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- Bitcoin, Ethereum, Cosmos and more Week 21 2024
Bitcoin, Ethereum, Cosmos and more Week 21 2024
Keeping you updated on crypto, web3 and blockchain
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TL;DR
Trump Now Accepts Crypto Donations: America’s First Bitcoin President
BlackRock’s Bitcoin ETF Sees Surge in Inflows
SEC Approves Spot Ethereum ETFs
VanEck Launches Ethereum ETF Post-SEC Approval
TOKI and SuccinctLabs Unveil the First Open-source ZK-IBC Solution
Injective Launches Ethereum Layer-3 Network
Binance Executive Collapses During Nigerian Trial
Venezuelan Authorities Seize Major Bitcoin Mining Facility
and much more!
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Bitcoin Highlights of the Week
In a press release this afternoon, President Trump announced that his campaign for the White House will now accept Bitcoin donations. This move is likely to intensify tensions with President Joseph Biden, who, along with Democrat Senator Elizabeth Warren (D-MA), has been heavily regulating the digital asset space, particularly Bitcoin, during his term.
The announcement stated, "As President, Donald J. Trump reduced regulations and championed innovation in financial technology, while Democrats like Biden and Elizabeth Warren believe government control is the solution. This effort to reduce government control over financial decisions is part of a shift toward freedom. Today’s announcement reflects President Trump’s commitment to an agenda valuing freedom over government control."
It was noted that Trump's appointment of former Coinbase VP Brian Brooks as Comptroller of the Currency was a pivotal Bitcoin-friendly move, allowing banks and financial firms to hold cryptocurrencies. This ruling took effect during the last year of Trump’s first term, and Bitcoin's price surged twentyfold in the following year.
The Bitcoin Policy Institute (BPI) has launched the Peer-to-Peer Rights Fund to protect decentralized Bitcoin tools and their developers from regulatory overreach. The fund's first project is defending Keonne Rodriguez and William Lonergan Hill, founders of Samurai Wallet.
The Peer-to-Peer Rights Fund aims to maintain Bitcoin’s decentralized integrity by supporting legal cases and offering regulatory guidance. BPI emphasizes that Bitcoin's success relies on its peer-to-peer foundation, which sets it apart from other electronic cash systems. Non-custodial tools like multi-signature wallets, Lightning Service Providers, and Coinjoin coordinators are crucial for security, low-cost transactions, and privacy.
However, recent regulatory actions in the U.S. have targeted developers of non-custodial tools such as Tornado Cash, Samurai Wallet, Uniswap, and MetaMask. These actions threaten to set legal precedents that could harm the non-custodial Bitcoin ecosystem. The government’s broad interpretation of regulations could require anyone facilitating fund transmission, regardless of control, to comply with the Bank Secrecy Act. This could impact developers of various non-custodial Bitcoin tools, including hardware wallets and transaction-broadcasting nodes.
The UK's Financial Conduct Authority (FCA) has given the green light to asset manager WisdomTree, allowing them to list Bitcoin and Ethereum exchange-traded products (ETPs) on the London Stock Exchange (LSE). Starting May 28, WisdomTree's Physical Bitcoin ETPs will be available for trading, initially targeting professional investors. This approval follows the FCA's decision in March to no longer oppose Bitcoin ETP listings for professional investors, aligning with similar approvals in the US and Hong Kong earlier this year.
WisdomTree highlighted that it's among the first firms to secure FCA approval for its Bitcoin ETP prospectus, indicating a change in the regulator's stance since banning such offerings in 2020. While the US and Hong Kong have warmed up to regulated Bitcoin funds, the FCA remains cautious and plans to maintain the ban on retail investors. This shift reflects the increasing adoption of Bitcoin ETFs, even among traditional institutions. Recent SEC 13F filings reveal major banks and financial giants have invested heavily in US spot Bitcoin ETFs.
A significant regulatory shift in the United States has sparked a new bullish trend for Bitcoin (BTC), positively impacting the altcoin market. Recently, several Congress members urged SEC Chair Gary Gensler to approve spot Ethereum (ETH) ETFs. Additionally, the US Congress almost unanimously passed the FIT21 bill, which clarifies cryptocurrency regulations in the country.
According to the latest on-chain data, Bitcoin whales with balances between 1,000 and 10,000 BTC have accelerated their accumulation in recent days. These whales have added 20,000 BTC, worth about $1.4 billion, in the past week. This surge in accumulation coincides with significant cash inflows into spot BTC ETFs, which have attracted about $1.7 billion in the past eight days.
Following the fourth Bitcoin halving over a month ago, demand for Bitcoin is expected to rise as various jurisdictions seek to accumulate the limited digital asset. Bitcoin has faced strong resistance around $72,000, leading to a retrace below $68,000. Meanwhile, many traders are shifting their focus to Ethereum, anticipating the approval of spot Ether ETFs.
BlackRock's IBIT saw a surge in inflows on Tuesday, May 21, totaling $290 million. This amount exceeded the combined inflows of the past 21 trading days. The IBIT, accounting for 95% of the total inflows into US spot Bitcoin ETFs, contributed to the $300 million net inflows for these ETFs on the same day.
The inflow into BlackRock's ETF marks the highest since April 5, reversing a trend of minimal inflows observed over the past six weeks. The total inflow over the past four trading days has surpassed $1 billion amid Bitcoin's volatile rally. Despite discrepancies in reported assets under management (AUM), the BlackRock fund has accumulated $16 billion in inflows since its launch.
Ethereum Highlights of the Week
Ethereum co-founder Vitalik Buterin recently addressed key decentralization challenges in a detailed blog post. He focused on three critical issues: Miner Extractable Value (MEV), staking complexities, and hardware requirements for running nodes.
Buterin emphasized the need to minimize MEV, which refers to the profits block producers can make by manipulating transaction orders. This can create an unfair system favoring those with more resources. He proposed approaches to mitigate MEV, including minimizing its occurrence and using protocols like CowSwap to ensure fair transactions by concealing details until confirmation.
Staking on Ethereum currently requires at least 32 ETH and significant technical expertise, leading many to use centralized services like Lido and RocketPool, which threatens decentralization. To address this, Buterin suggested solutions to reduce hardware and data storage needs for nodes, such as implementing Verkle trees and EIP-4444. These measures could lower storage requirements to under 100 gigabytes, making it feasible to run nodes on personal devices. Additionally, he proposed lowering the minimum staking requirement from 32 ETH.
Prometheum, a New York-based digital asset firm, has launched an SEC-compliant custody service specifically for Ethereum (ETH), a significant move towards regulatory compliance. This service treats ETH as a security, aligning with U.S. Securities and Exchange Commission (SEC) regulations.
Prometheum, known for its unique stance on digital assets, initially rolled out its ETH custody service to a limited group of companies. A full-scale release is scheduled for the first week of June. Co-CEO Aaron Kaplan emphasized that this marks the first time an investment contract involving a digital asset has been custodied and regulated under securities laws.
Kaplan noted, "This launch represents a significant advancement towards a regulated and secure digital asset market."
The service targets institutional clients like asset management firms, hedge funds, banks, and registered investment advisors. Prometheum plans to extend its offerings to retail clients by the end of 2024, providing comprehensive digital asset management while adhering to strict regulatory standards.
Vitalik Buterin recently discussed Ethereum's biggest current challenge. Despite progress in scaling, Ethereum still needs improvements to enhance user experience. There are two main scaling methods: layer-1 sharding and layer-2 solutions like rollups. Both aim to handle more transactions using similar technology, such as ZK-SNARKs for transaction verification and Data Availability Sampling. The main difference lies in their management and implementation.
When rollups like ZK-SNARKs are used in a sharded blockchain, they become a core part of the protocol. This means Ethereum's fundamental technology stays the same, but its application changes. This approach introduces challenges, especially in coordinating and stabilizing the network with multiple L2 solutions. One major issue is transferring tokens between various L2s. Currently, this process is cumbersome and forces users to rely on bridges, which may not always be secure. Buterin emphasizes that standardizing cross-chain interactions will lead to a more stable and safer environment.
Ethereum co-founder Vitalik Buterin recently addressed key decentralization challenges in a detailed blog post. He focused on three critical issues: Miner Extractable Value (MEV), staking complexities, and hardware requirements for running nodes.
Buterin emphasized the need to minimize MEV, which refers to the profits block producers can make by manipulating transaction orders. This can create an unfair system favoring those with more resources. He proposed approaches to mitigate MEV, including minimizing its occurrence and using protocols like CowSwap to ensure fair transactions by concealing details until confirmation.
Staking on Ethereum currently requires at least 32 ETH and significant technical expertise, leading many to use centralized services like Lido and RocketPool, which threatens decentralization. To address this, Buterin suggested solutions to reduce hardware and data storage needs for nodes, such as implementing Verkle trees and EIP-4444. These measures could lower storage requirements to under 100 gigabytes, making it feasible to run nodes on personal devices. Additionally, he proposed lowering the minimum staking requirement from 32 ETH.
After the SEC approved its spot Ether ETF, VanEck promptly released a celebratory 37-second promotional video urging viewers to "enter the ether." On May 23, about a week after the SEC approved the 19b-4 registration for the spot Ether ETF, VanEck shared the ad on social media.
Positive Reception for VanEck's Ethereum ETF Ad
VanEck joins major asset managers like BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise, thanks to the SEC's approval of its filing. However, trading won't start until the SEC approves each ETF’s S-1 filing, a process that could take several months.
The VanEck ad asks thought-provoking questions about Ethereum's potential to power a decentralized, open-source economy. The engaging content has resonated with viewers, garnering numerous reposts and views.
Cosmos Highlights of the Week
In a significant development for the blockchain community, TOKI and SuccinctLabs have announced the release of the first open-source, practical ZK-IBC (Zero-Knowledge Inter-Blockchain Communication) solution. This innovative project integrates ibc-solidity (IBCProtocol) and Tendermint X, creating new possibilities for decentralized applications (dApps) to securely exchange information across the Ethereum and Cosmos ecosystems using IBC.
The ZK-IBC solution is designed to be performant and accessible, providing a robust framework that anyone can use today. A recent gas report for the TendermintZKLightClient contract, measured with the forge test, showcases its efficiency.
TOKI is also looking to the future, aiming to accelerate the development of ZK-IBC by leveraging zkVM approaches such as SP1. This strategy is expected to reduce implementation costs for each light client, further enhancing the scalability and functionality of ZK-IBC networks. Committed to advancing zero-knowledge proofs, TOKI plans to continue utilizing Trusted Execution Environments (TEE) and Multi-Party Computation (MPC) within a multi-prover model. This approach is intended to bolster security and mitigate potential risks in IBCProtocol connections.
The Solana ecosystem can now seamlessly interoperate with IBC-enabled chains, thanks to the efforts of Picasso Network. This major development marks the launch of the first trust-minimized connection between Solana, Cosmos, Ethereum, and Polkadot. We are thrilled to announce that users can now experience IBC on Solana, enabling cross-chain transfers on the Picasso Network platform. Additionally, the $PICA token is now natively available on Solana via Orca.
This integration expands the possibilities for cross-ecosystem collaborations and innovations. It sets the stage for new opportunities in decentralized finance, enhancing the interoperability of blockchain networks. Users are encouraged to provide feedback to improve the cross-ecosystem IBC experience. Furthermore, the $PICA / $SOL pool is now live on Orca, with initial liquidity seeded and more to come. Special thanks go to Rex St. John, Jacob Creech, and Jonas of SolPlay for their support in deploying Solana IBC on the mainnet.
Hydro is a new bidding and governance platform designed to efficiently deploy liquidity across the interchain ecosystem. Developed by Informal Inc., Hydro addresses the growing demand for adding ATOM and other token liquidity within the Cosmos Hub.
Low liquidity has several negative effects:
Volatility: Thin liquidity leads to volatile asset prices, with small trades causing significant price swings, deterring both retail and institutional investors who prefer stability.
DeFi Constraints: Limited liquidity restricts access to DeFi protocols, which rely on liquidity pools for lending, borrowing, and other financial activities, stifling innovation and user adoption.
Investor Hesitancy: Investors are reluctant to commit to projects with illiquid tokens, fearing difficulty in exiting their positions, which creates barriers to entry and hampers healthy competition.
Developer Deterrence: The potential for low user engagement due to limited trading opportunities discourages developers from building within the interchain, driving them towards ecosystems like Ethereum and Solana.
Vicious Cycle: Low liquidity leads to lower trading volumes, making the ecosystem less attractive to market makers who provide additional liquidity, thereby exacerbating the initial issue.
By addressing these challenges, Hydro aims to foster a more robust and dynamic interchain ecosystem, encouraging investment, innovation, and broader adoption of interchain technologies.
Despite a significant downturn this year, Injective is pressing forward with a major expansion by launching a layer-3 network within the Ethereum ecosystem, leveraging Arbitrum's layer-2 technology.
This ambitious project, named “inEVM,” aims to create a more interconnected blockchain environment. Compatible with Ethereum’s EVM, inEVM will enable seamless smart contract operations and connect Ethereum, Cosmos, and Solana, promoting interoperability across these major blockchains.
The backbone of inEVM will be Arbitrum’s Orbit toolkit, which offers scalable layer-2 solutions for developers to customize chains. This integration enhances Injective’s scalability and efficiency while ensuring interoperability across blockchain networks. Developers using the Orbit toolkit can leverage Arbitrum’s robust infrastructure to create tailored solutions, maintaining the ability to interact with a wide array of ecosystems.
HAQQ Network Partners with evmOS for Enhanced Shariah-Compliant DeFi
HAQQ Network, a Shariah-compliant DeFi platform, has forged a strategic partnership with evmOS, marking a significant advancement in their shared mission. This collaboration enables HAQQ to leverage the innovative features of evmOS, a technology stack built with the Cosmos SDK and CometBFT consensus algorithm.
Enhancing Accessibility and Innovation With the integration of evmOS, the vast Islamic Coin community gains access to the entire Cosmos ecosystem and a wide array of interchain decentralized applications (dApps). This partnership is poised to unlock new opportunities for developers and users alike, facilitating inclusive, efficient, and Shariah-compliant financial services.
Unlocking Potential with evmOS The evmOS platform offers developers an environment that seamlessly combines the familiarity of Ethereum's EVM with the interchain interoperability of Cosmos. By overcoming scalability, performance, and connectivity challenges, HAQQ can now empower developers to create sophisticated smart contracts and decentralized applications while adhering to industry standards and principles.
Other Highlights of the Week
In an unexpected twist, Tigran Gambaryan, an executive from the world's largest cryptocurrency exchange, Binance, collapsed during a court session at the Federal High Court in Abuja, Nigeria. Gambaryan, who is facing money laundering charges, suffered a health incident that intensified the legal battle between Binance and Nigerian authorities.
As the trial was set to resume before Justice Emeka Nwite, Gambaryan remained seated instead of moving to the dock when called by the court registrar. A defense lawyer seated beside him helped him walk to the dock, but Gambaryan fell along the way. The lawyer assisted him in sitting in a front-row seat.Gambaryan's lawyer, Mark Mordi, informed the court that his client was "indisposed" and had submitted a written request to notify the court of his condition. Due to Gambaryan's health issues, the trial could not proceed that day.
On May 16, Justice Nwite denied Gambaryan's bail application over concerns that he might flee if released, leading to his remand at the Kuje Correctional Centre. The trial has been rescheduled for June, as part of the ongoing legal challenges faced by Binance in Nigeria amidst the government's broader crackdown on the cryptocurrency platform.
Venezuelan authorities have released a new video showcasing their crackdown on Bitcoin mining operations, focusing on a mining gallery in Valencia's industrial area. The country has initiated an official crackdown on Bitcoin mining firms, a move that has drawn criticism from crypto enthusiasts. Despite pushback, the government has launched an operation to monitor heavy power consumers through the National Power Ministry. Authorities aim to disconnect all Bitcoin mining firms from the national grid due to their high power consumption, which strains the country's ability to provide power to its citizens.
In the video, an official alleges that miners are siphoning electricity from the national grid, justifying the ongoing operation as a means to ensure citizens have more reliable power. Furthermore, the official expresses uncertainty about the legality of the mines, questioning whether they were authorized by the government. Venezuela's Ministry of Electrical Power (MPPPE) has begun enforcing the government's directive, calling for the immediate disconnection of cryptocurrency mining farms from the national electrical system. This move is part of a broader regulatory effort to control power consumption from heavy users and eradicate Bitcoin mining.
Bengaluru — Grayscale Investments announced on Monday that Peter Mintzberg, an executive from Goldman Sachs, will assume the role of CEO, effective August 15. This decision comes shortly after the digital asset manager withdrew its application for an ethereum futures exchange-traded fund (ETF). Mintzberg will succeed Michael Sonnenshein, who has stepped down from his position to pursue other interests, according to the company. Grayscale is renowned for providing crypto investment products, including exchange-traded funds that enable shareholders to access cryptocurrencies like bitcoin without direct ownership.
The company recently retracted its proposal for an exchange-traded fund linked to ether futures, which it had submitted in September. This move occurred shortly before the introduction of other ether futures ETFs. In the interim, CFO Edward McGee, who has been appointed principal executive officer, will assume CEO responsibilities until Mintzberg assumes the role in August. Mintzberg will join Grayscale from Goldman Sachs, where he currently serves as the global head of strategy for asset and wealth management. Prior to this, he held various global leadership positions in strategy, mergers & acquisitions, and investor relations at BlackRock, OppenheimerFunds, and Invesco.
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