After a shaky weekend, the market woke up with the optimistic news that Hong Kong regulators have given the green light for launching spot bitcoin and ether exchange-traded funds (ETFs). This news, combined with the fact that this week marks the fourth Bitcoin halving, was still insufficient to stabilize crypto prices. BTC fell below $60k on Wednesday, for a brief moment, while altcoins bled double-digits.
Degens are panicking that the highly awaited alt season is already behind us, and we can't blame them. But is this the case? Keep reading to find out what the data shows.
Top Story
Asia Enters The Crypto ETFs Race While The U.S. Takes a Break
There were rumors last week that Hong Kong officials were pushing for the country to approve spot Bitcoin and Ether ETFs more quickly. ChinaAMC, Harvest Global, and Bosera International were among the first companies authorized to issue exchange-traded funds (ETFs), confirmed on Monday.
It was announced later in the week that funds could begin trading by April 30th, potentially resulting in capital inflows of up to $25 billion. Critics refuted the report, claiming that the HK crypto ETFs are 'lucky' to have $500 million in total assets under management and that their capacity is insignificant compared to the much larger U.S. ETF market.
While news from Asia was at the center of attention, in the U.S. things took a different turn. BlackRock's Bitcoin ETF was the only fund with inflows since Friday, while GBTC outflows overpowered other spot ETF inflows for three consecutive days. Amid the slow-down of institutional inflows, Bloomberg ETF analyst James Seyfartt pointed out that on any given day, the vast majority of ETFs will have a flow number of ZERO, and that it is normal.
Market Updates
Is The Altcoin Season Over?
Remember the Alt Season hype from earlier this year? Statistics such as Bitcoin reaching a three-year high in market dominance, the ETH/BTC pair trading at new lows every few days, and the fact that alts suffer more during macro events and recover slower than BTC have all contributed significantly to the negative sentiment. Even memecoins, which carried the market in Q1, have recently lost their appeal.
… Or so they want us to believe.
A recent headline stated, "This year, only six out of the top 50 altcoins have outperformed Bitcoin." However, the data shows that Bitcoin is ranked 17th in YTD performance out of the top 50 coins, behind alts like Fantom, NEAR, Stacks, TAO, and even DOGE. Lesson: always do your own research.
More Layer 2s Are Debuting In Crypto
Last week, Monad made headlines as a fresh L1 contender that secured an impressive $225 million in funding and ambition to take on reigning giants like Solana. This week, the spotlight shifts to the L2 arena, where two new players have stepped onto the stage. These challengers are eyeing the throne currently held by Base, a project that has seen remarkable revenue gains—$28 million in the past 30 days.
Let's meet the contenders:
- Worldcoin launches its own 'human-centric' blockchain network
- OKX introduces Ethereum L2 for reduced fees & interoperability*
Regarding the overall landscape of L2 protocols, the charts exhibit strength despite a recent 13.29% drop in the total value locked (TVL). Over the past year, the TVL has consistently risen, with prominent protocols such as Arbitrum, Optimism, Base, and Blast taking the lead on the Ethereum network.
(*) Learn How To Add OKX's X Layer to MetaMask
DeFi Activity Is Booming: Report
Artemis and QuickNode just released a Q1 2024 OnChain Report covering an in-depth analysis of blockchain consumer behavior, developer trends, and the venture capital investment outlook. A few highlights from the report include:
- Stablecoin user activity is up 42% QoQ due to BTC ETF approval, upcoming halving
- Record 8.29mm active addresses in Q1 2024, up 73% YoY and 146% from Q3 lows
- Web3 gaming active addresses up 155% QoQ in Q1'24
According to the paper's researchers, blockchain activity in Q1 continued to showcase an expanding ecosystem, "setting new standards in innovation and user adoption." This is on par with other recent industry reports like the one from CoinGecko which showed 36% quarterly growth for DeFi protocols like Ethereum restaking on EigenLayer and DEX trading volume increasing by 78.4%.
BONUS: Canadians Will Pay 66% In Taxes (Or How Misinformation Spreads)
On a side note, today Canada announced that it is aiming to adjust capital gains rates. Of course, as dramatic as crypto folks are, they misinterpreted the news, and misinformation began spreading like wildfire. No, Canadians have not been paying a 50% capital gains tax until now, nor will they pay 66% if the new proposal gets approved.
The truth? Capital gains tax is a levy on the profit from selling something you invested in, like stocks, property, or crypto. In many countries, this tax applies to 100% of the profit. However, the current system in Canada only taxes 50% of the gains.
Example: Buy XYZ for $1000 -> Sell for $1500 -> Profit = $500 (But pay tax on just $250)
The proposed change would mean that individuals realizing over $250k per year would pay capital gains tax on 66% of the gains above $250k. So, if you made a profit of $300k, under the current system, you would be taxed on $150k. Under the proposed system, the math would look like 250*0.5 + 50*0.66, or around $158k. The exact amount a Canadian resident would owe depends on their tax bracket. Of course, this is a simplified explanation and shouldn’t be taken as accounting advice. Misinformation can hurt people and it was important to highlight the correct information. Also a big L for crypto twitter this time, even if everyone was just trolling.
MORE BITE-SIZED STACKS
Bitcoin
- Top Five BTC Miners Not Selling Despite Bitcoin Halving
- Bitcoin Supply To Run Out On Exchanges In 9 Months — Bybit
- Norway Wants to Restrict Crypto Mining by Regulating Data Centers
DeFi
- Limit Orders Are Now Live On Uniswap
- Kraken Releases Self-Custody Crypto Wallet
- TikTok Owner Tech Arm Collabs With Sui On Web3 Gaming, SocialFi
Institutions
- Germany's Largest Federal Bank LBBW to Offer Crypto Custody Services
- UK To Issue New Crypto, Stablecoin Legislation by July, Minister Says
- Tether Announces Upcoming Release Of Multi-Chain Tokenization Platform
Crypto Courtroom & Regulations
- What To Expect At Changpeng Zhao (CZ) Sentencing On April 30
- Railgun Denies Being Used By North Korea As It Nears $1b Total Volume
- Lummis, Gillibrand Introduce Bill Prohibiting Unbacked Algorithmic Stablecoins
Raises
- Andreessen Horowitz Raises $7.2B for New Funds, Second Gaming Fund
- DeFi Focused Berachain Raises $100M in Funding
- Citadel-Backed Hidden Road Partners On Track To Raise $120 Million
Misc
- Korean Won Surpasses U.S. Dollar As Most-traded Currency For Crypto In Q1
- Satoshi-Era Bitcoin Wallet Suddenly Revives After 14 Years
- Adidas Releasing $2,500 Solana NFT Sneakers in Move-to-Earn Game 'Stepn'
Yields, Airdrops & Degen Plays
- Solana DEX Drift to Airdrop 100M Tokens in Weeks
- Breakdown On Runes By X (Twitter) Analysis
- Parcl Protocol On Solana Lost 40% TVL Following Airdrop
Tweets For Thought
DISCLAIMER: This content is for informational purposes only. It is not intended as financial advice or any form of recommendation for investment strategies. The information provided should not be relied upon in making any financial decisions. Always conduct your own research and exercise caution when dealing with financial matters.