Ethereum Is Under Attack
Ethereum has had a rough week and is under attack once again from Gary Gensler.
Take a seat cos here is your weekend crypto update…
Here’s what’s in today’s issue:
- Rebecca shares her thoughts on the troubles ahead for Ethereum, Coinbase’s delays, interest rate cuts getting closer, Reddit’s IPO & Nigeria demanding Binance’s user data.
- Altcoin alpha by David.
- This week’s airdrop by Jesse.
- Sam has an NFT report on What Is Runes Protocol on Bitcoin?
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Trouble Ahead For Ethereum
Ethereum Foundation Under Investigation
Some eagle-eyed members of the crypto community noticed that something was missing from the Ethereum Foundation’s website.
The missing object was a statement showing the company hasn’t received any lawsuits or subpoenas from the government or the authorities. It was removed from the footer of the website on February 26 meaning the government was here.
Since then, a message has been posted to the Ethereum Foundation’s GitHub repository confirming that “we have received a voluntary enquiry from a state authority that included a requirement for confidentiality.” Uh-oh.
The SEC Is Calling ETH A Security
Here we go for the 100th time…the US Securities and Exchange Commission (SEC) is on its crypto crackdown.
Now the SEC has launched a legal campaign to classify Ethereum as a security.
Several US companies have been subpoenaed by the SEC as part of an information-gathering exercise.
Spot ETFs No Longer Likely
If Ethereum gets classified as a security, then crypto can kiss goodbye to the approval of a spot Ethereum ETF.
Once the spot Bitcoin ETFs were approved in January, an Ethereum equivalent felt imminent.
Bloomberg analysts back then gave the Ethereum ETFs a 60-70% probability of approval. Then it slipped to 30% just two weeks ago.
Now, the chances are looking even less likely.
This seems to be an attempt to either stall and push back the decision even further or it’s a full-blown attack on Ethereum.
Coinbase Warns Users Of Delays
Coinbase is fully in its Solana outage era.
The exchange has already seen two outages so far this year right when Bitcoin was trading at new ATHs. Now, Coinbase is warning users that there may be delays in processing deposits, withdrawals, and trading activity.
Not a good look at all.
The root cause of the problem is coming from its Ethereum Layer-2 network, Base. The Base network has been suffering from high traffic and congestion which is spilling over into the exchange’s trading services, including Coinbase Wallet transactions.
The Base network has announced a rescheduled pause for one hour on March 27. During this time, withdrawals from Base’s bridge will be temporarily suspended so maintenance can take place.
Coinbase says this is part of its “overall strategy to manage and mitigate incidents promptly.” I guess the real test will be when Bitcoin blasts to another new ATH. If there’s another outage then, something fishy is going on.
Interest Rate Cuts Are Getting Closer
We’ve already seen that financial markets don’t need interest rate cuts to trade in the green. Bitcoin is up 47% and the S&P 500 is up 11% so far this year.
This week saw the US and UK hold their interest rates once again at 5.25-5.5% and 5.25% respectively.
The Bank of England says rate cuts are “on the way” and the Federal Reserve has signalled three rate cuts are still coming in 2024.
Whilst we assume the US will lead the way, there was a surprise interest rate announcement of the week. Switzerland has skipped ahead and become the first major economy to cut its interest rates.
They have been able to comfortably do so as inflation has been below the 2% target rate since June 2023. The interest rate cut was a 0.25% reduction to bring rates down to 1.5%.
Almost immediately the Swiss franc dropped in value against the Euro. Once more countries start cutting rates, investors will be hoping that currencies begin to fall and risk assets, especially crypto and tech stocks, rally even harder.
Reddit IPO Sees Memecoin Launch
Reddit debuted this week on the New York Stock Exchange under the stock ticker, RDDT.
Reddit’s long-awaited IPO has been in the works since December 2021. It’s the first tech company to IPO since Pinterest went public in 2019. So of course, the crypto market wanted to capitalize on that.
Somebody somewhere spun up a crypto token under the exact same ticker symbol, RDDT. It’s not affiliated at all with the company. But I guess there’s the assumption that if the stock price goes up, the crypto token will too. And it will be a middle finger to the system, just like the GameStop saga from a few years back.
Well, that’s not exactly how it played out on IPO day. Reddit’s stock price skyrocketed over 60% within minutes after launching and ended the first day of trading with a 48% gain. The crypto token however dropped 50%.
Did you invest in Reddit’s stock or Reddit’s crypto token? Reply to this email and let me know.
Nigeria’s Getting Nosy—Demands Binance User Data!
A little over a week ago, Nigeria was asking Binance to hand over its user data. Specifically, the past six months of transaction data for its top 100 users.
Nigeria is trying to get to the bottom of $26 billion in untraceable funds that flowed through Binance in 2023. It turns out that Nigeria’s National Security Agency has detained two Binance execs against their will and these are their demands.
With Binance refusing to budge, the demands are escalating. Now an interim court order is demanding that Binance hand over comprehensive information about every user trading on its platform.
Yikes! The game of chess has started.
Nigeria has been on operation crypto crackdown since it rolled out its eNaira CBDC in 2021 and didn’t get the adoption it hoped for.
It’s also blaming the crypto industry for devaluing its currency against the US dollar.
There could be a time when KYC (Know Your Customer) is used against you.
Existing Projects / Tokens
- Entangle [NGL] just received a strategic investment from Consensys (i.e. the builders of MetaMask). Entangle is a new customizable messaging infrastructure protocol that works to help unify and optimize liquidity throughout the crypto ecosystem. The protocol’s native token, NGL, dropped March 13th.
- Fantom’s [FTM] Sonic Upgrade is set for April. Sonic will introduce a new smart contract coding language to the network, as well as implement a new execution engine in the Fantom Virtual Machine.
- Immutable [IMX] & Polygon [MATIC] have partnered with King River Capital to launch a $100M Web3 gaming fund. The trio says they will work to identify the best opportunities across the global video game industry.
- Optimism [OP] just released open-source, feature-complete fault proofs on the OP Sepolia testnet. OP Labs says this development will lead to further decentralization of the L2.
- Stellar [XLM] just launched Soroban, which is the network’s smart contracts platform. Soroban has been in testing for the last two years. The upgrade will open dapps, DeFi, and other use-cases to the network.
Upcoming Projects / Tokens
- Mode is a new modular DeFi L2 for Ethereum. The protocol is built with OP Stack, and will work in conjunction with Base and Optimism. You can join the Mode token airdrop now.
- Zero1 is an emerging decentralized AI network that’s positioning itself as a direct competitor against Bittensor. Zero1 says their competitive advantage is it will be cheaper for AI systems to connect to its network. No token launch has been announced, but the dev. docs indicate a token is on the way.
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What Is Runes Protocol on Bitcoin?
Runes Protocol is a new way of deploying fungible tokens on Bitcoin, set to launch at the Bitcoin halving next month.
As it’s created by Casey Rodarmor, also the creator of Ordinals Protocol on Bitcoin, Runes and Ordinals are closely connected.
Some top projects crossing over between Ordinals and Runes, and which are lining up to launch Runes tokens, include Runestone, RSIC Metaprotocol, BTC Machine, PUPS, RunesTerminal, and Runes as Fuck.
TO READ THE REST OF THIS ARTICLE, CLICK HERE – “What Is Runes Protocol on Bitcoin?”
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