Weekly Market Insight: May week 1

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Market Updates

29 Apr 2024

Headline News

- Bitcoin price decreased by 2.82% last week, sentiment remained calm before the Fed decision and Treasury refunding. Hong Kong spot BTC and ETH ETFs are expected to launch on April 30th with an in-kind creation model, allowing investors to create new ETF shares by using BTC and ETH. Some are optimistic as this approach could increase AUM quickly and portray a successful launch. Some are skeptical about the impact as these ETFs will not open up the market for mainland Chinese investors.
- The US Depository Trust and Clearing Corporation (DTCC) announced Bitcoin and other cryptocurrencies as underlying assets will not be assigned any collateral value for inter-entity settlement within the line of credit system. Collateral in brokerage activities are not impacted and depending on individual brokers' risk tolerance.

Macro-Outlook

- The US advance estimate GDP in Q1 increased by 1.6%, below forecasts of 2.5%, mainly due to a fall in goods consumption and net export. The year-over-year PCE price index in March increased to 2.7%, higher compared to forecasts of 2.6%.
- The market expects lower Treasury issuance and steady $750 billion or lower TGA target could benefit riskier assets. The Fed rate is expected to remain unchanged in the FOMC meeting this week and expects any discussion made on balance sheet tapering.
- Earning reports from Amazon, AMD, Apple, Coinbase and more are expected to be released this week.

Upcoming Economic Calendar including,

- Tuesday, April 30th 3:00am: US Treasury Refunding Financing Estimates
- Wednesday, May 1st 8:30pm: US Treasury Refunding Announcement
- Wednesday, May 1st 10:00pm: US ISM Manufacturing PMI in April
- Thursday, May 2nd 2:00am: US FOMC meeting
- Friday, May 3rd 8:30pm: US Non-Farm Payrolls and Unemployment Rate in April
- Friday, May 3rd 10:00pm: US ISM Services PMI in April

Weekly-Cryptos-Overview

- Ethereum daily median gas fees hit a 3-year low of 6.43 gwei on April 27th.
- Franklin Templeton's spot ETH ETF is listed on DTCC with the ticker of EZET. The listing doesn't guarantee SEC approval and it is just part of the application process. Bloomberg ETF analyst Eric Balchunas estimated the chances of SEC approving a spot ETH ETF in May at around 35%.
- Franklink Templeton has enabled peer-to-peer transfers for its tokenised money market fund shares, BENJI, on Polygon and Stellar networks.
- Renzo announced its token allocation distribution and the launch of its token REZ on April 30th.
- Dodo has launched its Layer 3 testnet, which is powered by Arbitrum Orbit, EigenDA and AltLayer.
- Movement Labs, a modular protocol which brings MoveVM to Layer 2, raised a $38 million funding round led by Polychain Capital.
- Metis launched its Phase 2 decentralised sequencer, which allows sequencer mining by staking METIS through LST providers, Artemis Finance and Enki Protocol.
- Ankr's AI-focus Layer 1, Neura, is live on public testnet.
- Shiba Inu has raised $12 million with its ecosystem token TREAT for developing a new privacy-focus Layer 3 blockchain.
- Gnosis Safe has listed in major exchanges such as OKX and Coinbase with approximately $2 billion fully diluted valuation. It also introduced incentive program, Safe{Pass}, to reward users for locking SAFE and transact using Safe smart account.
- Immutable launched the largest web3 gaming rewards program, The Main Quest, with up to $50 million for all players in games such as Illuvium, Pixelmon, Guild of Guardian and more.
- Treasure announced the launch of Ruby Testnet with a new incentive point system and partnership with EigenDA to provide MAGIC-ETH dual staking as the network security model.
- Worldcoin announced that it will be selling up to 1.5 million WLD to select trading firms outside of the US every week for the next 6 months, accounting for approximately 19% of the current circulating supply.

Upcoming Alpha: Token Unlock, Governance

- Stargate has passed its V2 proposal with lower fees, optimal liquidity and introduction of wrapped assets.
- Jupiter teased that mobile apps beta will be released in May.
- Io.net and Aethir announced a partnership to merge over 640,000 computing units. Io.net is expected to launch its token soon.
- Origin Protocol proposed new tokenomics to include revenue sharing from OETH and OUSD.
- DYDX token unlocked on May 1st, amount representing 10.72% of the token supply.
- ZETA token unlocked on May 1st, amount representing 2.24% of the token supply.
- ENA token unlocked on May 1st, amount representing 3.76% of the token supply.
- SUI token unlocked on May 3rd, amount representing 8.05% of the token supply.
- MEME token unlocked on May 3rd, amount representing 32.37% of the token supply.
- GAL token unlocked on May 5th, amount representing 5.76% of the token supply.
- Heroes of Mavia announced to reduce token unlocks by over 80% until February 2025. The upcoming token unlocked on May 6th reduced from 25.53% to 5.11% of the token supply.

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