Bitcoin blasts to $90k after "red sweep" in the US
Weekly Market Update #49
Major developments for the week:
Donald Trump won the US presidency
MicroStrategy acquired 27,200 BTC, raising $2.03 billion through ATM sales
Coinbase launched cbBTC on Solana, sparking optimism for DeFi expansion
Eigenlayer introduced its new Eigen Economy model
Wintermute presented a governance proposal to enable the $ENA fee switch
The Ethereum Foundation released its 2024 report
Swift, UBS Asset Management, and Chainlink completed a pilot project bridging tokenized assets with traditional payment systems
VanEck Europe expanded its crypto offerings through a partnership with Pyth Network
BNB Chain launched a hub for real-world asset (RWA) tokenization
SonicLabs set a snapshot date for December 1
Hyperliquid’s airdrop claim ends today (November 11, 2024, at 23:59 UTC)
In a historic political comeback, Donald Trump has won the 2024 U.S. presidential election, defeating Vice President Kamala Harris. He secured 312 electoral votes to Harris's 226, capturing all seven key battleground states and marking a significant shift toward the Republican Party nationwide. With 95% of the votes counted, Republicans hold a popular vote lead of approximately 4 million, and every state showed a swing in their favor compared to the 2020 election. Republicans have also regained control of the U.S. Senate by flipping seats in West Virginia, Ohio, and Montana and are poised to control the House of Representatives, though some races remain undecided. At 78 years old, Trump becomes the oldest individual to assume the presidency and the first in 132 years to be defeated and then return to office. Kamala Harris conceded the election with a speech urging her supporters to "never abandon the struggle for our democracy," while Trump announced he would begin forming his cabinet in the coming days and weeks.
Alongside his “Make America Great Again” agenda, Trump’s campaign featured a strong commitment to supporting Bitcoin and the broader cryptocurrency sector, a stance which has been seen as a major driver for Bitcoin’s recent all-time highs. Trump pledged to establish a national strategic Bitcoin reserve, retaining government-held Bitcoin assets, primarily acquired through legal seizures, to strengthen the nation’s financial position. He also committed to bolstering domestic Bitcoin mining by increasing electricity production, aiming to reduce dependence on foreign mining operations. To foster a supportive regulatory environment, Trump proposed creating a Bitcoin and cryptocurrency advisory council to establish clear guidelines within the first 100 days of his administration and promised to replace SEC Chair Gary Gensler with a more crypto-friendly appointee. These initiatives underscore Trump’s strategic focus on integrating Bitcoin into the U.S. financial system and positioning the country as a leader in the global cryptocurrency landscape, marking a potential shift in both domestic and foreign policy that has fueled optimism and growth in the crypto market.
MicroStrategy’s Bold $42 Billion Bitcoin Investment Strategy Leading the Corporate Charge:
In other Bitcoin related news, MicroStrategy has unveiled a plan to invest $42 billion in Bitcoin over the next three years, dividing the funds equally between debt and equity. Recently, the company added 27,200 BTC for a total expenditure of $2 billion, increasing its total holdings to 279,420 BTC. This aggressive buying approach, known as the "21/21" plan, aims to take advantage of Bitcoin's appreciating value and rising institutional interest. With its significant Bitcoin reserves, MicroStrategy now stands as the largest corporate Bitcoin holder.
Coinbase Launches cbBTC on Solana: Expanding Bitcoin’s Role in DeFi:
For our final Bitcoin update of the week, Coinbase has launched cbBTC, a wrapped Bitcoin token, on the Solana blockchain to broaden Bitcoin's utility within DeFi applications. Pegged 1:1 with Bitcoin, cbBTC is integrated into multiple Solana-based DeFi platforms, including Raydium and Kamino Finance. The launch is expected to boost liquidity on Solana, offering users faster and more cost-effective transactions. This development positions cbBTC as a major contender in the wrapped Bitcoin market and strengthens Solana's presence in the DeFi landscape.
Last week the Ethereum Foundation (EF) released their 2024 report. The core findings of this report highlight the EF’s dedication to Ethereum’s long-term growth and resilience:
Foundation Structure and Values: The EF prioritizes decentralized support, focusing on empowering independent teams and new institutions within the Ethereum ecosystem rather than centralizing control. Its core values: long-term thinking, "subtraction" (reducing centralized control), and stewardship of Ethereum’s values, guide its mission.
Financial Health and Treasury Management: The Foundation’s treasury stands at $970.2 million, with 81.3% held in ETH. EF follows a conservative treasury approach, using strategic ETH sales to secure funds for future ecosystem support, especially during market downturns.
Ecosystem Growth and Institutional Support: EF has actively fostered new institutions (e.g., Argot Collective, Geodework) to decentralize ecosystem support and share responsibility for Ethereum’s health. This helps to ensure diverse, sustainable growth across the Ethereum landscape.
Spending and Community Investment: EF invested over $240 million in the past two years across a range of activities, including R&D, security, grants, developer tools, and global community-building. This spending supports protocol upgrades, enhances developer experience, and funds local and regional Ethereum initiatives.
Conflict of Interest Policy: A new conflict of interest policy has been introduced, requiring EF members to disclose large crypto holdings, angel investments, and other ecosystem-related activities to preserve the foundation’s integrity and transparency.
These findings affirm EF’s commitment to decentralization, financial prudence, and integrity, with an emphasis on supporting Ethereum’s long-term development and resilience in a rapidly evolving ecosystem.
Wintermute Proposes ENA Fee Switch to Align Token Holders with Ethena Protocol's Financial Success
Our final update of the week comes from Wintermute who has proposed activating a fee switch for the ENA token within the Ethena protocol, aiming to align ENA token holders with the protocol's financial success by directing a share of protocol revenue to sENA holders. The proposal recommends that the Risk Committee approve potential revenue allocations to sENA and create a framework to determine when these distributions would be appropriate, taking into account the protocol’s maturity. It also requests clarification from the Ethena Foundation on the current revenue flow to support informed decision-making.
The Ethena Foundation has responded positively, affirming that all future protocol revenue will exclusively benefit the protocol itself, with no allocations to external entities like Ethena Labs. They committed to ensuring that 100% of revenue earned by the protocol is directed toward its growth and stability, not to any "Labs" or service provider. Additionally, the Foundation has shown support for Wintermute's proposal, indicating plans to collaborate with the Risk Committee to establish guidelines for revenue distributions to sENA-related programs.
Community feedback has been largely supportive, with members emphasizing the importance of transparency and the alignment of protocol success with token holder value. Some participants have suggested linking staking rewards to governance participation to bolster protocol security and encourage long-term growth.
In summary, Wintermute's proposal aims to activate a fee switch for ENA, allowing sENA holders to share in the protocol’s revenue. The Ethena Foundation has agreed to this alignment, committing to a protocol-focused revenue approach and collaborating with the Risk Committee to set parameters for revenue sharing. Community sentiment has been favorable, underscoring the desire for transparency and value alignment between the protocol and its stakeholders.
This weekly round-up is brought to you by:
Disclaimer: This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.