May 14, 2024

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Deutsche Bank Partners with Singapore in Asset Tokenization Project

Deutsche Bank has partnered with Singapore's central bank for Project Guardian, focusing on asset tokenization in DeFi and wholesale funding markets. They will test an open and interoperable blockchain platform for digital fund management. This initiative follows Deutsche Bank's recent skepticism about Tether's transparency. The bank will work with Memento Blockchain and Interop Labs to enhance digital asset management solutions and promote blockchain interoperability. This collaboration underscores the growing importance of secure blockchain interoperability in unlocking the potential of asset tokenization.

Coinbase Reports Full Recovery Following System Outage, Notes 'Degraded Performance'

Coinbase experienced a system-wide outage in the early hours of Tuesday, with services being restored later in the day after investigations and efforts to resolve the issue. While the exchange assured users of fund safety during the downtime, the Coinbase Status website still shows degraded performance for mobile and web transactions. The outage, not labeled as planned maintenance, left some users unable to sell assets, though Coinbase's publicly traded shares were being traded during this period. This incident follows a similar outage in February, attributed to increased traffic during Bitcoin's volatile market movements.

GameStop Rally Ignites Meme Coins Surge

Retail trader Keith Gill, known as Roaring Kitty, stirred the market with a viral post, causing top meme coins to surge. Gill, famous for his role in the GameStop short squeeze, triggered a frenzy in stocks and tokens after his post. His history of turning $58,000 into $50 million contributed to a spike in GameStop's stock despite no direct mention. This led to a surge in meme tokens on Ethereum and Solana blockchains, with a meme GME token rising by 500%. Larger tokens like Pepe and Floki, along with cat-themed tokens like Popcat and Mog, also surged up to 30%. This revival signals a return of risk appetite in crypto markets after a quiet trading period. Gill's influence highlights the appeal of retail traders impacting markets, making meme tokens competitive with utility crypto projects.

North Korean Hackers Utilize 'Durian' Malware, Targeting Cryptocurrency Firms

North Korean hackers from the Kimsuky group have been identified using a new and sophisticated malware called "Durian" to target South Korean cryptocurrency firms. The attacks involved exploiting legitimate security software used specifically by these firms, allowing for persistent infiltration. The Durian malware serves as an installer for various malicious tools, including a backdoor known as "AppleSeed" and a custom proxy tool named LazyLoad, along with legitimate software like Chrome Remote Desktop. Kaspersky, a cybersecurity firm, highlighted similarities between this new malware and tools used by Lazarus Group's sub-group Andariel, indicating a possible connection. Lazarus Group, infamous for its crypto hacking activities, has reportedly laundered over $200 million in illicit crypto between 2020 and 2023, contributing to a total theft exceeding $3 billion in crypto assets over the years.

Trading Desk Insights

Bitcoin prices retracted by 3.5% from Monday's highs, finding solid psychological support around the $60,000 mark. As long as the price remains above this threshold, we anticipate potential gains targeting the $65,000 level.

Turning to US BTC ETFs, the landscape shifted positively with inflows totaling $66 million, spearheaded by a substantial $38.6 million from Fidelity. This is a bullish signal, especially as Grayscale reported no outflows for the second session.

Market sentiment was notably influenced by a tweet from retail trader @TheRoaringKitty, central to the 2021 GME short squeeze, which propelled GameStop's stock and triggered a surge in major meme tokens. Over the past 24 hours, tokens such as PEPE, FLOKI, BOME, DOGE, and POPCAT have outperformed significantly. Likewise, other meme stocks like AMC are gearing up for a strong opening, showing a 100% increase this morning.

The Bitcoin Runes protocol saw a decline in activity and fee revenue following its post-halving spike, failing to emulate the success of Solana's meme coin ecosystem despite its advancements in transaction speed and cost. Although initially promising, Runes' momentum has waned, casting doubts on its long-term impact on the Bitcoin ecosystem.

In legal news, Tornado Cash developer Alexey Pertsev was sentenced to 64 months in prison by a Dutch court for money laundering charges, following his arrest in August 2022 after the platform faced U.S. sanctions.

Coinbase experienced a technical outage lasting three hours, starting at 04:15 UTC and resolving by 07:42 UTC. Although service has been restored, some users might still encounter issues with crypto transactions or fiat withdrawals.

On the macroeconomic front, U.S. stock futures dipped following an unexpectedly high producer price index (PPI) for April, tempering hopes for a Federal Reserve rate cut later this year amidst weakening inflation. The core PPI rose by 0.5%, exceeding the anticipated 0.2%.

Additionally, President Joe Biden is set to impose significant tariffs on Chinese imports, including a 100% tariff on electric vehicles, a 50% tariff on solar cells, and a 25% tariff on certain steel and aluminum products.

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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.

Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.

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