1. Ethereum Pectra upgrade is scheduled for the first quarter of 2025
The upgrade is expected to include EOF, PeerDAS, and EIP-7702, among other proposals. Pectra includes the Prague upgrade for the execution layer and the Electra upgrade for the consensus layer. The final scope of the upgrade is still under discussion, and possible changes include postponing Verkle until the Osaka hard fork.
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2. Bank of America analysts: The Fed will not start cutting interest rates until December
Analysts at Bank of America Global Research wrote that a rate cut by the Federal Reserve is "not likely for now," based on recent comments from policymakers and minutes from the central bank's latest meeting. Data released this week showing stronger-than-expected business activity and a drop in weekly unemployment claims also dampened hopes of an imminent rate cut. Bank of America analysts' base case is that the Fed will not start cutting rates until December. They believe the Fed will need to see a sustained slowdown in the price of services. "A sharp drop in headline year-on-year inflation would strengthen the case for a rate cut, but this seems unlikely given adverse base effects in the coming months," they said.
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3. Qian Zhimin, the main culprit in the UK's 60,000 Bitcoin money laundering case, was sentenced by the court for money laundering and will serve more than 6 years in prison
Qian Zhimin, the main culprit in the UK's 60,000 bitcoin money laundering case and Tianjin Lantian Green's 43 billion yuan illegal fundraising case, was sentenced by a British court to be guilty of money laundering and will serve more than 6 years in prison. Previously, Qian Zhimin had attempted to buy several luxury homes in London, including a 23.5 million pound seven-bedroom mansion in Hampstead and a 12.5 million pound mansion with a private cinema and gym, which attracted the attention of the police. There are still 23,300 bitcoins in circulation in this case.
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4. Yesterday, the total net inflow of US Bitcoin spot ETFs was US$252 million
Grayscale ETF GBTC had a net outflow of $0.00 per day. The Bitcoin spot ETF with the largest net inflow per day was BlackRock ETF IBIT, with a net inflow of $182 million per day. The second largest was Fidelity ETF FBTC, with a net inflow of $43.7083 million per day.
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5. Former SEC Chairman: Spot Ethereum ETF trading is expected to start in July or August
Jay Clayton, former chairman of the U.S. Securities and Exchange Commission, said that the approval of spot Ethereum ETFs for trading will be "inevitable," but there are still questions. Clayton pointed out that the approval of Ethereum ETFs is a two-step process, with listing approval already obtained, but approval of the product itself is still pending, and although there are still some issues to be resolved, such approval is inevitable. Although the specific details of Ethereum ETFs have not yet been determined, it is expected that these funds may begin trading in July or August.
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6. Wu Shuo Zhou’s Selection: Ethereum spot ETF passed in shock, what impact will it bring? The United States bipartisan jointly supports cryptocurrency and news Top 10
Top 10 News of the Week
1. On Thursday, the SEC approved 8 Ethereum ETFs including BlackRock and Fidelity in 19b-4 form link
Ethereum spot ETF has been approved by the SEC, and the SEC believes that ETH is a commodity
On Thursday evening, Eastern Time, the U.S. Securities and Exchange Commission (SEC) documents showed that the SEC approved the 19b-4 forms of eight Ethereum ETF issuers, including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy and Franklin Templeton. ETF issuers still need to make the S-1 registration statement effective before they can start trading. It is not clear how long this process will take, but some analysts speculate that it may take weeks. At present, ETF issuer VanEck has submitted the revised S-1 application form for the Ethereum spot ETF as soon as possible. BlackRock's spot Ethereum ETF has been listed on the DTCC website with the stock code ETHA.
Consensys said Thursday’s approval demonstrates that the SEC considers ETH to be a commodity, not a security — a contrary to the position it continued to take prior to this week’s events. While Consensys welcomes today’s decision to approve an ETH spot ETF as a step in the right direction, the last-minute approval is yet another example of the SEC’s cumbersome, ad hoc approach to digital assets. No other industry, market, or asset has been subject to such deliberate regulatory abuse. It’s unfair to market participants, contrary to the rule of law, and constrains innovation. We are pleased to see the tremendous bipartisan effort in Congress to provide clear and reasonable regulation.
Variant Fund Chief Legal Officer Jake Chervinsky said on May 21 that if the spot ETH ETF is really approved, everyone he knows who understands the regulatory situation in Washington will be shocked, but this does not mean it will not happen. This means that the approval of the ETF may indicate that the US cryptocurrency regulatory policy has undergone a major shift after the SAB 121 vote, which may be more important than the ETF itself.
Many institutions have made predictions on the future trend of Ethereum, and the sentiment is generally optimistic
OKX analysis points out that if the SEC approves the spot Ethereum ETF this week, institutional investors will invest $500 million in the first week. Lennix Lai, OKX Global Chief Business Officer, said, "The approval of the Ethereum ETF may be more important than the Bitcoin ETF." Lai also pointed out that "the potential approval of Ethereum as a trading agent under the traditional framework may bring a new wave of institutional demand." He believes that after the Ethereum ETF is approved, the price of Ethereum may soon break through the historical high. Since Monday this week, the price of Ethereum has risen by 24%.
Joe Lubin, co-founder of Ethereum and CEO of Consensys, said that the resulting large demand for ETH could lead to supply constraints, and the natural and pent-up demand for ETH purchased through ETFs will be considerable. In the case of Bitcoin, authorized participants — the companies that buy Bitcoin on behalf of the ETF by creating new shares for the ETF every day — can simply buy idle Bitcoin on an exchange or through an over-the-counter counterparty. Currently, 27% of the total ETH has been staked on the Ethereum network, which may make the price of ETH more responsive to capital inflows; in addition, the increase in Ethereum network activity will promote the destruction of ETH and further limit supply.
Geoff Kendrick, head of foreign exchange research and digital asset research at Standard Chartered, expects an Ethereum ETF to be approved this week, leading to inflows of $15 billion to $45 billion in the first 12 months. The bank's report on Tuesday reiterated that an ETF could push Ethereum to the $8,000 level by the end of 2024. Bitcoin will reach the $150,000 level by the end of 2024.
Bernstein analysts Gautam Chhugani and Mahika Sapra estimate that the approval of a spot Ethereum ETF will drive Ethereum prices up 75% to $6,600. They pointed out that the SEC approved a similar Bitcoin product in January, spurring a 75% increase in Bitcoin prices in the following weeks, and similar changes are expected in ETH's price trend. However, Kaiko analyst Adam McCarthy believes that there is not much demand for the Hong Kong ETH ETF and it has experienced several days of net outflows. The lack of collateral is also an important factor and may further affect demand.
Ethereum Collateralization and Hong Kong Talks to Allow Collateralization of ETFs
Bloomberg said that many people in the crypto market believe that the key changes made by issuers to the spot Ethereum ETF application are good for the Ethereum blockchain, but not good for the ETF product itself. Issuers including Fidelity and Ark have canceled plans to pledge Ethereum ETFs. Staking has always been a sensitive issue for Ethereum because it enables holders to earn returns, raising questions about whether the token should be considered a security regulated by US regulators. Some market participants believe that if the ETF cannot pledge its tokens, then the appeal of the spot ETF is less than directly buying the pledgeable Ethereum.
Fox reporter Eleanor Terrett said that spot BTC ETF issuers CoinShares and Valkyrie will not apply for spot ETH ETFs, mainly because there is no pledge function. People familiar with the matter said that the company believes that without the pledge function, especially in a crowded market with 9 issuers, there is no value for investors.
Tree News quoted Bloomberg as saying that the Hong Kong Securities and Futures Commission is negotiating to allow Ethereum ETF issuers to pledge. Correspondingly, the US Ethereum ETF issuers have stated in their latest 19b-4 filings that they will not participate in Ethereum pledge. However, the current trading volume of Hong Kong Ethereum ETF is very bleak.
2. Biden may soften crypto policy before election link
Dragonfly partner Haseeb Qureshi tweeted that Biden may soften his stance on cryptocurrencies before the election to avoid losing votes in a heated race. The ETF approval is the first sign of this change, and other institutions are expected to relax their policies in the coming months. This is not a complete reversal, but it is enough to reduce divisions. Trump is expected to be more supportive of cryptocurrencies, but Biden may soften his policies to avoid losing votes across the board.
3. Trump campaign officially begins accepting cryptocurrency donations link
The Trump campaign announced on Tuesday that it will begin accepting cryptocurrency donations, and supporters can donate in "any cryptocurrency" accepted through the Coinbase Commerce product. The move opens up a new potential source of funds for the Trump campaign, which still lags behind Biden in cash on hand despite surpassing incumbent Democratic President Biden in fundraising in April. Cryptocurrency donations will be reported as in-kind donations, just like stock gifts, and the campaign can decide whether to cash out the cryptocurrency or keep it. It is worth noting that Biden supporter Elizabeth Warren attacked cryptocurrency in a campaign ad released last year and claimed to be building an "anti-crypto army."
4. US House of Representatives passes FIT21 cryptocurrency bill link
The U.S. House of Representatives passed the 21st Century Financial Innovation and Technology Act (FIT21) by 279 votes to 136. The legislation, driven primarily by House Republicans, will establish a system to regulate the U.S. crypto market, set consumer protections, make the Commodity Futures Trading Commission (CFTC) the primary regulator of digital assets and the regulator of non-securities spot markets, and will more clearly define what makes a crypto token a security or commodity. Parts of the bill may change and need to be passed by the U.S. Senate, after which Biden will have ten days to sign it.
However, the White House has expressed opposition to passing the FIT 21 bill in its current form, which lacks adequate protections for consumers and investors engaging in certain digital asset transactions, but has also expressed a desire to work with Congress to “ensure a comprehensive and balanced regulatory framework for digital assets.”
Delegate founder foobar tweeted that FIT21 is not a real victory, it just transfers regulation from the SEC to the CFTC, and you still face the same problem: crypto tokens are not actually commodities and do not fit into the "old" commodity futures framework, just as they do not fit into the "old" securities framework. Just six months ago, the CFTC declared certain decentralized exchanges (DEX) illegal because someone might use them to trade leveraged tokens. This is a malicious institution applying more wrong laws in public. They are not your friends, and giving them more power is not a good thing.
5. Brazil’s cryptocurrency regulatory framework will be released by the end of this year link
Brazil's central bank said on Monday that it will publish a regulatory framework for cryptocurrencies by the end of this year. The central bank has identified at least three steps to develop a regulatory framework for cryptocurrencies, including public consultation on business activity rules for digital asset providers and the development and improvement of a supporting framework for VASPs operating in Brazil. According to its statement, as part of the framework development process, the central bank also plans to conduct internal planning related to stablecoin regulation.
6. Vitalik: We need an open decentralized protocol to transfer assets between L2s link
Vitalik Buterin said in a tweet that we need an open decentralized (no operator, no management) protocol for quickly transferring assets from one L2 to another, and integrate it into the default sending interface of the wallet. But before getting too obsessed with any fancy toys, do the basic work first. Our biggest user experience problem is that the L2 world does not feel "like a unified Ethereum" enough. Although it is much better than a year ago, it is still far from perfect. A simple algorithm: things that are easy to do on L1 are difficult across L2, such as token transfers, ENS, smart contract wallet key changes, etc. He also said that ens is our most successful non-financial application, and I don't know why more people don't care about it. Vitalik believes that in 10 years all rollups will be ZK, and each slot will submit blocks with final state roots to L1. To achieve this goal, a lot of infrastructure and prover optimization are needed, but this is obviously the ultimate goal.
7. Uniswap responds to SEC Wells notice: Alternative assets are traded on Uniswap link
Uniswap argues that tokens traded on its platform are not securities, but alternative assets such as stablecoins, community and utility tokens, and commodities; based on its decentralized nature, the protocol does not maintain user accounts or collect personal data. Uniswap believes that this case will encourage Americans to use foreign interfaces and trading protocols that are more difficult to regulate, while discouraging innovators; the SEC cannot get the answers it wants through litigation and needs congressional intervention to regulate cryptocurrencies.
8. Coinbase announces it will launch oil and gold futures contracts for retail investors link
Coinbase announced that it will launch oil and gold futures contracts for retail investors on June 3. The new contracts are for 10 barrels of oil and 1 troy ounce of gold, aiming to provide more trading opportunities in traditional markets. Coinbase Derivatives, which is regulated by the CFTC, said it already offers BTC, ETH, BCH, LTC and DOGE futures to customers.
9. Magic Eden, the largest Bitcoin NFT trading market, uses Coinbase to help it process small outputs link
Deezy founder Danny discovered that Magic Eden, Bitcoin's largest NFT trading market, was using Coinbase to help it process small outputs. Every transaction in Magic Eden includes a small output as a market fee, which is small but troublesome to integrate. Instead of using its own address to receive utxos, Magic Eden used their Coinbase account, and all these market fees were deposited into Magic Eden's Coinbase account, so Coinbase would pay the cost of integrating these outputs. Mempool founder Mononaut said that in the past 24 blocks, Coinbase integrated 92,400 small outputs from Magic Eden at 7sats/vb, involving 308 transactions, and ultimately paid a fee of 0.59 BTC to recover 1.75 BTC. Danny believes that Coinbase didn't know what was going on, so it was not very smart in integration and lost a lot of money.
10. Recently, the US Bitcoin spot ETF has continued to have net inflows for 9 consecutive days.
On May 23, the U.S. Bitcoin spot ETF had a total net inflow of US$108 million, marking the eighth consecutive day of net inflow.
As of May 22, GBTC has a historical net outflow of $17.62 billion, with a remaining position value of $19.39 billion; BlackRock ETF IBIT has a historical net inflow of $16.08 billion, with a remaining position value of $19.71 billion; FBTC has a historical net inflow of $8.65 billion, with a remaining position value of $11.18 billion. Since the approval of the Bitcoin spot ETF, the historical net inflow has reached $13.35 billion, with a total holding of $57.85 billion in assets, accounting for 4.30% of the total supply of Bitcoin.
Key financing events
Decentralized social protocol Farcaster announced the completion of $150 million financing, led by Paradigm link
ZK hardware acceleration company Cysic raises $12 million in pre-Series A funding link
Plume Network announces $10 million seed round link
Fantom Foundation announces completion of new round of strategic financing of US$10 million link
US blockchain startup Alphaledger announces completion of $9.5 million Series A funding link
Decentralized governance infrastructure Dora Factory announced the completion of a new round of strategic financing of US$10 million link
Mighty Jaxx Completes $11 Million Series A+ Funding Link
Blockchain interoperability protocol Stripchain recently completed $10 million in financing link
Ethereum restaking platform KelpDAO announces $9 million in private token sale financing link
ELFi Protocol announces completion of two rounds of strategic financing totaling US$5 million link
DePIN project Blockless raises $8 million in two early-stage funding rounds link
Web3 productivity app Focus Tree announces $2 million seed round of funding link
Web3 football game FantaGoal announces $3 million in funding link
Binance Labs announces investment in decentralized derivatives exchange Aevo link
For more industry financing events, please visit crypto-fundraising.info.
