“Summer” --- --- Charles Courtney Curran

Introduction:

The implied volatility of BTC's short-term out-of-the-money put options remains higher than that of call options, indicating that market concerns about a recent price pullback have not yet dissipated. However, the implied volatility of long-term options remains stable, showing that institutions are optimistic about BTC's long-term prospects.

1. Investment and Financing Observation

Last week, there were 26 investment and financing events in the crypto market, a decrease of 36.58% compared to the previous week, with a total funding scale exceeding $170 million, showing no change in growth rate, and the scale remained basically stable:

In the DeFi sector, 9 investment and financing events were announced, including the cryptocurrency trading platform Arbelos Markets, which completed a $28 million financing led by Dragonfly Capital;

In the GameFi sector, 7 investment and financing events were announced, including the Web3 game developer Seeds Labs, which completed a $12 million seed round financing, with participation from Blizzard Fund and others;

In the AI sector, 1 investment and financing event was announced, supporting the Web3 AI platform ChainML, which completed a $6.2 million seed round extension financing, led by Hack VC;

In the infrastructure and tools sector, 4 investment and financing events were announced, including Humanity Protocol, which announced a $30 million new round of financing at a valuation of $1 billion, led by Kingsway Capital;

In the centralized finance sector, 1 financing event was announced, with the crypto trading company Raven, founded by former Wintermute employees, completing a $2.7 million seed round financing, led by Hack VC;

Other Web3/crypto applications announced 4 financing events, including the crypto prediction market Polymarket, which has raised $70 million through two rounds of financing, with the most recent round led by Founders Fund;

From the month-on-month data, last week's investment and financing events in the crypto market ended a two-week upward trend, showing a significant decline, but the total funding scale remained basically unchanged, indicating that institutions are cautiously positioning themselves while increasing their bets on the projects they invest in. The market's enthusiasm is focused on DeFi, infrastructure, and GameFi sectors. Among VCs, the most active institution remains Animoca Brands, followed by Founders Fund, Framework Ventures, Endeavor Ventures, and Electric Capital.

About Polymarket

Polymarket is a decentralized information market contract trading platform that allows users to trade on the most controversial topics in the world (such as coronavirus, politics, current events, etc.). Currently, betting on the 2024 U.S. presidential election has become the most popular contract.

About Humanity

Humanity Protocol is a blockchain network that combats witch hunts through DID, utilizing fingerprint recognition technology and zero-knowledge proofs to ensure user privacy and security, aiming to provide an easy-to-access and non-invasive method for establishing human proof in Web3 applications.

About peaq

peaq is a DePIN network supporting the Internet of Things (EoT) on Polkadot, enabling entrepreneurs and developers to build decentralized applications for vehicles, robots, and devices, while allowing users to manage and earn income when connected machines provide goods and services.

2. Industry Data

The number of new BTC wallets has dropped to a six-year low

According to block data: In the past week, the average daily number of new BTC wallets was 275,000, the lowest since 2018. Other related indicators have also declined, with miner revenue measured by hash rate falling to a historical low, and transaction fees and on-chain transaction volume indicators also in a downward trend.

From the trend perspective, overall data shows a bottoming out situation, and it is expected that data recovery and rebound will begin to change and adjust with the market shift. Additionally, although on-chain indicators have declined, new protocols on the BTC network are attracting record interest from venture capital firms, which lays the foundation for market recovery.

Six months ago, the average daily number of new BTC wallets was 625,000, more than double the current figure. At that time, due to the recent launch of the BTC spot ETF, the development of the BTC ecosystem, and the halving event, the number of new addresses approached historical highs.

BTC inscriptions have decreased by 99% from the peak at the end of April

In the past week, the daily number of new inscriptions on the BTC chain has dropped below 250, a 99% decrease from the peak data at the end of April. However, inscription trading remains the most active part of May, primarily occurring on markets such as Magic Eden, OKX, Ordinals Wallet, and UniSat.

The decline in the number of inscriptions aligns with the overall market's heat and activity, mainly influenced by market conditions. It also reflects that inscriptions have not been able to generate independent market heat like previous engravings. The subsequent trend will still depend on macro market conditions and the activity level of the BTC ecosystem.

According to the data dashboard created by RUNES on Dune: From April 26 to 30, an average of 14,700 new inscriptions were made daily, with April 26 seeing a record high of 23,061 inscriptions;

Since Runes was launched on April 20, BTC miners have received a total of $4.5 million in transaction fees, averaging about $189 per day. So far, over 91,200 inscriptions have been made on the BTC chain;

Solana has become the public chain with the highest TPS

CoinGecko data: Solana's TPS (transactions per second) on-chain has reached a maximum of 1504, making it the fastest large blockchain, over 5 times faster than Polygon and 46 times faster than ETH. Nevertheless, Solana has only achieved 1.6% of its claimed theoretical TPS (65,000 transactions per second). Additionally, the second fastest blockchain is Sui, which reached a maximum TPS of 854 in July 2023.

In comparison, the average TPS of non-EVM public chains is 284, while the average TPS of EVM and EVM-compatible public chains is 74, meaning that non-EVM public chains are nearly 4 times faster than EVM public chains. However, in terms of stability and security, ETH-based public chains still dominate, and the current TPS of ETH-based public chains has not become a significant factor affecting or hindering their rapid development.

BSC and Polygon are the fastest EVM blockchains, with BNB Smart Chain (BSC) reaching a maximum of 378 TPS and Polygon reaching 190 TPS, making them the fastest Ethereum scaling solutions currently.

3. VC Holdings

Note: The above data is sourced from https://platform.arkhamintelligence.com/, statistical time: May 20, 2024, 19:00 (UTC+8).

4. This Week's Focus

May 20

• FOMC voting member and Atlanta Fed President Bostic will be interviewed by Bloomberg TV;
• Federal Reserve Governor Barr will speak on bank regulation;
• Federal Reserve Vice Chairman Jefferson will speak on economic outlook and the real estate market;
• PayPal's new policy effective May 20 will eliminate buyer and seller protections for NFTs;
• BounceBit will announce the asset withdrawal schedule, with BTCB, WBTC, FDUSD, and USDT not available for withdrawal in Premium staking;
• PYTH tokens will unlock 2.13 billion tokens at 22:00 on May 20, valued at approximately $812 million, accounting for 141.67% of the circulating supply;
• Crypto Expo Dubai 2024;

May 21

• FOMC voting member and Cleveland Fed President Mester will be interviewed by Bloomberg TV;
• U.S. Treasury Secretary Yellen, ECB President Lagarde, and German Finance Minister Lindner will speak;
• Federal Reserve Governor Waller will speak on the U.S. economy, and Federal Reserve Governor Barr will participate in a fireside chat;
• Chiliz Chain plans to conduct a hard fork of Dragon8 and introduce Tokenomics 2.0;
• IoTeX and DMC will jointly hold an online event themed "What are the Development Directions and Trends of DePIN in the East and West under Interest Rate Cut Expectations?";

May 22

• FOMC voting members Bostic and Mester will participate in a panel discussion on "Central Banks in the Post-Pandemic Financial System" at Collins;
• Jupiter's LFG third round of voting will begin on May 22;
• The SEC and lawyers for Terraform Labs and Do Kwon will engage in court debates regarding the fraud case compensation plan on May 22;
• Bitcoin Pizza Day;
• AVAX tokens will unlock 9.54 million tokens at 8:00 on May 22, valued at approximately $340 million, accounting for 2.49% of the circulating supply;
• ID tokens will unlock 18.49 million tokens at 8:00 on May 22, valued at approximately $14.26 million, accounting for 4.29% of the circulating supply;
• Microsoft Build Developer Conference;

May 23

• U.S. initial jobless claims for the week;
• The Federal Reserve will release the minutes of its monetary policy meeting;
• The SEC will decide on May 23 whether to approve VanEck's application for a spot Ethereum ETF;
• The decentralized GPU cloud infrastructure Aethir will officially launch the edge computing device Aethir Edge on May 23;
• Crypto V Summit;

May 24

• U.S. consumer confidence index for May;
• FOMC voting member and Atlanta Fed President Bostic will participate in a student Q&A event;
• Federal Reserve Governor Waller will speak;
• Voting on the proposal regarding "Lido Alliance: Ethereum Alliance Ecosystem" will end at 12:00 on May 24;
• The SEC will decide on May 24 whether to approve ArkInvest/21 Shares' application for a spot Ethereum ETF;
• The Superintelligence Alliance (ASI) is set to launch on May 24, with the merger of the three having been approved by proposal voting in various communities;
• Euler (EUL) will unlock approximately 4.66 million tokens at 00:17, valued at about $370,000, accounting for 0.34% of the current circulating supply;
• ETH Berlin will be held from May 24 to 26, 2024, at the CIC Innovation Park in Berlin, Germany;

May 25

• Animoca Brands Japan will launch "Fairy Tail" digital collectible cards on Quidd at 05:00 on May 25;
• The 5% tokens distributed to community members and exchange users by Notcoin will be closed on May 25;
• Acala (ACA) will unlock 4.66 million tokens at 08:00, valued at approximately $500,000, accounting for 0.48% of the current circulating supply;
• Bitcoin 2024;

5. Conclusion

Last week, the U.S. CPI inflation data was slightly lower than expected, restoring market confidence in the long-term bullish outlook for BTC. However, short-term volatility remains high, and macro factors continue to be key drivers of the crypto market's performance. Additionally, the number of investment and financing events in the crypto market ended a two-week upward trend, but the total funding scale remained basically unchanged, indicating that institutions are cautiously positioning themselves while increasing their bets on the projects they invest in. The market's enthusiasm is focused on DeFi, infrastructure, and GameFi sectors.

This week, several important events and meetings are taking place, such as Crypto Expo Dubai 2024, Microsoft Build Developer Conference, and ETH Berlin, which will bring new technological innovations and collaboration opportunities to the industry. Additionally, tokens valued at approximately $1.3 billion will be unlocked successively, including AVAX valued at $340 million and PYTH valued at $812 million, which will inevitably exert significant selling pressure on the market. After two months of declining prices, AVAX and PYTH are unlikely to experience significant fluctuations in FDV after the token unlock. If macro conditions are favorable, market confidence will further strengthen, and the long-term trend will be more optimistic.

Furthermore, the voting on the U.S. FIT21 bill is progressing, which could become a pivotal event in the history of U.S. crypto regulation and have a huge impact on the entire industry, providing strong positive trends at the macro level and becoming a key factor influencing subsequent industry trends and market changes. Investors are advised to pay close attention.

Note: All views above are for reference only. What are your thoughts on the proposed FIT21 bill and its impact on the future of U.S. digital asset regulation? Feel free to contact us with your insights.

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