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- Bitcoin, Ethereum, Cosmos and more Week 38 2024
Bitcoin, Ethereum, Cosmos and more Week 38 2024
Keeping you updated on crypto, web3 and blockchain
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TL;DR
Louisiana Adopts Bitcoin for Utility Bills
Fed Cuts Interest Rates by 50 Basis Points
Ethereum's 'Pectra' Upgrade Split into Two Phases
SEC vs. Consensys: Ethereum Win, MetaMask Battle
Jupiter Expands DEX with Coinhall, SolanaFM
ckBTC Bridges Bitcoin to Cosmos via Osmosis
Binance Founder to Be Released from Prison
Revolut Set to Launch Stablecoin
and much more!
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Bitcoin Highlights of the Week
Louisiana now accepts Bitcoin and other cryptocurrencies for public services, including utility bills, making it the first U.S. state to do so. This move aims to attract tech-savvy residents by providing more payment flexibility and streamlining services. State officials believe this modernization will appeal to a younger demographic and demonstrate cryptocurrencies' practical uses beyond investment.
This decision may inspire other states and prompt federal discussions on crypto regulations. While it poses regulatory challenges, Louisiana's bold step sets a precedent that could influence the future of cryptocurrency payments across the country, showcasing a practical application for digital currencies.
The Federal Reserve cut interest rates by 50 basis points, lowering the federal funds rate to 4.75%-5%, marking the first significant cut in over four years. This move addresses concerns about the U.S. economy, noting slowed job gains and a slight rise in unemployment despite good growth. The Fed aims to balance maximum employment and price stability, continuing to reduce Treasury and mortgage-backed assets.
Lower rates may increase Bitcoin's appeal, as traditional assets become less attractive. Historically, rate cuts boost liquidity, potentially driving demand for Bitcoin. Fed Chair Jerome Powell will discuss the decision further at 2:30 PM EST.
During the World Liberty Financial launch, Trump credited his NFT projects' success for changing his view on Bitcoin. Initially a Bitcoin critic, Trump saw his NFTs, minted on Polygon and purchased with crypto, as eye-opening. He mentioned his son Barron, an avid crypto user, as influential in this shift.
While Trump's new pro-crypto stance has garnered support from the crypto community for his second presidential run, some remain skeptical about his true motivations. Despite these doubts, Trump's position contrasts with other candidates like Harris, who show little engagement with the crypto industry, making him a favored choice for crypto enthusiasts.
Germany's Commerzbank and DZ Bank, two of its largest banks, are set to offer Bitcoin and crypto trading services, reflecting growing institutional demand. Commerzbank partnered with Deutsche Boerse's Crypto Finance to provide trading access for corporate clients, while DZ Bank teamed up with Boerse Stuttgart to enable its 700 cooperative banks to offer crypto services. This move follows Zurich Cantonal Bank's recent entry into retail crypto services.
With over $1 trillion in combined assets, Commerzbank and DZ Bank's involvement significantly boosts Bitcoin's mainstream adoption in Europe. Their regulated services cater to professional investors, emphasizing portfolio diversification and risk management. This development marks a major step in Bitcoin's integration into European finance.
On Sept. 18, former President and 2024 Republican nominee Donald Trump made headlines by purchasing hamburgers with Bitcoin at Pubkey, a Bitcoin-friendly bar in New York City. This marked the first time a former U.S. president used cryptocurrency in a transaction. The event, attended by Bitcoin advocate Anthony Pompliano, was also shared on Trump’s Truth Social account.
The visit came shortly after Trump announced a new token through the World Liberty Financial platform. Despite previously criticizing Bitcoin, Trump has included Bitcoin miners in his 2024 campaign. During the event, he handed out “crypto burgers” and emphasized his potential to win New York’s electoral votes.
Ethereum Highlights of the Week
Ethereum developers have announced the Pectra upgrade will be divided into two phases to manage its complexity and reduce potential bugs. The first phase, set for early 2025, includes eight Ethereum Improvement Proposals (EIPs) like EIP-7702, aimed at enhancing wallet user experience.
The second phase, still in development, may introduce changes to the Ethereum Virtual Machine and PeerDAS for improved data availability sampling, reducing costs and boosting Layer 2 scalability. This strategic split aims for a smoother rollout, enhancing validator efficiency and smart contract performance, pushing Ethereum closer to mass adoption.
Google Cloud has introduced a Blockchain Remote Procedure Call (RPC) service compatible with Ethereum, enhancing blockchain data interaction for developers. Initially supporting Ethereum's mainnet and testnet, the service aims to extend to other blockchains within a year. It includes a free tier, offering up to 100 requests per second and 1 million daily requests, and supports EIP-1474, simplifying integration with Ethereum-based applications.
This service promises improved reliability for decentralized applications (DApps), particularly during high network traffic. Google Cloud’s entry into the blockchain space is poised to be a significant development for Web3, aiding developers in creating more scalable and reliable DApps.
A Texas federal judge dismissed Consensys' lawsuit against the SEC, which aimed to prevent the regulation of Ether as a security. The court ruled that the SEC's investigation was not final enough for legal review. This decision marked a partial victory for Consensys, as the SEC also quietly ended its investigation into Ethereum 2.0.
Despite this win, Consensys faces ongoing legal challenges over MetaMask's Swap feature, which the SEC claims involves selling unregistered securities. Consensys plans to file a motion to dismiss this case. The outcome could significantly impact how blockchain companies operate in the U.S., potentially leading to tighter regulations or a favorable precedent for the crypto industry.
At Token2049 in Singapore, Vitalik Buterin highlighted the significant drop in Ethereum's transaction fees on layer-2 networks, which now approach zero. He recalled past experiences of paying over $800 for a single transaction, noting the change from fees of $10 to under $0.01 as a major milestone for crypto's mainstream adoption.
Buterin also reported improvements in transaction confirmation times, with most transactions now processed in 5 to 15 seconds since the Ethereum Merge. Looking ahead, Buterin emphasized the importance of balancing mainstream adoption with decentralization and open-source values.
ENS Labs' partnership with PayPal and Venmo aims to enhance cryptocurrency payment adoption by enabling transactions with human-readable Ethereum Name Service (ENS) addresses. This integration simplifies the user experience, allowing transactions to use recognizable usernames like “Thomas.eth” instead of complex hexadecimal addresses. Marta Cura of ENS Labs believes this collaboration will bridge Web2 and Web3, unlocking new use cases in various payment systems and e-commerce.
However, mainstream adoption requires cooperation with traditional finance (TradFi) companies, which can slow down progress due to regulatory hurdles. Additionally, the use of ENS names may reduce address poisoning scams, enhancing security and user confidence in crypto transactions.
Cosmos Highlights of the Week
Jupiter, a Solana-based DEX aggregator, has acquired blockchain explorer SolanaFM and Coinhall, a decentralized trading terminal for Solana and Cosmos blockchains. These acquisitions enhance Jupiter’s multi-chain trading and data capabilities, significantly broadening its reach.
Coinhall, serving over 225,000 users across 23 blockchain networks, boosts Jupiter's position in the decentralized exchange space, while SolanaFM strengthens its blockchain data infrastructure and liquidity aggregation. Alongside these strategic moves, Jupiter is developing new products like Jupiter Mobile and Ape.Pro, a memecoin trading platform.
Chain-key Bitcoin (ckBTC), a non-custodial Bitcoin token based on the Internet Computer blockchain (ICP), will soon be integrated into the Cosmos ecosystem through the decentralized exchange Osmosis. This partnership aims to provide a secure BTC option within Cosmos, addressing the increasing demand from DeFi developers to incorporate Bitcoin into diverse blockchain ecosystems.
ckBTC offers a decentralized alternative to Ethereum-based Wrapped Bitcoin (WBTC), which has faced centralization concerns due to Tron founder Justin Sun's influence over BitGo, WBTC's custodian. The move follows BitGo's proposal to share WBTC custody with BiT Global, raising fears of excessive control by Sun.
Agoric has partnered with Noble to introduce Fast USDC, enhancing USDC transfer speeds from Ethereum and EVM chains to the Cosmos ecosystem via the Noble Express application. This collaboration leverages Agoric's Orchestration and Noble's architecture to address the slow and complex nature of traditional cross-chain transfers, which often take over 20 minutes due to finality issues, thereby frustrating users.
Fast USDC aims to make transfers 10 times faster, offering on-chain, decentralized, and verifiable transactions. Users will be able to onboard between different chains and complete transfers in one session, significantly improving the efficiency and user experience in the Web3 economy.
The draft signaling proposal for Gaia v20 is now live on the Cosmos Hub forum, aiming to introduce three features that streamline the process for Consumer Chains and validators to join the Hub. The features include Permissionless ICS, allowing chains to launch without a governance proposal by simply issuing a transaction; ICS with Inactive Validators, enabling validators from outside the Hub’s active set to participate; and the removal of Unbonding Pausing from ICS, simplifying the protocol and reducing dependencies.
These enhancements are designed to lower entry barriers for new chains and validators, reduce operational risks, and simplify the Interchain process. The signaling phase for Gaia v20 is open for community feedback, inviting participants to share their thoughts and contribute to the proposed upgrade.
Celestia (TIA) saw a 15% price increase following the Lemongrass update, which introduced one-click interactions through IBC and interchain accounts. The update included key improvements such as CIP-6 to curb spam, CIP-9 for enhanced cross-chain transfers, and CIP-14 to strengthen cross-chain account features.
These enhancements have boosted market optimism, with TIA maintaining stable support levels and a significant rise in trading volume, signaling robust market activity. TIA's price surged to $6.22 with a 15% increase, driven by the Lemongrass update and broader bullish market sentiment. Trading volumes spiked by over 71% to $289 million, while open interest grew by 22.94%, indicating heightened market interest.
Other Highlights of the Week
Changpeng Zhao (CZ), the founder of Binance, is set to be released from the Long Beach Residential Reentry Management facility on September 29, 2024, after serving a four-month sentence for anti-money laundering violations. His case was part of a larger investigation by the U.S. Department of Justice (DOJ), which resulted in Binance facing a hefty $4.3 billion penalty.
Although prosecutors sought a three-year sentence, the court opted for four months, while CZ's legal team had requested probation. As his release nears, the crypto community is keen to see how Binance adapts to his absence and transitions to new leadership.
Revolut is reportedly in advanced stages of developing its own stablecoin, aiming to enhance its cryptocurrency offerings and strengthen its position as a crypto-friendly fintech. This initiative reflects a compliance-first approach, ensuring that the stablecoin meets regulatory standards amid evolving European regulations like the Markets in Crypto-Assets (MiCA).
With a valuation of $45 billion, Revolut has already facilitated cryptocurrency trading within its app and sees the stablecoin as a way to expand its services. The move aligns with a growing trend among competitors, including PayPal and Ripple, as Revolut seeks to innovate following its recent approval for a UK banking license.
Wall Street is optimistic following the Federal Reserve's recent 50 basis points rate cut, marking the first easing of monetary policy since the pandemic began. This move has spurred a rally in both stock and crypto markets, with the S&P 500 opening 1.5% higher—the largest overnight gain in 35 years.
While initial enthusiasm faded by the market close, the potential for a "Goldilocks" scenario, where inflation slows without significant job losses, is fostering economic optimism. Investors are hopeful that central bankers can manage interest rates effectively, but unexpected downturns in the economy could swiftly shift sentiment back to recession fears.
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