Crypto Market Liquidity

• Crypto market has seen a decrease in liquidity due to unwinding of hidden leverage and heightened counter-party risk
• Binance has become the leading crypto exchange with over 50% of global trading volume
• Coinbase is the dominant exchange for USD pairs and has established itself as the institutional-friendly exchange
• Despite the relative shift in the inter-exchange landscape, the aggregated trend of liquidity remains down due to loss of trust in centralized counterparties
• Decrease in liquidity has resulted in increased slippage and declining bid-ask spreads
• The events in the crypto market combined with global macro conditions have had a negative impact on global volume and measures of liquidity
• As the market stabilizes and new safeguards are put in place, liquidity is expected to return as trust is regained

Market Update

• The US Treasury and Fed announced measures to rescue the banking system, including the Bank Term Funding Program (BTFP) and a guarantee of all depositors at SVB and Signature.

• The KBW Bank Index suffered a 12% loss in Monday trading, and the end of the rate-hiking cycle was moved forward by months.

• The crisis is being monitored by metrics such as the spread between onshore and offshore dollar rates (FRA/ OIS) and the amount of money needed via the Federal Home Loan Banks.

• Bitcoin showed strength during the crisis, increasing by 20% and proving its usefulness as a source of liquidity and risk mitigation.

• Today: Consumer Price Index (CPI), with expectations of 6% YoY inflation

• The recent banking crisis has led to expectations that the Fed will stop increasing rates and may even start reducing them.

Filecoin (developments to observe)

• has enabled Ethereum-style smart contracts as part of its plan to disrupt legacy cloud computing and data storage platforms like AWS
• Filecoin Virtual Machine (FVM) upgrade allows decentralized applications to be deployed on Filecoin, similar to Ethereum
• FVM is compatible with Ethereum, so existing Ethereum applications can transition to Filecoin easily
• Filecoin addresses Ethereum's data storage limitations
• Storage providers in Filecoin function like miners in Bitcoin and receive compensation in FIL tokens

-> Smart contracts on Filecoin enable new use cases such as Data DAOs, on-chain data analysis, and perpetual storage
-> DeFi will also become possible on Filecoin, making the network more economically sustainable.

Arbitrum (Update)

• ETH layer 2 scaling network
• announced the launch of DAO governance for the Arbitrum One and Arbitrum Nova networks
• launch of $ ARB Token
• $ ARB token will be used for protocol governance -> the power to control key decisions at the core protocol level
• claiming begins March 23rd
• Arbitrum Obit -> will allow third-party apps & protocols to build new "layer 3" blockchains based on Arbitrum's infrastructure


IMPORTANT: Be careful many scammers will be on the way. Use only the official site/ twitter for information

Market Update

• This week saw a bullish rally despite negative economic events such as the USDC depeg, bank failures, and the ongoing Credit Suisse crisis
• The "bad news is good news" phenomenon is driving the market, as negative news makes Fed interest rate hikes less likely and boosts risk assets
• The Fed might continue its course of interest rate hikes, but there is speculation around potential pivots
• Factors driving the BTC and ETH rallies are speculative, and continued rate hikes could dampen them
• Watch the Fed's FOMC meeting on March 22-23 for clues about future actions
• Bullish factors: demise of banks, potential liquidity influx into crypto, past stimulus packages, and lower expectations for future rate hikes
• Bearish factors: recent banking crisis not as severe, banks stepping in to mitigate fallout, and no significant disruptions to the wider market


Interest rates likely to remain elevated, with central banks being cautious about cutting rates too quickly.
-> Be ready to revise expectations based on the Fed's signals next week.

Maker (real-world asset vault)

• Maker governance approved a $750 million increase in its Monetalis Clydesdale real-world asset vault
• The vault is currently comprised of U.S. treasury bonds at an initial debt ceiling of $500 million
• Maker plans to use $750 million of USDC from the PSM to acquire the RWA collateral, diversifying DAI's backing away from alternative stablecoins
• MIP65 is Maker's largest RWA vault, providing nearly $8.3 million in profits since asset acquisition
• Raise the portion of Maker’s balance sheet allocated to RWA from 11% to 24%
• Over half of Maker's revenue is now coming from RWA income, and by more than doubling the largest RWA vault, Maker is set to further increase revenue from its largest income source

-> RWAs become a sustainable source of revenue in DeFi
-> RWA tokens with low MC (possible opportunity mid-longterm)

DefiLlama (Current situation)

• DefiLlama is the largest TVL aggregator for DeFi
• The DefiLlama team has made the decision to initiate a fork of the Defillama platform
• There is an ongoing attempt to launch a token that does not align with the team's vision and objectives
• The individual in control of Defillama's Twitter account and domain has taken the decision to launch the token despite unanimous opposition from the team

-> As a result, few team members have determined that the best course of action is to fork DefiLlama
-> Situation is still uncertain, be careful

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Did you miss the Arbitrum Airdrop?
Don't worry we will show you OPPORTUNITIES how to PROFIT from the Arbitrum Airdrop HYPE and much more in our new issue of the Crypto Bullets TLDR!

Crypto Bullets TLDR is available at @cryptobullets_bot

Avail Blockchain (worth watching)

• Is a modular, protocol-agnostic blockchain that prioritizes data availability
• Allows developers to build customizable and scalable applications
• Is led by Anurag Arjun (Polygon co-founder)
• Started at Polygon Labs
• Testnet is Live

-> Avail will create a new not-for-profit foundation -> hand over governance to the community? (Token as a reward ?)
-> Polygon has managed to get some of the biggest names in the space for partnerships
-> Avail could benefit from this in the future

CBDCs (digital form of a country's fiat currency)

• Global market uncertainty has highlighted limitations of fiat currency and increased interest in central bank digital currencies (CBDCs)
• Many nations, particularly in Asia, are researching and piloting CBDCs
• Asian countries focus more on wholesale CBDCs, which reduce cross-border payment friction and facilitate more efficient secondary markets for government securities
• Western democracies, including the U.S., Europe, and Canada, are increasingly adopting CBDCs as well
• CBDCs potentially challenge the U.S. dollar's dominance in international trade
• Debate around CBDCs includes concerns about individual privacy, financial autonomy, and government involvement in personal finances
• Despite these debates, many countries continue to develop CBDCs with limited public resistance

Market (Update) - FOMC in 30 min

• FOMC rate hike/cut decisions today at 2 pm ET, with 85% odds for a 25bps rate hike; expect market volatility during the press conference
• Russia to use Chinese yuan instead of USD for trade with Asia, Africa, and Latin America, hinting at a slow shift in global reserve currency dynamics
• ARB airdrop approaching, with OTC markets likely creating a short-term price floor and reducing potential selling pressure upon launch (tomorrow)
• Arbitrum active addresses surge in anticipation of ARB airdrop, with DAO treasuries receiving 1.1% of the supply
• Sushi and Head Chef Jared Grey served with an SEC subpoena, prompting a proposal for a Sushi DAO Legal Defense Fund, which may cause bearish price action for Sushi in the coming days

---------

ImmutableX

• Immutable partners with Polygon to launch Immutable zkEVM, a L2 scaling solution for NFT gaming
• zkEVMs offer compatibility with Ethereum Virtual Machine (EVM), enabling easy migration of smart contracts to ZK-style scaling
• Immutable zkEVM will optimize web3 game development, providing excellent UX to players and flexibility for developers
• The new L2 could become the dominant gaming L2 in the Polygon ecosystem and the broader cryptoeconomy
• $ IMX token will be upgraded to serve as the gas token for transaction fees on the new L2
• Several games already operate within the Immutable ecosystem, providing a rich gaming scene ahead of the zkEVM launch

Regulation (Update)

• Coinbase potentially facing legal battle with SEC
• Alleged violations of US securities laws
• Lawsuit could set crypto industry precedent
• Clarification on digital assets as unregistered securities possible
• Coinbase Chief Counsel and CEO welcome court defense
• SEC sues Justin Sun, founder of Tron blockchain
• White House report questions digital assets and blockchain value
• Calls for greater regulation of crypto sector
• CBDCs and NFTs excluded from White House definition of crypto assets
• Potential benefits acknowledged in corporate and government DLT experiments


-> Not your keys not your money. Keep only what is necessary on exchanges.

zkSync Era Mainnet Alpha

• zkSync Era's zkEVM Mainnet is NOW open for everyone to use
• Has undergone extensive testing, security audits, public contests, and bug bounties to ensure its security
• Will remain in Alpha while being battle-tested in a live production environment
• zkEVM is designed to be future-proof, with features like:

-> Native account abstraction
-> Powerful LLVM compiler
-> Data compression
-> Hyperscalability (L3)

• zkSync Era aims to enable mass adoption of cryptocurrencies by providing a secure, scalable, and user-friendly solution


-> It might be profitable to test zkSync (airdrop). But remember, it is still the alpha version.

Opportunity (Insider Info)

There are rumors that METAMASK plans to take a snapshot of users' transactions on March 31, 2023, for their upcoming $ MASK drop scheduled to launch in Q1 2024.

While this information is not confirmed, it may be worthwhile to prepare accordingly.

To be eligible, users must have completed four transactions with a trading volume of $1,000 or more.

Please note that transactions between wallets will not count, and swapping or bridging must be done through METAMASK and not other services.

To those who seized the opportunity last week and utilized our information, a massive congratulations!

This week, the action continues!

We're unveiling projects worth watching! With low market caps and a booming narrative for the ecosystem, you don't want to miss them!

Market overview and everything important from this week.

Our NEW issue of the Crypto Bullets TLDR is available at @cryptobullets_bot

Market Update

Digital Asset Fund Flows - (weekly report)

• $160M inflows into digital asset investment products, largest since July 2022
• Turnaround after 6 weeks of $408M outflows
• Inflows driven by concerns about traditional finance sector stability
• US $69M, Germany $58M, and Canada $26M show notable inflows
• Bitcoin sees $128M inflows, considered a safe haven by some clients
• Short-bitcoin records $31M inflows
• Ethereum suffers $5.2M outflows for 3rd consecutive week, possibly due to Shanghai upgrade
• Most notable altcoins inflows: Solana $4.8M, Polygon 1.9M, and XRP $1.2M

__________

This week

Monday
• US - Dallas Fed Manufacturing Index (MAR)
• Germany - Ifo Business Climate (MAR)

Tuesday
• US - CB Consumer Confidence (MAR)
• US - Wholesale & Retail Inventories (FEB)

Wednesday
• US - Pending Home Sales (FEB)
• Eurozone - ECB Meeting

Thursday
• US - Jobless Claims
• Germany - Inflation Rate (MAR)
• China - NBS Manufacturing PMI (MAR)

Friday
• US - PCE Inflation (FEB)
• US - Personal Income & Spending (FEB)
• Canada - GDP (JAN)
• Eurozone - Inflation Rate (FEB)

Bitcoin & Zero-Knowledge Proofs (ZKPs)

• ZeroSync Association (28th March 2023 - Switzerland)
• Goal: bring ZKPs to Bitcoin
• ZeroSync has created a prototype that can verify Bitcoin consensus rules using zk-proofs (2022)
• Users can validate Bitcoin's network state without downloading the blockchain or trusting third parties
• ZeroSync will develop and maintain open-source software for ZKPs on the Bitcoin blockchain
• ZeroSync SDK will allow developers to easily generate custom validity proofs for their use cases
• Initial focus is on fast initial block download (IBD) and implementing the first full proof of Bitcoin consensus

-> The technology aims to improve decentralization guarantees and enable new applications for Bitcoin
(ZeroSync received sponsorship from Geometry Research and StarkWare Industries)

Sound .xyz - Sound Swap

• Sound Swap, a web3 music project, combines DeFi and NFTs to create a new way for musicians to reach audiences and optimize earnings
• It uses a bonding curve approach, allowing for ongoing liquidity for NFT drops
• Musicians earn 95% during the primary sale phase, secondary mints 7.5% to the artist, 2.5% to Sound, and 90% to the drop's liquidity pool
• Sound Swap simplifies user experience for both creators and collectors while optimizing artist reach and earnings
• Sound Swap could become a replicable distribution model for various types of collectibles beyond music

-> There was no music NFT hype yet
-> Still no real competitor to a web2 solution
-> The developments should be watched, platforms like Spotify are exploring ways to connect to the web3
-> Early adopter opportunities could arise

Bitcoin network

• Bitcoin network hash rate reaches all-time high of 350 EH/s, up 36.7% YTD
• The surge in hash rate is due to more machines coming online at profitable price points
• Public miners such as Marathon Digital Holdings, Riot Platforms, and Cipher Mining Technologies have significantly expanded
• Miner rig imports into the U.S. in January may have contributed to the hash rate expansion
• Public miners make up approximately 20% to 25% of total network hash rate
• Three-month hash rate growth is at a staggering 53%
• Mining stocks have outperformed bitcoin in 2023 due to factors such as volatility and market capitalization
• Hash price is used as a gauge for investment into the mining market


ps.: Congratulations to all CryptoBullets buyers, who used the information from the last sunday report and bought RDNT before it was on Binance.

The report is still online and there is more to discover: @cryptobullets_bot

Get it before it's gone next Sunday.

Kava Blockchain (Update)

• New DeFi applications on Kava have caused deposits to soar by almost 80% to $350M since March 1, leapfrogging Solana in (TVL)
• The surge is due to new applications Mare Finance, a lending protocol, and Équilibre, a decentralized exchange
• Mare Finance has driven over 80% of Kava's TVL growth, with users depositing over $130M since the beginning of the month
• Mare Finance can earn $280,000 worth of KAVA per month starting in April through the Kava Rise Incentives Program, which will be distributed among MARE stakers
• The success of these applications is a vindication of the ve(3,3) model and has revived the entire EVM chain of Kava

Little reminder for tomorrow

Avoid being tricked by April Fool's News tomorrow.

We saw that last year and the year before.
It is always the same.

Prices pump and dump even faster.