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CMC Market Pulse: Crypto Strategic Reserve Established
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Market Overview 📉
The week started off strong, with the sudden announcement of the formation of a Crypto Strategic Reserve over the weekend, directly from President Trump. The rest of the week saw volatility on speculation around the details and execution of the reserve, especially with the looming March 7th White House Crypto Summit. Total crypto market cap saw a slight increase over the week, from $2.917T to $3.048T.
Bitcoin (BTC) ended the week down 4.04%, while Ethereum (ETH) underperformed slightly, closing at 4.51% down from the prior week.
Daily liquidations jumped early on in the week, primarily on the long side, in the ensuing volatility following the announcement. A total of $1.2B in longs were liquidated over the early half of the week, with only approximately $300M in shorts during the same period. Liquidations cooled down towards the end of the week as market volatility slowly reduced. Funding rates largely remained flat to negative, with funding falling especially hard on assets mentioned in Trump’s post, perhaps to hedge against the news at the Summit.
📌 The White House and Donald Trump will be hosting the first ever White House Crypto Summit, with prominent figures in the crypto space as well as key members of the Presidential Working Group on Crypto Assets. - Link
📌 The SEC continues to drop cases against major crypto companies, including Yuga Labs, Kraken, Consensys and more. - Link
📌 El Salvador president, Nayib Bukele, continues to purchase Bitcoin for the country’s national reserve, despite their recent deal with the IMF to limit their Bitcoin-related activities. - Link
📌 CME Group announces plans to launch Solana Futures on March 17, with 25 SOL and 500 SOL contract sizes. - Link
Why does it matter?
The week kicked off strongly with the news of the Crypto Strategic Reserve sending a sharp reverse in sentiment after a brutal week of drawdowns on the entire crypto market. However, as the news set in, the market began to see some volatility from early profit taking, coupled with negative sentiment on equities dragging the market down further. The S&P 500 fell over 2.02% this week, while the Nasdaq dropped 2.32%.
The initial news of the Crypto Strategic Reserve saw a huge plunge in Bitcoin dominance as XRP, ADA and SOL surged along with the news. However, with the clarification that BTC and ETH would also be included, Bitcoin dominance reclaimed its level in the 61-61.5% range once again, closing the week up ~0.8% from the week prior.
Across the altcoin sectors this week, dino coins did exceptionally well, with Bitcoin Cash (BCH), Ripple (XRP) and Cardano (ADA) leading the way. Other tokens that were previously acquired by World Liberty Financial also moved well, with tokens such as Ondo (ONDO) and Movement (MOVE) outperforming their peers.
Narrative of the Week 📰
US President Donald Trump announces plans for a US Crypto Reserve on a Sunday afternoon, specifically mentioning five crypto assets directly.
📌 President Trump announces a US Crypto Reserve, specifically mentioning XRP, ADA and SOL. A second post was made subsequently to clarify that BTC and ETH would also be included. - Link
📌 Trump signs an Executive Order to establish a Strategic Bitcoin Reserve, with plans to fund it via criminal or civil asset forfeiture. A full audit will also be done of the government’s current holdings. - Link
📌 Many are quick to draw the similarities between Sunday’s price action and the infamous Xi candle of 2019, where BTC surged after a positive announcement from the Chinese government, only to retrace the entire move over the next few months. - Link
Why does it matter?
The sudden announcement of a Crypto Strategic Reserve over the weekend took many by surprise, especially coming after several weeks of weak price action. Moreover, the initial choice of assets, which includes ADA, XRP and SOL, was perhaps more intriguing, with many questioning the criteria behind the selection. In the most recent Executive Order, it seems that the Reserve will largely be a Bitcoin reserve, with assets obtained via criminal or civil asset forfeiture. This aligns much closer with the original Executive Order signed in January this year, where the term “stockpile” was used to reference the plan. Nevertheless, both critics and supporters alike are awaiting further clarity from the White House Crypto Summit on Friday.
Major Project Updates 🗓️
📌 Dominant EVM wallet, MetaMask, unveils a series of upcoming upgrades, including native Bitcoin and Solana support, paying for gas with any token, revamped UI, a MetaMask debit card and more. - Link
📌 Ethereum Foundation researcher, Danny Ryan, steps down from the Foundation to launch Etherealize, a new Ethereum institution designed to focus on real-world integration with Ethereum, alongside Vivek Raman as a co-founder. - Link
📌 Hyperliquid announces an increase to their validator set to 20, where the validator set will be determined by stake. The number of validators in the set will increase over time to further decentralize the network. - Link
📌 Real-time blockchain, MegaETH, announces their public testnet, which will be launched on 6th March for builders and 10th March for users. Testnet ETH will be distributed directly to users wallets. - Link
📌 Move-based L1, Sui Network, announces a strategic partnership with Trump’s DeFi project, World Liberty Financial, although critics are quick to point out that this is likely simply a token swap deal. - Link
📌 AI protocol, Ritual, unveils the Ritual Chain, an AI-focused L1 chain designed to be the infrastructure to bridge Crypto and AI. - Link
📌 Crypto.com-backed L1, Cronos, reverses its 2021 token burn of 70 billion CRO tokens, bringing the total token supply of CRO back to 100 billion tokens, under the pretext of establishing a Crosnos Strategic Reserve. - Link
Why does it matter?
MetaMask has long received criticism for its poor UX, which has persisted since its early days way back in 2016. Since then, multiple new wallets have emerged seeking to dethrone MetaMask as the dominant EVM wallet, with many boasting new features including gasless transactions, better UIs and more supported chains. With MetaMask’s new upgrades, MetaMask could turn the tables on its competitors to recapture some of its lost market share as well as expand to newer markets, with the addition of native Bitcoin and Solana support.
DeFi Brief 🏦
📌 Aave announces a major proposal for a tokenomics upgrade, involving the introduction of a buyback and distribute program, a new reward mechanism for AAVE stakers, and an improved protocol safety module, among others. - Link
📌 Fund manager, Bitwise, partners with institutional credit protocol, Maple Finance, to offer DeFi investment opportunities to their clients. - Link
📌 Uniswap passes a governance vote for $165.5M in funding to attract users to Uniswap v4 and Uniswap’s L2, Unichain. - Link
📌 Options and perpetuals exchange, Aevo, introduces Options OTC 2.0, an on-chain options OTC desk to bring institutional grade liquidity to option traders on Aevo’s L2. - Link
📌 Pendle is opening up access to community deployed assets, allowing users to submit their own tokens to Pendle’s markets, which will then be open for deposits after the team whitelists the asset. The move is part of a larger initiative for permissionless asset listing on Pendle. - Link
Why does it matter?
Aave’s new tokenomics overhaul marks a new chapter for the leading money market platform in crypto, with several new mechanisms designed to improve value accrual to token holders as well as improve capital efficiency and decentralization of the project. Their token buyback and distribute program seeks to repurchase $1M in AAVE tokens weekly, for the first six months, which looks to repurchase almost 0.8% of the total token supply at the current price. Buybacks have been a very popular value accrual mechanism recently, with projects such as Jupiter and Hyperliquid engaging in their own form of a token buyback program, much to the support of their token holders.
Meme Coins 🚀
📌 Retired football star, Ronaldinho, launches his own memecoin, STAR10, on the Binance Smart Chain, with plans to enable bridging to Solana. - Link
📌 The SEC declares the memecoins are generally not classified as securities under federal law. - Link
Fundraises 💰
📌 Encrypted blockchain, Seismic, raises $7M in a funding round led by a16z crypto, with other investors including Polychain, 1kx, dao5 and NGC Ventures. - Link
📌 Crypto market maker and OTC desk, Flowdesk, raises $52M in a Series B extension round, led by HV Capital and BlackRock, with other investors including Eurazeo, Cathay Innovation and ISAI. - Link
📌 Berachain liquidity protocol, Infrared Finance, raises $14M in a Series A funding round led by Framework Ventures, with support from Selini, Rubik, Symbolic Capital, Animoca Brands and more. - Link
📌 Bridging protocol, Across, raises $41M in a strategic token sale led by Paradigm, with participation from Bain Capital Crypto, Coinbase Ventures, Multicoin Capital and Sina Habinian. - Link
📌 DoubleZero Foundation raises $28M in a funding round led by Multicoin Capital and Dragonfly, with support from Foundation Capital, Reciprocal Ventures, DBA and more. - Link
Airdrops Abound 🎁
📌 Omni-chain liquidity layer, Elixir, releases their checker for the upcoming ELX token airdrop, with distributes 8% of the total token supply in their genesis airdrop. - Link
📌 Modular oracle network, RedStone, unveils their airdrop checker for the RED token airdrop for users who participated in the RedStone Expedition. - Link
📌 Art-focused L2, Zora, announces their upcoming token, ZORA, which will launch in Spring 2025. 10% of the total token supply of 10B tokens, will be airdropped to early users. - Link
📌 Money market and margin trading platform, Dolomite, releases their airdrop checker, allowing users to verify their DOLO, veDOLO and options airdrop allocations. - Link
Tweet of the Week 📝
Source: pure_patience
The absolute state of ETH holders.
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