Solana ETF & South Korea Martial Law

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Good Morning.

The crypto market is at a crossroads. The total altcoin market cap is hitting its all-time high while Bitcoin dominance goes down. At the same time, memes are showing fatigue with only micro caps and large caps surviving the liquidity fragmentation.

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In Today's Email:

• What Matters: South Korea Declares Martial Law 🚨 

• Case Study: MSTR Nears Nasdaq-100 Inclusion 📊 

• Governance & Features: Sonic Labs’ Mainnet Launch 📸 

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WHAT MATTERS

South Korea Declares Martial Law, Crypto Plunges

State of play: South Korea's President Yoon Suk-yeol declared emergency martial law Tuesday night, citing threats from North Korea and internal anti-state forces.

This action, last seen in the country in 1980, led to widespread panic in the crypto market.

• Major cryptocurrencies, including BTC, experienced double-digit losses on leading South Korean exchanges like Upbit, Bithumb, and Coinone.

• USDT briefly plunged to 84 cents, and altcoins like Ripple, Shiba Inu, and Dogecoin faced significant declines.

• The Upbit Market Index dropped over 13% in a day, with the platform’s mobile trading app becoming inaccessible due to a surge in traffic.

What’s next: The South Korean government may implement measures to stabilize markets and address security concerns.

Why it matters: Crypto liquidities in South Korea are significant with top exchanges like Upbit and Bithumb being responsible for top trading volume outside of Binance and Coinbase.

Our take: This is a fascinating event to observe how liquidity operates in a tight capital control environment.

For builders and investors: Ensure that your product and operations are not prone to geopolitical instability from any specific country.

CASE STUDY

MicroStrategy Nears Nasdaq-100 Inclusion

MicroStrategy is likely to be added to the Nasdaq-100 Index and the $312B Invesco QQQ ETF following Nasdaq's annual reshuffle announcement on Dec. 13.

• Inclusion in the index would bring significant passive investment flows, estimated at over $1B, and provide indirect bitcoin exposure to ETF investors.

• MicroStrategy's $37B Bitcoin holdings make it one of the largest crypto investors globally, surpassing the cash reserves of giants like Nvidia and Tesla.

• Analysts note this addition could further integrate Bitcoin into TradFi, as millions of passive investors in ETFs like QQQ gain exposure to crypto via MicroStrategy.

• While the company meets the criteria for inclusion, its heavy bitcoin strategy could complicate Nasdaq’s classification as a non-financial firm.

• The decision, expected mid-December, would mark a significant milestone for crypto in conventional markets, potentially setting the stage for MicroStrategy's future eligibility for the S&P 500.

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INSIGHTS

D2X Launches Regulated Crypto Derivatives

D2X has launched a regulated crypto derivatives exchange targeting institutional investors. Licensed by the Dutch Authority for the Financial Markets, D2X offers 7-day-a-week trading for cash-settled BTC-EUR and ETH-EUR Calendar Futures,

• D2X planned to launch the USD-denominated Futures and Options in early 2025.

• The platform provides a post-trade model allowing cash collateral management via a tier-1 EU credit institution, returning interest to clients.

• Notable institutional participants include Flow Traders, Basis Capital Markets, and Algorithmic Trading Group.

• D2X aims to bridge the gap between regulatory compliance and round-the-clock trading.

• The company raised $10M in March 2024, with backing from Point72 Ventures, GSR Markets, and others.

FEATURES & GOVERNANCE UPDATE

Sonic Labs Prepares for Mainnet Launch

Sonic Labs, a Layer 1 blockchain spun off from Fantom’s Opera network, announced its mainnet has produced its first block and is set to go public soon.

• The milestone follows the unveiling of the upgraded "testnet 2.0" Blaze.

• Blaze boasts significant performance enhancements, including a 1.17-second average block time and 0.85-second finality for its first 221,000 blocks.

• Aiming for sub-second finality and up to 10,000 transactions per second, Sonic Labs seeks to set new standards for high-performance blockchains.

• The project took a snapshot for its $S token airdrop on Sunday.

• After launch, $S can be exchanged 1:1 with Fantom’s FTM tokens.

• The Sonic Gateway bridge to Ethereum will integrate Ethereum's liquidity with Sonic’s high throughput and low costs, complemented by a shared sequencer.

• The mainnet launch aligns with the team’s anticipated timeline of late November to early December.

Other notable feature updates:

• Pendle launches on Base.

• Phantom adds Base support.

• Supra launches Phase 1 Mainnet.

• Ethervista launches Etherfun on Base.

• Starknet launches STRK staking phase 1 on Mainnet.

• USDe will soon be integrated into Deribit as eligible margin collateral.

QUICK BITES

• NYSE Arca files for Solana ETF.

• WisdomTree files with SEC for spot XRP ETF.

• US Government moves $33M in seized crypto.

• BlackRock’s spot ETF surpasses 500,000 BTC in AUM.

• Coinbase integrates Apple Pay for fiat-to-crypto onramp.

• Former Celsius CEO pleads guilty to two criminal counts.

• BTC exchange reserves dropped to the lowest levels in years.

• PumpFun reaches a monthly revenue peak of $93M in November.

• Paul Atkins reportedly might be tapped to become the next SEC chair.

• Global Ethereum investment products hit $2.2B in annual inflow record.

NOTEWORTHY READS & MEME

• Arthur Hayes’ read on ICO and the cure.

• Maven 11’s read on the opinionated application.

• Thecoreloop’s read on crypto x AI research hub.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.