Weekly Institutional Insights — Ether Spot ETF Sees Hope of Approval; Outperformers: ONDO, ENS, EDU

May 27, 2024: Broader equity markets continued to test all-time highs, particularly after NVIDIA impressed the market with its quarterly reports on Thursday. Meanwhile, the SEC's shift in attitude toward approving an Ether Spot ETF sparked widespread optimism in the cryptocurrency market. Bitcoin climbed above $70,000 at the beginning of the week, but has since fallen back to around $68,000. Ether, on the other hand, outperformed Bitcoin during the week, reversing the declining BTC/ETH price ratio.

Enjoy our weekly take on the market summary!

Macro Outlooks

Consumers Seeing Inflation Tempered, and NVIDIA Impresses Market Again

Broader equity markets continued to test all-time highs, bolstered by positive earnings reports from major technology companies like NVIDIA. This market momentum was further fueled by a shift in the SEC's attitude toward approving an Ether Spot ETF, sparking optimism in the cryptocurrency space.

The positive sentiment in the markets was further supported by data showing that American consumers have tempered their inflation expectations, suggesting the possibility of Federal Reserve rate cuts this year. The S&P 500 reclaimed the 5,300 mark, erasing earlier losses, and the Nasdaq-100 hit a new all-time high.

However, concerns remain about the Fed's ability to tame persistent inflation, as evidenced by the expected moderation in the core PCE deflator, the central bank's preferred inflation gauge. Investors are also grappling with the potential impact of unsustainable fiscal spending on neutral interest rates.

ETF Flows Highlight

Source: CoinGlass

Strong inflows into Bitcoin Spot ETFs early this week pushed Bitcoin above $70K. The positive inflows were likely a result of anticipation of the SEC’s approval of Ether Spot ETFs.

Tokens of the Week (Ending May 24, 2024)

ONDO Jumps Following Bullish Whale Activity

Ondo Finance (ONDO), founded in 2021, is a DeFi platform that blends traditional finance with blockchain to provide fixed-yield loans backed by crypto assets, targeting a diverse investor base with varying risk appetites. On May 16, 2024, a crypto whale invested $5.7 million in ONDO, buying 6 million tokens at $0.95 each — significantly above the estimated fair price range. This purchase led to a price increase for ONDO over 24 hours, as it reached $1.04. 

Speculation has arisen about potential insider knowledge, due to the high purchase price. Concurrently, ONDO Finance is actively expanding in the tokenized securities market, with notable partnerships and significant investments in BlackRock’s tokenized fund.

ENS Surges After Vitalik Buterin Once Again Praises ENS

Ethereum Name Service (ENS), launched in May 2017, is a blockchain-based domain system on Ethereum that turns complex addresses into simple names, similar to DNS. It’s secure, decentralized and governed by its token holders. 

Recently, ENS surged following Vitalik Buterin’s praise of ENS as Ethereum's most successful nonfinancial application, expressing surprise that it hasn't garnered more attention.

EDU Jumps After Open Campus Launches Principal Node Sale for EDU

Open Campus (EDU), founded in 2022, is a web3 protocol that decentralizes educational content creation and distribution. Participating educators control their content via blockchain, fostering community-driven learning and collaboration. 

Open Campus, backed by major investors such as Animoca Brands and Sequoia Capital, is launching a sale of Principal Nodes on its EDU Chain, a Layer 3 blockchain designed for education. Scheduled for June 2024, this sale will allow participants to operate nodes, verify transactions and earn rewards within a decentralized education ecosystem. The EDU Chain promotes a Learn Own Earn model, aiming to empower learners and educators by providing blockchain-based ownership of educational data and achievements.

Airdrop Spotlight

zkSync Airdrop Is Finally Here

zkSync, an Ethereum Layer 2 network that uses zero-knowledge rollups, has hinted at a governance token airdrop scheduled for the end of June 2024, coinciding with the finalization of its v24 upgrade that marks the transition of network governance to its community. Meanwhile, zkSync has gained significant traction with its total value locked (TVL) reaching $141 million. The network aims to enhance Ethereum scalability by handling transactions off-chain, significantly reducing fees, especially after Ethereum's Dencun upgrade in March 2024. 

Build Is launching BUILD airdrop

Build, a project on Farcaster, is launching an airdrop of its $BUILD tokens through an event called the BUILD Game. Participants can earn daily BUILD points by nominating their favorite builders on Build's official site. These points will then be converted into $BUILD tokens. To participate, users need to create a Farcaster account, obtain a Passport at Talent Protocol, and visit Build's website to make nominations. Each nomination earns BUILD points, and participants can nominate up to three builders daily to accumulate points. Additionally, participants are also eligible for a Farcaster airdrop, offering a dual earning opportunity.

Aleph Zero Introduces Alephoria Campaign 

Aleph Zero, a privacy-focused Layer 1 blockchain, is introducing its Alephoria campaign to attract new users into its ecosystem with airdrops and promotions. The platform supports a wide range of web3 applications, including DeFi, gaming and content creation, leveraging its fast, modular blockchain with strong privacy features such as zero-knowledge (ZK) privacy. 

AZERO, the ecosystem's native coin, not only facilitates transaction and development activities, but also offers staking rewards and access to ecosystem-wide airdrops. The campaign begins with the launch of Common AMM, a Uniswap-like decentralized exchange (DEX), and includes various incentives, such as Common Staking Drops and Common LP Drops. Alephoria aims to enhance user engagement through multiple upcoming campaigns, including web3 games and unique DeFi protocols.

Stay tuned for more institutional insights and crypto updates next week!