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More than $500 million was lost to memecoin rug pulls and scams in 2024, according to a report by crypto intelligence platform Merkle Science.

The most prolific scams involved social engineering, which is a technique that relies on impersonation and manipulation to gain access to someone’s personal data – often in this case celebrities or well-known tech figures.

One of these cases saw scammers compromise French footballer Kylian Mbappe’s X account. Once they gained access, a link was posted to a nefarious memecoin which rose to a $460 million market cap before being rug pulled.

There was also a case involving music artist Wiz Khalifa that targeted his 35.7 million followers on X. A fake WIZ token was promoted, rising to a $3.4 million market cap before plummeting to zero.

“These scams aren’t just opportunistic—they’re highly coordinated operations that exploit trust at scale,” Robert Whitaker, director of law enforcement affairs at Merkle Science told CoinDesk.

“Hackers are no longer just breaching wallets or exchanges; they’re hijacking the credibility of celebrities and industry leaders to manipulate markets in real time. Our research shows that meme coin rug pulls alone accounted for hundreds of millions in losses this year, with platforms like X being the primary battleground.”

Merkle Science’s report reveals that 75% of all attacks took place on X and 19% on YouTube. 44% of the reported social engineering scams resulted in rug pulls, while phishing attacks was also attributed to 44% of all scams.

Non-fungible token (NFT) platform OpenSea denied reports that users claiming a potential airdrop will be forced to complete detailed identification, or know-your-customer (KYC), checks.

“This is all completely false,” OpenSea CEO Devin Finzer wrote on X in response to a post that referred to the terms and conditions on the OpenSea Foundation website.

The terms and conditions also said users would be restricted from using VPNs and users in the U.S. would not be able to claim. The page contained “boilerplate language” and was “on a test website for a short period of time,” Finzer said.

Speculation over an OpenSea airdrop has been swirling since December after it registered an entity named OpenSea Foundation in the Cayman Islands, coinciding with the release of a new version of the platform dubbed “OS2.”

X user Adam Hollander said that he had a conversation with the OpenSea chief and “folks in the USA will be happy with the Foundation’s actual announcement when they make it,” seemingly confirming an airdrop will take place.

Polymarket odds weighing whether OpenSea would issue an airdrop before April spiked from 25% to 45% following Finzer’s tweets.

Trading volume on OpenSea has experienced a significant drop since the previous bull run in 2022, when it notched a record $2.7 billion of volume in a single day. Volume for all of January this year was just $194 million, according to Dune.

WazirX hack victims will receive 85% of their portfolio value as recorded on Jul.18 as the exchange completed its asset rebalancing on Tuesday, with the first round of distributions slated in April.

As of Tuesday, users can see both the U.S. dollar and Indian rupee values of assets that were lost in a $230 million hack in July 2024. Upside from unstolen tokens belonging to individuals have been distributed across all users, allowing for a higher amount to be returned to users.

Creditors now have until Feb.19 to accept the rebalancing under the current scheme, with a majority vote of 75% required for the plan to move forward.

Part of the refund plan is to launch a decentralized exchange (DEX), issue recovery tokens that can be traded, and perform a periodic buyback of recovery tokens using platform profits and new revenue streams over the next three years.

However, if the scheme is not approved, the restructuring plan fails and the process moves towards liquidation under section 301 of the Singapore Companies Act — potentially leading to a fire sale of assets and creditors receiving less compensation as assets are sold off at possibly lower values.

WazirX was hit by a security breach in one of its multisig wallets last July, causing over $100 million in shiba inu (SHIB) and $52 million in ether, among other assets, to be drained from the exchange.

The stolen funds accounted for over 45% of the total reserves cited by the exchange in a June 2024 report, leading to a restructuring process to clear liabilities. North Korean hacking unit Lazarus is believed to be behind the attack, as CoinDesk previously reported.

Ether (ETH) has underperformed year-to-date, declining over 20%, but fundamentals are improving and total value locked (TVL) on the Ethereum blockchain has risen dramatically, Wall Street bank Citi (C) said in a research report Monday.

“While user activity has been volatile in recent weeks, the fundamental backdrop is not all that murky,” analysts led by Alex Saunders wrote.

Citi noted that TVL on the Ethereum network has risen sharply, while ether exchange-traded funds (ETFs) are still seeing inflows, and search interest is rising.

Following the U.S. election in November, ether ETF flows turned positive, the report noted, with total inflows of $3.2 billion since their July launch.

Stronger user growth on layer-2s and rival blockchain’s such as Solana has raised questions about Ethereum’s competitive advantage, the report said.

President Trump’s World Liberty Financial holds more than $200 million of ether, and this could be viewed as “additional motivation for ensuring the U.S. strengthens its support for the crypto industry,” the bank said.

“Relative ETH and altcoin performance may serve as a gauge for how optimistic the industry is regarding follow-through on regulatory clarity in the U.S.,” the report added.

Citi noted that weakness in ether has coincided with an increase in bitcoin (BTC) dominance, which is now at multi-year highs above 60%.

Read more: Ethereum Faces ‘Intense’ Competition From Other Networks: JPMorgan

Hedge funds hold record short positions in ether (ETH) futures trading on the Chicago Mercantile Exchange (CME), raising questions about the motivations behind these positions.

At first glance, the data could suggest that sophisticated market players anticipate price slides, as discussed on social media. However, this isn’t entirely accurate; carry trades or arbitrage plays primarily drive the record short interest, but some of these short futures trades represent outright bearish bets on the cryptocurrency, per observers.

As of the week ended Feb. 4, hedge funds held a net short position of 11,341 contracts in the CME futures, according to data tracked by ZeroHedge and the Kobeissi Letter. The number has increased 40% in one week and 500% since November, according to The Kobeissi Letter.

“There is evidence suggesting that a notable portion of the short interest in Ether futures is tied to the carry trade. Despite macro headwinds and Ether’s relative underperformance, U.S. ETH ETF inflows have remained steady over the past three months, coinciding with an increase in futures short interest—potentially signaling an uptick in basis trades,” Thomas Erdösi, head of product at CF Benchmarks, told CoinDesk.

CF Benchmarks provides reference rates that underpin CME’s bitcoin (BTC) and ether derivatives.

Carry trades, also known as basis trades, seek to profit from price discrepancies between the two markets. In ETH’s case, it involves hedge funds shorting the CME futures while simultaneously buying the spot ether ETFs listed in the U.S.

“Hedge funds, in particular, appear to be active in this trade through regulated venues, in this case selling CME Ether Futures while buying ETHA [BlackRock’s iShares Ethereum Trust ETF]. Additionally, Ethereum’s basis has occasionally exceeded Bitcoin’s, making Ether carry trades more attractive,” Erdosi said.

Erdosi explained that the short interest has increased by roughly $470 million recently, which corresponds with the inflow of around $480 million in spot ETFs, which validates the argument.

That said, the overall short interest in the CME futures could involve some outright bearish bets to hedge against downside risks in ether. Traders could be shorting ether futures as a hedge against long bets in the altcoin complex.

“However, not all hedge fund short interest is necessarily driven by basis trades—some may be outright shorts given ETH’s lagging performance, particularly against other programmable settlement chains like SOL and a broader rally in altcoins,” Erdosi added.

ETH options on both the CME and offshore giant Deribit show a bias for put options expiring in the near-term. It’s a sign of lingering downside fears in ether.

A put option gives the purchaser the right but not the obligation to sell the underlying asset at a predetermined price at a later date. A put buyer is implicitly bearish on the market, looking to hedge against or profit from an expected price drop in the underlying asset. A call buy is implicitly bullish.

Long-end ETH options show pricier calls, a sign of bullish long-term expectations.

Odds of a litecoin (LTC) exchange-traded fund (ETF) going live in the coming months jumped to over 90% with dogecoin (DOGE) next at 75% odds, well-followed ETF analyst James Seyffart said in an X post late Monday.

Seyffart made similar predictions for bitcoin (BTC) ETFs before the products went live in 2024. Several providers have filed ETFs for various major tokens in the past year under the Biden administration to low interest from the U.S. Securities and Exchange Commission (SEC).

LTC is up 15% in the past 24 hours, beating a 2% increase in bitcoin (BTC), with DOGE up 6%.

A shifting regulatory climate has buoyed approval hopes, however, with the SEC already passing initial checks for certain tokens in the past weeks.

“We’re putting out relatively high odds of approval across the board. Mainly focused on Litecoin, Solana, XRP, and Dogecoin for now,” Bloomberg Intelligence’s Seyffart said. “Big implications/expectations in these odds are that Filings will be acknowledged. Likely this week for XRP and Dogecoin.”

“The odds for everything on this list –Aside from maybe Litecoin– would have been VERY very low if Dems were still in control,” Seyffart added. Prospective litecoin ETFs could see inflows of up to $580 million if investors adopt them at the same rate as the bitcoin ETFs, as CoinDesk previously reported.

Odds given by the analyst XRP and SOL products are under 70% as of Tuesday. Headwinds for XRP products come from a chance of possible appeals of the now-settled SEC’s case against related company Ripple Labs.

Cardano’s ADA token surged 11%, outperforming bitcoin (BTC) and ether (ETH), after Grayscale Investments applied for the first-ever spot ADA exchange-traded fund (ETF) in the U.S.

ADA jumped to 80 cents, with the move starting late Wednesday, according to CoinDesk data. However, the ninth-largest cryptocurrency by market value, is still down 36% from its December high of around $1.37.

Grayscale, a prominent crypto asset manager, filed to list the first ever spot ADA fund on the New York Stock Exchange. A spot ETF would enable investors to gain exposure to the cryptocurrency without having to own it directly.

Bitcoin and ether spot ETFs began trading in the U.S. last year, attracting billions in investor funds since their inception and bolstering the narrative of institutional adoption.

Note that the U.S. SEC’s approval of spot BTC and ETH ETFs was primarily based on the assumption that the CME’s surveillance system for bitcoin and ether futures would mitigate concerns about price manipulation. In other words, CME futures have been a prerequisite for obtaining spot ETF approval. The global derivatives giant is yet to list ADA futures.

The market doesn’t seem worried about that, as evidenced by ADA’s price spike.

Focus on Layer 1 coins

The cryptocurrency and its Layer 1 peers like BTC, ETH, SOL and others could remain well supported in days ahead as social media chatter suggests a shift in investor bias from memecoins to layer 1 coins, according to analytics firm Santiment.

“The crypto community has largely shifted their attention to Bitcoin and other Layer 1 assets like Ethereum, Solana, Toncoin, and Cardano. Collectively, the top Layer 1 assets are getting 44.2% of discussions among specific coins. Meanwhile, top meme coins like Dogecoin, Shiba Inu, and Pepe are being discussed less and less across social media,” Santiment said on X.

“A shift in trader attention from meme coins to Bitcoin and Layer 1 assets is generally a sign of a more stable and sustainable market environment,” Santiment added.

BTC in stasis

Bitcoin continues to trade lacklustre between $95,000 to $100,000, with upside likely capped by trade war fears and rising inflation expectations in the U.S. Ether, the second-largest token by market value, has been locked between $2,500-$2,900 since recovering from last Monday’s crash to $2,000 on several exchanges.

Macro traders have recently pivoted to gold, sending the yellow metal’s price to all time highs above $2,900 per ounce.

Some analysts said bitcoin will have the last laugh.

“The recent decrease in volatility, coupled with the rising price of gold, should highlight Bitcoinʼs growing appeal as an alternative store of value. Despite short-term fluctuations, Bitcoinʼs fundamental narrative remains intact, with increasing institutional interest and its positioning as a potential hedge against inflation and currency devaluation continuing to support its long-term potential,” analysts at Bitfinex said.

“A shift [away from gold] may be underway. Over $196 billion worth of Bitcoin is now held by ETFs, public and private companies, and even nation states. With central banks expanding money supply and fiat devaluation risks rising, Bitcoinʼs fixed-supply narrative is becoming increasingly attractive,” analysts added.