Volatile crypto market keeps investors on their toes 📈📉

Hola folks!

Welcome back to our weekly update on the crypto market. April 2024 is proving to be an exciting month for cryptos. The much-anticipated Bitcoin Halving event happened over the weekend. The BTC mining reward is now halved to 3.125 BTC, and the world’s largest crypto has held its ground at around the $65k mark post-halving.

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The cryptocurrency market experienced a rollercoaster ride that shook and strengthened the market in the past week, with Bitcoin testing the $60k support level three times. 

The most notable event was the Bitcoin Halving event, where the miner reward for mining new blocks was reduced by 50% to 3.125 BTC per block, reducing the BTC annual inflation rate to below that of gold for the first time. Although this well-predicted event was priced in, the halving event is unique as there is significant demand pressure from the Spot BTC ETFs, which might result in higher prices, as has been the case in previous cycles.

There was also significant geopolitical tension between Iran and Israel, which led to a sudden drop in Bitcoin's price by 10% in less than 30 minutes. This event triggered a ripple effect across the crypto market, erasing nearly $700 billion in market capitalization. Despite this, Bitcoin managed to rebound above 65k USD. ETH, too was able to rebound from lows under $3k last week, to trade above the $3.2k level again. With Bitcoin halving behind us now, analysts are expecting even more heightened volatility with macro and geopolitical developments.

A key highlight after the Halving event was the launch of the Runes Protocol, an inscription-linked innovation on top of the Bitcoin network, which resulted in a surge in transaction fees due to network congestion. Runes inscriptions are similar to the Ordinals innovation from last year and represent a new token standard beyond BRC-20 to launch new assets utilizing the underlying Bitcoin network's strength. This record surge in transaction fees was due to increased demand for blockspace by the Runes' related launches. 

Last week, we also saw one of the most sought-after events in crypto. Token 2049 was held in Dubai, during which the UAE announced a record of $25B in crypto transactions in 2022, highlighting the growing interest and investment in the crypto space in the region. This news comes as the UAE continues to promote further investment in crypto with regulatory flexibility, which could lead to a more open and regulated market in the region. Binance received its VASP license from Dubai's digital asset regulator VARA, to operate from the Emirate.

Overall the crypto markets traded sideways last week, with the total market cap still above $2.5 trillion. There were pockets of outperformance as well as several sharp corrections, but overall volatility was definitely heightened across the board. 

Notable outperformers of last week were meme tokens SHIBA, BONK, FLOKI, and PEPE, as increased market volatility attracted more risk capital which gets allocated across meme coins the quickest. Bitcoin-related tokens ORDI and STX reacted positively to the post-halving surge in BTC transaction fees, as they are affected directly by the underlying network's utility. 

Amongst Layer 1 protocols, NEAR recorded the sharpest surge on the back of its AI-linked roadmap, along with Aptos, which announced an institutional offering in partnership with Microsoft and Brevan Howard.

Ethena’s ENA, which had recently distributed users with a massive airdrop, came under selling pressure. Recently, airdropped tokens like Wormhole's W and Parcel's PRCL also saw a sharp correction in prices as investors looked for an exit. This could be a sign of slowdown for upcoming new token airdrops to take a breather and delay launches for a few weeks as the markets find a footing

• BTC $65,928 ⏬ 1.30%

• ETH $3,214 ⏬ 1.45%

• APT $10.18 ⏫ 4.23%

• BONK $0.00002076 ⏫ 23.86%

(All data here is as of 3:25 p.m., 22 April 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Bitcoin ushers in a fourth halving as miners’ block subsidy reward drops to 3.125 BTC. Bitcoin’s fourth halving occurred at the block height of 840,000. Read more here. 

• Runes Protocol launches on Bitcoin, sending fees soaring as users rush to mint tokens. Runes are digital tokens that can be minted on the platform. Read more here. 

Before you get on with your day, don’t forget to flex those brain muscles with our weekly crypto crossword.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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