Market Commentary

• Amid a sudden pivot in the SEC’s stance regarding an Ethereum spot ETF, multiple filers submitted amendments this morning, including the removal of language pertaining to staking underlying Ethereum. It is now expected that 19b-4 approvals will come as soon as tomorrow, with less clarity on when S-1 statements will be approved. ETH closed yesterday with a daily gain of 19.25%, the largest daily gain since January 2021. ETH -0.51% (+3.22%) continues to rise today, trading near $3,800, while BTC 0.20% (-2.17%) is taking a back seat, trading just under $70k. The news has helped ETHBTC climb 16.55% over the past two days to 0.054, erasing two months of declines. Equities are relatively flat as the market awaits Nvidia’s earnings tomorrow. If strong, they could spark a positive reaction in AI-related crypto tokens and support further gains in equity indices. 
• Sui, a high-performance alt-layer-1, successfully deployed Myticeti, its latest consensus protocol, on testnet. Mysticeti sets a new standard in consensus speeds, reducing Sui’s consensus time by 80% to 390 milliseconds. Additionally, Mysticeti will reduce validator CPU requirements and extend Sui’s low-latency performance across all transaction types. Sui (SUI -5.15% ) has an object-oriented architecture, allowing the network to process transactions differently based on transaction properties. Mysticeti processes shared object transactions using an optimized version of the Byzantine Fault Tolerance (BFT) consensus, allowing Sui to utilize network bandwidth more efficiently. The results of Mysticeti on testnet have been impressive with Sui demonstrating transaction throughput upwards of 10,000 TPS. Mysticeti is expected to be launched on mainnet in the next few months and will serve as another step towards improving blockchain scalability. 
• Gala Games, a web3 gaming platform, was exploited for over $200 million yesterday afternoon. The exploiter was able to mint 5 billion GALA -5.64% tokens and began selling in large quantities, causing the price to fall over 20%. The hacker was able to sell about $23 million worth of tokens before his address was frozen. Gala Games CEO Eric Schiermeyer blamed poor internal controls for the exploit but did not reveal specifics. Schiermeyer stated that unauthorized access to the mint contract was removed and that Gala is working closely with various law enforcement agencies, including the FBI and U.S. DOJ. Schiermeyer believes they have identified the exploiter and are pursuing proper legal action. Gala’s price has stabilized around $0.044, and Gala Games has iterated its commitment to moving forward and taking necessary steps to prevent any future exploits.

Technical Strategy

• Ethereum is back in focus following its 25% surge in the last 48 hours and has set in motion a rally to test and exceed former March highs en-route to a challenge of its former all-time highs near 4090. This level should serve as the first level of serious upside resistance, and if hit sometime in June, could result in a temporary slowdown/consolidation into August before another push higher gets underway. Momentum has accelerated very quickly this week, helping ETHBTC also begin to turn higher. It’s thought that any SEC Spot-Ethereum approval ruling might finally result in the much-anticipated long-term breakout for ETHBTC, which at this time remains premature. Technically, additional gains look likely as a result of this week’s rally, and should allow for a test of 4090, with any move above leading to at least 4460. ETH -0.51% looks like a good risk/reward on an intermediate-term basis despite this week’s gains and could show further rallies into June as part of a move into early August before consolidation takes hold.

Daily Important Metrics Crypto Size Bullish signal is tied to the crypto market growing Market cap 2.62T +$203B (8.36%) BTC Dominance 53.40 % (-2.04%) Stablecoins Increase in circulating stablecoins is a Bullish signal In Circulation +$111B (-0.06%) In Exchanges +$18B (-0.47%) BTC Metrics A decrease in Bitcoin on exchanges is bullish, indicates investors are moving coins to cold storage # BTC Exchanges +$2.3M (-0.18%) Funding Rates Positive funding rates indicate traders are Bullish Aggregate +1.4340 (1.1021) Binance +0.9899 (0.3348) Bitfinex +0.5005 (0.5127) Bitmex +1.0000 (0.5380) ByBit +1.0000 (0.6296) Deribit +1.6380 (1.6190) Huobi +1.0000 (1.0000) Kraken +2.5959 (1.4322) Mean +1.4340 (1.1021) OKex +3.1601 (3.1402) Sentiment BMI : 43 (-4.65%) Futures A positive spread between Futures Prices and Spot Prices is Bullish CME Price $71,795 (6.59%) Spot Basis +$781 (1.10%) Volume 918,131 (152.17%) Open Interest 260,004 (-3.35%) Options all exchanges Higher open interest change in a bull market is bullish for the sector Volume 38,215 (281.33%) Open Interest 251,127 (1.28%) Vol. Put/Call Ratio 0.5552 (-48.72%) OOI Put/Call Ratio 0.4952 (5.07%) All metrics as of 2024-05-21 16:46:59 All Funding rates are in bps Crypto Prices Symbol Market Cap Last Price Daily Change Year to Date Relative to BTC YTD BTC $1.38T $70,042 3.98% 65.84% ETH $455B $3,785 21.67% 66.34% 0.30% SOL $80B $177 -0.64% 74.06% 4.96% DOGE $210,571 $0.0002 14.59% -99.76% -99.86% All prices as of 2024-05-21 11:49:23 Exchange Traded Products (ETPs) Symbol Prem. to Nav Last Price Daily Change Year to Date Relative to BTC YTD BITW -0.32 $37 1.66% 60.56% -3.19% ETHE -0.17 $33 16.48% 72.46% 3.99% News Market Data The Block Ether futures open interest hits record $14 billion on centralized exchanges Open interest for ether futures on centralized exchanges has reached a fresh high — indicating increased trading activity. Crypto Infrastructure CryptoPotato Sui Sets New Standard for Blockchain Transaction Speeds [PRESS RELEASE – Grand Cayman, Cayman Islands, May 21st, 2024] Set to hit Mainnet this summer, Sui’s new Mysticeti protocol cuts consensus latency down to 390 ms. Sui, the pioneering Layer 1 blockchain that offers industry-leading performance and infinite horizontal scaling, today announced the successful deployment of Mysticeti, its latest consensus protocol, on Sui Testnet. […] Regulation CoinDesk NYAG Takes Victory Lap as Court Approves Genesis Settlement NYAG says the settlement will establish a fund for New Yorkers who invested more than $1.1 billion in Genesis through the Gemini Earn program and blocks Genesis from operating in the state. The Block Fidelity files amended S-1 registration statement, removing staking rewards from prospective Ethereum ETF Fidelity filed an amended S-1 registration statement with the SEC for its prospective Ethereum ETF ahead of upcoming deadlines. Fundraising and M&A CryptoPotato ELFi Protocol Secured $5 Million in Strategic Financing and Launched on the Arbitrum Testnet [PRESS RELEASE – Singapore, Singapore, May 20th, 2024] ELFi Protocol, a decentralized derivatives trading platform, has successfully completed two rounds of strategic financing, raising a total of $5 million. The latest round with leading investment from IDG Capital and KuCoin Ventures. ELFi Protocol has been launched on the Arbitrum testnet and is conducting an open […] The Block Solana wallet Phantom acquires a16z-backed Bitski wallet platform Solana wallet Phantom has acquired the Bitski wallet platform for an undisclosed sum and plans to bring "embedded wallets" to Solana. Hacks, Exploits, and Scams CryptoPotato Gala Games $200M Exploit Was An ‘Isolated Event,’ Team Working Closely With Law Enforcement The Gala Games CEO owned up to the lapse in internal controls that resulted in the theft.