Author: LBank Labs Research team - Hanze, Johnny

*All on-chain data is dated as of 12:00 a.m. EST on Sunday, March 31st.

Welcome back to LBank Labs Weekly Digest! Here we list all you need to know about crypto market in the past week(Mar.24-Mar.30).

Keywords: #PCE #GDP

Positive economic indicators buoyed spirits on Wall Street Thursday. PHOTO: MICHAEL M. SANTIAGO/GETTY IMAGES

1. Macro Market Overview

U.S. Stocks benchmark index finishes at 22nd all-time high of this year. According to WSJ, the S&P 500 rose Thursday to cap off its best first-quarter performance since 2019. The broad U.S. stock index advanced 0.1%, notching its 22nd all-time high of the year. The Dow Jones Industrial Average added about 47 points, or 0.1%, also closing at a record. The Nasdaq Composite fell 0.1%. Investors on Thursday got more reasons to be upbeat. The U.S. economy grew in the fourth quarter even more than previously thought, according to the government’s revised estimate for gross domestic product. Consumer confidence rose to its highest level in almost three years, according to a University of Michigan survey.

Additionally, the latest report on personal income and spending released by the U.S. Bureau of Economic Analysis during the market holiday on Friday showed that the preferred measure of inflation by the Federal Reserve, the core Personal Consumption Expenditures (PCE) price index, matched expectations. Specifically, the data revealed that in February, the U.S. Personal Consumption Expenditures (PCE) price index rose by 0.3% month-on-month, slightly below the market expectation of 0.4%, and increased by 2.5% year-on-year, consistent with market expectations. Federal Reserve Chairman Powell, speaking at a Federal Reserve Bank of San Francisco event on March 29th, stated that amid the dual mandate of maximum employment and price stability, the Fed is currently more focused on the latter. The Fed is not in a rush to cut interest rates, hoping to see more "favorable" inflation data to bolster confidence.

In the past seven days, the three major U.S. stock indices experienced different movements. The technology-focused Nasdaq Composite Index fell by 0.36%, while the Dow Jones Industrial Average and the S&P 500 rose by 0.80% and 0.41% respectively. Web3-related stocks collectively saw gains over the past seven days, with COIN rising by 3.8%, MARA by 8.2%, and MSTR by 11.9%.

Left: Three Indexes, Right: Nasdaq, COIN & MARA & MSTR (Source: Yahoo Finance)

Macro indexes

Personal income increased $66.5 billion (0.3 percent at a monthly rate) in February, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI), personal income less personal current taxes, increased $50.3 billion (0.2 percent) and personal consumption expenditures (PCE) increased $145.5 billion (0.8 percent).

The PCE price index increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.3 percent. Real DPI decreased 0.1 percent in February and real PCE increased 0.4 percent; goods increased 0.1 percent and services increased 0.6 percent.

(Source: Bureau of Economic Analysis)

Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the fourth quarter of 2023, according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent.

The GDP estimate released last week is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 3.2 percent. The update primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment.

(Source: Bureau of Economic Analysis)

The U.S. Dollar Index (DXY) had a strong week, reaching a high of 104.538 at the close of last Thursday. This marks an increase compared to the previous week's level of 104.430.

DXY (Source: TradingView)

According to the latest data from the Chicago Mercantile Exchange (CME) FedWatch tool, only about 4% of investors are expecting the Federal Open Market Committee (FOMC) meeting in May to result in the first interest rate cut of the year. This is a decrease from 12% reported a week ago. A larger proportion of investors believe that the Federal Reserve will keep interest rates unchanged and maintain them at their current level.

Left: EFFR, Right: Target Rate Probabilities for May 2024 Fed Meeting
(Source: Federal Reserve Bank of New York, CME FedWatch Tool)

Last week, the yield on the 10-year U.S. Treasury note (US10Y), which serves as a benchmark for mortgages and other borrowing costs, slipped to 4.192% at Thursday's close.

US10Y (Source: TradingView)

BlackRock's Fink Says an Ether ETF Is Possible Even if ETH Is a Security. BlackRock CEO Larry Fink said an ether ETF would still be possible even if the U.S. Securities and Exchange Commission designates the cryptocurrency as a security, which would increase the regulatory scrutiny around the second-largest digital asset. Asked Wednesday on Fox Business whether BlackRock – which has made waves in crypto through its bitcoin exchange-traded fund introduced earlier this year – could still list an ETF that holds Ethereum's ether if the crypto is a security, he replied, "I think so."

The SEC is reportedly taking a look at the question of whether ether is a security. Fortune reported earlier this month that the regulator is seeking to classify ether as one and has sent subpoenas to several companies as part of that inquiry.

(Michael M. Santiago/Getty Images)

Last week, Bitcoin spot ETFs transitioned from net outflows to net inflows, with the current total net inflow reaching $12.1 billion. The current Total Net Assets stand at $59.1 billion, accounting for 4.3% of the Bitcoin market capitalization. Following four consecutive days of net outflows, Bitcoin spot ETFs began to recover net inflows starting from last Monday. The daily net inflows from Monday to Thursday were $15 million, $418 million, $243 million, and $183 million, respectively. As of Thursday's close, Grayscale's GBTC experienced a single-day net outflow of $105 million, with a total net outflow of $14.8 billion. Blackstone's IBIT saw a single-day net inflow of $95 million, with a total net inflow of $14 billion. Fidelity's FBTC experienced a single-day net inflow of $68 million, with a total net inflow of $7.6 billion.

Bitcoin Spot ETF Overview (Source: SoSo Value)

2. Crypto Market Pulse

Market Data

Last week, the cryptocurrency market saw a return of inflows, with the total market capitalization currently standing at $2.66 trillion, up $200 billion from the net inflow over the past seven days. Bitcoin and Ethereum experienced brief declines starting from last Monday, but were boosted back to highs by moderate U.S. inflation data released on Thursday. Bitcoin and Ethereum reached peaks of $71,500 and $3,600 respectively on Thursday. As of early March 31st, the spot price of Bitcoin has risen to $70,270, an 8% increase over the past 7 days. As the second-largest cryptocurrency, Ethereum is currently priced at $3,607, with a 7% increase over the past 7 days. Additionally, the market capitalization of Bitcoin and Ethereum is approximately $1.4 trillion and $435 billion respectively, accounting for approximately 53% and 16% of the total market capitalization.

Left: Market Cap, Right: BTC&ETH Price (Data: CoinMarketCap)

$CORE, $WIF, and $MNT emerged as Top 3 gainers, while $KCS, $XMR, and $AKT were Top 3 losers. In the top 100 cryptocurrencies by market capitalization, $CORE surged by over 140% weekly, securing the top position. Core Chain is a Layer1 public chain incubated by the Core Dao team, combining features such as Bitcoin's PoW, DPOS, and Ethereum's scalability. $CORE is the native token of Core Chain. Last week, Core Chain announced the upcoming launch of non-custodial Bitcoin staking, a move expected to significantly increase the public chain's Total Value Locked (TVL). In second place, Dogwifhat ($WIF) is a Memecoin based on the Solana blockchain, which surged by 110% last week, surpassing PEPE and currently ranking third in the Memecoin market capitalization. In third place, $MNT serves as the native currency of the Mantle blockchain. Its price has surged by over 60% in the past seven days, with a significant reason being the announcement last week that the token will be listed on the South Korean exchange Upbit.

Top 10 Gainers & Losers (Data: CoinMarketCap, LBank Labs)

Last week, the total supply of stablecoins continued to rise, reaching a new high of $143 billion. Over the past seven days, the net position change in stablecoin supply has maintained a positive growth trend, with the net growth rate steadily increasing. This indicates that the investment demand in the cryptocurrency market is still steadily growing. Additionally, observing the net position data of stablecoins on exchanges over the past week has shown a stable and significant trend of net inflows. This suggests a decrease in the attractiveness of on-chain trading activity to investors, with more funds flowing to centralized exchanges. Overall, the data indicates that the cryptocurrency market is still in a phase of positive growth.

Stablecoins Market Cap (Data: Glassnode)

In the derivatives market, the open interest in perpetual contracts for Bitcoin and Ethereum has slightly increased over the past seven days. The prices of Bitcoin and Ethereum have experienced relatively small fluctuations over the past week, leading to a slight increase in open interest in the futures market since last Monday. Liquidation data further indicates that the liquidation volume last week remained at a relatively low level over the past month. The liquidation volume for Bitcoin was balanced between long and short positions, while Ethereum was mainly dominated by long positions, indicating a relatively weak upward performance for Ethereum. Overall, the data suggests that the current crypto market is recovering after the last pullback.

Left: BTC & ETH Open Interest, Right: BTC & ETH Total Futures Liquidations (Data: Glassnode)

In the decentralized finance (DeFi) market, the Total Value Locked (TVL) began to rebound last week and is currently at $99.7 billion. Over the past seven days, the trading volume on decentralized exchanges (DEXs) has continued to decline to $50.6 billion, a decrease of 16% compared to the previous week. The market share gap between decentralized exchanges (DEXs) and centralized exchanges (CEXs) has narrowed, with DEXs now accounting for 22% of the total CEX trading volume. The TVL of the top ten blockchain projects ranked by TVL has all experienced an increase in the past week. The increases in Base and Blast are the most notable, with both experiencing gains of over 30% in the past seven days.

Left: TVL & Volume, Right: Top 10 chains (Data: DefiLlama)

Last week, the market capitalization of Ethereum non-fungible tokens (NFTs) experienced a slight increase of 2%, rising to $8.9 billion. Meanwhile, the total trading volume decreased by 17% to $140 million. In the leading blue-chip NFT collectibles on Ethereum, the floor price and average price of CryptoPunks fell by 8% and 70%, respectively. The floor price and average price of Pudgy Penguins increased by 11% and 2%, respectively, currently ranking second in market capitalization. The blue-chip index, priced in cryptocurrency, dropped from 4093 to 3956.

Market Cap & Volume, 7D (Data: NFTGo)

LBanks Lbas Recap

ETFs inflow volume outpaced Grayscale's selling volume this week. However, despite this bullish indication, Bitcoin's price trajectory hasn't mirrored enthusiasm, displaying signs of exhaustion in its growth trajectory. Concurrently, a significant retracement of 10-20% among several altcoins has unfolded, which, while inducing short-term volatility, could fortify the market's foundation for sustained growth in the long term.

Of particular interest this week are memecoins, with the spotlight once again shining on Base. In response, we will be dedicating a special edition to delve into the dynamics of memecoins, analyzing why certain projects are outperforming others in this vibrant sector.

$MEW, despite originating with a modest Twitter following, swiftly catapulted to a $200 million market cap within a mere three hours of its inception. However, the rapid surge in its valuation appears anomalous, suggesting potential manipulation orchestrated by whale groups backing the project, which could exert further upward pressure on its price.

$BOBAOPPA, initially hailed as one of the most promising projects with a staggering $40 million raised in its Solana pre-sale, is now grappling with the shadow cast by its creator, Machi, a figure associated with dubious activities. As the market acquaints itself with Machi's history, a palpable downturn in sentiment has precipitated an aggressive downtrend in the token's value.

$MFER stands out with its robust community support, bolstered by both Base and Farcaster communities, underscoring its potential for resilience amidst market fluctuations.

$COST Costco hotdog themed meme, really refreshing concept and the founder of Costco is Sol Price.

$HAMI's genesis on a YouTube live stream, demonstrating the process of memecoin creation, adds a unique narrative to its development trajectory.

$NUB, characterized by its enduring community and cat-themed motif.

$SLERF with pool is burnt, $SLERF is deflationary, as more $SLERF will be paid in transaction fees.

$DINO, initially touted for its ERC50 narrative, has found itself overshadowed by the imminent launch of MFER.

3. Major Project News

[Layer2] Arbitrum and Azuki join forces to launch anime-based web3 network. Looking to broaden its interests even further, Arbitrum Foundation has announced it is teaming up with both the popular NFT brands Azuki and Weeb3 Foundation in an effort to create a web3 network that appeals to fans of anime.

Through collaboration, the three organizations aim "to usher in the next era of anime fandom by leveraging web3 technology to enhance the anime experience for millions worldwide, encompassing first-party and third-party anime content, games, merch, and NFTs," according to a statement. The new project has been christened AnimeChain.

(Source: Twitter@arbitrum)

[Bitcoin] Bitcoin Ordinals founder Casey has released the Runes documentation. Bitcoin Ordinals founder Casey has released the highly anticipated Runes documentation. Runes allow Bitcoin transactions to etch, mint, and transfer Bitcoin-native digital goods. The protocol messages for Runes, called Runestones, are stored in Bitcoin transaction outputs. Runes are formed through etching, which creates a Rune and sets its attributes, including pre-mining functionalities. Runestones may be malformed for various reasons, and malformed Runestones are referred to as cenotaphs. Runes inputted into cenotaph transactions are destroyed.

(Source: docs.ordinals)

[Celestia] Celestia: Blobstream is now live on the Base mainnet. Modular blockchain network Celestia announced on the X platform that Blobstream has gone live on the Base mainnet. With Blobstream, developers can reportedly continue building within the same ecosystem, creating customizable high-throughput block spaces. Developed by Succinct Labs, Blobstream serves as a one-way data proof bridge, enabling Ethereum L2 and L3 to utilize Celestia for modular data validation. It uses DA proofs and Merkle roots of batch Celestia block data to prove the existence of rollup data on Celestia.
Developers can now begin integrating the new Ethereum rollup frameworks with Blobstream to extend any ecosystem. It's important to note that Blobstream is still in its early stages and is experimental software, and users should assume the risks associated with using Blobstream.

(Source: Twitter@CelestiaOrg)

[Solana] Solana Gets New NFT Standard, Metaplex Will Give Fees to DAO for Potential MPLX Rewards.

The Metaplex Foundation revealed last Monday that it is launching a new non-fungible token (NFT) standard for Solana that is cheaper to mint and easier for developers to work with—and crucially, given recent congestion, it requires substantially less Solana network compute too.

The Metaplex Core standard is billed as a next-generation NFT standard for the Solana network, cutting mint costs and network demand by more than 80% compared to the existing Token Metadata standard on Solana.

(Source: Twitter@metaplex)

[Avalanche] Avalanche and Chainlink Leveraged in Tokenized Asset Settlement Project. Avalanche has announced a partnership with Chainlink and the Australia and New Zealand Banking Group (ANZ) to explore on-chain asset settlement. The collaboration aims to bridge the Avalanche network and Ethereum to facilitate the circulation and settlement of tokenized assets globally. With over 8.5 million retail and institutional clients, ANZ will utilize Chainlink's Cross-Chain Interoperability Protocol (CCIP) to achieve Delivery versus Payment (DvP), enabling clients to seamlessly access, trade, and settle tokenized assets across different networks and currencies.

(Source: avax.network)

[Fantom] Fantom plans to leverage Sonic to build a 'shared sequencer' for other blockchains. Fantom Foundation CEO Michael Kong stated that the project is gearing up to introduce its next iteration, Sonic.  Sonic promises to process 2,000 transactions per second (TPS) with sub-second finality and is anticipated to launch in late summer or early fall of this year. It is being developed as the next step after the existing Opera version of Fantom that’s able to facilitate 200 transactions per second. Sonic’s rollout includes plans to enhance DeFi activities on Fantom through support for liquid staking tokens and the expansion of grant programs to fund development.

The team also plans to leverage Sonic as a “shared sequencer” for other Layer 1 and Layer 2 chains — Kong noted. A shared sequencer is a party or protocol that produces blocks for multiple rollups simultaneously. They are essentially a pool of sequencers that can be used by multiple rollups. Other examples of shared sequencers in development include Espresso, Astria and FairBlock. Last year, the project noted exploring adding optimistic rollups to connect to Ethereum.

(Source: Twitter@FantomFDN)

4. Key Fundraising Data

Last week witnessed a total of 30 financing events, raising a substantial amount of over $268.1 million*. Compared to the previous week, financing activities remained active both in terms of transaction volume and total funding amount. The GameFi services sector led with the highest number of financing events, totaling 7. The GameFi sector also recorded the highest total funding amount, raising a total of $114 million, accounting for 43% of the overall financing. The largest financing event was led by Parallel and 0G Lbas, both successfully raising $35 million. Parallel is an innovative science fiction trading card game (TCG) that leverages non-fungible tokens (NFTs) to grant players ownership of their cards. 0G is a Modular AI Chain featuring a scalable programmable Data Availability (DA) layer tailored for AI dapps. More detailed information is provided below.

* 7 events of unknown amount are included, which have been excluded from the remaining data.

Top Left: Stats in Areas; Top Right: Stats in Rounds; Bottom: All Events

(Data: Cryptorank, Foresights, LBank Labs)

Below, we listed the most noteworthy fundraising deals for you:

1. [GameFi] The science fiction-themed NFT card game Parallel has completed a $35 million financing round, with participation from Solana Ventures and others.

Parallel, a science fiction-themed NFT card game, has completed a $35 million financing round, with Solana Ventures, Distributed Global, OSS Capital, VanEck, Focus Labs, Big Brain Holdings, Base, Collab+Currency, Amber Group, Spartan Group, and Builder Capital among the participants.

Parallel previously received a $50 million investment from Paradigm in October 2021, valuing it at $500 million. Earlier reports indicated that in March, Parallel would launch the AI survival simulation game Colony on Solana, and the Colony whitepaper has since been released.

• Official Link: https://parallel.life/

2. [Chain] Web3 infrastructure company 0G Labs raised $35 million in its seed funding round.

Web3 infrastructure company 0G Labs, a Modular AI Chain featuring a scalable programmable Data Availability (DA) layer tailored for AI dapps, raised $35 million in its seed funding round. Hack VC led the round, with participation from Alliance, Animoca Brands, Delphi Digital, Stanford Builders Fund, Symbolic Capital, and OKX Ventures. The initial funds will be used to hire engineers and establish market functionalities, community, and ecosystem for 0G. As of now, 0G Labs does not have its own token, but it plans to release one in the future.

• Official Link: https://0g.ai/

3. [GameFi] PlayStation crypto game dev Gunzilla Games raises $30 million in round led by Avalanche fund and CoinFund.

Gunzilla Games, the developer behind the upcoming video game "Off the Grid," has raised $30 million in a round co-led by CoinFund and Avalanche's Blizzard Fund, according to a statement. "Off the Grid," which is a free-to-play, battle royale video game, is slated for release on both the Sony PlayStation and Microsoft's Xbox, in addition to PC. The new third-person shooter video game "deploys the revolutionary concept of complete asset ownership and a player-driven in-game economy," according to Gunzilla Games.

In its statement, Gunzilla Games also said its "combined $30 million" raise includes a "$10 million strategic token round," participation from Republic Capital and Morningstar Ventures, and "previously unreported equity and validator sales." Gunzilla Games's new raise follows a $46 million funding round from August 2022.

• Official Link: https://gunzillagames.com/en/

4. [Service] Polychain leads $15 million fundraise for dappOS.

Intent execution network dappOS has raised 15.3 million in a Series A round led by Polychain at a $300 million valuation. dappOS was selected to join Binance Incubation Program Season 5 in December, 2022. In July 2023, dappOS received seed round investment from Binance Labs, Sequoia China, and others. dappOS is an intent execution network that empowers chains and dApps to be intent-centric. It turns value-specific intents into on-chain outcomes by creating a two-sided marketplace: On the supply side, service providers stake collateral and opt into running one or more execution services. And on the demand side, it enables developers to find solutions to fulfill users’ intents.

Other backers in this round included Nomad Capital, IDG, Flow Traders, IOBC, NGC, Amber Group, Uphonest, Taihill, Waterdrip, Bing Ventures, Spark Digital Capital, Satoshi Lab and Metalpha among others.

• Official Link: https://dappos.com/

See you next week! 🙌

📢 Disclaimer: The weekly crypto market insights are provided for informational purposes only and should not be considered as financial advice. The cryptocurrency market is highly volatile and unpredictable. Prices and trends can change rapidly, and past performance is not indicative of future results. Always conduct thorough your own research and consult with a qualified financial professional before making any investment decisions.