There’s never a dull moment on the blockchain. Here’s what you need to know this week:

Bitcoin

R$664,381.89



0.18%

Ethereum

R$21,427.87



1.39%

XRP

R$17.58



3.32%

Tether

R$5.60



0.01%

Solana

R$1,024.18



4.76%

USDC

R$5.60



0.00%

See the latest prices

MARKET UPDATE

After more than two years, Bitcoin hits new all-time high

On Tuesday morning (EST), BTC hit a new all-time high just north of $69,300, slightly eclipsing the previous high-water mark of $69,000 set in November 2021. 

The new U.S. dollar peak followed bitcoin’s all-time highs against the Euro and U.K. pound set on Monday. (BTC prices fell below $62,000 on Tuesday afternoon before climbing back above $66,000 by Wednesday morning.)

Bitcoin’s new record total market capitalization of $1.35 trillion also outpaced the $1.28 trillion high set in 2021. In addition to recent price gains, bitcoin’s market cap has been boosted by its ever-growing supply, given that more BTC has been mined since November 2021.

What’s driving this rally, and what might happen next? Here’s what you need to know. 

Trade volume for spot BTC exchange-traded funds (ETFs) keeps breaking records.

The strongest likely trigger for the current rally has been the arrival of spot BTC ETFs from a range of firms including BlackRock and Fidelity, which have made it easier for a wider range of traders to gain exposure to crypto in their portfolios. 

“Many analysts attributed bitcoin’s advance in the second half of last year to anticipation that the ETFs would be approved,” said the Wall Street Journal. “Now, they say investors’ embrace of the funds is driving more bullishness, in addition to creating new demand.”

On Monday, BlackRock’s bitcoin ETF (IBIT) set another daily trading record with close to $3.8 billion in volume. This comes after IBIT saw more than $1 billion in trade action every day last week, according to Bloomberg analyst Eric Balchunas. Overall, a record $22 billion moved in and out of the new bitcoin investment products last week.

“Will this subside or is [the] new normal here?” Balchunas asked in a tweet last Friday. “We’ll know next [week].”

Bitcoin’s fourth halving is set for April.

Bitcoin is designed to be a scarce, inflation-resistant asset, and one of the key mechanisms it uses is the halving (or halvening), in which the amount of new BTC created by mining is reduced by half approximately every four years until all 21 million BTC are mined sometime next century. 

Currently, 6.25 BTC are mined every ten-or-so minutes. After April’s halving, that number will drop to 3.125. Because bitcoin prices spiked following the last two halvings, one of the reasons traders may be buying BTC now is in the hopes that prices will rise post-halving. 

What will happen with BTC’s price following the halving? 

Opinions vary. JPMorgan analysts suggest that the effect may have already been “priced in” by savvy traders, and therefore BTC could actually fall to around $42,000 post-halving.

Other analysts suggest that the halving’s reduced supply will meet the heightened demand from ETFs and result in a rally. As always though, only time will tell. 

The bottom line…

Whatever happens next, a huge majority of BTC holders should be feeling pretty good about their HODLings. According to data from crypto analytics firm IntoTheBlock, as of Wednesday more than 98% of addresses were in profit with BTC north of $66,000.

“Given the substantial percentage of addresses in profit, the selling pressure from users attempting to break even no longer has a significant effect,” the firm noted. “For newcomers entering the market to purchase coins, they are essentially buying from existing users who are already realizing a profit.”

ALT WEEKLY

ETH, DOGE, and other tokens surge following bitcoin rally

With bitcoin breaking new all-time highs, some crypto traders are turning to the next big question: Is it altcoin season?

Alt (or altcoin) season is crypto slang for a period when non-BTC tokens rally following a spike in BTC’s price. It’s triggered in part by traders pivoting BTC profits into smaller tokens, as well as new participants deciding to join in on the rally. 

As of Wednesday morning, the altcoin market cap is up roughly 40% over the past month, and some crypto watchers are predicting that an even bigger move could be on the horizon.

Here’s what you need to know.

Optimism around Ethereum ETFs may be boosting markets.

The second-biggest cryptocurrency by market capitalization is up more than 60% in the past month. On Tuesday, prices crossed the $3,800 mark for the first time since January 2022 (but remain well below ETH’s $4,600 peak).

What’s driving the rally? In part, it’s due to traders' optimism that spot ETH ETFs from firms including BlackRock will gain SEC approval and begin trading later this year. 

On Monday, the SEC delayed making a decision on BlackRock’s proposal. According to Blockworks, “The move was largely expected. Analysts, like Bloomberg ETF analyst James Seyffart, believe that a decision to either green light or postpone the launch of the spot ether ETFs won’t come until May — at the earliest.” 

The Ethereum economy is on the move.

Beyond ETH itself, tokens across the Ethereum ecosystem are rallying. 

• The Ethereum scaling protocol Polygon saw its native token MATIC rise 35% in the past month, crossing the $1 mark for the first time since last April.

• OP, the native token of the layer-2 network Optimism, is up about 40% in the past month — with a 40% gain in monthly active users over that same period. 

• Uniswap, the decentralized exchange that is Ethereum’s most popular app by far, has seen prices for its native token spike by 150% in the past month following a governance proposal that paved the way for holders to earn staking rewards. 

Wall Street is eyeing tokenization next. 

With the BTC ETFs breaking new records on a near-weekly basis, it feels safe to say that Wall Street has finally warmed up to crypto. But besides spot ether ETFs, what could traditional finance firms dive into next? 

According to BlackRock CEO Larry Fink, the next step could be the tokenization of real-world assets — or bringing asset classes like real estate or stocks onto blockchains to take advantage of their ability to make global transactions faster and cheaper. It's estimated to become a $10 trillion market by 2030.

Many of the protocols involved in tokenization have seen big rallies in recent weeks. 

• Algorand, which supports a variety of major projects including a programmable Euro approved by the Dutch Central Bank, has seen its native token ALGO rise more than 50% in the past month. 

• Hedera, another blockchain which supports tokenization projects ranging from real estate sales to global water markets, has seen its native token HBAR rise nearly 70% in the past month. 

• XRP is up roughly 20% after announcing a partnership aimed at bringing more tokenized assets onto its blockchain. 

Retail investors are buying dog-themed coins again.

While institutional investors pour capital into BTC ETFs and Ethereum, spikes in smaller tokens tend to be correlated with a rise in everyday (or “retail”) trading. 

“Retail is hearing about the large crypto run-up from the Bitcoin ETFs, and has re-entered the market buying all the cheap coins,” Jordi Alexander, founder of digital-asset trading firm Selini Capital, told Bloomberg. “DOGE and SHIB [are] getting a bit of comeback also — the key question is do dogs keep the lead, or is there a faster animal?”

• Dogecoin is up about 100% over the last month — and a majority of futures traders are predicting prices will continue to rise. Traders placed more than $1 billion in futures bets on the OG memecoin’s price, with 70% betting prices will go up.

• The DOGE-insipired Shiba Inu (SHIB) token has more than doubled DOGE’s gains in the same period, rising 275% in the past month.

• BONK, a Solana-based dog token that’s seen a meteoric rise in recent months, is up over 200% in the last four weeks, with more than $2 billion in trading volume on Monday alone. 

The bottom line…

Some analysts are skeptical of a potential alt season, suggesting that the institutional investors who have fueled this current rally are unlikely to roll BTC profits into smaller tokens. But one key metric could offer some optimism about what’s next.

According to the TOTAL3 – which represents the total crypto market minus BTC, ETH, and stablecoins — the altcoin market peaked at around $1 trillion in 2021. Currently? The TOTAL3 sits at just $670 billion, potentially indicating there’s more room to run.

NUMBERS TO KNOW

$11 billion

Value, as of last week, of digital assets traded on decentralized exchanges built on Solana, surpassing the previous high of nearly $10 billion set in December. Solana’s native token also hit 22-month highs.

$16 million

Sales price (4,500 ETH) on Monday for CryptoPunk 3100 — one of nine rare “alien” Cryptopunk NFTs. “That’s the second-largest sale ever for the blue-chip NFT collection, trailing only a $23.7 million CryptoPunk purchase made in Feb. 2022,” reports Blockworks.

90

Level that the Crypto Fear & Greed index hit on Tuesday, for the first time since 2021. The index — which measures sentiment on a scale of 1 to 100 via a variety of metrics including volatility and social searches — is firmly in the “extreme greed” zone, indicating that traders are feeling bullish about bitcoin.

74%  

Share of institutional investors already exposed to digital assets who plan on increasing their exposure this year, according to a recent survey from Nickel Digital. The same survey found 92% of respondents see crypto as an attractive investment opportunity over the next five years. 

26%

Share of Ethereum’s total supply (worth around $115 billion) that is currently being staked. Since Ethereum moved to a proof-of-stake network in 2022, staking has become increasingly critical to ensuring the network’s security and efficiency.

TOKEN TRIVIA

What is the name of Ethereum’s next major upgrade?

Find the answer below.

Trivia Answer