Hong Kong Approves Spot Bitcoin ETFs (and ETH too)
$2B USDe Stress Test | EigenLayer's New AVS
Marco Manoppo & Karon Pangestu
April 15, 2024
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Good Morning.
The weekend was wild. World War III was about to start and we were worrying about the price of dogwifhat, the irony.
Macro sentiment is not as positive compared to a month back, with inflation printing higher and tradfi figureheads stating the possibility of a higher for longer rates environment. All this is even before the potential of a supply chain shock because of the Iran situation.
As always, every few months we’re reminded that the entire space is a risk-on asset.
In Today's Email:
What Matters: HK Bitcoin & Ether ETFs 🇭🇰
Product: EigenLayer’s new AVS ♾️
Charts: Negative funding rates, Meme coins on AVAX 📈
Narratives: Telegram and Bitcoin ecosystem.
We just launched a crypto appstore ranking bot that tracks top apps across the US. This includes exchanges like Coinbase and Kraken; and wallets such as phantom and Metamask. Check it out here.
We are now publishing airdrop alphas on our telegram!
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WHAT MATTERS
HK Approved Bitcoin & Ether ETFs Today
State of play: Hong Kong has approved several spot Bitcoin and Ethereum ETFs today, according to Nikkei Asia.
HK regulators had previously approved the launch of futures-based crypto ETFs, including CSOP Bitcoin Futures, CSOP Ether Futures, and Samsung Bitcoin Futures, with a total asset value of ~$170M.
If listing details are finalized with Hong Kong Exchanges & Clearing (HKEX) in time, the products could launch by month-end.
China Asset Management, Harvest Global, and a partnership between Bosera Asset Management and HashKey Capital are the first to receive approvals for HK spot Bitcoin and Ether ETFs.
What’s next: The approval of Ether ETFs by Hong Kong might give a push for the SEC to do the same to avoid the slow and complex bureaucracy.
Our take: Hong Kong's approval of the ETF products is regarded as a significant market-moving event, potentially solidifying Hong Kong's position as Asia's premier digital asset hub.
For builders and investors: According to Matrixport, the Bitcoin ETFs could unlock $25B in demand from Chinese investors via the Southbound Stock Connect program.
The Southbound Stock Connect allows mainland Chinese investors to access shares listed in Hong Kong.
Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇
PRODUCT OF THE WEEK
EigenLayer’s New AVS
EigenLayer has expanded its ecosystem by launching new actively validated services (AVS) as part of the mainnet phase 3 rollout. This follows the introduction of EigenDA, EigenLayer’s first AVS.
The newly introduced AVSs include AltLayer, Brevis, Eoracle, Lagrange, WitnessChain, and Xterio. Those AVSs offer a diverse range of functionalities.
Lagrange's state committee will provide light client functionality, enabling quicker and more secure communication between optimistic rollups and other blockchains.
AltLayer's MACH platform aims to accelerate rollup finality with confirmation speeds of under 10s, as reported by EigenLayer.
Eoracle, the first Ethereum-native oracle network developed on EigenLayer will allow the integration of real-world data into dApps.
Brevis is creating "coprocessors" on EigenLayer, which specialize in offering efficient computational resources.
Other cool products:
Web3Nest, a gateway to the web3 universe.
Mode Spray, a token transfer platform on Mode.
openchainlib, a decentralized computing platform.
CHARTS OF THE WEEK
Negative Funding Rates & Ethena Stress Test
State of play: On April 14, the ETH and BTC funding rates turned negative for approximately 12 hours for the first time since October 2023.
The short negative funding rates raised concerns about Ethena's funding risk, given its use of derivatives positions to hedge the delta of its digital asset collateral.
@opmichael_eth noted that on April 14, The ETH-weighted funding rate touched -33% and the BTC-weighted funding rate touched -35.4%.
Ethena’s USDe briefly de-peg to $0.997.
USDe experienced a slight TVL decline for the first time.
Our take: Ethena's backtesting indicates that even with a hypothetical -100% rate, the maximum potential loss in any 8 hours is 0.091%. Additionally, negative funding rates have only occurred three times in the past three years.
Meme Coins Swap on Avalanche Hit $1.5B+ in Volume
Credits to OurNetwork for the original report
State of play: In the last 6 months, Memecoin's cumulative swap volume on Avalanche hit $1.5B, driven by two significant surges in December 2023 and March 2024.
On March 21, the Avalanche Foundation launched Memecoin Rush, a $1M liquidity mining incentive program, aimed at boosting liquidity and fostering momentum for AVAX community coins.
The meme coin scene has seen rapid growth, expanding from just HUSKY in 2023 to over 15 tokens, including COQ and MEOW.
COQ remains dominant, with 30-40% of swap volume, while MEOW, KIMBO, and TECH are gaining traction, accounting for 10-20% of the market.
Our take: Meme coins, though viewed skeptically by some blockchain purists, have played a significant role in the explosive growth of Solana. Even BNB Chain has joined the trend with its meme coin campaign.
QUICK BITES
Bitkub may be valued at $3B in IPO.
IRS anticipated more crypto-related tax crime.
EtherFi inks $500M restaking deals with RedStone Oracles.
Hacker sentenced to 3 years for stealing $12M+ from CEXs.
Uniswap Labs hikes swap fee to 0.25% on trades through UI.
Coinbase files interlocutory appeal in its case against the SEC.
Winklevoss invested $4.5m in Packy McCormack’s football club.
Bitmain launches Antminer S21 Pro, its most advanced BTC miner.
TON Foundation teams up with HashKey to drive telegram on-ramp.
NOTEWORTHY READS & MEME
If we do descend into maximum chaos here you’re going to want to be holding coins from *real* projects with *real* utility so you can barter with the people who have meat and rations and ammunition they usually only accept coins with DAOs and a roadmap
— Gwart (@GwartyGwart)
9:36 PM • Apr 13, 2024
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