TWIC: Is this the end of Bitcoin as we know it?

Welcome to this week in crypto! The DHX migration has been completed and everyone who successfully filled out the migration form from Digi Dao got his DHX airdropped. Ethereum scores a major win with the SEC dropping its investigation. Arbitrum’s revenue soars following LayerZero’s token launch. Solana takes the lead in decentralized exchanges. Dive in to catch up on these exciting developments!

1. SEC clothed Ethereum Investigation
2. LayerZero’s ZRO Token Launch Spurs Arbitrum’s Revenue to ATH
3. Solana’s Market Share Grows, Capturing 60% of New DEX Volume
4. Bitcoin Short-Squeeze incoming?
5. DHX migration Completed

SEC clothed Ethereum Investigation

In a surprising move, the U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into whether Ether (ETH) is a security. This decision followed the SEC’s approval of spot Ether exchange-traded funds (ETFs), which some interpret as an indication that ETH is viewed as a commodity rather than a security. Consensys lawyer Laura Brookover noted that the SEC’s approval of ETH ETFs likely influenced this decision, suggesting that ETH is now classified as a commodity.

Despite this, Carol Goforth, a professor at the University of Arkansas School of Law specializing in business associations and securities regulation, clarified that ETF approval does not confirm ETH’s status as a commodity. She emphasized that the SEC’s approval of an ETF does not necessarily determine the underlying asset’s classification. The SEC’s decision to halt the investigation may indicate its belief that proving ETH is a security under the Howey test would be challenging due to the asset’s widespread trading and market-driven profitability.

The crypto industry has long criticized the SEC for inconsistent guidance on applying the Howey test to cryptocurrencies like Ethereum. Former SEC director William Hinman’s 2018 speech, stating that Ethereum was not a security due to its decentralized nature, contrasts with the agency’s ongoing scrutiny under current leadership. While the SEC’s withdrawal from the investigation is a positive development for Ethereum, the broader regulatory landscape for cryptocurrencies remains fraught with uncertainty.

LayerZero’s ZRO Token Launch Spurs Arbitrum’s Revenue to ATH

LayerZero’s launch of the ZRO token on June 20 led to a dramatic increase in Arbitrum’s daily revenue, reaching a record $3.43 million — a 16,680% spike compared to the previous day. The token launch included a controversial “donation” mechanism, requiring claimants to spend a small amount per token, which significantly increased average gas fees on the Arbitrum network. As a result, profits soared to $3.29 million on the day.

Despite the revenue boost, the ZRO token’s price has declined by 23% in the last day, now trading at $3.42 after peaking at $4.79. This surge marks Arbitrum’s highest revenue day since December 14, 2023, when it earned $2.13 million in revenue due to increased gas fees from large data transactions. LayerZero’s approach of requiring donations per token has sparked debate, with some criticizing it as an airdrop in disguise.

Solana’s Market Share Grows, Capturing 60% of New DEX Volume

Solana has made significant strides in the decentralized exchange (DEX) market, capturing 60% of new DEX volume in May. Pantera Capital attributes this growth to Solana’s monolithic architecture, which integrates hardware and software for superior performance, similar to Apple’s macOS. Solana’s market share in DEX volume has risen from 0% in early 2021 to 24% by May 2024, driven by a surge in retail activity and memecoin popularity.

The number of active addresses on Solana has increased dramatically, from 14,000 in October 2020 to nearly 1.3 million by May 2024. This increase in activity has led to a significant rise in priority fees on the network, growing from less than $100,000 per month in mid-2023 to over $60 million in March 2024. The price of Solana’s SOL token has surged by 723% over the past year, now trading at $123.

Solana’s architecture has also attracted developers of memecoins and decentralized infrastructure projects, outpacing other blockchains like BNB Smart Chain, Ethereum, and Polygon in new token creation. By May 2024, Solana accounted for 85% of all new tokens appearing on DEXs. Despite past technical challenges and network outages, Solana’s upcoming Firedancer upgrade, developed with Jump Crypto, is expected to enhance the network’s reliability and scalability, paving the way for continued growth.

Bitcoin Short-Squeeze incoming?

Bitcoin short sellers are on high alert if BTC approaches the $70,000 mark, a level it hasn’t reached in the past 12 days. According to CoinGlass data, a return to $70,000 would trigger the liquidation of a staggering $1.67 billion in short positions. Market sentiment remains bullish, with Discover Crypto CEO Joshua Jake predicting an imminent bounce due to the stacked liquidations in both Bitcoin and Ethereum.

Bitcoin’s open interest (OI), representing the total value of all outstanding futures contracts across exchanges, has dropped by 10.99% since its peak on June 7, now standing at $33.55 billion. However, this is still 82% higher compared to January 1. While a decrease in open interest might signal a weakening trend, an increase suggests growing market interest. Earlier in June, a $2 billion surge in Bitcoin’s OI over three days had traders speculating about a potential “whipsaw” effect on its price.

Crypto analyst Willy Woo has suggested that a major liquidation event is necessary before Bitcoin can reach new all-time highs. “We need a solid amount of liquidations still before we get the all clear for further bullish activity,” Woo wrote on June 19. Despite the current “boring” market phase following the Bitcoin halving on April 20, many analysts remain optimistic about a significant price movement in the near future.

5. DHX migration Completed

The DHX migration is complete! Nearly 200,000 DHX tokens have successfully found new homes in over 1,000 wallets.

Check your wallet on the moonchain network and add the DHX contract address to your metamask: 0xe477ad7a379d285337762441c1f628b6818D6d23

We extend our heartfelt thanks to our incredible community for their collaboration and support in making this migration a huge success. This seamless transfer has sparked positive enthusiasm and excitement throughout the community.