of bearish sentiment in the crypto community have often coincided with market bottoms, reflecting a sentiment that aligns with American poet and novelist Charles Bukowski famously asserted that the masses are consistently mistaken, and true wisdom lies in taking actions divergent from the crowd. 

This principle applies to Bitcoin as well, as the current prevalence of bearish sentiment suggests the possibility of a reversal in the ongoing sell-off of BTC prices.

Blockchain analytics platform Santiment noted a decrease in mentions of “bull market” or “bull cycle” on crypto social media platforms since late March, coupled with a consistent rise in references to “bear market” or “bear cycle.” This shift in sentiment may indicate a possible reversal in Bitcoin’s price trajectory.

Santiment’s Social Trends indicator, which monitors discussions across platforms like Telegram, Reddit, and 4Chan, has observed a decrease in “buy the dip” mentions, indicating waning hopes among retail investors for a quick recovery and continued bull run.

Factors such as diminishing expectations of Federal Reserve interest-rate cuts, heightened geopolitical tensions, and the timing of U.S. tax payments have contributed to bitcoin’s recent price decline, which saw a 14% slide this month.

Despite these challenges, bitcoin’s blockchain is set to undergo its fourth mining reward halving, reducing the per-block BTC emission by 50% to 3.125 BTC. While some analysts, including JPMorgan, have warned of a potential further decline in prices following the event, the overall consensus remains bullish for Bitcoin’s long-term prospects.

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