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Market Overview 📉
The week kicked off with a slow bleed on tariff fears, which quickly escalated into a full-blown sell off, amidst fears of a trade war.Bitcoin (BTC) plunged from the weekend highs of 105K down to 91K, before gradually recovering into the week, settling in the 95-98K range. The total crypto market cap fell off this week, dropping more than 12% to $3.260T this week from $3.708T the week before.
Bitcoin (BTC) ended the week down 7.78%, while Ethereum (ETH) suffered a much deeper drop, closing at 17.88% down from the week prior.
Daily liquidations on both sides spiked early in the week, with the long side taking the brunt of the liquidations. While the official liquidation figures are around $2B, many estimate the actual total figure to be closer to 5x higher at around $10B. Funding rates, unsurprisingly, have continued to fall despite already being in the low ranges, signalling fatigue in the markets and a wipe of leverage in the system.
📌 The US FDIC plans to revise crypto guidelines, aiming to allow banks to engage in certain crypto activities. - Link
📌 US Senator, Bill Hagerty, introduces the GENIUS bill in the Senate, designed to establish regulatory clarity for US stablecoins, licensing requirements for issuers and more. - Link
📌 Michael Saylor’s MicroStrategy rebrands to Strategy, adopting the classic Bitcoin orange color and a new logo sporting Bitcoin’s stylized “B” logo. - Link
Why does it matter?
Despite expectations of tariffs within Trump’s term, many market participants were caught ill-positioned by the timing of the tariffs, which were not expected to be signed till later in the quarter. With the sudden and rapid move, the markets saw the largest dollar-value crypto market liquidation event ever, even surpassing FTX and the Luna crash. Nevertheless, progress made with Canada and Mexico helped to alleviate fears of a full-blown trade war for now, although market participants remain cautious on Trump’s next move. Traditional markets fared much better, with the S&P 500 down only 0.18% across the week after falling an initial 2.87% on the news. The Nasdaq actually ended the week higher, up 0.54%, after the initial 3.33% move downwards.
The increased volatility pushed Bitcoin dominance higher, while altcoins continue to bleed against the market. Bitcoin dominance broke out to a new high of 64%, before retracing to the 61% range after altcoins bounced off the lows.
Most altcoins suffered huge losses this week, with the majority down even further from the week prior. Notable outperformers include Cosmos-based EVM L1, Kava (KAVA), DeFi 2.0 darling, Olympus DAO (OHM), DeFi lending platform, Clearpool (CPOOL) and RWA L1, Mantra (OM).
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Narrative of the Week 📰
The enactment of Trump’s promise of tariffs took the spotlight this week, with tariffs on Canada, Mexico and China, with the promise for tariffs on the EU as well.
📌 Trump signs 25% tariffs on Canada and Mexico, and 10% tariffs on China, on Friday evening, sparking an immediate reaction from the markets. - Link
📌 Trump also promises tariffs on the EU to come, resulting in the EU threatening retaliation against US Big Tech if the tariffs were to be signed. - Link
Why does it matter?
Trump’s first term was a volatile time for the markets, with back-and-forth tariffs between the US and China. However, this time, tariffs were levied on Canada and Mexico as well, some of the US closest trading partners and allies. The move took the market by storm, sending shockwaves through both crypto and traditional markets as markets attempted to price in retaliation and further escalation. While some of the tariffs were paused after some discussion, the market remains hesitant, uncertain of Trump’s next move.
Major Project Updates 🗓️
📌 Stablecoin issuer, Tether, announces plans to bring USDT to Bitcoin and the Lightning Network. The move comes shortly after their announcement of a record-high $13B in profits in 2024. - Link
📌 Alt-L1 and perpetual DEX, Hyperliquid, announces an upgrade to the HyperEVM, which utilizes a dual-block architecture to separate between smaller, faster blocks and larger, slower blocks. - Link
📌 Real-time blockchain, MegaETH, announces the upcoming launch of their public testnet on 6th March 2025. - Link
📌 EVM L1, Berachain, releases their long-awaited mainnet, just two days after the release of their whitepaper, named “The Honeypaper”. - Link
📌 RWA protocol, Ondo Finance, announces Ondo Chain, a new L1 blockchain designed with RWAs in mind, with leading traditional finance advisors including Franklin Templeton, WisdomTree and more. - Link
📌 AI data layer, Grass, announces their Sion upgrade, which is designed to optimize web data retrieval at scale, allowing the scraping of 1 petabyte of data per day. - Link
Why does it matter?
Tether has long been the dominant stablecoin issuer in the crypto space, doing especially well after USDC’s crisis during the collapse of the Silicon Valley Bank. With Tether’s record high profits in the past year and their expansion to Bitcoin, Tether’s reach only continues to increase. Additionally, Tether has also made an announcement this week on their foray into the AI space, with their own AI SDK platform launching in the near future.
DeFi Brief 🏦
📌 Trump’s DeFi project, World Liberty Finance has been reaching out to blockchains for “token swap” deals where the teams purchase a minimum of $10M of the WLFI token with a 10% fee and World Liberty Finance will acquire the same amount of the blockchain’s native token. - Link
📌 RWA protocol, Ondo Finance, announces Ondo Nexus, an initiative designed to unlock liquidity for tokenized Treasuries through OUSG’s instant minting and redemption. OUSG’s backing will now include Treasuries from Franklin Templeton, WisdomTree, Wellington Management and Fundbridge Capital. - Link
📌 Uniswap releases Uniswap V4, introducing customisable hooks which enhances DeFi capabilities and increases the possibilities for applications built on Uniswap V4. - Link
📌 Leverage DeFi protocol, f(x) Protocol encountered an RPC sync error, which resulted in 1,979 wstETH worth of positions liquidated. F(x) Protocol will be airdropping 1,000 FXN tokens to the affected users as compensation. - Link
📌 DeFi suite, Frax Finance, introduces Borrow Automated Market Maker (BAMM), which allows users to borrow against their liquidity pool positions for up to 3x leverage, only on the Fraxtal Chain. - Link
📌 ETH staking protocol, Lido Finance, teases the upcoming launch of Lido V3. - Link
📌 EVM wallet, MetaMask, releases gasless swaps, enabling users on Ethereum mainnet to pay for swaps using the token they are swapping with, even if they do not have ETH in their wallet. - Link
Why does it matter?
Thus far, the purchases of cryptocurrencies via Trump’s World Liberty Finance have been the subject of speculation from investors and traders alike, after his initial purchases of WBTC, ETH and several ETH DeFi tokens. With the announcement that the project will be engaging in a “token swap” with willing blockchains, the move reduces the value of each purchase as each purchase feels more transactional in value rather than out of World Liberty Finance’s support of the project or potential synergies in the DeFi space.
Meme Coins 🚀
📌 The PAIN memecoin presale raises ~$40M in SOL in just 48 hours, before deciding to refund 80% of deposits, to use the remaining 20% for liquidity and project development. - Link
📌 Solana memecoin, dogwifhat (WIF), gives a long-awaited update on the “WIF Sphere funds”, funds raised to put the memecoin on the Sphere, citing difficulty in organization due to a lack of corporate entity behind the memecoin. - Link
Fundraises 💰
📌 Zero-knowledge proof generation project, Irreducible, raises $24M in a Series A funding round led by Paradigm and Bain Capital Crypto, with support from Fenbushi, L2 Iterative Ventures, Robot Ventures and more. - Link
📌 Bitcoin Ordinals project, Taproot Wizards, raise $30M in a post-seed round, led by Standard Crypto, with participation from Cyberfund, Collider Ventures, Geometry and more. - Link
📌 Gaming backend infrastructure project, Beamable, raises $13.5M in a Series A funding round led by Bitkraft Ventures, with support from Arca, Solana Foundation, Permit Ventures and more. - Link
📌 Token trading infrastructure project, Reservoir, raises $14M in a Series A funding round led by Union Square Ventures, with other investors including Variant, Archetype, 1kx, Delphi Digital and more. - Link
📌 Real-time blockchain, MegaETH, introduces “The Fluffle”, a collection of 10,000 soulbound NFTs which will mint at 1 ETH each, entitling holders to a portion of the MegaETH token supply. - Link
Airdrops Abound 🎁
📌 Solana NFT marketplace, Tensor, opens claims for their S4 airdrop, allowing eligible users to claim an additional 25% if they claim via Vector, their new memecoin trading platform. - Link
📌 EVM L1, Berachain, opens claims for the BERA token airdrop, distributing 15.8% of total token supply in their genesis drop, with 6.9% going to Bong Bear NFT and rebased NFT holders. - Link
📌 Solana restaking layer, Solayer, announces the tokenomics for their LAYER token, with 12% of the token supply to be allocated to the Genesis airdrop. - Link
Tweet of the Week 📝
Source: @jon_charb
Trump is supposed to be bullish for risk assets…right?
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