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EigenLayer Makes A Big Splash With EIGEN Token Launch And Major Airdrop Plan, Get The Full Scoop!

EigenLayer, a decentralized restaking protocol built on Ethereum (ETH), has made significant announcements, paving the way for new developments within the crypto ecosystem. 

The protocol unveiled its native token, EIGEN, which the newly formed Eigen Foundation will distribute. Alongside this, EigenLayer introduced a major plan for an airdrop and released a comprehensive new Whitepaper.

EigenLayer Unveils EIGEN With Novel Mechanism

According to the protocol’s announcement, the introduction of the EIGEN token brings forth a complementary mechanism designed to address “intersubjective” faults, which cannot be resolved through ETH restaking alone. 

By expanding ETH restaking, EigenLayer positions ETH as the Universal Objective Work Token, while the universality of EIGEN makes it the Universal Intersubjective Work Token. EIGEN’s universality is reportedly aimed at allowing it to fork and slash for intersubjective errors committed by EIGEN stakers in any AVS (Automated Verification System) within the protocol. 

To ensure widespread adoption of EIGEN across applications, EigenLayer has designed an application-independent mechanism to maintain the system’s cryptoeconomic security. 

In EigenLayer, EIGEN staking and ETH restaking play complementary roles. EIGEN addresses safety properties through objective slashing, and ETH restaking ensures liveness and censorship-resistance properties dependent on stake decentralization.

The launch of EIGEN also introduces intersubjective staking, marking a significant milestone for the protocol and the Ethereum ecosystem. However, due to its newly introduced design, the concept requires widespread adoption and discussion among ecosystem participants. 

At launch, the Eigen token will have a total supply of 1.67 billion tokens, with the Foundation allocating 45% of the tokens to the community. This allocation is further divided into staked drops, community initiatives, and ecosystem development.

Investors will reportedly receive almost 30% of the tokens, while early contributors will receive over 25%. Both these groups are subject to a three-year lockup period for their allocations. 

A complete lock will be in place during the first year, followed by a gradual release of their total holdings at a rate of 4% per month over the subsequent two years.

EIGEN Token Launches Meta-Setup Phase

While the initial implementation of intersubjective staking at launch mirrors only a limited extent of the full protocol, several parameters still need to be determined for its full actuation. 

To address this, EIGEN is being launched in a meta-setup phase, serving as a call to action for researchers, experts, and the broader community to engage in public discourse. 

As EigenLayer announced, this collaborative effort aims to help define the necessary parameters to make the protocol and its interaction with the rest of the Ethereum ecosystem as effective as possible.

EigenLayer

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SEC Anticipated To Reject Spot Ethereum ETFs In Upcoming Decision, ETH Price Takes 5% Hit

Over the past 24 hours, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has experienced a significant 5% price drop. This drop comes amid growing speculation that the highly anticipated Ethereum ETFs will likely be rejected by the US Securities and Exchange Commission (SEC) in the upcoming May deadline.

US Bitcoin ETF Issuers Brace For SEC’s Expected Denial

According to a recent Reuters report, various US Bitcoin ETF issuers and firms anticipate the SEC’s denial of their applications to launch ETFs tied to the price of ETH. 

These expectations have been fueled by “discouraging meetings” between the applicants and the regulatory agency in recent weeks, as disclosed by four individuals familiar with the matter.

Prominent investment firms such as VanEck, ARK Investment Management, and seven other issuers have submitted filings with the SEC to list ETFs that would track the spot price of Ethereum. 

As the first in line, VanEck’s and ARK’s applications are subject to the SEC’s decisions by May 23 and May 24, respectively.

The sources involved in the meetings between Bitcoin ETF issuers and the SEC have reported that the discussions have been primarily “one-sided,” with agency staff not engaging in substantive details about the proposed products. 

This starkly contrasts the intensive and detailed discussions between issuers and the agency before the SEC’s landmark approval of spot Bitcoin ETFs in January. 

The issuers argued during the meetings that the approval of spot Bitcoin ETFs and Ethereum futures-based ETFs by the SEC in October set a precedent for the spot ETH products. They also made efforts to address potential regulatory concerns. 

Despite their arguments, the report notes that the SEC staff did not clarify specific concerns or engage in meaningful dialogue, further indicating a possible denial of the requests.

Setback For Crypto Industry

If these expectations materialize, it would be a setback for the cryptocurrency industry, which had hoped that the approval of spot Bitcoin ETFs would pave the way for similar products and contribute to the mainstream adoption of cryptocurrencies. 

According to Todd Rosenbluth, head of ETF analysis at data firm VettaFi, the likely delay in approval or rejection until later in 2024 or beyond has left the regulatory landscape uncertain.

While some issuers have expressed their intention to submit additional disclosure paperwork to continue the conversation with the SEC, the overall sentiment indicates a growing belief that the applications will be rejected.

VanEck CEO Jan van Eck has already stated that the company’s application will likely be rejected, while ARK Investment Management has yet to comment.

Rejected Ethereum ETFs Could Spark Potential Court Battles

Several applicants expect the SEC to cite broader issues, such as the nature and depth of statistical data on the underlying ETH market, as reasons for their decision in the event of ETF rejections. 

Matt Hougan, chief investment officer at Bitwise Asset Management, which has filed for a spot in Ethereum ETF, believes that the SEC may require more time to observe Ethereum futures and gather additional data.

Industry insiders further speculate that rejecting Ethereum ETFs could potentially lead to legal action, with one source suggesting that the courts may get involved before Ethereum ETFs eventually become a reality.

The anticipated rejection has already influenced the price of Ethereum, with Hong Fang, president of the crypto exchange OKX, stating that the cryptocurrency is experiencing downward pressure as market participants factor in the likelihood of a negative outcome.

Ethereum ETFs

Currently, ETH is trading at $3,100, further highlighting the cryptocurrency’s persistent downtrend over broader time frames. Over the past fourteen and thirty days, the token has experienced significant declines of 12% and 14%, respectively.

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Ethereum Blockchain’s Q1 2024 Success: Unveiling The Factors Behind The $370M Profit Surge

Not only has Ethereum (ETH) seen an impressive rise of nearly 100% in the first quarter of 2024 in terms of price action, but the Ethereum blockchain has also generated substantial profits of up to $369 million during this period. This unexpected profitability has raised questions about how a blockchain like Ethereum can be profitable. 

Ethereum Revenue Potential

As noted in a recent analysis by the on-chain data platform Token Termina, the collection of transaction fees is a critical aspect of Ethereum’s business model. 

All network users are required to pay fees in ETH when interacting with applications on the blockchain, which serves as an important source of revenue for Ethereum.

Once transaction fees are paid, a portion of the ETH is burned and permanently removed from circulation. This process, commonly referred to as “ETH buyback,” benefits existing ETH holders, as the reduction in supply increases the scarcity and value of the remaining ETH tokens. Thus, the daily burning of ETH contributes to the economic benefit of those holding Ethereum.

In contrast to the burning of ETH, Ethereum also issues new ETH tokens as rewards to the network’s validators for each new block added to the blockchain. 

These rewards are similar to traditional stock-based compensation and are designed to incentivize validators to secure and maintain the network’s integrity. 

Nonetheless, it’s important to note that the issuance of new ETH tokens dilutes the holdings of existing ETH holders.

According to Token Terminal, the difference between the daily USD value of the burned ETH (revenue) and the newly issued ETH (expenses) represents the daily earnings for existing ETH holders, essentially the Ethereum blockchain owners. This calculation allows for the determination of Ethereum’s profitability on a day-to-day basis.

Reduced Transaction Costs Drive $3.3 Billion Growth

In addition to the overhauled revenue model implemented by the Ethereum blockchain, the launch of the much-anticipated Dencun upgrade to the Ethereum ecosystem at the end of the first quarter of 2024 brought significant changes, including the introduction of a revolutionary data storage system called blobs. 

This upgrade has reduced congestion on the Ethereum network and significantly reduced transaction costs on Layer 2 networks such as Arbitrum (ABR), Polygon (MATIC), and Coinbase’s Base. 

Implementing the Dencun upgrade, alongside the adoption of blobs and Layer 2 networks, has significantly impacted Ethereum’s revenue. 

According to Token Terminal data, the blockchain’s revenue has witnessed an 18% annualized increase, amounting to an impressive $3.3 billion. These revenue gains can be attributed to reduced transaction costs, making Ethereum a more attractive platform for users and developers.

Ethereum

Despite the positive revenue growth, it is essential to acknowledge the impact of market corrections and dampened investor interest in the second quarter of 2024. 

Over the past 30 days, Ethereum’s revenue has declined by over 52%. This downturn can be attributed to the broader market dynamics and the temporary decrease in investor enthusiasm. 

Examining the data over the past 30 days, Ethereum’s market cap (fully diluted) has decreased by 15.2% to $358.47 billion. Similarly, the circulating market cap has declined by 15.2% to reach the same value. 

Additionally, the token trading volume over the past 30 days has declined 18.6%, totaling $586.14 billion. 

Ethereum

ETH is trading at $3,042, up 0.4% in the last 24 hours. It remains to be seen whether these changes and the reduction in fees will have the same effect in the second quarter of the year, and how this, coupled with a potential increase in trading volume, can push the ETH price to higher levels. 

Featured image from Shutterstock, chart from TradingView.com 

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‘Dencun’ Upgrade Officially Deployed On Ethereum Mainnet, ETH Price Holds Steady Below $4,000

Ethereum (ETH) has completed a major software upgrade, Dencun, that promises to make utilizing the network ecosystem more cost-effective. This update specifically targets Layer 2 (L2) networks, such as Arbitrum (ARB), Polygon (MATIC), and Coinbase’s Base, which are interconnected with Ethereum. 

With Dencun, transaction costs on these networks have significantly decreased, with fees dropping from dollars to cents or even fractions of a cent.

Ethereum Dencun Upgrade And Cost Savings

Considered the most significant change in Ethereum’s end-user experience, the Dencun upgrade is expected to foster the development of new applications and services by significantly reducing expenses. 

As NewsBTC reported on Tuesday, the update introduces a new data storage system, departing from the traditional approach of storing Layer 2 data on Ethereum itself. Adopting a new “blobs” repository reduces data storage costs since information is warehoused for only about 18 days instead of indefinitely.

One of the notable benefits of the Dencun upgrade lies in its impact on decentralized exchanges (DEXs) and gas costs. For instance, projected gas costs for popular Layer 2 networks, such as Arbitrum, Optimism, and Coinbase’s Base, are set to be significantly reduced. 

Ethereum

The projected savings translate into a reduction of Arbitrum’s swaps from $2.02 to $0.40, Optimism’s swaps from $1.42 to $0.28, and Coinbase’s Base swaps from $0.58 to $0.01, emphasizing the pivotal role of this upgrade. 

As the upgrade was successfully launched on the mainnet, Tim Beiko, Ethereum Foundation core developer, expressed his satisfaction with the work accomplished and claimed:

Dencun is both the most complex fork we’ve shipped since the Merge, and tied for “most total EIPs in a fork” with Byzantium. There were more teams than ever involved in the process, and it somehow all worked out smoothly…! Grateful to work with all of them, onto the next one. 

Blob Transactions And Pricing Changes

Layer 2 network Arbitrum has provided insights into the upgrade process. It will take around one to two hours for blob transactions to commence posting and for the new pricing changes specified by EIP-4844 to come into effect. 

ArbOS Atlas, an upgrade that supports Arbitrum Chains, will introduce further fee reductions for Arbitrum One, set to be activated on March 18th. The updated configurations include a reduction in the Layer 1 (L1) surplus fee from 32 gwei to 0 per compressed byte and a reduction in the L2 base fee from 0.1 gwei to 0.01 gwei.

The Dencun upgrade unlocks cost-saving opportunities for Layer 2 networks and addresses congestion concerns by freeing up more space on the Ethereum network for additional transactions. While the upgrade offers enhanced efficiency, it does come at the cost of no longer retaining a complete record of all data indefinitely.

However, as Layer 2 networks embrace this new update to the Ethereum ecosystem, the stage is set for accelerated adoption, usage, and broader accessibility within the Ethereum community and its underlying protocols.

Dencun Upgrade Fails To Propel ETH Above $4,000 

Despite the successful upgrade, ETH’s price remains unaffected, continuing to consolidate below the $4,000 threshold. The token attempted to surpass this crucial resistance level on Monday and Tuesday but failed to sustain its position above it.

Ethereum

For over 24 hours now, ETH has been trading between $3,930 and $3,970. Nevertheless, it’s worth noting that ETH has maintained its upward momentum, with gains exceeding 18% over the past fourteen days and nearly 60% over the past thirty days. 

Additionally, introducing the Dencun upgrade is expected to drive increased demand for ETH, potentially sparking a renewed uptrend that could bridge the gap between current trading prices and its previous all-time high (ATH) of $4,878, achieved in November 2021.

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Getting Cheaper, Getting Higher? Ethereum Dencun Upgrade And The Potential For ETH To Rise Back Above $4,000

The highly anticipated Dencun upgrade for the Ethereum (ETH) ecosystem is on the horizon, promising to bring significant cost reductions and notable changes to Layer 2 (L2) networks. The update, scheduled for March 13, will introduce a new data storage system known as blobs, reducing congestion on the Ethereum network and driving key new features in various areas. 

Ethereum Dencun Upgrade

As highlighted in a recent Bloomberg report, Dencun aims to reduce the cost of Layer 2 networks such as Arbitrum (ABR), Polygon (MATIC), and Coinbase’s Base by enabling previously costly transactions to become significantly cheaper. 

In particular, transactions that used to cost $1 can now cost as little as one cent, the report notes, while others that used to cost cents can be reduced to a fraction of a cent. This cost reduction is expected to improve the end-user experience greatly and is a significant improvement over previous upgrades such as the September 2022 “Merge.”

One of the most crucial aspects of the Dencun upgrade is the introduction of blobs, a new type of data repository for Layer 2 networks. Currently, Layer 2 blockchains store their data on the Ethereum network, leading to substantial storage costs passed on to applications and users. 

However, with blobs, Layer 2s will store their data for a significantly shorter period, about 18 days, resulting in lower costs. While this shift sacrifices storing a complete record of all transactions forever, it frees up more space on the Ethereum network for other transactions, reducing congestion.

AI-Driven Trading Strategies

According to the report, introducing blobs through the Dencun upgrade also paves the way for using artificial intelligence (AI) in various applications. For example, games can incorporate AI-driven non-player characters, enabling advanced gameplay capabilities and a deeper experience. 

In decentralized finance (DeFi), automated market makers can incorporate “complex trading strategies” driven by AI models. This newfound flexibility and complexity are expected to foster innovation and drive the development of advanced applications in the Ethereum ecosystem.

In addition, the Dencun upgrade is expected to reduce the operating costs of Layer 2 chains significantly. Previously, launching and operating a Layer 2 project required considerable venture capital backing. However, Bloomberg reports that with the cost reductions brought about by Dencun, small teams may be able to launch and maintain Layer 2 chains. 

While the adoption of blobs and the associated cost advantages are expected to drive immediate benefits, it is worth noting that the cost of blobs may increase over time as demand grows. 

How Could Dencun Boost ETH Price?

While the price of ETH has corrected by over 3% in the past 24 hours, resulting in a current trading price of $3,916, the Dencun upgrade holds the potential to have a positive impact on its price.

The upgrade aims to significantly reduce costs for Layer 2 networks and enhance the overall user experience, making Ethereum a more appealing platform for decentralized applications (dApps) and other use cases. By lowering transaction fees and improving scalability, Dencun could attract more users and developers to the Ethereum ecosystem, potentially driving up demand for ETH tokens.

Despite the ongoing correction, it is worth noting that the current price of ETH is not far from its two-year high of $4,084. However, it’s important to consider that the price has formed a double top pattern on the daily time frame for two consecutive days, which may present a near-term hurdle for ETH’s price. The market’s reaction and the ability of ETH to surpass its nearest resistance level remain to be seen.

Ethereum

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Market Expert Highlights Top Coins To Watch As Ethereum (ETH) Reaches 22-Month High

Market expert Miles Deutscher has identified several key trends and developments in the cryptocurrency market, particularly focusing on the Ethereum (ETH) rally and its implications for Layer-2 (L2) decentralized finance (DeFi) altcoins. 

Deutscher highlights that ETH’s recent surge to a 22-month high of $3,130 has sparked increased interest in L2/DeFi altcoins, presenting potential opportunities for investors.

Ethereum Price Strength Continues

In a recent post on social media X (formerly Twitter), Deutscher notes that Ethereum continues to show strength, especially compared to Bitcoin (BTC), which remains in a key consolidation phase at $51,100. Holding above the significant psychological level of $3,000, ETH’s bullish momentum is further fueled by reports of Justin Sun, the founder of TRON, purchasing over $500 million worth of ETH in recent days. 

Deutscher remains optimistic about ETH and ETH-betas leading up to the proposed exchange-traded fund (ETF) dates in May and the upcoming Dencun upgrade in March. There are also potential indications of ETH/BTC breaking out, with investor Andrew Kang actively increasing his ETH long position.

First, on his altcoins watchlist, Deutscher highlights the fee switch proposal underway at Uniswap (UNI). This US-based decentralized crypto exchange has seen notable price gains of over 37% in the past week, which could have significant implications for the entire industry from a regulatory standpoint.

Notably, the analyst believes that this development could potentially trigger a broader rotation into other DeFi 1.0 tokens such as Curve DAO (CRV), Compound (COMP), Aave (AAVE), and Frax Share (FXS), THORchain (RUNE), GMX, as investors seek to capitalize on the DeFi landscape.

Moving on to another altcoin that could see a price spike, Deutscher suggests that this week’s anticipated launch of Blast L2, founded by the same individual behind BLUR, presents an opportunity for BLUR stakers to receive tokens from the airdrop and potentially be further integrated into the ecosystem. 

Deutscher suggests that BLUR provides an alternative way to gain exposure to the Blast project, which has garnered bullish sentiment from numerous funds and thought leaders.

Following the positive news surrounding Uniswap, DYDX has been on the rise, with the token seeing a 7% increase in price over the last seven days. However, Deutscher cautions that a significant unlock is expected this week, which may tempt some recipients to sell, potentially causing a temporary dip in price.

Next in the spotlight, speculation surrounding the upcoming launch of Aevo (AEVO), which will allow developers to launch their protocols on its rollup and introduce an incentive program, is growing and generating interest in Ribbon Finance (RBN).

Given these developments, Deutscher notes that the prospect of pre-markets and IOU markets gaining “massive” attention and the recent record $4 million in fees positions RBN within an exciting narrative.

Deutscher’s Insights Point To Promising Trends

Following Deutscher’s mention of COTI last week, the coin has seen over 100% growth, breaking through key resistance levels. With the launch of their new privacy-enhancing L2 coinciding with the upcoming Ethereum Dencun upgrade, Deutscher notes that the protocol is in a favorable position for further price growth in the market.

On the other end of the spectrum, Deutscher acknowledges the rapid pace of market rotation and suggests keeping a close eye on Artificial Intelligence (AI) coins, which, as reported by NewsBTC, have seen significant gains with the hype surrounding AI projects such as Worldcoin (WLD).

Finally, with signs of life emerging over the weekend, according to the analyst, Rollbit Coin’s (RLB) burn mechanics position it as a leader in the “Rev Share/Real Yield” narrative. With the market potentially entering an “explosive bull run,” Deutscher believes the casino/gambling narrative could gain traction, benefiting projects like Rollbit, which has also seen gains of over 7% in the past 24 hours.

Ethereum

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ERC-404 Sector Plunges: Market Capitalization Drops By 29% In 24 Hours

Surprisingly, the newly introduced Ethereum (ETH) token standard, ERC-404, made an impressive debut in the crypto market, outperforming many other digital assets. 

However, as Bitcoin (BTC), the dominant cryptocurrency, began to rally, investors swiftly shifted their focus to the king of crypto. Consequently, this shift led to notable price drops and market capitalization declines across the ERC-404 ecosystem and its associated tokens.

From Skyrocketing Surges To Sharp Corrections

According to data from CoinGecko, the ERC-404 sector has experienced a significant decline, with an overall market capitalization drop of 29% in the past 24 hours. 

Key tokens within this sector, including PANDORA, DeFrogs, RUG, Froggy Friends, and Crystal, have all witnessed substantial price decreases. PANDORA, which had garnered attention and speculation, surged by a staggering 12,000% within a week. 

Opening at $250 on February 3, 2024, its value skyrocketed to over $34,000 per token by February 9, 2024. However, it dropped by 38% from its all-time high (ATH) in just 24 hours.

ERC-404

On the other hand, Crystal suffered the most significant losses, with its price plummeting by 28.4% and trading volume declining by over 35%. These figures indicate a stark decline in market activity for the token. Currently, Crystal is down more than 51% from its ATH of $792.74, exemplifying the inherent volatility of the ERC-404 sector.

Following closely behind, Froggy Friends experienced a 16% drop in trading volume and an 81% decrease in price from its peak of $823. CoinGecko data reveals that Froggy Friends currently trades at $150 per token.

But what are the ERC-404 token standards? And what is causing the price and market capitalization to drop?

Navigating The ERC-404 Ecosystem

Ethereum, known for its smart contract platform, has been a breeding ground for various token standards. While ERC-20 and ERC-721 gained widespread adoption for fungible and non-fungible tokens (NFTs), a new contender emerged: ERC-404. 

Named after the popular website error code “404,” ERC-404 introduces the concept of “semi-fungibility” to Ethereum. It combines the divisibility of ERC-20 tokens with the uniqueness of ERC-721 tokens, bridging the gap between these two types.

ERC-404 tokens are associated with specific NFTs, allowing fractional transfers of linked NFTs. Full ownership results in minting the linked NFT to the holder’s wallet, while fractional transfers trigger the burning of the associated NFT. New NFTs are automatically minted when sufficient fractions are accumulated to form a complete token.

DN-404 Prepares To Challenge ERC-404’s Dominance? 

According to a recent report by The Block, transaction fees increased as ERC-404 tokens gained traction, prompting developers to work on an alternative implementation called Divisible NFT (DN-404). 

This new standard aims to optimize code and reduce transaction fees, addressing the rising costs associated with ERC-404 tokens. The DN-404 implementation is set to be released soon, potentially alleviating network congestion caused by the influx of ERC-404 tokens.

While there were initial discussions between the Pandora team, the creators of ERC-404, and the developers working on DN-404, the two groups did not reach an agreement and are not collaborating, according to the report. 

This introduces uncertainty for traders and investors who navigate between supporting the original ERC-404 or the upcoming DN-404 implementation.

Overall, the introduction of ERC-404 brought excitement and volatility to the crypto market. While semi-fungibility and fractional transfers of linked NFTs hold promise, challenges such as rising transaction fees and the emergence of DN-404 have impacted the ERC-404 ecosystem. 

Traders and investors now face the dilemma of choosing between the original implementation and the upcoming alternative. As the market evolves, it will be interesting to see how the ERC-404 sector adapts and whether it can regain stability and investor confidence.

ERC-404

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Prometheum’s Ethereum Custodial Launch Puts SEC’s ETH Classification In The Spotlight

Prometheum, an “alternative” trading platform for crypto “securities” assets, has recently announced the launch of its custodial services for Ethereum (ETH). This move has significant implications for the legal status of the second-largest cryptocurrency by market capitalization. 

Fortune Magazine reported that the company’s strategy is to compel regulators, particularly the Securities and Exchange Commission (SEC), to recognize Ethereum as a security. 

SEC Pressured To Settle Ethereum Legal Status

Per the report, Prometheum, based in New York, has positioned itself as a compliant player in the crypto industry by claiming to have discovered a path to operate within existing laws. 

The company received regulatory approval in 2021 to operate as an alternative trading platform for securities. It gained further attention when it obtained a special-purpose broker-dealer license from the Financial Industry Regulatory Authority (FINRA).

The license allows them to operate as a broker-dealer in “digital asset securities,” a designation no other firm has achieved. This has prompted crypto companies and even members of the US Congress to call for investigations into the firm’s activities.

Previously, the SEC refrained from definitively classifying Ethereum as a security despite declaring several other cryptocurrencies as such. 

Prometheum aligns with the SEC’s assessment that most cryptocurrencies are securities and argues that Ethereum can be listed as a security under an exemption called Rule 144, typically used for trading restricted stocks. 

The embattled company claims it can use blockchain data to determine whether the assets have been circulating for over a year, a crucial factor in claiming the exemption.

What’s interesting is that Prometheum’s custodial services for Ethereum could potentially force the SEC to determine Ethereum’s legal status. The company’s registered status with FINRA and the SEC, prominently displayed on its website, adds weight to its claim. 

Legal experts and academics speculated that the SEC may be forced to rule on Ethereum’s classification due to Prometheum’s custodial launch. This decision could have far-reaching consequences for the crypto industry, challenging the industry’s argument that cryptocurrencies cannot operate under existing securities laws.

Backlash Mounts As Prometheum Shakes Up Crypto Regulations

SEC Chair Gary Gensler, who has intensified enforcement efforts following the collapse of FTX, has emphasized the sufficiency of existing rules while filing lawsuits against exchanges for failing to register with the agency. 

Prometheum’s approach contrasts with other crypto exchanges like Coinbase, which argue that the existing rules are outdated. Prometheum’s strategy has drawn criticism from the crypto industry and Republican lawmakers who accuse Gensler of supporting the firm to advance his regulatory agenda.

Overall, Prometheum’s introduction of Ethereum custodial services has thrust the debate over Ethereum’s legal classification into the spotlight.

This move could compel the SEC to decide whether Ethereum should be classified as a security, challenging the crypto industry’s argument for new laws. 

While the success of Prometheum’s approach is still uncertain, it remains to be seen how subsequent SEC administrations will respond and whether institutional investors will be attracted to Prometheum’s compliant approach.

Ethereum

Currently, ETH is trading at $2,428, reflecting a marginal 0.5% price increase in the last 24 hours.

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Ethereum Dencun Upgrade Launch Boosts ETH Price, Eyes 90% Fee Reduction

Ethereum (ETH) has made significant strides in its 2024 roadmap with the successful launch of the Dencun upgrade on the final Holesky testnet. 

This is seen as a crucial step towards deploying the upgrade on the mainnet, signaling Ethereum’s progress in improving transaction efficiency, and scalability and reducing transaction fees by up to 90%. As a result, ETH has surged 2.9% in the last 24 hours, breaking its previous downtrend.

Ethereum Dencun Upgrade

The Dencun upgrade was first activated on the Sepolia testnet in January 2024, following its deployment on the Goerli testnet. This upgrade aligns with Ethereum’s broader strategy to enhance scalability and reduce transaction costs for its users. 

Introducing the concept of “proto-danksharding,” Dencun aims to decrease transaction costs for layer-2 blockchains and address scalability challenges, paving the way for the eventual implementation of “danksharding” for further benefits.

Once fully implemented, Dencun is expected to significantly increase Ethereum’s transaction processing capacity, potentially enabling the network to handle over 100,000 transactions per second. According to the network’s development team, this scalability enhancement is crucial for supporting the growing ecosystem of decentralized applications (dApps) and users on Ethereum.

Furthermore, Dencun will have notable technical improvements, such as the introduction of ‘blobs,’ which reduce the cost of rollups on the Ethereum mainnet by compressing transaction data off-chain. 

By caching data needed for short-term transaction verification, blobs aim to minimize storage and processing requirements, further enhancing the network’s transactional capabilities.

Anticipation For ETH’s Market Impact

The successful implementation of the Dencun upgrade holds the potential for significant implications on ETH’s market value, driven by a combination of factors.

Firstly, the upgrade’s enhanced network capabilities, including boosted transaction processing capacity and reduced costs, are expected to attract more developers and users to the Ethereum ecosystem. 

With improved scalability and lower transaction fees, Ethereum could become a more attractive platform for building dApps and conducting transactions. This increased utility and demand for Ethereum could have a positive impact on its market value as more participants seek to acquire ETH tokens.

The perceived reliability and forward momentum resulting from the successful implementation of Dencun may attract more investors to consider Ethereum as an investment opportunity. The increased interest and demand for ETH tokens driven by this positive sentiment can contribute to potential price appreciation.

Lastly, the anticipation of Dencun’s benefits and the reactions to its successful implementation may lead to short-term price volatility, with investors adjusting their positions based on their expectations of how the upgrade will impact Ethereum’s functionality and market position.

All of these developments could have a significant impact on ETH’s price trajectory and position the token in a long bullish trend, if this momentum continues to be capitalized on, the next barrier at $2,450 could be easily surpassed, potentially sending ETH to new highs. 

While the long-term implications remain to be seen, this is a positive development for ETH bulls as the network has lacked significant catalysts and has been involved in a significant price correction for the past 3 weeks.

With activations on the Sepolia and Goerli testnets already completed, the final testnet deployment, Holesky, was initially scheduled for February 7, 2024. However, it has now been rescheduled for March 2024. 

Ethereum

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Ethereum ETFs Approval Date Set For May 23, Forecasts Suggest ETH Could Reach $4,000

The Securities and Exchange Commission (SEC) is poised to follow a similar approach to approving spot Bitcoin (BTC) exchange-traded funds (ETFs) for spot Ethereum ETFs, with the expectation that approval will be granted on the initial final deadline of May 23, as per Standard Chartered Bank analysis.

Ethereum ETFs Face Delays, Approval Remains Likely

According to a report by The Block, Geoffrey Kendrick, head of forex and digital asset research at Standard Chartered Bank, stated that they expect pending applications for spot Ethereum ETFs to be approved on May 23, which is considered the equivalent date to January 10 for Bitcoin ETFs. 

Furthermore, Kendrick predicts that if Ethereum prices follow a similar trajectory to Bitcoin leading up to ETF approval, Ethereum could trade as high as $4,000 by the specified date.

Kendrick further supports the approval of spot Ethereum ETFs based on the SEC’s classification of ether as a non-security in its legal actions against crypto companies. 

Additionally, the fact that Ethereum is listed as a regulated futures contract on the Chicago Mercantile Exchange (CME) adds weight to the expectation of approval.

Following the same line, Scott Johnsson, a financial lawyer, offered insights into the potential roadmap for Ethereum ETFs. Johnsson emphasized that while long-term approval for spot Ethereum ETFs is highly likely, there may be short-term delays due to ongoing regulatory actions involving Coinbase/Binance securities exchanges. 

Shorter Path For ETH ETF Approvals?

Johnsson highlighted the regulatory path from a plain spot digital asset to a spot ETF offering, using Bitcoin as an example. Johnsson noted that the process for Bitcoin took seven years, involving multiple steps and disapprovals along the way. 

However, Johnsson noted that the timeline for Ethereum is compressing, with applications open for both futures ETFs and spot ETFs. He suggested certain prerequisites that Johnsson believes may no longer be necessary for spot approval, such as Step 3, which requires the SEC to issue a formal 19b-4 approval for the futures ETF.

Johnsson highlighted two key factors to understand the SEC’s current approach to future approvals, including Ethereum. Firstly, he discussed the threshold question in the context of the Grayscale ruling, which focused on correlation analysis. 

Secondly, Johnsson emphasized the SEC’s view, as bounded by the recent BTC approval order, which considers correlation with the CME, a lengthy sample period, intra-day trading data, and consistency throughout the sample period.

While the specific threshold for sufficiency remains unknown, the correlation analysis for Bitcoin is within an acceptable range. Therefore, it is expected that Ethereum will likely meet this threshold in the foreseeable future, Johnsson suggests. 

Once the required level of correlation is achieved, Johnsson believes that approval for spot Ethereum ETFs is likely to follow shortly after that, with May being the expected month of approval. 

Overall, industry analysts and experts suggest that the SEC’s approval of spot Ethereum ETFs is a matter of time, barring any major legal shifts. 

Ethereum ETFs

ETH is currently trading at $2,370, up more than 2% in the past 24 hours and more than 7% in the past seven days, following Bitcoin’s lead.

Featured image from Shutterstock, chart from TradingView.com 

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QCP Capital Forecasts ETH’s Dominance Over Bitcoin To Persist, Ethereum ETFs In Focus

Over the past 30 days, Ethereum (ETH), the second-largest cryptocurrency, has experienced a notable surge of 17%, outperforming Bitcoin (BTC), which has recorded a surge of 2.5% over the same period. 

This comes as the initial excitement surrounding the approval of the exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) appears to have waned, with BTC witnessing a 5% drop in the past seven days. 

Interestingly, according to crypto trading firm QCP Capital, following the approval of Bitcoin ETFs, the focus has shifted to the potential launch of an ETH spot ETF, which could be one of the factors for Ethereum outperforming BTC.  

Ethereum Gains Ground Against BTC 

According to QCP Capital, the total volumes transacted across all 11 ETFs in the past week have reached $9.8 billion. The Grayscale Bitcoin Trust (GBTC) alone accounted for $4.6 billion. 

Since converting from a Trust to an ETF, GBTC has experienced outflows of $1.17 billion. This is “unsurprising” for the firm, considering GBTC had been trading at a discount since 2020, offering investors an opportunity to exit at par value. 

BTC initially surged to a high of $49,100 upon ETF approval but has since seen a decline, consolidating above the $40,000 support level. Volumes have slowed since the initial launch, and market attention is focused on GBTC outflows. 

Meanwhile, ETHBTC, which traded below 0.05, has seen an upward trend to 0.06. According to QCP Capital, Ethereum is anticipated to continue to outperform Bitcoin in the medium term as the narrative shifts towards potential ETH Spot ETF approvals.

Bitcoin Forward Contract Yields Decrease

Following the launch of the BTC spot ETF, BTC forward contracts have experienced a greater decline compared to ETH forward contracts. BTC 1-month forward fell from 32% annualized to 9% (-23%), while ETH 1-month forward decreased from 28% to 12% (-16%). 

According to QCP Capital, despite declining yields, ETH forwards still appear attractive, offering 11-13% annualized returns. Additionally, selling ETH 1-month 2200 Puts presents a viable option with yields above 21% annually, and it could be a suitable level to buy in the event of a dip upon potential ETH spot ETF approvals.

Ultimately, the crypto firm suggests that the forthcoming BTC halving in mid-April and the potential approval of ETH Spot ETFs from May are anticipated to be significant events for the crypto market. 

In the interim, market movements may also be influenced by macroeconomic events. The January Federal Open Market Committee (FOMC) meeting, as well as the February Non-Farm Payrolls (NFP) and Consumer Price Index (CPI) reports, are being closely monitored for insights. 

The pace of the balance sheet runoff, discussed briefly in December 2023, is expected to provide further clarity during the January FOMC meeting. The market consensus suggests a slowdown in quantitative tightening (QT), but the timing and extent of these changes remain uncertain.

Overall, the potential launch of an Ethereum spot ETF has sparked speculation and could have a transformative impact on the Ethereum ecosystem. As the market grapples with changing dynamics, attention remains on key events, such as the BTC halving and potential ETH Spot ETF approvals.

Ethereum

Featured image from Shutterstock, chart from TradingView.com

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Ethereum Rising User Base Boosts Revenue Projections: Predicted To Double To $5 Billion

Bitwise Invest, an investment firm specializing in the crypto space, recently unveiled its anticipated crypto predictions for 2024.

These projections provide a glimpse into the future of the cryptocurrency industry, highlighting major milestones and potential breakthroughs for the largest cryptocurrencies such as Bitcoin (BTC), and Ethereum (ETH), and exchanges like Coinbase. 

Bitcoin Predicted To Smash Records

Bitwise’s first prediction suggests that Bitcoin will surpass previous records and trade above $80,000, setting a new all-time high. The firm attributes this bullish outlook to two key catalysts: the imminent launch of a spot Bitcoin exchange-traded fund (ETF) early in 2024 and the anticipated halving of new Bitcoin supply by the end of April. 

Furthermore, Bitwise expects the spot Bitcoin ETFs to be approved and to collectively become the most successful ETF launch in history.

Interestingly, Bitwise also forecasts that Coinbase, one of the largest cryptocurrency exchanges, will witness its revenue double, surpassing Wall Street expectations by at least 10 times. 

Ethereum

The firm points out that Coinbase’s trading volumes typically surge during bull markets, and they anticipate a similar trend in 2024. Additionally, Bitwise highlights Coinbase’s successful launch of various new products that have gained traction in the market.

On the other hand, the investment firm predicts that more money will settle using stablecoins compared to traditional payment giant Visa. Bitwise highlights stablecoins as one of crypto’s “killer apps” and notes their remarkable growth from virtually zero to a $137 billion market in just four years. Bitwise anticipates 2024 to be another significant year for stablecoin expansion.

Ethereum Set For Major Breakthrough

Bitwise expects Ethereum’s revenue to more than double from $2.3 billion in 2023 to $5 billion in 2024. The firm attributes this growth to the increasing number of users flocking to crypto applications. Bitwise emphasizes Ethereum’s potential as one of the fastest-growing large-scale tech platforms globally.

Ethereum

Furthermore, Bitwise anticipates a major upgrade to Ethereum, labeled EIP-4844, which could reduce average transaction costs to below $0.01. This significant cost reduction is expected to pave the way for mainstream adoption and the development of groundbreaking applications within the crypto ecosystem.

Bitwise’s bonus prediction suggests that by the end of 2024, one in four financial advisors will allocate funds to cryptocurrencies in their clients’ accounts. The firm foresees increased adoption by financial advisors once Bitcoin becomes easily accessible and mainstream.

Ethereum

In summary, Bitwise Invest’s crypto predictions for 2024 paint an exciting future for the cryptocurrency market. With expectations of a new all-time high for Bitcoin, the successful launch of spot Bitcoin ETFs, and revenue growth for industry giants like Coinbase and Ethereum, the crypto space is poised for significant advancements in the coming years.

As of the current update, ETH is trading at $2,200, reflecting a 1.4% increase over the past 24 hours. This positive movement follows a similar trend set by BTC. However, Ethereum has experienced a slight decline of 2.4% in the past seven days.

Featured image from Shutterstock, chart from TradingView.com 

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Ethereum Bulls May Propel Price To $3,100, Analyst Suggests

Ethereum (ETH), the second-largest cryptocurrency, has seen a significant price increase over the past month. The recent bullish rush in the crypto market, coupled with BlackRock’s involvement, has pushed ETH to its year-to-date high of $2,139.

Ethereum Outshines Bitcoin And Altcoins

According to market data provider Kaiko, ETH has outperformed BTC and many altcoins in recent weeks, signaling a shift in market dynamics.

Kaiko’s report highlights how ETH struggled to gain momentum over the past year, despite successful upgrades such as The Merge in April. 

However, the sentiment around ETH changed dramatically when BlackRock filed for a spot ETH exchange-traded fund (ETF), leading to a reversal in the ETH to Bitcoin (BTC) ratio.

The impact on the market was substantial, with ETH prices surging above $2,000 for the first time since April. Additionally, daily spot trade volumes reached $7 billion, the highest level since the collapse of FTX. 

Ethereum

The ETH ETF narrative provided further impetus to the ongoing rally, amplified by improved global risk sentiment and declining US Treasury yields.

The dominance of altcoin + ETH volume relative to BTC has risen to 60%, marking its highest level in over a year. During bull rallies, altcoin volume typically increases relative to BTC. 

This surge in demand has also led to rising leverage, as reflected in the recovery of ETH open interest to early August levels. Notably, BTC open interest has declined over the past month due to liquidations on Binance, resulting in the Chicago Mercantile Exchange (CME) outpacing Binance as the largest BTC futures market.

Furthermore, ETH funding rates, a gauge of sentiment and bullish demand, have reached their highest levels in over a year, indicating a significant shift in sentiment. In November, both BTC and ETH 30-day volatility rose to 40% and 50% respectively, following a multi-year low of around 15% during the summer months.

Crypto Expert Predicts ETH Breakout

Renowned crypto expert Michael Van de Poppe believes that ETH is on the cusp of a significant breakthrough. According to Van de Poppe, if Ethereum manages to surpass the crucial $2,150 resistance level, it could signify the end of the bear market. 

Drawing a parallel with Bitcoin’s critical $30,000 barrier, Van de Poppe suggests that breaching this level could pave the way for a substantial rally, potentially propelling Ethereum towards the price range of $3,100 to $3,600. 

Ethereum

However, Ethereum has yet to touch the $2,150 resistance line, as it faces a pre-existing obstacle in the form of its yearly high of $2,139. This pivotal level has halted the cryptocurrency’s bullish momentum, acting as a formidable resistance. 

As a result, Ethereum has been consolidating within a narrow range between $2,050 and $2,100 for the past three days.

The forthcoming days will reveal whether Ethereum can overcome its immediate resistance levels and establish a consolidated position above them. Alternatively, it may face a fate similar to Bitcoin, which failed to surpass the $31,000 level for over seven months before reaching its current trading price of $36,000.

Featured image from Shutterstock, chart from TradingView.com

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US Authorities Confiscate $54 Million In Ethereum From Convicted Drug Dealer

In recent developments, US authorities led by US Attorney Philip R. Sellinger successfully seized $54 million worth of Ethereum (ETH) from Christopher Castelluzzo, a convicted drug dealer operating in Lake Hopatcong, New Jersey. 

Massive Crypto Bust

The US Attorney’s Office filed a civil forfeiture action to recover previously seized cryptocurrency that was determined to be the proceeds of an illegal narcotics distribution scheme operating in and around New Jersey. 

US Attorney Philip R. Sellinger emphasized law enforcement’s “commitment” to seizing financial gains from criminal activity, regardless of the form they take. Sellinger further stated:

The civil action we are taking today seeks to recover millions of dollars of cryptocurrency, which the defendant allegedly obtained from drug sales. Whether it’s as simple as bags of cash or as sophisticated as cryptocurrency, we will take the steps necessary to seize financial gains defendants obtain from criminal activity. 

According to the US Department of Justice’s (DOJ) press release on the case, the prosecution sheds light on using cryptocurrencies such as Bitcoin (BTC) and Ethereum by criminals on the darknet to evade detection.

In addition, James E. Dennehy, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in Newark, stated that the FBI played a critical role in uncovering the illegal conduct and ill-gotten proceeds.

Drug Trafficker’s Ethereum Stash Seized

According to court documents and the investigations conducted, Christopher Castelluzzo and his associates conspired to sell narcotics between 2010 and 2015. 

In 2013, they allegedly began trading drugs on darknet platforms in exchange for Bitcoin. Castelluzzo, using proceeds from narcotics sales, participated in Ethereum’s Initial Coin Offering (ICO) in July 2014, acquiring 30,000 Ethereum. Additionally, Castelluzzo received 30,000 ETH Classic in 2016.

Castelluzzo’s plan to move the funds to a tax haven in Ireland, Malta, or the Bahamas, or potentially keep them in USDT (Tether), was revealed in forfeiture documents. 

However, a subsequent search warrant led to the raid of Brian Krewson’s residence, an associate of Castelluzzo. Police discovered the relevant crypto wallets under Krewson’s control, and after obtaining the necessary passwords, law enforcement executed the seizure of the Ethereum, valued at $31 million at the time.

Currently serving concurrent 20-year federal and state prison sentences for drug distribution convictions, Castelluzzo attempted to evade taxes and transfer the 30,000 Ethereum out of the United States while incarcerated. 

However, Castelluzzo’s plans were intercepted when recorded prison telephone calls exposed his efforts to launder the cryptocurrency. As a result, the United States intervened and seized Castelluzzo’s cryptocurrency holdings linked to his drug trafficking crimes.

The current value of the 30,000 Ethereum stands at approximately $54 million, underscoring the significant impact of the seizure. 

Ethereum

As of the time of writing, ETH is trading at $1,815, reflecting a 0.9% increase over the past 24 hours and a steady upward trend of over 2% in the past seven days, exhibiting strong bullish momentum in the market.

Featured image from Shutterstock, chart from TradingView.com

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BREAKING: Valkyrie Secures Green Light For Ethereum Futures ETF, Trading Launching Tomorrow

According to a recent FOX Business report, Valkyrie Investments has secured approval from the Securities and Exchange Commission (SEC) to launch the first exchange-traded fund (ETF) featuring Ethereum (ETH) futures. 

This achievement positions Valkyrie as the frontrunner among nine issuers seeking to provide investors with an opportunity to speculate on the future price of the world’s second-largest digital asset through an ETF.

Valkyrie Emerges As First Mover In Ethereum Futures ETF Race

Ether, the native token of the Ethereum blockchain, currently holds a value of approximately $1,659 per token. Valkyrie aims to enhance retail participation in the crypto market by introducing an ETF that tracks Ether futures. 

Ethereum

According to FOX, Valkyrie Investments plans to merge its existing Bitcoin (BTC) futures ETF with the newly introduced Ether futures ETF, creating a combined fund named “the Valkyrie Bitcoin and Ether Strategy ETF”. 

Notably, the ETF’s Nasdaq ticker, BTF, will remain unchanged. The fund’s strategy includes opportunistically purchasing Ethereum futures, reflecting the growing interest in this digital asset over the past year.

Originally scheduled to commence trading on October 3, Valkyrie expedited its launch in response to the possibility of a government shutdown on Friday, a development that would limit SEC operations. 

With nearly two million federal workers facing layoffs without a funding agreement, Gensler has urged companies planning to go public to expedite their offerings before the shutdown occurs. 

The fate of the Ether futures applicants remains uncertain, as the SEC has requested that they update their filings with any additional information by Friday afternoon.

Lastly, Steven McClurg, Chief Investment Officer at Valkyrie, expressed enthusiasm about being at the forefront of offering Ethereum futures to investors, recognizing the exponential growth in interest surrounding this asset class. 

Featured image from Shutterstock, chart from TradingView.com