What to Expect in the Cryptocurrency Market in February?

By analyzing the potential significant events and trends in the

cryptocurrency

space in February, several noteworthy occurrences have been identified. These include the launch of the Hong Kong Bitcoin spot ETF, Starknet's token issuance, EigenLayer's staking rewards, Frax Finance's L2 integration, and the anticipated Dencun upgrade. Some of these events have already commenced.

The First BTC ETF Launches in Hong Kong

Harvest Global Investments, one of China's major asset management companies, applied to launch the first BTC ETF in Hong Kong a few weeks ago. Another financial giant, VSFG (Vision Financial Group), has set the first quarter of 2024 as the target for launching a BTC ETF. Additionally, regulatory authorities in Hong Kong confirmed in December last year that they are seriously considering accepting applications for spot Bitcoin ETFs. Harvest Global Investments seems to aim to launch Hong Kong's first spot Bitcoin ETF after February 10.

Starknet Token Launch

Starknet is a crucial project in the Ethereum L2 space and one of the first ZK-Rollup L2 networks built on Ethereum.

While there's no official confirmation, many familiar with the Starknet ecosystem anticipate the STRK token to launch in February.

The project team confirmed they took a snapshot of token distribution over 60 days ago, suggesting the token release isn't too far off.

Why is this significant？

Whenever a major L2 project announces the launch of its token, ecosystem activity and TVL (Total Value Locked) typically surge from that moment until the token generation event ends. For example, in the case of Arbitrum, TVL increased by $500 million within a week of ARB token launch confirmation.

EigenLayer's Deposit Reopens

EigenLayer, the largest restaking protocol, has reopened deposits. They have lifted the individual 200k ETH cap on LST, but now, the restaking points allocated to any liquid staking token or liquid restaking token will be limited to a maximum of 33% of the total future issuance.

EigenLayer's Total Value Locked (TVL) currently stands at $6.5 billion. The pace of its growth this year is incredibly remarkable.

Frax Finance's L2 Launch

Frax Finance, a DeFi product ecosystem on Ethereum, boasts popular products like the FRAX stablecoin and the frxETH liquidity staking token.

The team has long been working on Frax's own L2 blockchain, with the anticipated launch date set for February 7th. Fraxtal, as the upcoming L2 for Frax is named, isn't just another simple Optimism fork; it brings several interesting innovations:

·

Gas token

flexibility: Fraxtal will utilize both frxETH and FRAX as gas tokens simultaneously.

· Block space incentives: Users, applications, and developers will be rewarded for using the veFXS network, which is the staked version of FXS.

· BAMM: A novel lending Automated Market Maker (AMM) developed by the Frax team will enable users to leverage any token on Fraxtal's new L2 without requiring an oracle within 1 to 2 months after its launch.

Curve Finance and Ra (a DEX created by the Ramses Exchange team) have confirmed their deployment on Fraxtal. The founder of Frax Finance boldly predicts that Fraxtal will attract hundreds of millions of dollars in the first month.

Ethereum's Dencun Upgrade Enters Final Testing Phase

The final testnet release for one of Ethereum's upgrades is scheduled for February 7th. If all goes well, Ethereum's Dencun upgrade, as confirmed by EthHub co-founder Anthony Sassano, is set to go live on the mainnet on March 13th.

The Dencun upgrade is crucial mainly because it introduces proto-danksharding. Proto-danksharding is expected to significantly reduce transaction fees on Layer 2 (L2) by lowering the “rent” that L2 must pay, making it more affordable.

Over the past two years, L2 has seen significant growth, and if Dencun meets the community's expectations, it could attract a large influx of new users to Ethereum L2, making it more accessible to them.