Top News
▌Tether Holds 25% Stake in BitDeer, Becoming Second Largest Shareholder
According to a document disclosed by the US Securities and Exchange Commission, Tether, the issuer of USDT, currently holds 25% of the shares of BitDeer, a Bitcoin mining company. This makes the company behind Tether the second largest shareholder of BTC mining shares, following only Victory Courage Ltd., reportedly registered under the name of Wu Jihan.
▌Telegram CEO Announces Launch of Telegram Stars, Supporting Digital Service Payments via Mini Programs
Telegram CEO Du Rove announced on the Telegram channel the launch of Telegram Stars, a way to pay for digital services through mini programs. Mini programs can accept payments for digital services and make in-app purchases on Android and iOS, such as Notcoin, without the need for installation. Developers can use TON to extract Stars through Fragment and further promote their apps on Telegram using Stars under favorable conditions. When users purchase Stars from Apple and Google, a 30% commission fee is deducted, but Telegram subsidizes ads purchased using Telegram Stars.
Market Update
As of the time of writing, according to Coingecko data:
BTC recent trading price is $70,772.40, with a 0.5% change in the last 24 hours;
ETH recent trading price is $3,811.99, with a 1.5% change in the last 24 hours;
BNB recent trading price is $709.72, with a 0.4% change in the last 24 hours;
SOL recent trading price is $170.55, with a 1.9% change in the last 24 hours;
DOGE recent trading price is $0.1602, with a 2.0% change in the last 24 hours;
XPR recent trading price is $0.5217, with a 0.9% change in the last 24 hours.
Policy
▌Hong Kong Police Intensify Crackdown on Illegal Gambling Promotion, Focus on Cryptocurrency Betting
With the European national cups approaching, Hong Kong police are stepping up efforts to combat illegal online gambling, noting an increase in websites accepting cryptocurrency bets. Police point out that the anonymity and convenience of cryptocurrencies increase the risks of illegal gambling, but both cryptocurrencies and stored value payment tools are under surveillance. Police will crackdown on related crimes under the charge of money laundering and cooperate with Mainland China and Macau. Police will conduct outreach in various districts, including distributing flyers in bars.
Police data shows that last year, there were over 790 operations against illegal gambling, leading to the arrest of around 6,100 people. In the first three months of this year, the police have investigated 99 related cases, a decrease of nearly 30% compared to the same period last year. Police also note that the average age of first-time gamblers has dropped to about 18 years, and the widespread use of the internet has made young people more exposed to illegal gambling.
▌New York Attorney General Sues NovaTech for $1 Billion Cryptocurrency Fraud
New York Attorney General Letitia James has filed a lawsuit against the cryptocurrency company NovaTech and its founders Cynthia and Eddy Petion, accusing them of being involved in a $1 billion fraud. The lawsuit alleges that over 11,000 New York residents lost millions of dollars through investments in NovaTech. NovaTech is accused of being a Ponzi scheme and falsely reporting its licensing and registration status. The company collapsed in May 2023.
Petion’s couple previously founded AWS Mining, which was also accused of being a Ponzi scheme. James seeks to recover illegal profits and prohibit them from operating in New York. Currently, the NovaTech website is still operational, claiming that company funds were lost in a data breach and are in the process of recovery.
Blockchain Applications
▌zkSync: v24 Upgrade Underway, Funds to be Migrated to New Bridge Contract
According to an announcement from the zkSync developer account on X platform, the v24 upgrade has commenced, with a new L1SharedBridge being a new L1 contract. As a result, funds on the zkSync Era will be migrated from the old contract to the new one, ensuring the security of users’ funds.
▌LayerZero CEO: Witch Hunt Not Yet Over
LayerZero CEO Bryan Pellegrino posted on X platform, addressing those inquiring about the status of the witch hunt, along with an image stating, “The job is not yet done.”
▌Alchemy Launches Rollup Tool to Help Developers Create Custom Layer2 Solutions
Web3 infrastructure company Alchemy has released a new Rollup tool designed to assist developers in creating their own blockchain. This tool enables developers to easily build and deploy custom Layer 2 chains, improving development efficiency and simplifying the application of blockchain technology. Alchemy states that the release of this tool will drive the widespread adoption of blockchain technology, particularly in the decentralized finance (DeFi) and other Web3 areas.
Cryptocurrency
▌Kraken Plans to Raise Over $1 Billion Funding Before IPO
According to sources familiar with the company’s plans, cryptocurrency exchange Kraken is in negotiations for pre-IPO funding. Kraken is seeking to raise over $1 billion in funding, with completion expected by the end of this year. Rumors about Kraken’s listing have been circulating for the past few years. The company has been dealing with charges brought by the US Securities and Exchange Commission (SEC) last year, accusing it of operating an unregistered platform and mishandling customer funds. A spokesperson declined to comment on the financing but stated, “We have always been exploring strategic paths to fulfill Kraken’s mission: accelerating the global adoption of cryptocurrencies. We will remain focused on investing in this goal.”
▌Analysis: Power Contracts and Lower Valuations Could Catalyze Consolidation in Cryptocurrency Mining Stocks
On Thursday, Bitcoin mining stocks outperformed other cryptocurrency-related stocks, with several industry acquisition offers sparking market attention on who might be the next target. Recently, one of the largest miners, Riot Platforms (RIOT), initiated a hostile takeover of peer Bitfarms (BITF), while artificial intelligence company CoreWeave proposed acquiring another large miner, CoreScientific (CORZ).
Although Bitfarms and CoreScientific both rejected the acquisition offers, these attempts remind investors that the industry may be ready for consolidation. B. Riley analyst Lucas Pipes suggests that power contracts and lower valuations could be catalysts for initiating a phase of consolidation in mining stocks. In a report, he wrote, “We believe the optimistic outlook in the power market may catalyze increased M&A activity this year, especially given the substantial differences in valuations.”
▌MicroStrategy Faces Highest Institutional Short Position, Strongest Bearish Sentiment
MicroStrategy (MSTR) faces a net short position of approximately $6.941 billion, representing 23.14% of its market value, indicating strong bearish market sentiment or widespread hedging demand. This high ratio could lead to increased market volatility and even potential short squeezes.
In contrast, Coinbase (COIN) with a market value of about $62 billion holds a net short position of $1.129 billion, representing 1.77% of its market value, showing relatively mild bearish sentiment. Marathon Digital Holdings (MARA) with a market value of about $6 billion has a net short position of $101 million, representing 1.68% of its market value.
These net short positions may be part of strategic hedging, such as Kerrisdale Capital simultaneously shorting MSTR and longing Bitcoin.
Fintel’s data highlights the highest net short position faced by MicroStrategy among the three companies.
▌FTX Creditors Oppose Restructuring Plan, Citing Tax Issues with Cash Payments
A group of FTX creditors led by Sunil Kavuri has filed opposition to the bankruptcy trustee’s proposed restructuring plan. Creditors argue that the plan does not pass the best interest test, contains provisions that are not in line with estate interests, and overlooks property rights issues.
Creditors state that cash payments would require customers to pay taxes on the received cash, adding to the burden. They suggest adopting in-kind payments to avoid tax issues.
Additionally, creditors request FTX to update the disclosure statement for the Internal Revenue Service (IRS). Under the settlement plan, the IRS will receive a $200 million priority claim within 60 days of approval, and an additional $685 million secondary priority claim will be paid after full customer repayment.
FTX’s restructuring plan includes compensating creditors with claims below $50,000 at 118%, while other non-government creditors will receive full claims and up to 9% interest compensation.
▌US Prosecutes Three Individuals in Evolved Apes NFT Scam Case, Involving $3 Million
The US Attorney’s Office for the Southern District of New York has charged Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan in connection with the 2021 Evolved Apes NFT scam. The project promised to develop a video game, but after fundraising, the anonymous developer Evil Ape disappeared, transferring 798 Ether (approximately $3 million). This case is seen as part of a rug pull scam, where developers raise funds through NFT or token sales, then suddenly shut down the project and disappear. Similar scams since 2011 have resulted in over $14.5 billion in losses.
▌Total Value Locked in DeFi Protocols Currently at $109.9 Billion
According to DefiLlama data, the total value locked (TVL) in DeFi protocols across the network is currently $109.9 billion. Among them, Lido has the highest TVL at $36.6 billion, with a 1.27% increase in the last 24 hours; EigenLayer ranks second at $20.1 billion, with a 1.88% increase in the last 24 hours; and AAVE ranks third at $13.2 billion, with a 0.71% increase in the last 24 hours.
Important Economic Developments
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What is Liquidity Staking?
Liquidity staking allows stakers to maintain the liquidity of their staked tokens by using alternative tokens, enabling them to earn additional returns through DeFi protocols. Liquidity staking allows cryptocurrency holders to participate in staking without relinquishing control over their holdings. This changes the way users engage in staking. Projects like Lido have introduced liquidity staking, tokenizing staked assets in the form of tokens and derivatives.
