Crypto whales are gearing up for the next anticipated “altcoin season,” as decentralized finance (DeFi) loans experience a resurgence, reaching levels not seen since 2022.
Whales Gearing Up for Altcoin Rally
Crypto whales, the large holders in the cryptocurrency market, are positioning themselves for the potential next altcoin rally. According to Ki Young Ju, founder of CryptoQuant, these whales are creating what he describes as “strong buy walls” in preparation for a future surge in altcoin demand. Ju’s analysis focuses on the one-year cumulative buy/sell quote volume difference for altcoins, a metric that tracks the disparity between buy and sell limit orders over a year. This metric is crucial because it indicates the increasing number of buy-limit orders placed by large investors and institutions, suggesting a robust future demand for altcoins.
DeFi Loans See a Revival
The decentralized finance sector is also experiencing a notable revival. Key metrics such as active loans and total value locked (TVL) have been on the rise. Token Terminal, a crypto market analytics platform, noted in a recent post that DeFi is “waking up again.” The platform backed this claim with charts and statistics showing that active loans have returned to around $13.3 billion, a level not seen since early 2022. This resurgence indicates renewed interest and activity in the DeFi space, which had seen a downturn in recent months.
Morpho Labs Secures $50 Million Funding
In a significant development within the DeFi sector, Morpho Labs has successfully raised $50 million in funding. This funding round was led by Ribbit Capital with participation from a16z Crypto, Coinbase Ventures, Variant, Pantera Capital, and Kraken Ventures. Morpho Labs had previously raised $23.6 million across multiple funding rounds, including an $18 million Series B funding round led by a16z and Variant in 2022. The new funds will support the recently launched Morpho Blue, a permissionless lending protocol that enables entities to create and manage their own markets without requiring prior approval from any central authority. This solution also includes vaults that can be customized with specific risk management parameters.
Terra Blockchain Halts Operations
The Terra blockchain recently announced a temporary halt in operations at block height 11430400. During this downtime, user transactions will not be processed. According to an official post from Terra, the team will collaborate with Terra (Phoenix-1) validators to apply an emergency patch to address a suspected exploit. Cyvers Alerts revealed that the exploit resulted in the theft of approximately 60 million Astroport (ASTRO) tokens, 3.5 million USD Coin (USDC) tokens, 500,000 Tether (USDT) tokens, and 2.7 Bitcoin (BTC).
CeFi Entities Major Target for Hacks
Centralized finance (CeFi) entities remain the primary targets for cryptocurrency hackers in 2024. According to Deddy Lavid, co-founder and CEO of Web3 security firm Cyvers, over 70% of the funds lost through cryptocurrency hacks are stolen from CeFi entities. Lavid noted that CeFi entities account for about 70% of incidents in terms of both lost funds and the number of exploits. He also mentioned that attacks against smart contract-based projects are on the rise, highlighting significant security vulnerabilities stemming from both code and personal negligence.
DeFi Market Overview
The majority of the top 100 cryptocurrencies by market cap have ended the week in the red. According to data from Cointelegraph Markets Pro and TradingView, Base-native meme token Brett (BRETT) saw the biggest decline, falling over 55% on the weekly chart. Solana-based memecoin Dogwifhat (WIF) followed closely, with a decline of over 54%. These losses highlight the volatile nature of the cryptocurrency market, particularly in the DeFi sector.
The total value locked in DeFi, a crucial metric for gauging the health and growth of the sector, has also shown fluctuations. The recent trends underscore the dynamic and rapidly changing nature of the DeFi landscape.
Conclusion
The cryptocurrency and DeFi sectors are undergoing significant changes, marked by renewed interest from large holders, a revival in DeFi metrics, substantial funding rounds, and ongoing security challenges. As whales prepare for the next altcoin rally and DeFi loans return to 2022 levels, the market continues to evolve, offering new opportunities and challenges for investors and developers alike. Stay tuned for more updates and insights into this ever-changing space.
