Category: Cryptocurrency

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Toncoin (TON) has overtaken Cardano’s ADA to claim the ninth position in market capitalization. With its recent surge, can Toncoin sustain its upward momentum and potentially surpass Dogecoin next?

Toncoin’s Ascendancy to 9th Place

Following a remarkable 13% daily price surge, Toncoin reached $6.65 by 1:45 p.m (UTC), securing the ninth spot among cryptocurrencies with a market capitalization of $23 billion, surpassing ADA’s $22 billion market cap, according to data from CoinMarketCap.

The rally coincided with TON Society developers allocating $5 million Toncoin to incentivize users for identity verification using palm scanning technology. This initiative aims to enable digital identity verification for Telegram users over the next five years, offering one million TON to participants in the proof-of-personhood program.

Toncoin’s increased traction has outpaced Cardano’s ADA, with TON witnessing a remarkable 135% surge over the past month, while ADA faced a 15% decline.

Zooming out, Toncoin has surged 183% year-to-date (YTD), contrasting ADA’s 1.30% YTD decrease.

Toncoin’s Initiatives for Growth

Toncoin initiated a $115 million community incentive program on March 20, allocating $38 million for token mining and user incentives, $22 million for airdrops, $15 million for The League developer ecosystem, and $40 million for liquidity pool boosts, aiming to stimulate user adoption.

In contrast, Cardano’s ADA saw subdued interest this year, with investor attention diverted towards Bitcoin exchange-traded funds (ETFs) and major blockchain upgrades such as Ethereum’s Dencun upgrade.

Sustaining Momentum: Toncoin vs. Dogecoin

Toncoin’s performance has eclipsed that of Dogecoin significantly. Toncoin surged 130% in the past month, while DOGE only recorded a 14.8% gain. Year-to-date, TON has surged by 177%, whereas DOGE’s price has increased by 108%, according to TradingView.

Toncoin’s utility within the Telegram messaging app offers a direct avenue for price appreciation with increasing user adoption, unlike Dogecoin, which relies primarily on speculative demand.

Concerns and Considerations

However, Toncoin’s token distribution could raise concerns among retail investors. Data from CoinCarp suggests that over 60% of Toncoin is held by the top 10 holders, while the 100 richest holders control 93% of the supply. This concentration of ownership may impact market dynamics and investor sentiment moving forward.

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With the Bitcoin halving approaching, traders are closely monitoring market dynamics, particularly professional traders, to gauge sentiment. Historically, the anticipation surrounding halving events has typically led to bullish sentiment in the months following rather than on the exact halving date. This is due to the delayed impact of reduced mining output on the market.

Bitcoin miners tend to accumulate rather than liquidate holdings daily, especially anticipating a bullish market, bolstered by Bitcoin’s 59% appreciation year-to-date in 2024. This expectation of market appreciation further tightens supply, potentially driving prices higher.

However, analysts caution against simplistic post-halving price surge expectations, noting Bitcoin’s price trajectory is influenced by various factors, including economic trends, investor risk appetite, monetary policies, and correlations with the stock market. Relying solely on historical halving patterns may be overly optimistic.

Neutral-to-bullish call options dominate the June 28 expiry, with professional traders turning to options strategies to leverage positions with minimal upfront deposits, avoiding direct liquidation risk found in futures markets.

Open interest for options expiring on June 28 at Deribit has reached $4.5 billion, showcasing a significant call-to-put options imbalance, with bullish positions outweighing bearish ones threefold. However, this perspective warrants deeper analysis, considering the cryptocurrency community’s tendency towards optimism.

While there are call options targeting as high as $140,000 and $200,000 for the June 28 expiry, some appear overly ambitious. Realistic call options open interest is around $2.72 billion, excluding bets on prices exceeding $90,000. Conversely, put options placed before Bitcoin’s surge over $50,000 have diminished the likelihood of profitability, with open interest in puts at $57,000 or higher at a scant $250 million.

Bitcoin’s unexpected performance surge, attributed to factors like the approval of a spot exchange-traded fund in the U.S., reduced inflation to 3%, and absence of a predicted global economic recession by June 28, caught bears off guard. Consequently, bearish scenarios tied to the Bitcoin halving seem increasingly unlikely.

Speculations about a “death spiral” due to reduced block rewards and decreased miner participation have been consistently debunked. Bitcoin’s network adjusts its difficulty every 2016 block, ensuring stability amid fluctuating hash rate levels.

In a hypothetical scenario where Bitcoin’s price drops to $47,000 by June 28, a 32% decrease from current levels, put options open interest would be $422 million, while calling options up to $46,000 account for a $670 million exposure, highlighting a market inclination towards neutral-to-bullish strategies for the Bitcoin halving, at least by the June 28 expiry.

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Mezo, an innovative Bitcoin “economic layer” developed by Thesis, has successfully raised $21 million in funding, the company announced.

Accepting deposits in BTC, TBTC, and WBTC, Mezo emerges from stealth mode with substantial financial backing, primarily led by Pantera Capital. Other investors participating in the funding round include Multicoin Capital, Hack VC, ParaFi Capital, Nascent, Draper Associates, Primitive Ventures, and Asymmetric Ventures.

Matt Luongo, CEO of Thesis and founder of Mezo, revealed that the fundraising for Mezo commenced in December and concluded recently. The $21 million funding was secured through two tranches, although specific details regarding valuation and the structure of the round remain undisclosed. Nevertheless, Mezo will introduce its native token.

What is Mezo?

Described as a Bitcoin “economic layer,” Mezo aims to build an ecosystem of applications tailored to users’ economic needs, spanning from groceries to tuition. Luongo articulated the ambition of Mezo to extend the Bitcoin network, aiming to incorporate approximately 25% of the world’s economy onto the blockchain, a scale comparable to the current size of the US economy.

Utilizing “proof of HODL” as its consensus mechanism, Mezo enables users to secure the network by staking BTC and MEZO tokens. This approach aligns Mezo economically with BTC holders, who can stake and earn rewards for their participation in running the network.

With over $26 million in total value locked through bitcoin deposits, Mezo has initiated its operations, emphasizing the importance of locking bitcoin deposits for accruing a higher HODL score, which functions as a points program.

Moreover, upon joining Mezo, users receive five one-time invitations to extend to their friends, with the platform subsequently distributing reciprocal earnings based on the duration and amount of their friends’ Bitcoin deposits made through these invitations.

In addition to BTC, Mezo supports deposits of TBTC and WBTC, both wrapped bitcoin variants developed by Thesis.

The funding round for Mezo elevates the total funding for all Thesis projects to over $90 million, according to Luongo. Currently, 48 individuals are engaged in Thesis projects, with plans underway to nearly double the headcount for this year.

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Cryptocurrency ETFs are grappling with a 5.99% decrease in value as both Bitcoin and Ethereum suffer losses, exacerbated by the SEC’s postponement of spot ETF approvals, which further impacts ETFs like EFUT and AETH.

The cryptocurrency market experienced a challenging week, particularly affecting crypto Exchange-Traded Funds. Reflecting setbacks in major cryptocurrencies, the overall theme of cryptocurrency investments witnessed a decline of 5.99%. Bitcoin dipped by 2.25%, falling below the $70k mark, while Ethereum faced a steeper drop of 6.5%.

SEC and Spot ETF Challenges

The recent action by the U.S. Securities and Exchange Commission (SEC) triggered profit-taking. The SEC initiated a three-week comment period regarding proposals for spot Ether ETFs, effectively delaying any potential approval until at least May. This delay tempered investor optimism, especially among those expecting swift approvals for spot ETFs, which directly represent cryptocurrency investments rather than derivatives.

Impact on Crypto ETF Performance

Specific crypto ETFs felt the repercussions of these developments. The Ether Tracker Euro ETC (ETHEREUM XBTE) and the 21Shares Ethereum Staking ETP (AETH) experienced declines of 7.96% and 7.63%, respectively. These declines underscore the heightened sensitivity of crypto ETFs to regulatory decisions and market sentiment as investors navigate the uncertain landscape of cryptocurrency regulations and their implications for spot ETFs.

The SEC’s decision to postpone spot ETF approvals has cast doubt on the future of Ether ETFs, momentarily halting the momentum that had been building in anticipation of broader institutional acceptance. While these ETFs provide a regulated avenue for investors to access cryptocurrencies, the road ahead appears murky with regulatory uncertainties, affecting both investor confidence and ETF performance.

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This post was originally published on this site

This post was originally published on this site

The cryptocurrency market encountered challenges this week, particularly impacting crypto Exchange-Traded Funds (ETFs). The theme of cryptocurrency investment witnessed an overall decline of 5.99%, reflecting setbacks in major cryptocurrencies. Bitcoin retreated by 2.25%, slipping below the $70,000 mark, while Ethereum faced an even steeper decline, plummeting by 6.5%.

Challenges with SEC and Spot ETFs

The recent setback stemmed from actions by the U.S. Securities and Exchange Commission (SEC). The regulatory body initiated a three-week comment period regarding proposals for spot Ether ETFs, effectively postponing any possibility of approval until at least May. This delay subdued investor optimism, especially among those expecting prompt approvals for spot ETFs representing direct investments in cryptocurrencies, as opposed to derivatives.

Impact on Crypto ETF Performance

Particular crypto ETFs bore the brunt of these developments. The Ether Tracker Euro ETC (ETHEREUM XBTE) and the 21Shares Ethereum Staking ETP (AETH) experienced declines of 7.96% and 7.63%, respectively. These setbacks highlight the heightened sensitivity of crypto ETFs to regulatory decisions and market sentiment as investors navigate the uncertain landscape of cryptocurrency regulations and their implications for spot ETFs.

The SEC’s decision to postpone approvals for spot ETFs has cast a shadow over the future of Ether ETFs, temporarily halting the momentum that had been building in anticipation of broader institutional acceptance. While these ETFs offer a regulated avenue for investors to gain exposure to cryptocurrencies, the path forward appears to be mired in regulatory uncertainty, impacting both investor sentiment and ETF performance.

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According to a survey by Deutsche Bank released on Monday, consumers are showing slightly diminished skepticism towards bitcoin, though nearly one-third of respondents still foresee a significant drop in its price by the conclusion of 2024.

Despite substantial investments poured into bitcoin with hopes of capitalizing on price surges, leading regulators have asserted its lack of intrinsic value and associated risks.

Deutsche Bank’s survey encompassed over 3,600 participants, with 52% expressing the belief that cryptocurrencies will emerge as an “important asset class and payment method” in the future. This marks a shift from less than 40% in September 2023.

One-third of respondents in the United States anticipate bitcoin’s value to dip below $20,000 by the end of 2024. Notably, this demographic is marginally diminishing, having comprised 35% in February and 36% in January.

The segment of individuals regarding cryptocurrencies as a “temporary trend destined to fade away” dwindled to less than 1%.

However, merely 10% of those surveyed expect bitcoin to surpass $75,000 by year-end.

Context

Bitcoin ascended to a three-week peak on Monday, having achieved an all-time high of $73,803.25 in March after rebounding from a significant downturn in 2022.

Analysts attribute the recent resurgence to anticipation surrounding spot bitcoin ETFs and expectations of impending interest rate reductions.

What’s Ahead

Some analysts interpret bitcoin’s recent rebound beyond $70,000 as a sign of investors disregarding cautionary advice.

Deutsche Bank analysts anticipate support for bitcoin’s price from forthcoming events such as the “bitcoin halving,” regulatory measures, central bank rate cuts, and the potential approval of spot ethereum ETFs by the SEC.

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A recent analysis of Ether options’ open interest for the end of April expiry suggests a prevailing bullish sentiment in the market, with an underlying bias toward upward movement, according to industry experts.

The largest cohort of ether options open interest, set to expire at the end of April, demonstrates a significant tilt toward bullish positions, with approximately $3.3 billion of notional ether options slated to expire, as per Deribit data. Around two-thirds of this total have been placed on calls, representing bullish bets on price movement.

Wintermute OTC Trader, Jake Ostrovskis, highlighted that call strikes are concentrated between $3,700 to $4,000, indicating an inclination toward upside movement and an overall bullish sentiment in the market.

Moreover, Ostrovskis pointed out that the current open interest skew favors call trading at a premium to puts, coupled with a notable increase in implied volatility over the weekend. This suggests a stronger directional bias and reduced dependence on writing options to finance premiums.

Bullish Put-Call Ratio

Deribit data reveals that the ether put-call ratio for the end of April expiry stands at 0.45, slightly more bullish compared to bitcoin options, which have a put-call ratio of 0.48. Ostrovskis attributes this trend to traders identifying relative value in ether, especially considering its underperformance compared to Bitcoin in 2024.

A put-call options ratio below one signifies that call volume exceeds put volume, indicating bullish sentiment in the market. This trend is further underscored by Monday’s ether put-call ratio on Deribit for all expiries, which has fallen to 0.4, reaching a low not seen since late February, according to The Block’s Data Dashboard.

Despite the bullish outlook, Ostrovskis cautions against perceived negative impacts from regulatory changes, such as the ongoing scrutiny from the SEC regarding Ether’s classification as a security. Additionally, skepticism persists regarding the likelihood of an ETF approval by June 30th, 2024, with market sentiment indicating only a 17% probability. Even positive developments, such as the SEC soliciting comments on spot ether ETFs, have not been fully embraced by the market.

Ether Price Movement

Ether has observed a notable 6.8% increase in the past 24 hours, trading at $3,645 at 11:14 a.m. ET, according to The Block’s Price Page. This surge in price further reinforces the bullish sentiment prevalent in the options market for the end of April expiry.

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In recent days, the Solana network has encountered congestion issues attributed to a surge in spam transactions, prompting developers to spring into action with various solutions.

Solana developers are actively addressing the congestion dilemma as users grapple with delays and dropped transactions, particularly noticeable on the Phantom wallet app and other platforms. The root cause of this congestion lies in the influx of spam transactions, aggravated by a spike in memecoin-related activities, which strain the network’s block space and impede regular user access.

In the first quarter of 2024, we witnessed a notable uptick in memecoin activity on the Solana blockchain, reflecting the growing interest among new and retail users lured by the network’s cost-effective transaction fees. However, the surge in spam transactions has become a bottleneck for Solana’s operation.

Matt Sorg of the Solana Foundation likened Solana’s architecture to that of the internet, highlighting its decentralized transaction processing system. Unlike traditional setups with mempools, Solana dispatches transactions directly to block leaders, potentially leading to transaction drops under a heavy spam load.

In response, the Solana development team is actively devising solutions, including software patches. Anatoly Yakovenko, co-founder of Solana, anticipates improvements in the coming week as bug fixes roll out.

Anza, the developer of Solana’s Agave validator client, also addresses specific issues within its QUIC implementation to enhance performance under high request volumes.

The upcoming 1.18 update, slated for April, aims to make transaction scheduling more deterministic to streamline processing and alleviate bottlenecks. Additionally, implementing priority fees across Solana applications will mitigate delays and enhance user experience, as highlighted in a March blog post from Solana Labs.

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