First Mover Asia: Bitcoin Begins the Week by Holding Strong at the $30K Support Level

Good morning. Here’s what’s happening:

Prices: While a bitcoin ETF may spark disagreement within the industry, it remains the dominant topic in the market's collective consciousness.

Insights: Charles d'Haussy from the dYdX Foundation shares his insights on the platform's future beyond Ethereum and the evolving regulatory landscape.

Prices

Bitcoin (BTC) $30,171 −124.0 ▼ 0.4%	Ethereum (ETH) $1,863 −2.5 ▼ 0.1%	CoinDesk Market Index (CMI) 1,231 −3.3 ▼ 0.3%
S&P 500 4,398.95 −12.6 ▼ 0.3%	Gold $1,931 +4.4 ▲ 0.2%	Nikkei 225 32,388.42 −384.6 ▼ 1.2%

BTC/ETH prices per CoinCryptoUs, as of 7 a.m. ET (11 a.m. UTC)

Bitcoin Opens Week Defending $30K Support Level

The market's sole focus rests on the anticipation of a bitcoin ETF.

BlackRock CEO Larry Fink's sudden endorsement of bitcoin has created a sharp divide among analysts and the broader industry.

“So-called mainstream adoption will bring waves of new entrants to bitcoin, and the risk is that they won’t care, and won’t protect the decentralization properties that make it valuable over centralized alternatives in the first place,” Alex Thorn, head of research at Galaxy, wrote last week in his report.

However, the broader market appears unconcerned and indifferent towards the intricacies of decentralization.

The largest digital asset in the world remains resilient, defending the $30K level as Asia's trading week begins at $30,171. Ether is also maintaining its position above $1800, trading at $1,863.

“In a largely uneventful week, we saw Bitcoin trending downward to test support levels near $30K,” BitBull Capital’s Joe DiPasquale said in a note to CoinDesk. “However, the market leader managed to defend the key level despite news of the SEC calling ETF filings inadequate.”

BlackRock has resubmitted its application, and DiPasquale highlights the market's anticipation for further elucidation on this development.

“We still maintain that continued trading above $30K will see more attempts to go higher. Meanwhile, $27K remains a strong support for now,” he said.

In the upcoming week, the market will closely monitor inflation data and jobless claims, which are crucial factors influencing the Federal Reserve's decisions on interest rates. Consequently, the cryptocurrency market is likely to respond accordingly.

Biggest Gainers

Asset	Ticker	Returns	DACS Sector
Cosmos	ATOM	+2.5%	Smart Contract Platform
Polygon	MATIC	+1.2%	Smart Contract Platform
Shiba Inu	SHIB	+0.8%	Currency

Biggest Losers

Asset	Ticker	Returns	DACS Sector
Solana	SOL	−2.4%	Smart Contract Platform
Cardano	ADA	−2.2%	Smart Contract Platform
Loopring	LRC	−2.0%	Smart Contract Platform

Insights

dYdX Foundation CEO Calls Move to Own Blockchain From Ethereum a Prelude

Last year, dYdX made a significant announcement stating its departure from Ethereum and its migration to its own exclusive blockchain platform, Cosmos. The decision was primarily driven by concerns surrounding Ethereum's scalability. In early April, the exchange achieved a significant milestone by introducing the V4 version of its private testnet, marking a crucial advancement in its overall roadmap.

During a recent interview with CoinDesk at the IVS Crypto Conference in Japan, Charles d'Haussy, the CEO of the dYdX Foundation, shed light on the decision to migrate to their proprietary blockchain by likening it to the concept of tech sovereignty. He elaborated that having their own blockchain empowers dYdX to have complete control over their entire technological infrastructure, without relying on Ethereum's roadmap, speed, and associated trade-offs.

“When you sit on someone else’s blockchain, you have a dependency on their roadmap. It’s not yours,” he told CoinDesk. “By having our own chain, we are able to execute much faster by moving away from a general purpose blockchain.”

Although dYdX is not a new platform, it has recently garnered increased attention due to the Securities and Exchange Commission (SEC) targeting its centralized counterparts. However, the platform is not without its challenges, and ultimately, the key question will be whether its new technology stack can address them. Over the past month, its token has experienced a decrease of approximately 6%, while the price of ether has risen by 1.3%. This indicates that the market is cautiously observing dYdX as it prepares for its next phase.

Part of Broader Trend

D'Haussy perceives dYdX's ownership of its own blockchain as a reflection of a wider trend in which prominent crypto applications are tailoring their platforms for specific purposes, thereby reducing the suitability of general-purpose blockchains.

“At the beginning, you start with a Swiss knife, doing everything, but eventually, you want to become a craftsman and have specialized tools,” he said. “So I think we’ll see a lot of application chains and more interconnectivity between blockchains.”

However, it should be noted that dYdX's adoption of its own blockchain does not imply centralization. D'Haussy emphasized that dYdX remains "blockchain agnostic," constantly evolving and enhancing its technology. He considers this flexibility to be a crucial attribute of thriving decentralized finance applications.

dYdX's upcoming blockchain will be open for other platforms to utilize; however, D'Haussy emphasized that it is primarily tailored for dYdX's own purposes, comparing it to a "Formula 1 for decentralized finance."

Diversity of validators

In order to mitigate the risk of centralized failure, dYdX strives for a diverse set of validators across different geographical locations, underlying service providers, and types of providers. D'Haussy predicts an increase in domestic validators, particularly in regions where regulatory guidelines are unclear, to ensure a more robust and resilient network.

“We work on this to make sure that we've got a diversity of geographies, diversity of underlying service providers, a mix of cloud providers, a mix of what we call bare metal providers,” he said.

D'Haussy anticipates that future regulations might mandate financial institutions to connect to public networks through domestic nodes. This requirement aims to ensure that on-chain activities are subject to local regulatory oversight, consequently leading to a substantial surge in the demand for domestic validators.

This implies that trading regulated crypto derivatives is only possible in specific regions of the world.