Introduction: 

On April 10th, the core inflation data of the US CPI came in higher than expected, leading to a significant weakening of the expectation for a rate cut by the Federal Reserve. Additionally, the escalation of geopolitical tensions between Iran and Israel over the weekend further contributed to Bitcoin's drop to nearly $60,000, with altcoins following suit, experiencing a general decline of over 30%.

1. Investment and Financing Observation

Last week, the crypto market saw a total of 27 investment and financing events, representing a decrease of 35.7% compared to the previous period. However, the total funding amounted to $440 million, marking an increase of 92.9% year-on-year.

In the DeFi sector, there were 7 investment and financing events announced last week.Among them, Bitcoin DeFi developer Automated Liquidity Exchange (ALEX) completed a $10 million strategic financing round, with Spartan Capital leading the investment.

In the blockchain gaming sector, there were 2 investment and financing events announced last week.Among them, Web3 game studio Sortium completed a financing round of over $4 million, with participation from ARK Investment Management and others.

In the infrastructure and tools sector, there were 9 investment and financing events announced last week.Among them, Monad Labs completed a financing round of $225 million, with Paradigm leading the investment and participation from Electric Capital, SevenX Ventures, and others.

In other areas of Web3/cryptocurrency, there were 8 financing announcements last week.Among them, Bitcoin mining equipment manufacturer Auradine completed a $80 million Series B financing round, with participation from StepStone Group and others.

From a month-on-month perspective, the number of investment and financing transactions in the cryptocurrency market experienced a significant decline. However, the total funding size surged rapidly. In terms of specific sectors, this week's investment and financing amount continued to be concentrated in the infrastructure sector. Electric Capital stood out as particularly active, mainly focusing on infrastructure and DeFi areas.

AboutMonad
Monad is a Layer1 blockchain network positioned to challenge competitors like Solana and Sui. Its goal is to accelerate the disruptive power of decentralization by achieving 100 to 1000 times efficiency, enabling more complex applications and broader adoption.

About Mezo
Mezo is a Bitcoin Layer2 solution that utilizes the idle Bitcoin holdings of holders through its "HODL Proof" incentive program. The longer the holding period, the higher the contributor's "HODL Score Multiplier" becomes. Users can access applications that promote the use of Bitcoin tokens, thereby driving a circular Bitcoin economy rather than just "savings."

AboutUplink
Uplink is a DePIN project aimed at reducing reliance on traditional telecommunications providers. It incentivizes users and businesses to participate in and utilize the network through token rewards. Uplink prioritizes initial distribution by establishing partnerships with large enterprises.

2. Industry Data

Ethena Experiences Its First Negative Premium.

DeFiLlama data: The stablecoin protocol Ethena experienced its first negative revenue this week, amounting to $1.05 million. The negative revenue was mainly generated on April 11th, with $1.38 million in negative revenue recorded on that day. Additionally, the current issuance of Ethena's USDe is $2.359 billion, and the sUSDe APY has decreased to 17.2%.

The underlying logic of Ethena involves earning ETH staking rewards while simultaneously opening a 1x short position on a centralized exchange (CEX) with the same volume as its spot holdings to earn funding fees. However, during last week's downward trend, the funding rate turned negative, requiring the protocol to pay fees to the CEX to maintain its contract positions, resulting in negative revenue. Therefore, whether USDe can maintain and consolidate its position in the crypto market will require further validation over time.

The ETH Lending Market Sees Liquidations Reaching an All-time High.

According to The Block data, the recent market crash has intensified loan liquidations, with the ETH lending market witnessing the highest monthly liquidation volume in years. Aave's liquidation amount is close to $80 million, while Compound's liquidation amount is close to $50 million, with these two protocols comprising the majority of liquidations. However, despite the downturn and liquidations, there seems to be no significant impact on market sentiment, as inflows of funds continue.

CoinGlass data shows that over the past four days, as Bitcoin has fallen from its recent all-time high, the total liquidation amount in the cryptocurrency market has approached $1.7 billion. The majority of these liquidations are long positions. The last significant month of liquidations was in June 2022, following the collapse of the $40 billion Terra ecosystem, which amounted to $400 billion.

Only 6 Tokens Have Outperformed BTC in Terms of Price Appreciation.

According to TradingView data, as of April 15th, among the top 50 tokens by market capitalization, only 6 tokens have outperformed BTC in terms of price appreciation. They are DOGE, SHIB, STX, BNB, MNT, and RNDR. Among these, DOGE is the top-performing altcoin in the top 50, rising from $0.09 on January 1st to $0.16 at the time of publication, marking a gain of over 77%.

In this current market cycle, although there have been several sectors and narratives briefly dominating the spotlight, the leading trends are still the BTC spot ETF and Meme coins. While this may fuel greater expectations for narratives in various sectors, it's more advisable for investors to approach the heat and trends of these narratives rationally.

BTC has seen a growth of over 50% this year, rising from $44,100 on January 1st to its current price of $66,000.

BTC's market dominance has risen to a new high since April 2021, currently standing at 55.35%. Ethereum's market dominance is currently reported at 16.56%.

3. VC Holdings

Note: The above data is from https://platform.arkhamintelligence.com/ , and the statistical time is 17:00 on April 15, 2024 (UTC + 8).

4. This Week's Focus

April 15th

April 16th

April 17th

April 18th

5. Conclusion

Last week, despite a significant increase in investment and financing activities, the overall market witnessed a sharp decline and volatility, which directly affected the lending and derivatives markets. Ethena even experienced its first negative premium.

This week, with the halving approaching and the Hong Kong Securities and Futures Commission approving multiple fund institutions for BTC and ETH spot ETFs, the bullish sentiment continues to be strong. This is evident in the significant premium of USDT to USD (approximately 2.92%) and the rapid and pronounced recovery trend after the decline, indicating strong buying pressure in the market.

Additionally, the market trend is highly likely to continue to be dominated by ETFs in the future, especially after the approval of spot ETFs in Hong Kong. The support from Asian capital and institutions will be another important factor. The probability of the approval of a US ETH spot ETF in May is also increasing. However, it's worth noting that apart from MemeCoin, there haven't been signs of dominant narratives emerging in various sectors influencing this market cycle. Therefore, investors are advised to pay close attention and analyze the driving forces behind the current market trends rationally.

Note: All of the above opinions are not investment advice. If there are any inappropriate points, please feel free to leave a message to correct them.

Welcome to follow and join the MIIX Capital community to learn more about cutting-edge information:
Twitter EN: https://twitter.com/MIIXCapital
Telegram EN: https://t.me/MIIXCapitalEN
We welcome job applicants to send applications to [email protected].
Positions available: Investment Research Analyst/Operations Manager/Visual Designer