Summary of outstanding events in the second quarter of 2023

The second quarter of 2023 has just ended, and there have been many important developments in the global cryptocurrency market. Legal crackdowns in the West contrast with friendly regulatory frameworks in the East. There is a lot of FUD ahead, but there is also a lot of good news. In addition, the price of Bitcoin has just hit a new all-time high in 2023, which brings us to a turbulent quarter.

April

Ethereum Upgrade Shanghai

The Ethereum development roadmap continues with important upgrades. The Shanghai upgrade (also known as Shapella) was successfully deployed at epoch 194.048 at 05:27 AM (VNST) on April 13, going exactly as planned.

One of the key proposals is EIP-4895, which unlocks a “huge” amount of staked ETH for The Merge’s Ethereum 2.0.

As of the time of writing, over 3.5 million ETH has been withdrawn from the chain, but the amount of ETH staked is much higher at 23.5 million.

Additionally, data from both Beaconchain and Nansen show that the amount of ETH withdrawn is lower than the amount deposited at the same time. For example, in the past 24 hours, 29,200 ETH was staked on-chain, but only 3,700 ETH was withdrawn.

Source: Beaconcha.in

Source: Nansen

It can be seen that the demand for staking ETH has increased dramatically, which also shows the trust of users in this project. As a result, the amount of ETH on the exchange has bottomed out since 2016.

Liquid Staking Derivatives (LSD) Explodes

At the same time, the liquidity staking platform has also been updated to be compatible with Shanghai, unlocking staking for users such as Lido V2.

Since Shanghai, platforms offering flexible staking, or collectively referred to as Liquid Staking Derivatives (LSD), have begun to dominate the market. As reported by Coin68, LSD was a notable “topic” in the first quarter and became even more popular in the second quarter.

According to DefiLlama, LSD is currently the market segment with the highest TVL holdings, valued at over $20 billion, followed by the DEX array at $15.4 billion.

In addition, according to TVL data, the top projects are Lido, Coinbase Wrapped Staked ETH, Rocket Pool, Frax and Binance Staked ETH.

The memecoin wave

The biggest surprise in April may be the strong recovery of memecoin. In the absence of much change in the overall market structure, the memecoin project appeared only a few days ago and helped many people quickly xxx their accounts.

The two projects that led the trend at the time were Pepe the Frog (PEPE) and ArbDoge (AIDOGE). But in the end, PEPE became the most "successful" coin of the season, entering the top 100 coins with the largest market capitalization and being listed on Binance.

However, the land of "gem" memecoins is small, but scams and rug pulls are plentiful. Cases of users changing their lives after a night are just a few of the many who have lost money.

Some of the recorded scams include Math Lady Coin (MATH), WallStreetBets (WSB) or wallet addresses of the “founders” of more than 100 memecoins in 2 months.

SUI Mainnet, Public Token Sale and Series

As a counterweight to Aptos, SUI expected a massive airdrop similar to APT in Q1. But the project chose another path, not airdropping tokens, but selling Launchpad on OKX, Bybit and Kucoin exchanges, and then selling on Binance Launchpool.

Although the community was not "satisfied" with this move, and there were many technical problems at the opening, SUI eventually deployed the mainnet and launched the floor at the same time, with the price reaching $2 in early May.

However, Suiswap’s project quality was rated as “poor”. In early June, Suiswap DEX suddenly canceled its IDO due to concerns that the community would “capture” poor quality. The price of the project token after listing was even divided many times compared to the previously expected IDO price.

possible

BRC-20 fever is launched

Following the Bitcoin NFT craze in the first quarter, the BRC-20 generation tokens continued to explode in April and May, with the market value of the BRC-20 generation tokens almost "crossing" the $1 billion milestone, and even causing Binance Bitcoin to close the gate for withdrawals. Transaction fees have risen.

Not limited to the Bitcoin network, the trend of developing similar tokens has also appeared in Proof-of-Work (PoW) chains such as Litecoin and Dogecoin.

Moreover, trading platforms, wallets, and NFT marketplaces began supporting the Bitcoin network in May, proving that the number of users of the system is a number that cannot be ignored.

However, this wave has shown signs of retreating. At the end of June, BRC-20 seemed to have cooled down, attracting little attention, and only those who were truly knowledgeable stayed.

Follow DGC - Genesis

The “liquidity crisis” of 2022 has continued into 2023 for the “Bogot” Digital Currency Group (DCG). Starting in early May, the community began to worry about the debt that DCG owed to Genesis.

But in the current predicament, how will DCG repay its debts and what impact will it have on the market.

Although DCG-Genesis has pledged to repay debt and is looking for ways to raise capital, it remains a ticking time bomb at the top of the market.

The U.S. public debt

As the June 1 milestone draws closer, the world’s financial markets are “holding their breath” in anticipation of the U.S. Treasury announcement. Cryptocurrencies are no exception.

In the last few days of May, the market seemed to be "strangled", with minimal fluctuations, and the society was paying attention to the dynamics of American politics day and night. The situation became more difficult when President Biden wanted to increase cryptocurrency taxes to deal with the public debt crisis and criticized "cryptocurrency investors" for influencing policies.

As time passed, people "breathe a sigh of relief" when the White House and the U.S. House of Representatives reached an agreement on the debt ceiling, eliminating the risk of historic default.

Rumors of Multichain team being arrested

On the evening of May 24, the social network Twitter broke the news that the Multichain Chinese team had been arrested by the authorities. At the same time, many on-chain signs indicated suspicious activities related to the MULTI token.

As of the morning of the 25th, Multichain confirmed that some cross-chain remittance gateways could not work properly due to "force majeure" and the recovery time was unknown.

Multichain Bridge (formerly Anyswap) is one of the most used bridges today. But due to unclear moves, users began to abandon the project.

Binance stopped supporting some of the related tokens, and it was not until the evening of May 31 that the team announced that the CEO could not be contacted. This also affected the Gate.io exchange and some other projects.

June

Hong Kong is open

June 1, 2023 marks the day Hong Kong “opens” to cryptocurrencies, allowing retail investors to trade cryptocurrencies and enacting a number of policies to promote market development.

Hong Kong is seen as a "gateway" to connect to the huge cash flow from China, bringing new hope to the lack of momentum in the market.

So far, the Hong Kong authorities have not disappointed the community. From actively inviting Coinbase to urging major banks to quickly open accounts for cryptocurrency exchanges. Local companies, led by HSBC, have also welcomed the new policy.

US legislation continues to stifle the cryptocurrency industry

Maintaining the attitude of the first quarter, the SEC continued to suppress the crypto industry this quarter, focusing on two lawsuits against Binance and Coinbase. As a result, a series of tokens were declared as securities, pushing the prices of the "discovered" tokens down sharply.

By comparison, it can be seen that the SEC was harsher on Binance than on Coinbase. While only charging Coinbase with selling unregistered securities, the SEC also sued Binance and CEO Changpeng Zhao for more crimes, including the alleged commingling of $12 billion in customer funds.

The consequence of this label is that many cryptocurrency organizations have successively withdrawn from the Flower Kingdom, including projects that have been incubated and developed in this market for a long time. Among them are Gemini, Coinbase or Crypto.com, Animoca Brands.

If they want to stay, they will either have to downsize their crypto business like Jane Street and Jump Crypto, or be forced to delist like Robinhood.

Wall Street and Cryptocurrency

There are more surprises! On the one hand, the authorities are suppressing, and on the other hand, a series of large institutions have submitted applications for Bitcoin ETFs. Society is gradually realizing that games have gradually turned to traditional financial institutions, and financial and legal preparations are sufficient.

• BlackRock submits Bitcoin ETF application;

• Deutsche Bank submits application for cryptocurrency custody services;

• EDX Markets cryptocurrency exchange from three major Wall Street giants goes online;

• WisdomTree continues to register Bitcoin ETF;

• Invesco resubmits Bitcoin ETF application;

• Valkyrie re-registers Bitcoin ETF;

• There are rumors that Fidelity is preparing to submit a Bitcoin ETF application;

• ARK Investment modifies Bitcoin ETF registration.

Binance in global trouble

Binance’s “fate” shows no signs of stopping. Not only has it been sued by the US SEC and CFTC, Zhao Changpeng’s exchange continues to be in trouble around the world.

The exchange has announced its withdrawal from the UK, the Netherlands, Cyprus and Austria. Meanwhile, the Belgian market regulator ordered Binance to stop providing crypto services in the country, and there are rumors that France is investigating whether Binance has serious money laundering. Recently, the floor has also encountered waves in Brazil.

Eurobank partners stopped supporting the exchange after September 25.

Despite repeatedly emphasizing that it always hopes to comply with the regulations of various countries, Binance's operating model is a thorn in the eyes of regulators. The SEC's "nervousness" added fuel to the fire, causing other countries to increase pressure on the market.

Do Kwon sentenced to 4 months in prison in Montenegro

Do Kwon was eventually sentenced to four months in prison by a Montenegrin court for using a fake passport. But if the detention period from March 23 is counted, Kwon's sentence will end on July 23.

At that point, Montenegro will most likely turn to extraditing Do Kwon to the United States or South Korea to continue “standing trial” on charges that are inversely related to the LUNA-UST ecosystem on May 05/2022.

Last May was also a year after that traumatic event.