Crypto news roundup for week 33/2024
Bitcoin's recent 26% drop from its all-time high, while significant, is not unprecedented in the context of a broader bull market cycle. In 2017, Bitcoin experienced six separate drops of 25% or more as it rallied to new highs. Although it should be noted that market cycles are not all the same — as evidenced by the markedly different patterns seen in 2021-2022
8/11/20245 min read


Macroeconomic review of the past week
Global risk assets fell on Monday following a surprise rate hike from the Bank of Japan last week, weighing heavily on the USD-JPY spread.
Stocks, forex and cryptocurrencies all fell on Monday morning, with the S&P 500 down nearly 9% from its all-time high on July 16. Last week, Bitcoin fell 23% to $49,000 and Ether fell 33% to $2,300, both lows since February. Both assets have since recovered slightly, with Ether up 14% and Bitcoin up 19% from its lows this week.
The recent market decline can be attributed to a variety of macroeconomic factors, including weak US economic data, changes in global monetary policy, as well as crypto-specific issues such as a significant ETH sale from Jump Crypto ($470 million) and various token distributions.
Bitcoin ETFs saw net negative flows this week, while Ethereum ETFs saw more positive flows overall, with Grayscale ETHE outflows declining since launch. Ethereum ETFs saw net positive flows for the first time this week.
Other on-chain moves that shook the market last week included the US government moving $2 billion in Bitcoin seized from Silk Road to two new addresses on July 29, just days after Trump announced he would create a “national Bitcoin reserve.”
It is unclear whether these coins were moved for liquidation or if the US Marshalls simply transferred them to Coinbase Custody, which they recently acquired as a custodian and exchange provider. Additionally, the Chinese government appears to be focusing on about $450 million in ETH seized from the PlusToken Ponzi scheme in 2019.
Crypto Project Updates of the Week


Celestia is about to upgrade Lemongrass, introducing many important updates
Celestia has announced an upcoming major upgrade called Lemongrass. This upgrade includes several changes to the consensus layer, such as cross-chain accounts, packet forwarding middleware, and a CIP-10 mechanism to simplify future upgrades. Celestia-app v2.0.0 will be activated on Arabica Devnet for Lemongrass in August.
After successful testing, the Mocha Testnet is also scheduled to be upgraded in August. The Lemongrass upgrade of the Celestia mainnet Beta is scheduled to be implemented in early to mid-September. In addition, the data availability (DA) layer will also undergo technical changes, including blob data pruning (CIP-4) and a new messaging framework Shwap (CIP-19).
The Lemongrass hard fork includes many of the CIPs specified in CIP-17, including price enforcement (CIP-6), packet forwarding middleware (CIP-9) and coordination upgrades (CIP-10), cross-chain account (CIP-14), and disabling the Blobstream module (CIP-20). These updates are designed to improve network efficiency, simplify the architecture, and enhance interoperability with other blockchains.


Chain Signatures Implemented on NEAR Protocol, Expanding Cross-Chain Capabilities
The NEAR Foundation, the non-profit organization supporting the Layer 1 NEAR Protocol, launched chain signatures on its mainnet on August 8.
Chain signatures provide a new approach to cross-chain interactions. They link NEAR account addresses to other blockchains using a method called subkey derivation. This process creates multiple subkeys from a single master key, allowing for the management of different blockchain accounts.
When a user initiates a cross-chain transaction, the smart contract on the NEAR blockchain requests a signature for the transaction on the target blockchain. This request is performed by a multi-party computation (MPC) service.
The service, initially secured by eight validators including Pagoda, Luganodes, The Lifted Initiative, InfStones, Staking4All, Node.Monster , Black Sand Technologies, and Aurora, operates in a decentralized manner, preventing any entity from compromising users' funds.
Solana discreetly patches potentially critical security vulnerability: SOL Validator
A critical security vulnerability and patch has been disclosed in Solana, this public disclosure comes after a majority of stakes have been patched to protect the network.
Through extensive and sustained outreach by the Solana Foundation, Anza, Jito, and others, within hours a super minority and soon after a super majority (66.66% stake) were patched. After patching 70%, the network was essentially secure and the existence of the vulnerability and patch was made public with a call for all remaining operators to upgrade.
According to Solana Validator Laine, the process was initiated on Wednesday, August 7, after known members of the Foundation contacted the team about the upcoming critical patch and a hashed message.


Ethena Expands USDe to Solana, Plans to Include SOL as Collateral.
On August 7, Ethena Labs deployed the delta-neutral stablecoin USDe on Solana, its second ecosystem after its first launch on Ethereum in February 2023. The integration with Solana is made possible through the LayerZero interoperability protocol. Ethena’s Solana integration will also be accompanied by an incentivized ‘Sats Campaign’ that rewards participants with points redeemable for ENA tokens. USDe is already available on Solana DeFi applications including Kamino Finance and Drift, and will soon be available on the Jito restaking protocol.
According to the announcement post on X, Ethena Labs also expects SOL to be included as collateral for USDe, subject to a governance decision (expected to be voted on next week). Adding SOL as collateral “unlocks an additional $2-3 billion in open interest across major exchanges,” with the Ethena team adding that SOL’s funding rate has surpassed both BTC and ETH funding rates year-to-date. According to Solscan, the USDe supply on Solana is 4.2 million held across 120 unique addresses.
eCash Returns for Bitcoin Transactions
The long-awaited Bitcoin app Fedi launched on Wednesday. The app offers an easy way to securely store and spend bitcoin, primarily aimed at empowering underserved populations. The highly anticipated app leverages a new technical architecture developed by the Fedimint protocol, introducing a community-based approach to bitcoin management and payments. Notably, Fedimint has raised at least $23 million from venture capitalists to date, making it one of the more prominent Bitcoin startups.
Our review:
Bitcoin's recent 26% drop from its all-time high, while significant, is not unprecedented in the context of a broader bull market cycle. In 2017, Bitcoin experienced six separate drops of 25% or more as it rallied to new highs. While it should be noted that market cycles are not exactly the same — as evidenced by the distinctly different patterns seen in 2021-2022 — these significant price drops may be part of Bitcoin's typical volatility during bull phases.


Looking ahead to the rest of the year, there are three major catalysts to watch for Bitcoin:
1. The distribution of $12 billion in cash to FTX creditors could inject new capital into the crypto market, although the impact of this may be limited as the majority of the funds will be distributed to funds that have redeemed claims from individual creditors.
2. The US presidential election is important, with Trump’s crypto-friendly stance potentially boosting Bitcoin if his chances of winning increase. If the Democrats remain hostile and Harris’ chances increase, that could create headwinds. Interestingly, if the Democrats soften their stance on crypto, the correlation between Trump’s odds of winning and the BTCUSD rate could break down.


3. The Federal Reserve's September interest rate decision remains important, although its impact may be muted if it falls in line with current expectations for a rate cut.
Given these factors, Bitcoin is expected to trade in a narrow range in the short to medium term. The main risks are further deterioration in the macro backdrop or moves in government-held cryptocurrencies, while the upside potential comes from FTX distribution, an improving political environment, and a more accommodative interest rate environment.
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