This week in DeFi, a discussion arose about whether increased participation from Wall Street could usher in the crypto market’s first prolonged “supercycle,” potentially leading to digital asset valuations surpassing the traditional four-year cycle timelines.
As the foremost smart contract blockchain, Ethereum’s native Ether (ETH) token might experience gains from “Wall Street engaging with the blockchain,” according to BitMine, the largest corporate ETH holder.
Yet, despite this optimistic outlook, Ether’s price dropped by 13% over the past week, falling below the $4,000 mark for the first time since August 8, per Cointelegraph data.
In the broader cryptocurrency landscape, the Hyperliquid (HYPE) token’s vesting schedule will release approximately $11.9 billion in HYPE tokens over 24 months for the team, which may serve as the “first true test” of the token’s resilience, according to BitMEX co-founder Arthur Hayes’ family office fund, Maelstrom, said on Monday.
Described as a “Sword of Damocles” moment, this will introduce around $500 million worth of monthly unlocks, with only about 17% expected to be absorbed by buybacks, potentially leaving a $410 million oversupply, according to Maelstrom researcher Lukas Ruppert.
On Monday, a whale wallet “0x316f” withdrew $122 million worth of HYPE tokens, shortly after Maelstrom’s caution about the expected sell pressure.
Ethereum bulls promote supercycle; Wall Street remains doubtful
The cryptocurrency market could see its first extended cycle due to an influx of institutional capital and trading products in the Web3 sector, enhancing accessibility for digital asset investments.
Some investors are anticipating a crypto “supercycle” that could challenge the established four-year crypto market cycle linked to Bitcoin (BTC) halving and allow digital asset valuations to exceed this historical timeframe.
For Ether, the supercycle may be triggered by Wall Street’s increasing adoption of blockchain technology, according to BitMine Immersion Technologies, the largest corporate holder of Ether.
The primary catalyst for Ether could be “Wall Street running into the blockchain,” as stated by BitMine.
However, not all Wall Street participants are optimistic about the future price of Ether.
US investment bank Citigroup has established a $4,300 year-end price target for Ether, which significantly trails below ETH’s all-time high of $4,953 recorded on August 24.
Citi noted in a Monday communication that “current prices are above activity estimates, potentially influenced by recent buying activity and excitement surrounding use cases,” as reported by Reuters.
As of writing, Ether has appreciated approximately 108% over the last six months and is trading at $4,177, according to TradingView data.
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Circle investigates “reversible” USDC transactions in deviation from crypto ethos
Circle, the second-largest stablecoin issuer worldwide, is reportedly exploring reversible transactions to aid in recovering funds from fraud and hacks, seemingly contradicting one of crypto’s core principles: that transactions are final and immune to centralized control.
Circle president Heath Tarbert mentioned to the Financial Times that the company is investigating methods that could permit transactions to be reversed under circumstances of fraud or hacks, while still ensuring settlement finality.
“We are considering [. . .] whether there’s a possibility of reversibility for transactions, right, while still wanting settlement finality,” Tarbert expressed to the FT. “There’s an inherent tension between being able to transfer something immediately, but having it be irrevocable […].”
Conflict with crypto ethos
Proponents of transaction reversibility argue it could assist scam victims and enhance mainstream confidence in stablecoins. Nonetheless, this concept challenges the decentralized model that underlies crypto, where transactions are permanent and resilient against unilateral adjustments by issuers or validators.
Cointelegraph has reached out to Circle for comments regarding the specifics of transaction reversibility and the conditions that would govern any reversals.
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Vitalik advocates for open-source infrastructure in health, finance, governance
Ethereum co-founder Vitalik Buterin has urged for open-source, verifiable infrastructure across crucial sectors such as healthcare, finance, and governance, cautioning that centralized systems threaten to undermine trust and security.
In a blog post on Wednesday, Buterin argued that as digital infrastructure becomes more integrated into daily life, reliance on closed, opaque platforms increases the risk of exploitation and monopolization.
“Civilizations that gained the most from new waves of technology are not those who merely consumed it, but those who produced it,” Buterin stated, adding that “openness and verifiability can combat global fragmentation.”
Buterin envisions a future where verifiable devices support global systems, expressing concern that “by default, we are likely to see digital computing entities constructed and operated by centralized corporations.” However, he believes it is possible to strive for a better alternative.
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BlackRock generates $260 million annually from Bitcoin, Ether ETFs
BlackRock’s cryptocurrency-based exchange-traded funds (ETFs) have turned into a revenue powerhouse, generating $260 million in annual income for the world’s largest asset manager, indicating a “benchmark” model for traditional investment firms looking for profitable avenues.
The Bitcoin and Ether ETFs from BlackRock produce $260 million in annualized revenue, comprising $218 million from Bitcoin ETFs and $42 million from Ether products, as noted on Tuesday by Leon Waidmann, head of research at the Onchain Foundation, a nonprofit organization.
BlackRock’s crypto-focused ETFs’ success may prompt additional investment giants from the traditional finance (TradFi) sector to introduce regulated cryptocurrency trading products, with BlackRock’s crypto ETFs potentially serving as a “benchmark” for institutions and traditional pension funds, Waidmann asserted.
“This is no longer an experiment. The world’s largest asset manager has demonstrated that crypto is a significant profit source. This represents a quarter-billion-dollar business, almost established overnight. For context, many fintech unicorns take a decade to reach that level.”
Waidmann drew comparisons between the ETFs and Amazon, which began with books before expanding its offerings, describing the ETFs as the “gateway into the crypto realm.”
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Aster propels perpetual DEX trading volume to $70 billion
Perpetual trading volumes on decentralized exchanges (DEXs) soared to a record high of $70 billion on Thursday, fueled by Aster, a new derivatives platform on BNB Chain.
Perpetual DEXs reached historic volumes for three consecutive days as activity in decentralized perpetuals intensified. On Tuesday, the overall volume for perp DEXs reached $52 billion, followed by $67 billion on Wednesday.
The volume surpassed $70 billion on Thursday, showcasing renewed energy in the decentralized finance (DeFi) derivatives market.
Aster led the charge with nearly $36 billion in 24-hour trading volume, accounting for over 50% of total perp DEX activity on Thursday, surpassing competitors such as Hyperliquid and Lighter, both of which reported volumes over $10 billion.
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DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, the majority of the 100 largest cryptocurrencies by market capitalization finished the week in positive territory.
The Story (IP) token experienced a drop of over 30%, marking the biggest decline among the top 100, followed by the memecoin launchpad Pump.fun’s (PUMP) token, down over 29% on the weekly chart.
Thank you for reading our recap of this week’s significant DeFi events. Join us next Friday for more stories, insights, and education surrounding this rapidly evolving space.
