Happy Friday, TM Family!

Welcome to the Token Metrics Research | Daily Newsletter, where we cover key market movements, regulatory updates, and early alpha for our readers and investors. 

Let's dive in! 

In Today's Edition

1. Bitcoin and Ethereum Liquidations: A Billion-Dollar Wipeout

2. Pump.fun's $1 Billion Raise: Hype and Caution

3. Ethereum Foundation's New Treasury Policy: A Focus on Sustainability

4. JP Morgan's Crypto ETF Collateral: A Mainstream Milestone

1. BTC and ETH Liquidations: A Billion-Dollar Wipeout

The crypto market faced a difficult day, with nearly $1B in liquidations affecting over 223,300 traders in the past 24 hours. Bitcoin led with $342M in liquidations, followed by Ethereum at $286M, with Solana ($51M), Dogecoin ($27M), and XRP ($23M) also hit hard. The primary catalyst was a public feud between U.S. President Donald Trump and Elon Musk over Trump's tax and spending bill, which Musk called a "disgusting abomination." This clash triggered a sharp sell-off, overshadowing recent bullish trends.

Additional pressures included tariff-driven macro fears and an over-leveraged market, with $888M of the $988M total liquidations coming from long positions. Automated liquidations and the crypto market's structural fragility amplified the downturn. Bitcoin's price dipped close to $100,000 before recovering to $103,979, while Ethereum and other altcoins faced similar volatility.

2. Pump.fun's $1 Billion Raise: Hype and Caution

Pump.fun, a platform that has minted nearly 11M tokens and has an ecosystem of $4.5B market cap tokens, is raising $1B at a $4B valuation through a token sale to public and private investors. With over $700M in cumulative revenue, the platform is eyeing a token launch within the next two weeks. Fartcoin is currently the highest-value token in the Pump.fun ecosystem, with a market cap of $1B.

X discussions reveal a polarized sentiment. Some users promote new tokens launched on the platform, while others warn of a "top signal," suggesting Pump.fun's fundraising could be a move to "max extract" value before a potential downturn. The platform's ambitious raise is generating buzz, but investors should weigh the platform's growth against concerns about sustainability.

3. Ethereum Foundation's New Treasury Policy: A Focus on Sustainability

The Ethereum Foundation's new treasury policy introduces a structured, transparent, and sustainability-focused approach to managing its assets as the organization prepares for what it calls a pivotal period for Ethereum's development.

• Operating Expense Cap and Buffer: Annual operating expenses (opex) are capped at 15% of the Foundation's total treasury assets, with a mandatory reserve buffer to cover 2.5 years of expenses. The Foundation aims to gradually reduce this opex cap to a long-term baseline of 5% over the next five years, aligning with practices of endowment-based organizations. 

• Active Asset Management: The policy determines how much of the treasury is held in fiat, ETH, and other assets, directly influencing the timing and scale of ETH sales.

• DeFi-First and On-Chain Deployments: There is a strong emphasis on deploying treasury assets in decentralized finance (DeFi) platforms, such as staking ETH, providing liquidity, and using established lending protocols.

• Transparency and Reporting: The Foundation commits to enhanced financial transparency, publishing quarterly financial reports to its board and an annual report for the public, detailing asset holdings, investment performance, and major developments.

• Strategic and Sustainable Stewardship: The policy is designed to ensure the Foundation's long-term sustainability and ability to support critical Ethereum research, ecosystem grants, and community initiatives.

• Broader Asset Diversification: While ETH remains the core holding, the Foundation plans to expand into tokenized real-world assets and investment-grade bonds to stabilize its fiat reserves.

4. JP Morgan's Crypto ETF Collateral: A Mainstream Milestone

JP Morgan Chase & Co. is set to allow clients to use crypto ETF shares, starting with BlackRock's iShares Bitcoin Trust (IBIT), as collateral for loans. This global policy applies to retail and institutional clients and includes crypto holdings in net worth and liquidity assessments, aligning them with traditional assets like stocks and real estate. 

The move follows a pro-crypto regulatory shift under the current U.S. administration. Spot Bitcoin ETFs, approved in January 2024, now manage over $135B in assets. Some X posts celebrate this as "legacy finance bending the knee," though, cautioning about crypto's volatility risks. JP Morgan's embrace of crypto ETFs signals a turning point for mainstream adoption, potentially unlocking significant capital flows.

Meme of The Day

References 

1. Crypto Market Sees Nearly $1B in Daily Liquidations

2. Pump.fun Plans $1B Token Sale at $4B Valuation

3. Ethereum Foundation Treasury Policy

4. JPMorgan to Allow Bitcoin ETF Shares as Loan Collateral

5. Bitcoin, Ether Bulls Hit With $800M Liquidation

6. Trade $BTC on Token Metrics

7. Trade $FARTCOIN on Token Metrics 

8. Trade $ETH on Token Metrics 

That's all for today, people. To the Moon and beyond. Happy weekend.

Your Friends at Token Metrics