Emergent Growth in ETFs and Liquid Restaking Spurs Crypto Surge

HnfG...P2kv

17 Jan 2024

GM Defiers!
Bitcoin miners comprised a major source of selling pressure amid last week's spot ETF launches, with data from CryptoQuant indicating that miner wallets offloaded $4.7B worth of BTC last week. The ETFs also inspired a surge in activity for institutional crypto products, with the sector hosting $17.5B worth of volume — nearly nine times the weekly average during 2023.
In other news, pre-orders are now live for the next Solana smartphone, Socket resumed operations after users suffered a $3.3M exploit, and the discount on Grayscale Ethereum Trust shares is quickly shrinking.
Plus, the emergent liquid restaking sector is making waves amid the meteoric growth of EigenLayer.
In today’s newsletter:

Miners offloaded 110,000 BTC last week
Inflows and volume spike for institutional crypto products
Pre-orders are live for Solana's next smartphone
Socket users exploited for $3.3M
ETF optimism drives down ETHE share discount
Leading liquid restaking protocols boast $450M TVL

The Defiant Podcast & Interviews

DEX Aggregator Matcha Adds NEW Cross-Chain Functionality

Markets in last 24 hrs:
TİCKERVALUE24HBTC$42,587↗ 1.88%
ETH$2,515↗ 1.51%
S&P 500$4,766↙ -0.37%
GOLD$2,026↙ -1.4%
Arch WEB31.32pts↗ +2.9%
↳ FINANCE1.27pts↗ 3.13%
↳ INFRA1.44pts↗ 1.85%
↳ CONSUMER1.46pts↗ 4.64%
Learn more about Arch Indices here.

WATCH

Check out our interview with the popular crypto trader and commentator, Fiskantes, to get his take on the recent bullish market momentum. Also watch our podcast with Matt Hougan, the CIO of Bitwise, to get his take on what the launch of spot Bitcoin ETFs means for the digital asset markets and web3 sector.

THANKING OUR NEWSLETTER SPONSORS

| NEWSLETTER CONTİNUES BELOW |

A developer-friendly, Rust-based smart contracts platform designed for scale and sensibility. Coming soon to mainnet, Soroban seamlessly integrates with and works alongside the existing Stellar blockchain. Start building on Soroban today.

MARKETS

Miners Offloaded $5B of Bitcoin Into ETF Launch

TLDR Data from CryptoQuant shows Bitcoin miners sending almost 50,000 BTC to exchange two on Jan. 9, and then an additional 60,000 BTC on Jan. 11 — the same day that the highly anticipated spot Bitcoin ETFs began trading.
SO WHAT The long-awaited approval and launch of the first U.S.-based spot Bitcoin ETFs manifested as a sell-on-the-news event for BTC, with the asset pulling back by 12% after posting a local high on Jan. 11.
READ MORE: Miners Offloaded $5B of Bitcoin Into ETF Launch

MARKETS

Institutional Crypto Trading Tops $17B During ETF Launch Week, Highest On Record

TLDR Institutional crypto products saw a frenzy of activity last week amid the lead-up to and approval of the first spot Bitcoin ETFs. Said products hosted $1.2B in inflows and $17.5B in trade volume — nearly 800% more than last year's weekly average.
SO WHAT The freshly-launched spot Bitcoin ETFs could attract traders away from institutional crypto products by providing an alternative regulated vehicle for accessing digital asset exposure.
READ MORE: Institutional Crypto Trading Tops $17B During ETF Launch Week, Highest On Record

SOLANA

Solana Mobile Opens Preorders for New Smartphone

TLDR Solana Mobile has opened pre-orders for the Saga Chapter 2 smartphone. Users can secure the forthcoming phone for $450 — less than half the price of its the debut phone.
SO WHAT The first Saga smartphone sold out within a week of launching, with many buyers racing to get their hands on the unit for its complimentary allocation of BONK tokens, a recently surging Solana-based memecoin. The new device is expected to ship next year.
READ MORE: Solana Mobile Opens Preorders for New Smartphone

HACKS

Socket Resumes Operations After Users Lost $3.3M To Exploit

TLDR Socket has resumed operations after becoming the latest cross-chain bridge to suffer an exploit. Hackers took advantage of a recent buggy contract upgrade to steal $3.3M from users with unlimited approvals active for Socket before the affected smart contract was paused.
SO WHAT Socket says it plans to do right by its users an recover the stolen assets. The incident follows at least two exploits targeting web3 bridges last month.
READ MORE: Socket Resumes Operations After Users Lost $3.3M To Exploit

MARKETS

Investors Ponder Ether ETF as ETHE Discount Shrinks

TLDR The discount on Grayscale Ethereum Trust shares compared to ETH has dropped from 47% to 15% over the past 12 months. The move mirrors a similar trend for Grayscale Bitcoin Trust shares leading up to its conversion to a spot ETF last week.
SO WHAT The trend was likely propelled by spot Ether ETF speculation, with Grayscale filing to convert its Ethereum Trust into an ETF in October. Grayscale is among several asset issuers with pending Ether ETF applications,
READ MORE: Investors Ponder Ether ETF as ETHE Discount Shrinks

DEFİ

Emerging Liquid Restaking Sector Approaches Half-Billion TVL

TLDR An emerging cohort of liquid restaking protocols are building on top of EigenLayer, the pioneering Ethereum restaking protocol. EtherFi already boasts a $216M TVL, while Kelp DAO has amassed $170M, and Renzo's deposits total $75M.
SO WHAT The rise of the liquid restaking narrative follows EigenLayer's TVL rocketing from $252M in mid-December to $1.65B after increasing its limits last month. The protocol will introduce support for three new liquid staking tokens with caps of 200,000 ETH each on Jan. 29, setting the stage for its TVL to increase by a further 100%.
READ MORE: Emerging Liquid Restaking Sector Approaches Half-Billion TVL

OUR REPORTERS ARE WATCHING

ELSEWHERE

SEC v. Terraform Labs trial pushed to March to potentially accommodate Do Kwon (Cointelegraph)
Binance’s Market Share Dips 5% As OKX & Bybit Gain Traction (Coingape)
Gemini obtains VASP approval in France, prepares retail and institutional services launch (The Block)