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Cryptocurrencies were on the rise early last week, until the release of CPI data in the U.S. added to the volatility of the equity market and the broader cryptocurrency. Bitcoin fell below $70K, while Ether and altcoins experienced a larger pullback.
Enjoy our weekly dose of market summary below!
Inflation Worries Central Bankers Amid Rising Geopolitical Tension
This week, two new possibilities emerged in the ongoing global battle against high inflation.
First, there’s discussion that the European Central Bank (ECB) may take the bold step of implementing an interest rate cut as early as June, even if the U.S. Federal Reserve holds steady on rates. As Bank of Greece Governor Yannis Stournaras stated, "It's time to diverge. The situations in the euro area and the U.S. are completely different."
The other possibility has Wall Street bracing itself. If U.S. inflation remains stubbornly high, the Federal Reserve might do more than just delay planned interest rate cuts, and implement another rate hike. This isn’t out of the question, as robust consumer spending and business investment — coupled with easing supply chain problems — have fueled strong economic growth in the U.S., despite higher borrowing costs.
Meanwhile, in China, which has the world's second-largest economy, the economic landscape appears much grimmer. Deflationary pressures there remain a key threat to the stalled recovery. Globally, the International Monetary Fund (IMF) predicts that growth this decade will only be "marginally stronger" if inflation and debt challenges aren’t adequately addressed.
Escalating geopolitical tensions are further complicating the global economic picture. Russia's widening military assault on Ukraine's infrastructure, coupled with Ukraine's attacks on Russian oil refineries (and the risk of a regional conflict in the Middle East involving potential Iranian retaliation against Israel) have sparked increased bullish activity in the oil options market.
Q1 Earning Season Starts With Downbeat Bank Earnings
On Friday, two major U.S. banks, JPMorgan Chase & Co. and Wells Fargo, reported that net interest income, which represents the earnings they generate from lending, fell short of Wall Street analysts' expectations. At JPMorgan Chase & Co., the largest bank in the U.S., this key revenue metric declined from the previous quarter for the first time in nearly three years. This news caused JPMorgan's stock price to tumble more than at any time since 2020.
With persistent high inflation in the U.S. making it more likely that the Federal Reserve will have to delay cutting interest rates, investors were hoping to hear how this might further boost the banks' lending revenue. However, banking executives instead focused on discussing ways in which depositors are seeking higher returns on their savings. At Wells Fargo, non-interest bearing deposits, which don’t pay interest to customers, dropped 18% year-over-year. In contrast, interest-bearing deposits that do pay customers jumped.
The weaker-than-expected net interest income results from these two major banks suggest they’re facing challenges in the current economic environment of high inflation, and the likelihood of prolonged interest rate hikes by the Fed.
Date | Net Flows |
Apr 8, 2024 | $223 million outflow |
Apr 9, 2024 | $18.7 million outflow |
Apr 10, 2024 | $123.7 million inflow |
Apr 11, 2024 | $91.3 million inflow |
Apr 12, 2024 | $55.1 million outflow |
Total | $81.8 million Outflow |
The past week has seen another weekly outflow for all of the Bitcoin Spot ETFs traded in the U.S. The outflows on Grayscale show no signs of a slowdown, which may continue to strain the price movement of the largest cryptocurrency.
AltLayer Surges After Launching MACH AVS on Testnet
AltLayer, founded in 2021, offers a blockchain platform focused on enhancing Layer 2 rollups, enabling easy deployment without coding. It tackles issues such as limited validators, slow Ethereum finality and centralized sequencing, aiming to streamline and secure rollup processes.
AltLayer's MACH AVS, designed to provide fast finality for transactions on Optimism’s OP Mainnet and Arbitrum One, is now live on the Holesky testnet. It invites users to delegate ETH, LSTs and ALT tokens for testing. Aimed at enhancing rollup validation, MACH prepares for mainnet launch with features such as rapid confirmations, security and decentralized validation. Users can restake tokens and delegate to MACH, following a specific guide, with a focus on single-operator delegation and asset redelegation processes.
TON Jumps After Announcing $5 Million Incentive and Smartphone Partnership
The Open Network (TON), launched in 2018, is a decentralized Layer 1 blockchain that utilizes a proof of stake (PoS) consensus model for transaction validation and payment settlement. Initially known as Gram, Toncoin serves various purposes, including paying transaction fees within the TON ecosystem. TON is offering $5 million in Toncoin tokens for users who verify their identity with palm scanning technology, aiming to enhance digital identity verification and web3 integration for Telegram users. This initiative, part of a broader effort to boost user and developer engagement, includes robust privacy and security measures, complementing TON's community rewards and the launch of a monetised Telegram Ad platform.
OysterLabs unveiled the Universal Basic Smartphone (UBS) at the 2024 Hong Kong Web3 Carnival. The UBS is a blockchain-integrated mobile device designed to promote digital equity through the TON ecosystem. Aimed at addressing the lack of smartphone access among 49% of the global population, the UBS emphasizes user privacy, rewarding data sharing with Web 2.0 cashback and web3 token rewards.
With a pre-sale price of $99.99 (plus a $30 shipping fee), the phone requires a TON wallet address for purchase, though details on shipping and restrictions have yet to be clarified. Each UBS purchase includes a Genesis NFT, opportunities for daily data dividends, up to 30% cashback at over 14,000 stores, and crypto cashback on trading and gas fees. Additionally, it features the Universal DApp Store with access to over 600 TON ecosystem DApps, and comes pre-loaded with the Universal App Suite, including the OysterEarn app for further rewards, positioning the UBS as a pivotal tool in bridging the digital divide and seamlessly integrating users into the digital economy.
ONDO Rises Following Testing BUIDL and USDC Conversion Feature
Ondo Finance (ONDO), founded in 2021, is a DeFi platform that blends traditional finance with blockchain to provide fixed-yield loans backed by crypto assets, targeting a diverse investor base with varying risk appetites. Ondo’s price increased by 8% after testing a new feature enabling instant conversions between BlackRock’s BUIDL token and USDC stablecoins. The test involved a $250,000 transaction and showcased the feature's ability for 24/7 redemptions. This follows BlackRock’s entry into asset tokenization, with the BUIDL token offering daily blockchain-based yields backed by U.S. Treasury securities.
Participants of ‘Road to Mainnet’ Galxe Campaign Can Mint NFTs Entitling Them to Upcoming Airdrop
Participants of the Road to Mainnet Galxe campaign will soon be able to mint limited-edition utility NFTs, which are poised to offer significant value on the DOP Mainnet. There are four types of NFTs, each with different rarity levels, and the rarer the NFT, the larger the boost to the holder's Mainnet airdrop reward. Those who have completed all four stages of the campaign should prepare to mint their NFTs in the coming days on Polygon.
Cashmere Uses Goat Points to Rewards Users
Cashmere has launched Season 1 Goat Points, rewarding users based on their testnet app transactions, NFT holdings and overall blockchain activity. Points range from 100 to 2,000, based on the total number of transactions, with additional points for testnet and Mainnet NFT holders. Factors such as transaction count, wallet age and ETH balance further influence rewards, with anti-Sybil measures in place. Future seasons will offer new opportunities for earning points. Claiming is available through the Cashmere exchange website.
OMNI Offers Airdrop up to 3% of Total Supply
The Omni Foundation is offering an airdrop of 3% of the total $OMNI supply, amounting to 3 million tokens. To check eligibility, users need to connect their Ethereum and Cosmos wallets to the provided link and verify their status. The claims process will begin at a later date. Eligibility for the airdrop includes early testnet users, Galxe OAT minters, the top 10,000 EigenLayer restakers and the first 5,000 Ethereum Beacon Chain solo stakers, as well as holders of specific NFTs from Milady Maker, Redacted Remilio Babies, Pudgy Penguins and the Ninja series, as well as participants from 25 strategic partner protocols.
Stay tuned for more institutional insights and crypto updates next week!