BitGo: Crypto Water Cooler — Apr 10

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GM. It’s Wednesday, April 10.

Newsmakers

Stablecoin Market Heats Up

Stablecoin supply is a proxy for money flowing through the crypto ecosystem, so it’s not surprising that the market is growing during this bull run, recently hitting $150B+ in market cap — a number that’s expected to almost double by 2028. There are some two hundred stablecoins, but the market is dominated by Tether (USDT), which has about a 70% market share, followed by Circle (USDC) with about 20%. That isn’t stopping “stablecoin wars” from heating up, though, with new market entries from Ripple Labs and startup Ethena Labs and a bid by PayPal to expand the reach of PYUSD.

Ripple last week announced a new USD-pegged stablecoin backed by U.S. dollar deposits, short-term U.S. treasuries, and other cash equivalents. It hopes to differentiate itself by providing regular reserve audits and by highlighting its compliance and licensure in multiple jurisdictions. Tether is notoriously cagey about the composition of its reserves.

While Ripple CEO Brad Garlinghouse characterized the move as a natural extension of its XRP network, it’s also likely the firm is looking to add new revenues to counter lackluster ($) adoption and profits as well as uncertainty around the outcome of its suit with the SEC.

Ethena Labs’ USDe “synthetic dollar,” which launched to the public on February 19 is a different sort of entry. It is collateralized with crypto assets–such as staked Ethereum (stETH)–and corresponding short futures positions on centralized exchanges. With an eye popping 35.4% yield (thanks to a blend of native staking returns and average funding paid to shorts, the company says) USDe has drawn a range of industry responses: from “truly interesting experiment” to traumatic memories about Terra to questions about whether it is even a stablecoin. Ethena Labs has a $10MM insurance fund to help mitigate the risks.

And, as part of its push to mainstream crypto, PayPal announced that U.S-based customers can now use their cross-border money transfer service to convert USD into PYUSD and send funds to 160+ countries with no transaction fees. At the time of writing, PYUSD has a ~$2B market cap.

Read more →CoinDesk

High Profile Projects Reflect Evolution of Tokenization

Predictions that tokenization is the future of markets abound, but so far, a dearth of value-producing use cases and a lack of regulatory clarity have impeded mass adoption. Some new high profile projects could change that.

Recently, the Bank for International Settlements (BIS) began Project Agorá, a public-private collaboration with the central banks of France, Japan, Mexico, South Korea, Switzerland, the UK, and the U.S. to explore tokenizing assets within the monetary system. The project will focus on a system to bridge tokenized wholesale money with tokenized commercial bank deposits.

The BIS is also involved in another collaborative effort, Project Promissa, with the Swiss National Bank and the World Bank to build proof of concept for a tokenized promissory note platform. Promissory notes, which play a big role in the global financial system, are still mostly paper based.

Meanwhile, HSBC, one of the world’s top ten banks, launched a tokenized gold product for its Hong Kong customers, the first bank-backed tokenized gold. Retail investors can buy HSBC Gold Token through the bank’s Orion app. Customers can’t trade this product, however; they can only redeem tokens with HSBC.

Plus, BlackRock, one of the pioneers of U.S. spot Bitcoin ETFs, has filed to launch the USD Institutional Digital Liquidity Fund (BUIDL) in collaboration with asset tokenization firm Securitize. Although BUIDL is not the first of this type listed with Securitize, BlackRock’s $100MM in seed funding makes it the largest. Its dominant market position may well spark other institutional tokenization investments.

Read more →BIS

Beyond Bitcoin: The Secrets to Dogecoin’s Staying Power

It’s become trivially cheap and easy to launch meme coins; thousands are created every day. While most are aimed at making a quick buck and getting out, those that aspire to greater things might want to study the success of Dogecoin.

The original meme coin recently hit its highest price since 2021 when Elon Musk touted it on Saturday Night Live. Its valuation of nearly $30B keeps it solidly within the top ten digital assets by market cap. Musk is still linked with Dogecoin, and perennial speculation about it becoming a payment method on X reliably spurs a rally. But if there’s one word to sum up the secret to its staying power, it would be “community.”

With approximately 6.9M holders, 4M followers on X, and 2.5M subscribers to its subreddit, Dogecoin is a global phenomenon. Launched in 2013 ($) as a joke about the fervent speculation around early cryptos, the coin was inspired by the Shiba Inu “doge” meme popular around the same time. Where crypto was complicated and laden with jargon, the doge is cute, free of political undertones, and doesn’t rely on recherché in jokes.

The community culture was evident early on when the Dogewallet was hacked and users banded together to repay those who suffered losses. Dogecoiners have since rallied around charitable efforts like bringing clean water to Kenya, raising money to send the Jamaican bobsled team to the Olympics, and training and providing service dogs. Its unofficial tagline: “Do Only Good Everyday.”

While assets like Bitcoin derive part of their value from a finite supply, Dogecoin issues 5B DOGE each year. Its goal isn’t to be a store of value; it’s to be widely used as a currency. Perhaps the most fitting tribute to its influence and staying power is the dog-themed meta that is now part of crypto culture and the fact that other dog-themed tokens like Shiba Inu, Bonk, Floki inu — and, most recently, Dogwifhat — have reached market caps in the billions themselves.

Read more →CoinDesk

News In Brief

Business of Crypto

• Top Chinese Asset Managers Apply for ETFs via Hong Kong Subsidiaries — Bitcoin Magazine
• VC Startup Funding is Making a Comeback — Bloomberg ($)
• Hut8 Mining Says Banks Are Asking It to Buy BTC Directly — DL News

Regulation and Security

• DeFi in Court: Jury to Decide if “Code Is Law” in Mango Markets Trial — Bloomberg ($)
• U.S. Treasury Presses Congress for Powers to Sanction Foreign Crypto Exchanges — PYMNTS
• Google Sues Developers Over 87 Fraudulent Crypto Apps on Google Play — The Block

DeFi and Web3

• a16z Announces $75MM SPEEDRUN Gaming Fund — BE[IN]CRYPTO
• Ellipsis Labs Raises $20MM Series A for Phoenix DeFi Exchange — Fortune ($)
• DeFi Firm 1inch Introduces Web3 Debit Card Powered by Mastercard — CoinDesk

Midweek Market Pulse

Total Market Cap: $2.60T — 7 day change as of Tuesday 4/9/24 12 PM EST: +6.1%

Chart and quotes via CoinMarketCap

The global crypto market cap rebounded to $2.60T, a 6.1% gain after last week’s dip. Bitcoin (+6.4%) jumped ahead of the upcoming halving (now slated for April 20), retaking the $70,000 level before receding slightly. Reports that Chinese asset managers Harvest Fund and Southern Fund have filed for Bitcoin ETFs could be a catalyst. In other Bitcoin news, a wallet belonging to the U.S. government moved 30,175 Bitcoins worth about $2B on Tuesday.

Ethereum (ETH, +8.6%) also climbed with Ethereum L2 Ethena (ENA, +79.5%), which debuted by airdropping $450M to users, nearly doubling since its launch last week. ENA has quickly accumulated $2.3B in total value locked (TVL) and over 128,000 users.

Solana (SOL, -3.0%) dipped as congestion issues plagued the network. At one point, about 70% of non-voting transactions on the network were failing. Solana developers are working to address the challenges, but several projects have delayed their launches until the issues are alleviated. Solana-related tokens like Jupiter (JUP, -13.5%), Pyth Network (PYTH, -6.3%), and Jito (JTO, -11.6%) are down in sympathy with Solana.

Elsewhere, Bitcoin Cash (BCH, +9.1%) hit its highest levels since 2021 after its own halving. Toncoin (TON, +37.2%) moved into the top ten digital assets by market cap, flipping Cardano (ADA, +4.2%) and Avalanche (AVAX, +1.0%) in the process.

The Last Word

Non-Voting Transactions

Noun

: A transaction that moves tokens between accounts; in contrast, voting transactions are transactions submitted to the network for validation

/ Non-voting transactions on Solana could be transfers, mints, or bot spam.

About BitGo

BitGo provides the most secure and scalable solutions for the digital asset economy, offering regulated custody, borrowing and lending, and core infrastructure to investors and builders alike.

Founded in 2013 — the early days of crypto — BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.

Over the years, BitGo has expanded from offering wallets into providing a full-suite solution that lets clients hold assets safely and then put them to work.

BitGo launched BitGo Trust Company in 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.

Today, BitGo is the leader in digital asset security, custody, and liquidity, providing the operational backbone for more than 1500 institutional clients in over 50 countries — a list that includes many regulated entities and the world’s top cryptocurrency exchanges and platforms. BitGo also processes approximately 20% of all global Bitcoin transactions by value.

For more information, please visit www.bitgo.com.

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