《Bathers at Asnières》 ------ Georges Seurat

Introduction:

On April 10, the U.S. CPI core inflation data exceeded expectations, leading to a significant reduction in the Federal Reserve's interest rate cut expectations; the escalation of geopolitical conflicts between Iran and Israel over the weekend further caused BTC to drop to nearly $60,000, with altcoins following the market and falling over 30%.

1. Investment and Financing Observation

Last week, there were a total of 27 investment and financing events in the crypto market, a year-on-year decrease of 35.7%, but the total funding amount reached $440 million, a year-on-year increase of 92.9% :
In the DeFi sector, 7 investment and financing events were announced, among which Bitcoin DeFi developer Automated Liquidity Exchange (ALEX) completed a $10 million strategic financing round led by Spartan Capital;
In the blockchain gaming sector, 2 investment and financing events were announced, including Web3 game studio Sortium, which completed over $4 million in financing, with participation from ARK Investment Management;
In the infrastructure and tools sector, 9 investment and financing events were announced, including Monad Labs, which completed $225 million in financing, led by Paradigm, with participation from Electric Capital, SevenX Ventures, and others;
In other Web3/cryptocurrency sectors, 8 financing events were announced, including Bitcoin mining machine manufacturer Auradine, which completed $80 million in Series B financing, with participation from StepStone Group;
From a month-on-month perspective, the number of investment and financing events in the cryptocurrency market has significantly decreased, but the total funding amount has surged. In specific sectors, this week's investment and financing amounts are still concentrated in the infrastructure direction, with Electric Capital being particularly active, mainly focusing on infrastructure and DeFi.

About Monad
Monad is a Layer 1 blockchain network positioned to challenge competitors like Solana and Sui by achieving 100x to 1000x efficiency to accelerate the disruptive power of decentralization, enabling more complex applications and broader adoption.
About Mezo
Mezo is a Bitcoin Layer 2 that utilizes holders' idle Bitcoin through a "HODL proof" points program, where the longer the holding time, the more "HODL score multipliers" contributors receive, allowing users to access applications that promote Bitcoin token usage, driving a circular Bitcoin economy rather than just "savings."
About Uplink
Uplink is a DePIN project aimed at reducing reliance on traditional telecom providers by incentivizing users and businesses to participate and use the network through token rewards, prioritizing partnerships with large enterprises for initial distribution.

2. Industry Data

Ethena First Appears with Negative Premium

DefiLlama data: The stablecoin protocol Ethena has recorded negative income for the first time this week, amounting to $1.05 million, primarily generated on April 11, which saw a negative income of $1.38 million; additionally, the current issuance of Ethena USDe is $2.359 billion, with sUSDe APY dropping to 17.2%.
The underlying logic of Ethena is to earn ETH staking yields while opening a 1x short position in CEX equivalent to its spot holdings, but during last week's downward trend, the funding rate turned negative, requiring the protocol to pay fees to CEX to maintain its contract positions, resulting in negative yields. Therefore, whether USDe can maintain and solidify its position in the crypto market will require time to verify.

ETH Lending Market Liquidations Hit Record High

The Block data: Recent market crashes have intensified loan liquidations, with the liquidation volume in the ETH lending market reaching a monthly high not seen in years after significant market sell-offs. The liquidation amount for lending protocol Aave is close to $80 million, while Compound's liquidation amount is nearly $50 million, with these two protocols constituting the majority of the liquidations. However, from my observation, this decline and liquidation have not genuinely affected market bullish sentiment, and capital inflows continue.
CoinGlass data shows: In the past 4 days, as Bitcoin has fallen from its recent all-time high, the total liquidation in the cryptocurrency market has approached $1.7 billion, most of which were long positions, with the last significant liquidation month being June 2022, a month after the collapse of the Terra ecosystem, which was valued at $40 billion.

Only 6 Tokens Outperform BTC

TradingView data: As of April 15, among the top 50 tokens by market capitalization, only 6 tokens have outperformed BTC, namely DOGE, SHIB, STX, BNB, MNT, and RNDR. Among them, DOGE is the best-performing altcoin in the top 50, rising from $0.09 on January 1 to $0.16 at the time of publication, an increase of over 77%.
In this market cycle, although multiple sectors and narratives briefly occupied the hot spots, BTC spot ETFs and meme coins still dominate the market. While this gives us greater expectations for various sector narratives, it is advisable for investors to treat the heat and trends of sector narratives rationally.

BTC has risen over 50% this year (from $44,100 on January 1 to the current $66,000);
BTC's market share has risen to a new high since April 2021, currently reported at 55.35%; Ethereum's market share is currently reported at 16.56%;

3. VC Holdings

Note: The above data is sourced from https://platform.arkhamintelligence.com/, statistics time: April 15, 2024, 17:00 (UTC+8).

4. This Week's Focus

April 15

• U.S. "terrifying data" for March retail sales month-on-month will be released;
• The third phase of the Arbitrum Foundation's funding application will begin on April 15;
• Cellula's first game "Game of Life" will launch on the mainnet on April 15, along with an airdrop event in collaboration with BNB Chain;
• The claim deadline for the airdrop token LNR from the Near ecosystem's re-staking platform LiNEAR Protocol is April 15;
• The 12th Blockchain Life 2024 will be held in Dubai from April 15 to 16;
• StarkWare plans to unlock 134 million tokens on April 15, which will be adjusted to only unlock 64 million tokens;

April 16

• The Gitcoin GG20 application deadline is April 16;
• The SingularityNET community voting on the proposal to merge tokens with Fetch.ai and Ocean Protocol will close at 20:00 Beijing time on April 16;
• LBank Labs will co-host a series of themed summits titled "Web3 Summit Dubai" with Web3 Summit and BlockNews;

April 17

• U.S. EIA crude oil inventory for the week;
• A series of community events "ZK Seasons Dubai" hosted by Metaverse Post and Cryptomeria Capital;
• DeThings and BioMatrix will hold an offline after-party themed "WEB3 For Everyone - DeNight" at 20:00;

April 18

• The U.S. will announce the number of initial jobless claims for the week;
• The Federal Reserve will release the Beige Book on economic conditions, and FOMC officials will give speeches;
• The early bird event for data contributors from AI project FLock.io will end on April 18;
• Ethereum staking infrastructure SSV Network will stop supporting the Goerli testnet;
• Binance NFT will stop supporting Bitcoin NFT trading and recharge services;
• TOKEN2049 Dubai will be held from April 18 to 19 in Dubai;

5. Conclusion

Last week, although the scale of investment and financing significantly increased, the overall market's sharp decline brought the most direct volatility impact to the lending and contract markets, with Ethena experiencing negative premiums for the first time.
This week, with the halving approaching and the Hong Kong Securities and Futures Commission set to approve multiple fund institutions' BTC and ETH spot ETFs, bullish sentiment remains strong, primarily reflected in the significant premium of USDT against USD (approximately 2.92%) and the rapid and noticeable rebound trend after the decline, indicating that market buying power remains strong.
Additionally, the subsequent market trend is likely to continue being dominated by ETF sentiment, especially after the approval of Hong Kong's spot ETFs, which will provide another important support from Asian capital and institutions. The probability of the U.S. ETH spot ETF being approved in May will also increase. However, it is important to note that aside from MemeCoins, there are no signs of dominant narratives in various sectors influencing this cycle, and investors are advised to pay close attention while rationally analyzing the driving forces behind the heat.
Note: All opinions above are for reference only and do not constitute investment advice. If there are any objections, please feel free to contact us for corrections.

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