Category: Cryptocurrency

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The layer-2 blockchain  has launched its much-anticipated airdrop of the ZK token, with 45% of the tokens claimed within the first two hours, according to the ZKsync Association. This non-profit organization, created by Matter Labs, oversees the airdrop process.

“It’s a Monday, don’t you have work?” the ZK Nation X account tweeted, noting the rapid claim rate. The ZK token opened at $0.31 but has since decreased by 21%, trading at $0.24 according to CoinGecko. The market capitalization is approximately $908 million based on the circulating supply, with about 3.7 billion tokens eligible for distribution. The fully diluted market cap would be $5.1 billion.

The ZK token is listed on cryptocurrency exchanges Binance, Bybit, and KuCoin. Binance had initially postponed the listing due to technical issues with their node but assured users that the issue was being fixed urgently and that deposits would be credited once the block height catches up.

Matter Labs, in a statement to CoinDesk, detailed the token distribution plans through the ZKsync Association. Despite some user dissatisfaction with the airdrop’s design, the team defended its “unconventional design.”

According to the distribution plan, 89% of the airdrop can be claimed by ZKsync users who transacted on the blockchain and met an unspecified activity threshold. The remaining tokens are allocated to ecosystem contributors, including:

• ZKsync native projects: 5.8%
• On-chain communities: 2.8%
• Builders: 2.4%

Additionally, Matter Labs employees will receive 16.1% of the ZK tokens, and investors will get 17.2%, both of which will be locked for a year and then released over three years. The rest of the token supply will be divided between ZKsync’s Token Assembly (29.3%) for governance purposes and Ecosystem Initiatives (19.9%).

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Bitcoin investment products saw significant outflows totaling $621 million last week amid mixed economic signals from the U.S., according to asset manager CoinShares.

Across the broader digital asset ecosystem, there were net outflows of $600 million, primarily driven by Bitcoin’s losses. This marked the largest outflow since March 22. Grayscale’s GBTC was particularly hard-hit, experiencing $273 million in outflows.

CoinShares noted that these outflows overshadowed minor inflows into various altcoins, including Ethereum (ETH), Lido (LDO), and Ripple (XRP).

The U.S. inflation data for May, as measured by the Consumer Price Index, exceeded expectations, remaining flat for the month. However, this positive news was dampened by the Federal Open Market Committee of the Federal Reserve maintaining its benchmark rate range at 5.25%-5.50%. The economic outlook suggested just one 25 basis point rate cut this year.

Bitcoin was affected by this hawkish stance, dropping to its lowest point in four weeks on Friday at $65,100. At the time of writing, Bitcoin was stable at $66,000. The CoinDesk 20 Index, which tracks the performance of the broader digital asset market, was down by 1.75%.

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The Australian Securities Exchange, which accounts for 90% of Australia’s equity market, has approved its first spot Bitcoin (BTC) exchange-traded fund. The issuer, VanEck, announced in a blog post that it will launch the ETF on June 20, touting it as the “lowest cost bitcoin ETF in Australia.”

VanEck resubmitted the application for this product in February. Reports from April indicated that DigitalX Ltd. had applied for approval around the same time, and Sydney-based BetaShares was also working toward launching a similar product on the ASX. Bloomberg had previously reported that spot Bitcoin ETFs might be approved by the end of 2024, making this an early development.

In contrast to the U.S., Australian firms need approval from both the Australian Securities & Investments Commission and the exchange listing the product. In May, ASIC confirmed via email to CoinDesk that DigitalX Ltd., VanEck, and BetaShares either had the relevant licenses or were collaborating with firms that did.

Earlier this month, Australia-based Monochrome Asset Management received approval for its Monochrome Bitcoin ETF (IBTC) from the Cboe Australia exchange, ASX’s smaller rival. Monochrome stated that its product was the first and only ETF in Australia to hold Bitcoin directly.

“Despite regulatory and exchange framework challenges in Australia, VanEck intends to lead the way in bringing the first Bitcoin ETF to ASX investors,” VanEck stated in their blog.

Industry experts previously expressed more excitement for a spot Bitcoin ETF to trade on ASX due to its larger trading volumes. ASX’s approval of VanEck’s product is expected to lend greater legitimacy to cryptocurrency and related ETFs in the region.

After the U.S. approved spot Bitcoin ETFs in January, there has been anticipation for similar approvals in APAC countries as they strive to position themselves as major crypto hubs. VanEck plans to leverage its global expertise and infrastructure, having launched approved spot Bitcoin ETFs in the U.S. and Europe, to provide Australian investors with a top-tier cryptocurrency solution.

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Tether, the company behind the $110 billion stablecoin, announced on Monday the launch of Alloy, a new token minting platform on the Ethereum network. Alloy allows users to create tokens collateralized by Tether’s tokenized gold (XAUT).

“Alloy by Tether is an open platform that allows the creation of collateralized synthetic digital assets and will soon be part of the new Tether digital assets tokenization platform, launching later this year,” said Paolo Ardoino, CEO of Tether, in an X post. Tether also mentioned in a press release that the platform might offer yield-bearing products in the future.

The first asset available on the Alloy platform is aUSDT, a token pegged to the U.S. dollar. Investors can mint aUSDT by using Tether’s XAUT as collateral. XAUT has a market capitalization of $570 million and is backed by physical gold stored in Switzerland.

The aUSDT token is designed for users who want to make crypto payments and remittances without selling their gold-backed tokens. According to the press release, the collateral must be overcollateralized, with new tokens limited to 75% of the collateral value.

The asset issuance for Alloy will be handled by Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., both regulated under El Salvador’s National Commission of Digital Assets.

This new offering is part of Tether’s broader strategy to expand beyond USDT, the largest stablecoin by market value and a key component of the digital asset market. Tether has recently invested in bitcoin (BTC) mining, payment processing, and artificial intelligence through cloud computing. In April, Ardoino outlined plans to launch a tokenization platform that would enable the creation of digital versions of various assets, including bonds, stocks, funds, and loyalty reward points.

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Cryptocurrency markets remained under pressure during U.S. trading hours on Thursday, extending a decline that began the previous day when the Federal Reserve indicated it expected to cut rates only once this year.

Ether (ETH) saw a mid-morning bounce after U.S. Securities and Exchange Commission Chairman Gary Gensler, during a Senate hearing, stated he anticipated that spot ether ETFs would receive full approval from his agency by the end of the summer. This news briefly lifted ether by 1%, but the gain was short-lived. The price reversed more than 3% within an hour and was trading at $3,440 at press time, down 5% over the past 24 hours. The broader CoinDesk 20 Index was down 4.9% in the same period.

Bitcoin (BTC) also dropped nearly 5%, trading near a one-week low of $66,300.

Markets turned negative on Wednesday afternoon following the Federal Reserve’s hawkish policy meeting. The U.S. central bank kept its benchmark fed funds rate range steady at 5.25%-5.50% but updated its projections to suggest just one 25 basis point rate cut in 2024. In contrast, rate futures markets had been anticipating two to three 25 basis point cuts this year.

Thursday morning’s U.S. economic data, indicating continued softening in both inflation and the economy, failed to improve the macro mood in crypto. The May Producer Price Index (PPI) fell 0.2% against expectations for a 0.1% rise. On a year-over-year basis, PPI was up 2.2% compared to forecasts of 2.5%. Additionally, initial jobless claims rose to nearly a one-year high of 242,000, versus expectations of 225,000.

“$66K seems like equilibrium,” said well-followed analyst Skew in a post on X, who, along with others, is trying to decipher a market that hasn’t sustained higher levels despite recent bullish news. This includes improving inflation data, a Bitcoin-friendly presidential frontrunner in Donald Trump, spot ETH ETF approvals, and other risk asset markets, like U.S. stocks, reaching new all-time highs.

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Paradigm, known for its early investments in projects like crypto exchange Uniswap and Ethereum scaling solution Optimism, has raised $850 million for an early-stage crypto venture fund. Founded in 2018 by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang, Paradigm is one of the largest venture capital investors in the cryptocurrency industry. This new fund marks Paradigm’s first since Ehrsam stepped down from a leadership role in October.

“This is the sort of early-stage work that we love contributing to, and it’s what we’ll be increasingly focused on going forward,” Huang wrote in a blog post on Thursday.

In 2021, Paradigm raised a $2.5 billion fund, which was the largest-ever crypto investment vehicle at the time.

The pace of launching new cryptocurrency-focused funds has accelerated this year, with many existing funds also raising capital. This fundraising surge coincided with Bitcoin’s rally to record highs, driven by the introduction of exchange-traded funds (ETFs) investing directly in Bitcoin and recent indications that similar funds focused on Ether are likely to gain approval soon.

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Riot Platforms (NASDAQ:RIOT) criticized Bitfarms (NASDAQ:BITF) for adopting a poison pill strategy to prevent a takeover, calling the move “shareholder unfriendly” and highlighting Bitfarms’ weak corporate governance.

Riot stated on Wednesday that it had privately urged Bitfarms to remove its chairman and interim CEO, Nicolas Bonta, and to appoint at least two independent directors to its board. This dispute follows Riot’s unsolicited $950 million acquisition offer made in April, which Bitfarms rejected, deeming it undervalued. In response, Bitfarms approved a poison pill plan to block hostile takeover attempts.

The plan specifies that if any entity acquires more than a 15% stake in Bitfarms between June 20 and September 10, Bitfarms will issue additional shares to other stockholders, diluting the acquiring entity’s stake. Riot contended that the 15% trigger “conflicts with established legal and governance standards.”

Riot CEO Jason Les stated, “We will continue to address the serious corporate governance issues at Bitfarms and ensure that shareholders have a say in the company’s direction.”

Bitfarms did not immediately respond to a request for comment from Reuters.

In a separate regulatory filing, Riot revealed that it had increased its stake in Bitfarms to 13.1% from 12% earlier this month, making it Bitfarms’ largest shareholder, according to LSEG data.

Despite a surge in the crypto industry due to the approval of exchange-traded funds tied to bitcoin’s spot price, shares of Riot and Bitfarms have declined by 35% and 19%, respectively, this year.

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Bitcoin and other cryptocurrencies rallied on Wednesday following U.S. inflation data that came in slightly below expectations, raising hopes that the Federal Reserve might start cutting interest rates later this year. The world’s largest cryptocurrency surged over 4% to above $69,500 shortly after the inflation report’s release.

The Labor Department reported that the annual inflation rate decreased to 3.3% in May, down from 3.4% in April.

While still elevated, the lower-than-expected inflation readings could prompt the Fed to ease its aggressive rate hike measures eventually.

Crypto prices jumped on the news, with Bitcoin rising over $1,900 within minutes. Ether and other altcoins also saw gains as traders reevaluated the macroeconomic landscape.

However, despite the optimistic market response, Wednesday’s report alone might not persuade Fed Chair Jerome Powell and colleagues to start cutting rates immediately. At 3.3%, inflation remains above the Fed’s 2% target.

The Fed is set to conclude its latest policy meeting later on Wednesday.

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The U.S. Consumer Price Index remained unchanged in May, outperforming economists’ expectations of a 0.1% rise and down from 0.3% in April. On a year-over-year basis, CPI increased by 3.3%, slightly lower than both the forecast and April’s reading of 3.4%.

The core CPI, excluding food and energy costs, rose 0.2% in May, better than the anticipated 0.3% rise and down from April’s 0.3%. Year-over-year, core CPI was up 3.4%, below the expected 3.5% and April’s 3.6%.

Bitcoin responded positively to the lower inflation reading, jumping to $69,400, an increase of nearly 4% over the past 24 hours.

After significant drops in inflation throughout 2022 and 2023 due to the Federal Reserve’s aggressive interest rate hikes, the decline had stalled at higher levels than the Fed’s 2% target, dampening market hopes for imminent rate cuts.

At the beginning of this year, traders anticipated five or six 25 basis point rate cuts in 2024 by December. This expectation had decreased to one or two cuts before today’s CPI report, with the first cut not expected until September, according to the CME FedWatch Tool.

Crypto prices have shown high sensitivity to U.S. economic data, noted K33 Research earlier this week. Rising inflation figures and reduced expectations for rate cuts caused Bitcoin to fall from its all-time high above $73,000 in March to below $57,000 in May. Traders believe that looser monetary policies will drive the next phase of the crypto rally to new record prices.

Contrary to U.S. trends, several major central banks worldwide, including the European Central Bank and the Bank of Canada, have begun lowering benchmark rates, pushing the U.S. dollar index to a one-month high.

Investors are also keenly awaiting the Federal Reserve’s “dot plot,” scheduled for release later today, which outlines the Federal Market Open Committee members’ interest rate projections and could significantly impact asset prices.

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Solana crypto wallet startup TipLink is simplifying blockchain access for newcomers by eliminating the need for traditional wallet browser extensions. Their new service, TipLink Wallet Adaptor, enables users to create in-browser wallets linked to their Google accounts, bypassing the need to set up wallets like Phantom or Solflare before receiving tokens.

TipLink CEO Ian Krotinsky stated, “It unlocks the rest of the world for easy onboarding.” This approach aims to attract the majority of internet users who lack a crypto wallet and the knowledge or inclination to set one up. Users can receive a wallet link, log in with their Google credentials, and start using it immediately.

While this might not sit well with staunch advocates of self-custody—those who emphasize “not your keys, not your coins”—Krotinsky isn’t concerned about that niche. He explained that TipLink’s app secures private keys to minimize the risk of users unintentionally exposing them to phishing attacks. Google’s security measures, especially for accounts with two-factor authentication, add another layer of protection.

“It’s currently not the place users will likely store a million dollars in,” Krotinsky noted, but assured that the team is working to introduce “more layers of security” in the future.

TipLink operates within a controlled environment for decentralized applications, only interacting with vetted programs to ensure user safety and prevent fund theft, as demonstrated in a promotional video shared with CoinDesk.

Additionally, TipLink is developing a “Pro” service aimed at helping developers distribute cryptocurrencies to hundreds or thousands of users via campaign links.

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